After its release in April, the decision of the U.S. Court of Appeals for the Second Circuit in United States v. Aleynikov1 was widely hailed as one that would likely weaken companies’ ability to protect their most important computer trade secrets. At a time when prosecutors are sounding the alarm about the increasing risks of cyber crimesgoing so far as to refer to cyber threats to American businesses and government as “the next Pearl Harbor; one of the greatest existential threats facing the United States”2the Second Circuit appeared to limit the reach of two of the statutory tools available to combat the theft of computer trade secrets: the National Stolen Property Act (NSPA) and the Economic Espionage Act (EEA). However, much remains to be learned about whether, and to what extent, these statutes have in fact been narrowed, and a Second Circuit decision likely to be handed down in the coming months in the case of United States v. Agrawal will likely provide much needed guidance on these questions.
Second Circuit’s ‘Aleynikov’ Decision
In 2009, the U.S. Attorney for the Southern District of New York charged Sergey Aleynikov, a former computer programmer at Goldman Sachs, with stealing the computer code for Goldman’s proprietary high-frequency trading (HFT) system and unlawfully providing it to his new employer.3 Aleynikov was alleged to have committed this crime by uploading sections of the HFT’s source code to an Internet server in Germany and subsequently downloading the files to his personal computer and flash drive.4 On Dec. 10, 2010, a jury in the Southern District convicted Aleynikov of violating both the NSPAwhich criminalizes the interstate transportation of stolen property5and the EEAwhich criminalizes the theft of a trade secret “produced for or placed in interstate commerce.”6 Aleynikov was subsequently sentenced to 97 months in prison. On April 11, 2012, the Second Circuit reversed Aleynikov’s convictions, holding that neither statute applied squarely to Aleynikov’s actions.
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