Can writing software be a crime? A recent indictment in San Diego, California indicates that the answer to that question may be yes. We all know that launching certain types of malicious code - viruses, worms, Trojans, even spyware or sending out spam - may violate the law. But on July 21, 2005 a federal grand jury in the Southern District of California indicted 25 year old Carlos Enrique Perez-Melara for writing, advertising and selling a computer program called "Loverspy," a key logging program designed to allow users to capture keystrokes of any computer onto which it is installed. The indictment raises a host of questions about the criminalization of code, and the rights of privacy for users of the Internet and computers in general.

Like many nations, the United States has laws prohibiting the surreptitious eavesdropping of conversations. The federal law prohibits the "interception" of such communications while "in transmission," as well as the disclosure of the contents of any such unlawfully intercepted communications. Under federal law there are three exceptions to this. The first is where you are the government and you have either a Title III court order, a FISA court order, or what is called a "national security letter" permitting such interceptions. The second exception is where you are the "provider of communications facilities" and the interception is "in the ordinary course of business" and for particular stated purposes. Finally, the third exception is in situations where you have obtained the consent of at least one of the parties to the communication.

Thus, at least under federal law, it is legal to record a conversation, an e-mail, an internet communication if one and only one of the parties to the communication has given actual or implied consent to the "interception" or recording. Indeed, it is for this reason that most entities have "computer use policies" which explain that use of corporate computer systems implies their consent to monitoring of communications.

Loverspy and EmailPI

Carlos Enrique Perez-Melara developed, advertised and sold a spyware program called alternatively "Loverspy" or "E-Mail PI" on websites known as lover-spy.com or emailpi.com. They were sold for $89, and were advertised to be used to surreptitiously spy on anyone. The idea was that you would buy the Trojan program, e-mail it to your target (disguised in a greeting card) which would then cause the Trojan to be installed on any computer the purchaser directed it to - assuming the "victim" was dumb enough to open a greeting card from an ex-spouse.

Once installed, the Trojan gave the attacker full access to the victim's computer by logging keystrokes, capturing e-mail, capturing websites visited, and even allowing remote access to things like webcams and microphones. Thus, the software had several different components. First, it was able to be installed surreptitiously as a Trojan. Second, it had both a key logger or e-mail logging functionality. Third, it acted as a remote control client, similar to programs like MS Terminal Server or Remote User, or commercial software like GoToMy PC.

The government has prosecuted people under the federal wiretap laws for using keystroke loggers, most notably the indictment last year of Larry Lee Ropp, who at the time was an employee of Bristol West Insurance Group / Coast National Insurance company. Ropp installed physical key loggers onto his employers' computers to obtain evidence to support his assertion that the company was ripping off their customers. That case was dismissed when the federal judge ruled that the physical key logger, installed between the keyboard and the computer, did not capture communications "in interstate or foreign commerce" but rather captured them locally.

The Perez-Melara case, in comparison, represents the first time the government has attempted to prosecute the developer of a software that can be used for both lawful purposes (surreptitiously monitoring conversations with the consent of one party, or with the "implied" consent of an employee or a minor) or for unlawful purposes (eavesdropping without the consent of either party). To be sure, the government is also going after people who purchased and used the software. At the time Perez-Melara was indicted, the government also indicted four purchasers of the software for using the software to spy on ex-wives or girlfriends.

What exactly did Perez-Melara do that was illegal? Was it writing the software? Selling it? Advertising it? And how much illegal use must be made of the software before the software itself becomes a crime? There is all sorts of other software that can be used for legal and illegal purposes as well.

The wiretap law

In addition to criminalizing the actual interception, the U.S. law makes it a crime to either manufacture or possess any device if you have a reason to know that it is, "primarily useful for the purpose of the surreptitious interception of wire, oral, or electronic communications." This statute has been used, for example, to go after these "spy stores" that sell things like concealed voice activated tape recorders. Or in 1974 (remember Watergate?) the statute was used to prosecute someone for advertising a mini tape recorder that, "secretly tapes a conversation, interview, conference or lecture in your shirt pocket." In fact, the statute was even used to prosecute the manufacturer of a suction cup microphone which you could attach to your telephone to record a conversation.

The law also makes it a crime to disseminate by electronic means an advertisement of an eavesdropping device if you know or even just have reason to know that "the design of such [a] device renders it primarily useful for the purpose of the surreptitious interception of wire, oral, or electronic communications." This also works if you promote the use of the device for surreptitious interception. There is little doubt that LoverSpy, like hundreds of other devices, was advertised as being useful for surreptitious interception.

These laws make no distinction between secretly spying on my own computer, and secretly spying on computers of others. Thus, if I install such a program in my own computer because I suspect that someone may be using the computer without my authorization, I may be violating the wiretap law, and the manufacturer of the program may likewise be committing a felony. If I install a key logger or other monitoring program to keep my kids away from porn sites (or to monitor them if they do go there) my actions may be legal but the sale and distribution of the software used may be illegal. What if I use this software on my own computers to ensure my children don't become victims of stalkers, or companies that violate the Children's On-line Privacy Protection Act (COPPA)? Again, my actions may be legal assuming - and this is a big assumption - that I am authorized to give "consent" to the interception of their communications without their knowledge. In fact, under federal conspiracy law, while my use of the software may have been legal, I may have conspired with the software developer to sell the product, and therefore may be guilty of a crime just by buying software I can otherwise use legally. In addition, while a program may be useful for surreptitious interception, and may even be advertised that way, it may be equally useful for lawful purposes. Nevertheless, as the indictment shows, the software may be illegal.

As with the Groskter case decided by the U.S. Supreme Court, the Perez-Melara case points out that you can make software illegal simply by promoting or advertising its usefulness for illegal or infringing purposes. In the Groskter case, the Supreme Court suggested that the program might not be unlawful if it had substantial non-infringing uses and was promoted for such uses. Perhaps the same is the case for Trojanized key loggers?

A foolish consistency

Another problem with the Perez-Melara case is that the government's theory is directly opposite the position it took when they wanted to install a Trojanized key logger onto a computer without a Title III wiretap order.

In the case of reputed Philadelphia mob boss "little Nicky" Scarfo, the government got a court order to install a key logger onto his computer. Scarfo objected to the introduction of evidence captured by the key logger, claiming that even though the government had a warrant to surreptitiously install the key logger, the program captured electronic communications in transmission, and therefore the government was required to get a more restrictive wiretap order to retrieve the captured communications. The government vehemently disagreed, claiming that the key logger did not "capture" any communications in transmission, and therefore a simple subpoena or search warrant would suffice.

As Ralph Waldo Emerson noted, "A foolish consistency is the hobgoblin of little minds." Indeed, at what point does a wiretap "capture" a communication in transmission? For example, when the government wanted to gather evidence against NSA contract employee Brian Regan for spying for Libya, instead of installing a key logger they simply put a video camera pointed at the monitor. Voila! Wiretap issue solved!

Lessons learned

Software developers need to be aware of potentially illegal uses of the software that they develop, market and sell. While they generally will not be held liable for such illegal uses, they may have some liability if they know or reasonably should know about the illegal or infringing use, particularly if they advertise or promote the usefulness of the software for such use.

This could be applied, for example, to anonymizing programs, wipe or delete programs, evidence eliminators, or even (potentially) access control programs, if developers know or should know that these will be used for obstruction of justice. It is kind of like holding manufacturers of shredders liable for their use by Enron, or holding gun manufacturers liable when their guns are used for illegal purposes. Oh wait, Congress just exempted gun manufacturers from such liability. Keep your eyes open to see how this one ends.

Copyright © 2005, SecurityFocus

Mark D. Rasch, J.D., is a former head of the Justice Department's computer crime unit, and now serves as Senior Vice President and Chief Security Counsel at Solutionary Inc.