April 11 (Reuters) - 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 foreign commerce.
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.