Electronic information stored on computer disks, magnetic tapes, audio files, and even data sent via electronic signals are protectable property rights.

As the U.S. economy has transitioned into the information age, the legal system also has been forced to adapt. Property law concepts in existence for centuries are now being applied to modern day concepts. For example, in Thyroff v. Nationwide Mut. Ins. Co., 8 N.Y.3d 283 (2007), a New York appellate court held that a party could sue for conversion of intangible electronic records that are stored on a computer. The court recognized the intrinsic value of both electronic and print documents and declined to draw a distinction between electronically stored information and printed documents for these purposes. Similarly, several courts have held that electronic information stored on computer disks, magnetic tapes, audio files, and even data sent via electronic signals are protectable property rights.

Moreover, the data stored by a firm may constitute trade secrets, copyrighted work, or other materials protected by U.S. intellectual property laws. If a law firm’s “cloud” resides off-shore in another country, the laws of that country may not provide adequate protection if someone else obtains this information.

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