In February, a 3-judge panel of the appeals court decided to overturn a lower court's conviction of former Goldman Sachs programmer Sergey Aleynikov, who had been found guilty of illegally downloading computer code from his onetime employer. Today, Wednesday, the United States Court of Appeals for the Second Circuit released an opinion that elaborated on that February decision issued by the 2nd U.S. Circuit Court of Appeals panel.

Whereas, the February 17th ruling set the programmer free and, in doing so, dealt a blow to one of the most prominent federal prosecutions of corporate espionage in recent years, the April 11th opinion provided the legal reasoning for that unusual decision.

Closer Look at Today's Opinion. Chief Judge Dennis Jacobs, who presided over the February hearing, wrote the opinion for the unanimous 3-judge panel.  The opinion stated that former employee Sergey Aleynikov did not violate:  (i) the Electronic Espionage Act of 1996 or (ii) federal stolen property laws. The Judge conceded that Goldman’s code was "highly valuable," but noted that its trading program was never intended to be sold.  Nor was the high-frequency trading “system designed to enter or pass in commerce, or to make something that does.  And so, it fell short of the interstate commerce requirements of the Electronic Espionage Act, according to the appeals court’s reading of the statute.  With those points established, Judge Jacobs concluded that Aleynikov’s theft of source code relating to that system was not an offense under the EEA - a 1996 law that makes it illegal to steal trade secrets. Goldman "went to great lengths to maintain the secrecy of its system," Jacobs wrote.  "The enormous profits the system yielded for Goldman depended on no one else having it."  However, the "highly valuable" source code did not qualify as physical "goods" or "wares" or "merchandise" within the meaning of the stolen property law - and thus did not qualify as stolen goods under the federal law. The judge also found that while Mr. Aleynikov had taken code and uploaded it to his own computers, he had not actually taken a physical object - and therefore did not violate the letter of federal law.  That he later transferred the code to a thumb drive still did not make his actions a federal crime. And responding to those who may have wanted the court to try and reconfigure the written words of law in a manner that matches up definitions of law to characteristics of today's technology, Judge Jacobs simply added: "We decline to stretch or update statutory words of plain and ordinary meaning in order to better accommodate the digital age." Recalling Aleynikov's Arrest. Mr. Aleynikov was arrested nearly 3 years ago, after Goldman accused him of downloading programming code for its high-speed computerized trading operations.  The act was almost literally on Mr. Aleynikov’s way out the door, shortly before a going-away party. He had accepted a job at a software company catering to other trading firms.  Mr. Aleynikov’s lawyers had argued that while their client had violated Goldman’s confidentiality policy, he had not broken the law. For further details, go to: [Appeals Court Opinion on Sergey Aleynikov] and [Reuters, 4/11/12].