Court rules that Source Code theft was not a Crime

May 12, 2012 /24-7PressRelease / -business espionage may be more difficult to prosecute criminally after a recent decision of the appeal court. The Court of appeal of the United States for the Second Circuit overturned the conviction of the former Goldman Sachs Sergey Aleynikov programmer who has been charged with theft of trade secrets and essentially commit espionage against his former employer. Downloaded Aleynikov allegedly code source Goldman for its trading system high frequency on a remote server in Germany before downloading his computer and flash in Chicago drive, all before taking a new position with a competitor, Tezza Technologies. Goldman has taken steps and contacted the FBI, which arrested him.

Aleynikov was charged with (and for) violation of the national law in property stolen (NAPs) and the economic espionage Act (EEA). He was sentenced to eight years in prison.

However, the Second Circuit has quashed his conviction, holding that its actions do not violate the NAPs, since it did not assume physical control over the code or deprive its use Goldman. Applying the clear wording of the Act, the Court held that Aleynikov had taken "purely intangible property embodied in an intangible format" and that he has not transferred the code with the knowledge that it was stolen. As such, he step "steal" the code, as defined by the Act.

The three judge Committee has also concluded that Aleynikov did not violate the EEA, since he did not (or wanted to) take advantage of the sale or the license code. The unanimous Committee, the Chief Judge Dennis Jacobs explains, "because the Watchdog system was to enter or pass through trade, or to do something which is, theft Aleynikov source code related to that the system was not an offence under the EEA."

However, the Court noted that Aleynikov should have known that his actions violated its agreement with Goldman Sachs and could lead to civil penalties, but they ultimately do not constitute a crime.

Article provided by Erik s. Syverson
Visit us at the www.syversonlaw.com

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