As a follow up to our prior post on the trials and tribulations of former Goldman Sachs programmer Sergey Aleynikov, once again he obtained a judicial ruling that overturned a conviction following a jury trial. In a 72-page opinion the trial court, Justice Daniel Conviser, concluded that there was insufficient evidence to support the jury’s conclusion that Mr. Aleynikov had violated New York’s unlawful use of secret scientific material statute. N.Y. Penal Law § 165.07.

Much like the Second Circuit found in 2012 when it reversed his federal conviction under the National Stolen Property Act and the Economic Espionage Act of 1996, the New York State Justice determined that the prosecutors had not submitted any evidence that the source code downloaded by Mr. Aleynikov “could be touched” or had “physical form” which would be necessary to meet the nearly 50-year old statute’s requirement that the reproduction be in “physical form” and that he had made a “tangible reproduction or representation” of the secret scientific material he downloaded. The Court also found that the prosecution did not demonstrate that he had the “intent to appropriate . . . the use of secret scientific material.”

As Congress subsequently amended the Economic Espionage Act of 1996, to address the value of the trade secret issues and enacted the Theft of Trade Secrets Clarification Act of 2012, so must the New York Legislature act to modernize the Penal Law to encompass the downloading of electronic data to address the “tangible” reproduction and intent issues. The New York Senate acted two weeks ago in that regard, now it is up to the Assembly and the Governor to act on it.