April 11 A federal appeals court set limits on
the government's ability to prosecute alleged corporate
espionage, in an opinion Wednesday explaining its February
decision to throw out the conviction of a former Goldman Sachs
Group Inc computer programmer.
The 2nd U.S. Circuit Court of Appeals in New York said the
alleged theft of source code by Sergey Aleynikov could not
subject him to criminal liability under the Economic Espionage
Act of 1996, which makes it a crime to steal trade secrets,
because it was not produced for or placed in interstate or
Goldman "went to great lengths to maintain the secrecy of
its system," Chief Judge Dennis Jacobs wrote for the court. "The
enormous profits the system yielded for Goldman depended on no
one else having it."
Last month, the 2nd Circuit overturned Aleynikov's December
2010 conviction. Aleynikov has been serving an eight-year prison
term since last March.
In its opinion on Wednesday, the court also said the "highly
valuable" source code did not qualify as a stolen good under the
National Stolen Property Act because it was not a physical item
that could be seized.
"We decline to stretch or update statutory words of plain
and ordinary meaning in order to better accommodate the digital
age," Jacobs wrote.
U.S. Attorney Preet Bharara in Manhattan declined to
comment, a spokeswoman for his office said.
The case is U.S. v. Aleynikov, 2nd U.S. Circuit Court of
Appeals, No. 11-1126.