Compliancex

A federal appeals court reversed the conviction of computer programmer Sergey Aleynikov this past Thursday, triggering a DealBook editorial about how digital technology plays into espionage law.

Aleynikov was Goldman Sachs’ most highly paid programmer when he split for an even bigger paycheck for a competitive firm. But before he made it out the door, he downloaded source code from the firm’s digital trading system, an act which was detected by the servers.

He was then slapped with two indictments for violating the Economic Espionage Act and the Interstate Transportation of Stolen Property provision, was ultimately convicted, and has already served about a year in prison in NJ before his release Friday.

But here’s the timely question which has emerged from this case. Is the source code considered either a “product,” “goods,” “wares,” “merchandise,” “securities” or “money”? Or, on the other hand, is it “intangible property… not worth anything until… later incorporated into a high-speed trading system?”

This is apparently an important distinction because the definitions in the statutes have not yet been broadened to cover digital theft specifically, putting theft of code into “a gray area,” per DealBook.

The Second Circuit has not yet released its reason for overturning the conviction, stating in its order that an opinion will be released “in due course.”

Daryn Strauss is a contributing writer for CompliancEX and Wall Street Job Report. She is a 2012 Writers Guild Award Nominee, Outstanding Achievement in Writing Original New Media and is the Creative Director & Founder, Digital Chick TV, Writer/Director/Executive Producer of Downsized.