Crowell & Moring’s work on the DuPont v. Kolon matter, one of the largest trade secrets cases of its kind, was recognized at The American Lawyer’s third annual Global Legal Awards, winning “Global Dispute of the Year: U.S. Litigation.” The firm represented DuPont in recovering Kevlar® trade secrets stolen by a South Korean conglomerate. After
Last week, the Ninth Circuit issued an important decision for employers in United States v. Christensen, No. 08-50531, 2015 WL 5010591, at *14 (9th Cir. Aug. 25, 2015). In that case, the Court of Appeals held that employees who misuse their access to their employers’ computer systems can be held criminally liable under California Penal Code § 502(c)(2). While many lower-court decisions within the Ninth Circuit had questioned the scope of Section 502(c) and certain of its sub-parts, and some considered it to be primarily an “anti-hacking statute,” the Ninth Circuit’s decision makes clear that § 502(c) applies even to an employee who accesses a database or system with a valid password, but proceeds to take, copy, or use data without permission to do so.
Continue Reading Access Denied — Christensen Sets the Standard for Violations of Penal Code § 502(c)
Sergey Aleynikov, the ex-Goldman Sachs computer programmer convicted of stealing high-frequency trading source code, has once again succeeded in reversing a criminal conviction related to his infamous code-copying acts. Federal prosecutors had previously charged, tried, and won a conviction of Aleynikov for violations of the federal National Stolen Property Act (NSPA) (18 USC § 2314) and Economic Espionage Act (18 USC § 1832). However, in 2012, the Second Circuit reversed both convictions. See United States v. Aleynikov, 676 F.3d 71 (2d Cir. 2012). That in turn prompted Congress to amend the Economic Espionage Act to close the loophole that allowed Aleynikov to walk.
Continue Reading Twice Convicted, Twice Reversed: Another Aleynikov Code Theft Conviction Overturned
Editor’s Note: This is the third in a series of posts addressing how corporate victims of trade secrets theft can enforce their intellectual property rights through the criminal justice system. Prior posts can be found here and here.
Once a criminal investigation of trade secrets theft is underway, it’s not just a matter of the corporate victim passively watching the government pursue the case. Pro-active engagement is required to maximize the benefits of a criminal investigation and prosecution. But going about that the right way is an art form – there are many variables, unwritten rules, and traps for the inexperienced. Effectively managing such situations begins with an understanding of the corporate victim’s relationship with the government.…
Editor’s Note: This is the second in a series of posts addressing how corporate victims of trade secrets theft can enforce their intellectual property rights through the criminal justice system. The introductory post can be found here.
The criminal enforcement landscape
The federal government has intensified its focus on intellectual property theft in recent years. For example, there is now an Intellectual Property Enforcement Coordinator in the White House, and an Intellectual Property Task Force within the Department of Justice. The Intellectual Property Rights Coordination Center spans some two-dozen federal agencies, and has public and stakeholder outreach as part of its mission. The fact that more trade secrets cases are being prosecuted is a direct reflection of these efforts. More agents and prosecutors have been made available, and the federal government has become more aggressive in going after foreign officials and state-owned entities despite the diplomatic implications. Domestic enforcement is on the rise as well, with more high-profile criminal trade secrets cases being brought than ever before.…
Sergey Aleynikov, the former Goldman Sachs computer programmer accused of stealing computer source code powering the bank’s high-frequency trading platform, has been convicted by a New York jury of a single count of Unlawful Use of Secret Scientific Material. The jury hung on a second Unlawful Use count and acquitted Aleynikov on a third count of Unlawful Duplication of Computer-Related Material.
This is not the first time Aleynikov has been criminally convicted for this same conduct: In 2010, Aleynikov was charged, tried and convicted in federal court of violating the federal National Stolen Property Act (“NSPA”) (18 USC § 2314) and Economic Espionage Act (“EEA”) (18 USC § 1832). However, in 2012, the Second Circuit reversed both convictions.…
One remarkable aspect of the resolution announced last week in the long-running DuPont-Kolon trade secrets dispute is the transfer of $275 million to our client DuPont through the criminal restitution process. This highlights an option for corporate victims of trade secrets theft that is too often overlooked – initiation of criminal proceedings in parallel with civil litigation. In fact, in some cases, a criminal trade secrets theft investigation and prosecution may eliminate the need for costly civil litigation entirely.
Continue Reading Calling the Cops: Enforcing Trade Secret Rights Through Criminal Prosecution