Employers and technology companies may not have felt it yet, but they’ve just taken a left hook to the head and a right upper cut to the chin from the federal courts. On the heels of the Ninth Circuit’s decision in U.S. v. Nosal, on April 11, the Second Circuit held, in United States v. Aleynikov, that the Economic Espionage Act (EEA) and the National Stolen Property Act do not apply to the theft of source code. The Second Circuit’s interpretation of the EEA seems to rest on particularly shaky ground, so it would not be surprising if the government sought rehearing en banc or Supreme Court review. Companies concerned about the effects of these decisions on their ability to protect their source code or proprietary data more generally should consider how they might contain the damage.
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