[ by Melanie Gretchen ] Room for Gray in the World of Black & White Interps of Federal Law? Sergey Aleynikov, a computer programmer for Goldman Sachs, went to prison after being convicted of stealing the firm's trade secrets - he downloaded Goldman's "black box" code for high volume trading.  Not only did the jury find Aleynikov guilty of violating the Economic Espionage Act, but of violating the Interstate Transportation of Stolen Property provision, also. Apparently, Aleynikov knew what they were doing when they appealed the conviction, because in February 2012, an Appeals Court panel overturned the original conviction, saying his actions did not constitute a federal crime.  A written ruling will be released in "due course." How can it be that, in a case with uncontested facts - Aleynikov violated Goldman's in-house rules by downloading (stealing) programmable code - that judicial rulings can stand on opposite ends of the legal spectrum?  Did the two courts not find something upon which they could agree?  Apparently not.  Guess we'll have to chalk it up to "The Black or White Interpretation of Federal Law." A Proposal of "The Gray Interpretation of Federal Law." Professor Peter Henning, in his 'White Collar Watch' column for Dealbook, explains why jurists are so comfortable with issuing "Black" and "White" rulings, rather than trying to find a middle ground - i.e., a GRAY INTERPRETATION. In the present status quo, prosecutors often find themselves in a difficult position when new technologies and business processes have to be fit into older statutes that might contain gaps in their coverage.  The classic type of trade secret theft is taking the plans for a new product or blueprints for a machine, while downloading source code that can make designing a competing computer program does not fit that simpler form of the offense. Laws sometimes have to be contorted to cover areas that are on the edge of legality, but courts are often reticent about contorting the meaning of the statutory language to reach new areas. Congress could fix the problem by rewriting the Economic Espionage Act to cover a wider range of trade secrets, but that creates the danger that knowledge about customers or internal sales strategies could become the basis for prosecuting a former employee who uses that information in a new job.  It is not clear that the federal government should criminalize private disputes between employers and employees, or turn everything confidential in a business into a trade secret. Mr. Aleynikov’s case may well end up in the Supreme Court because the issue of trade secret protection is one of growing importance as the Justice Department focuses more on white-collar crimes involving businesses.  The court could take a narrow approach to the Economic Espionage Act like it did with the Interstate Transportation of Stolen Property provision in Dowling, which means Congress would have to consider whether there is a gap in the law it needs to address. So, where do we stand and where is the bright line?  It's all very uncertain and we cannot provide you with any enlightenment.  We, instead, will leave you with Sergey Aleynikov who, upon being released said:

"Today is a victory, but tomorrow you never know."

For further details:  [Dealbook, 2/21/12] and [Dealbook, 2/17/12].