Code can't be stolen under federal law, court rules
The government's effort to prosecute corporate espionage was dealt a setback today when a federal appeals court ruled that downloaded code did not qualify as stolen under a federal theft statute.
The 2nd U.S. Circuit Court of Appeals in New York ruled today that former Goldman Sachs programmer Sergey Aleynikov was wrongly charged with theft of property under the National Stolen Property Act, which makes it illegal to steal trade secrets.
Aleynikov, 42, was convicted in December 2010 of downloading code for Goldman Sachs' high-speed computerized trading operations and uploading it to an overseas server before he left the Wall Street investment bank in 2009. "Because Aleynikov did not 'assume physical control' over anything when he took the source code, and because he did not thereby 'deprive [Goldman] of its use,' Aleynikov did not violate the NSPA," Chief Judge Dennis Jacobs wrote in the three-judge panel's unanimous decision (see below). "We decline to stretch or update statutory words of plain and ordinary meaning in order to better accommodate the digital age."
