I hope that by novel he meant deceit and wasteful. Pure waste to be mining like that. If they had at least used a scrypt coin, that'd be a start.

Information is too scarce to see if they managed GPU mining somehow. Although that'd produce it's own set of problems (see also what happened after blizzard had the starcraft menu not-vsynced).

I don't see why the law would have to be involved though. What motivation is given for their research? Very hard to understand. Maybe it can be phrased as "stealing computer power"?