And who says there is no bi-partisanship in Congress? On Nov. 27, the Senate, by unanimous consent, approved an amendment to the Economic Espionage Act of 1996 that makes it easier to get a criminal conviction when trade secrets are stolen.
First, the case that prompted the amendment: United States of America v. Sergey Aleynikov (2d Cir. 2012). The opinion sketches out the following: Aleynikov worked for Goldman Sachs & Co. He made $400,000 a year. He designed a computer source code for Goldman that would allow it to engage in high-frequency trading. Goldman only intended to use it internally and not sell or provide it to any third parties. (This is key, as we will see in a second.) Well, Aleynikov got hired away to a company that wanted him to design such a system for it. He was to get a cool $1,000,000 a year in salary; and oh, by the way, he had to crank it out in six months (usually designing such a system requires several years).
So, just before attending his going away party, he swipes the code by sending it to a server in Germany. He is indicted under, among other criminal statutes, the EEA. The trial court affirms his conviction of this count. The Second Circuit says that’s wrong. Why? The Act makes it a crime to swipe something that is "produced for" or "placed in" interstate or foreign commerce. Not the case here.
Because Goldman was only going to use the system for itself and no one else, the conviction was reversed. (His conviction on a count under another federal statute was set aside as well. Freedom, sweet freedom for Sergey.)
Ever hear the phrase, "there ought to be a law"? Looks like there soon will be. So, the Senate to the rescue: the amendment deletes the loophole language and in lieu of, inserts "a product or a service used in or intended for use in" interstate or foreign commerce. We will keep you updated on when this becomes law. Bad guys, beware.
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