The Second Circuit Reverses Conviction of Computer Programmer and Holds that Theft of Intellectual Property Is Not Necessarily Criminal


Earlier this month, the U.S. Court of Appeals for the Second Circuit seemingly stripped federal prosecutors of the use of two statutes used to combat the theft of intellectual property, critical technologies and other proprietary and sensitive business information, when it reversed the conviction of Sergey Aleynikov. See United States v. Aleynikov, ---F.3d ---, 2012 WL 1193611 (2d Cir. 2012). As discussed below, the Aleynikov opinion has far-reaching implications for companies seeking to protect their intellectual property and other proprietary products and information. It further serves as a lesson that now is the time for companies to review internal policies and processes relating to identifying and protecting intellectual property, computer use and removable media and information sharing between human resources, management, information technology and security.

In February 2010, a grand jury sitting in the U.S. District Court for the Southern District of New York returned an indictment charging Mr. Aleynikov, a computer programmer formerly employed by Goldman Sachs & Co. who helped to write the source code for Goldman’s proprietary high-frequency trading (HFT) system, with (1) theft of trade secrets in violation of the Economic Espionage Act of 1996, 18 U.S.C. § 1832 (the “EEA”), (2) transportation of stolen property in interstate and foreign commerce, in violation of the National Stolen Property Act, 18 U.S.C. § 2314 (the “NSPA”), and (3) unauthorized computer access, in violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (the “CFAA”).

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