Appeals Court Rules Computer Code Is Not "Property" and Can't Be Stolen

Illustration for article titled Appeals Court Rules Computer Code Is Not "Property" and Can't Be Stolen

Sergey Aleynikov, an ex-Goldman-Sachs programmer, spent a year in prison for downloading source code of the firm's high-speed trading software before his sentence was overturned in February. Today, the court explained why—downloading computer code doesn't constitute stealing under the National Stolen Property Act.


The 2nd Circuit Appeals Court ruled that since computer code cannot be physically obtained, it doesn't fit the legal description of a stolen good. "Because Aleynikov did not ‘assume physical control' over anything when he took the source code, and because he did not thereby ‘deprive [Goldman] of its use,' Aleynikov did not violate the [National Stolen Property Act]," the court wrote in its decision.

In addition, the Appeals Court struck down charges against Aleynikov of violating the Electronic Espionage Act since the software was never destined for foreign markets. Specifically, the judges wrote, "Because the HFT system was not designed to enter or pass in commerce, or to make something that does, Aleynikov's theft of source code relating to that system was not an offense under the EEA."

The court was quick to point out that this decision should not be interpreted for all cases of electronic theft, however the legal recognition that code isn't physical property (which people have been saying for years) is sure to make this case a focal point in future MPAA/RIAA wranglings. [2nd Circuit Court of Appeals via Wired via The Verge - Image: the AP]


Anti-Star Super-Christ

I don't see this affecting the MPAA or RIAA, as their copyrights are on the works themselves, and involve little code, if any at all. We're talking songs and movies here.

This ruling is on computer code, which has been argued for some time, with first sale doctrines and whatnot. When you have physical property, like a CD, that you want to resale on ebay, companies like Autocad have skewed this definition and removed all first sale doctrine rights. Then you have companies like Adobe Apple, Oracle, etc that claim any similar coding in your own software, or if you try to torrent said software, that you are stealing from them.

The two biggest points up to now have been:

Code is simply math...that anyone with similar coding capabilities could have written the same, code doesn't pass the transformative test of getting a patent. Math is nature and can't be patented, and the code as a whole is just an arrangement of math. You can't patent 2+2=4.

When you torrent something, you are NOT depriving the original company of said code. It could be argued as well that you are NOT depriving them of a lost sale either, since it cannot be proven that those who downloaded it would have bought it in the first place.

This ruling specifically states that the "theft" wasn't a theft at all, because the code still existed for use by the original "owner."

It will be interesting to see how this gets translated for ongoing cases like Oracle vs Google and Apple vs the world.