On April 11, 2011, the U.S. Court of Appeals for the Second Circuit rendered a much-anticipated opinion in the appeal of Sergey Aleynikov, a former Goldman Sachs programmer, reversing Aleynikov’s conviction by a jury sitting in the Southern District of New York.1 The decision, which wrestled with questions about the intangibility of code and whether internal business software can qualify as a “product,” will likely have a significant impact on the federal government’s ability to prosecute data theft, particularly to cases involving purely digital misconduct, with its small and “eco-friendly” carbon footprint.
Although some have said that the opinion indicates that Aleynikov was wrongfully convicted, it would be a mistake to conclude that what he did was not a crime and that such cases can never be prosecuted. A careful reading of the opinion indicates its limits. Moreover, available state penal provisions can likely fill any federal enforcement gaps created by the decision.
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