Printing Hard Copies Of Stolen Source Code: The Difference Between Freedom And Incarceration In The Second Circuit

by Orrick - Trade Secrets Group

Whenever an appeals court kicks off a 65-page opinion by describing you (or your client) as a thief, and posits that the question before it is whether you’ve been properly convicted of thievery, you know you’re in trouble.  That’s what defendant Samarth Agrawal must have thought when the Second Circuit issued its decision last week upholding his conviction under the Economic Espionage Act and the National Stolen Property Act for theft of his employer’s source code.

The other emotion Agrawal probably felt was shock: just 15 months earlier, the Second Circuit reached the opposite conclusion in a case involving almost the same law and facts.  In United States v. Aleynikov, the court overturned the defendant’s conviction and set him free.

What gives?  Both cases involved employees who stole proprietary source code used in the financial industry to execute high frequency trades.  Both employees peddled those secrets to their employers’ competitors in the hopes of landing a higher-paying, lucrative job.  Both were charged under the same federal statutes that criminalize misappropriation of trade secrets.
The difference?  Agrawal printed the source code, making it “tangible”; Aleynikov kept everything electronic.  That’s right.  The difference between freedom and jail time was a simple press of the “print” button.

In Aleynikov, the Second Circuit held that the NSPA criminalizes theft of physical, tangible goods, but not intangible property such as the bytes contained in software code.  Aleynikov accomplished his theft of source code in the cloud, uploading and encrypting his employer Goldman Sachs’ HFT source code to a remote server in Germany before downloading it to his personal laptop at his home in New Jersey.  Because the code was not in tangible form when he misappropriated it, Aleynikov beat the NSPA.

In contrast, Agrawal was old school.  He copied the company’s HFT source code from a digital file into a Word file, printed it out in hard copy on the company’s printers, and took the papers home with him.  The simple act of reducing his employer’s source code to tangible form made Agrawal a thief under the NSPA while Ayenlnikov was set free.

The Second Circuit Court acknowledged the fundamental unfairness of these similar cases:  “We recognize that, in terms of moral culpability, there may be little to distinguish Agrawal from the defendant in Aleynikov.  But it is Congress’ task, not the courts’, to define crimes and prescribe punishments.”  In other words, Agrawal was lucky that he stole the source code through electronic means and didn’t print.

The Second Circuit’s contradictory interpretations of the EEA are a bit murkier.  Its Aleynikov decision met with heavy criticism and led to Congress to amend the EEA in December 2012.  But because the amended EEA was not retroactive, the old version of the statute applied in Agrawal.  As a result, Agrawal’s case seems indistinguishable from Aleynikov’s.  So why were the results different?  According to the majority opinion, the jury charge in Agrawal was better.  Judge Pooler’s dissent was more cynical, suggesting the decision was result-oriented:  “No doubt the majority’s misapprehension of both law and fact is in part driven by its conviction that the defendant is a ‘thief’ and its wish to retroactively apply Congress’s amendment to the EEA.”

The conflicting Aleynikov and Agrawal decisions serve as a cautionary tale to those accused of trade secret misappropriation.  Freedom or a jail cell may depend on a simple keystroke.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Orrick - Trade Secrets Group | Attorney Advertising

Written by:

Orrick - Trade Secrets Group

Orrick - Trade Secrets Group on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.