Cisco's theory, then, was that by decompiling the source code to find the vulnerability, Lynn (and presumably his employer, ISS) violated the terms of the EULA - a contract. This contract violation then meant that the license to acquire or use the software was violated, and Lynn was using a copyrighted work (the software) without the consent of the copyright holder - thus a copyright violation - which gets Cisco into federal court rather than state court. When Lynn and Black Hat sought to publish the bits of source code in the presentation, they were alleged to be distributing the code in violation of the EULA and copyright law, and also violating Cisco's right to protect its trade secrets. Finally, Lynn was alleged to have violated the terms of his ISS non-disclosure agreement by disclosing information at the conference that he learned "in secret" from ISS under the NDA - presumably information that ISS obtained by unlawful reverse engineering!

The Register has a good piece on the legality of disassembling code and the reach of End User License Agreements (EULA). The cite Mike's case heavily.

Very nice (even though they keep saying "decompiling the source code." If you have the source code, you wouldn't need to decompile it!).

Legal disassembly