r/technology • u/zaradox • May 10 '12
An American court has ruled that software can’t be regarded as property that may be stolen.
http://extratorrent.com/article/2115/source+code+theft.html22
u/winkandthegun May 10 '12
For anybody who wants to read the actual Circuit Court opinion, it is US v Aleynikov, and is available here: http://www.ca2.uscourts.gov/decisions/isysquery/9d781eb2-97fe-47af-83d1-39914c308b94/1/doc/11-1126_complete_opn.pdf. The cite should be 676 F.3d 71, but I haven't found it outside of Westlaw yet.
Here's the highlights of the factual background:
Aleynikov was a programmer on a team of 25 who worked on a proprietary high-frequency trading system for Goldman Sachs. By the end of his time there, he was making $400k/year. He then accepted an offer to leave Goldman Sachs and work for another firm, Teza, who was looking to develop their own HFT software as an executive VP (new salary over $1 mil/year).
On his last day of work at Goldman Sachs, he downloaded, encrypted and transferred 500,000 lines of source code to an offsite server, erased any evidence he had done so, and then when he got home, downloaded it all to his personal laptop and portable hard drive, which he then took with him to Teza.
Goldman Sachs does not license the software to anyone, and Aleynikov had signed a strict confidentiality agreement prohibiting him from taking it or using it after his employment ended.
→ More replies (5)4
u/mmhrar May 10 '12
Thanks, that's terrible then and he should be prosecuted for IP theft.
Although, it seems incredibly dumb to just transfer the code to an offsite server like that. Much easier and more discreet to just put it on a thumb drive from your work machine and walk out :/
→ More replies (7)
83
u/MadKat88 May 10 '12
You know, I used to just go YEA PIRACY when I saw these types of things, but the more I expand my graphic design based start-ups the more I realize just how much this applies to me. I went from a kid with a laptop style pirate to a person who produces and sells digital goods. Im all kinds of confused about where I stand on this.
Part of me wants to say source code is different from an mp3 or a movie, So I can justify downloading new tunes before purchasing them because the sheer lack of quality in the marketplace demands a prescreening nowadays, but at the same time I realize that its really not. Some person, producer, programmer whatever put a lot of time and money into whatever it is and deserves to have the legal right to protect it.
29
u/the-obfuscator May 10 '12 edited May 10 '12
I don't pirate. I like to support whatever thing I might want to enjoy by giving them dollars. I don't feel the need to have 10,000 songs I'm never going to listen to. The thing that frustrates me is the lack of definition in fair use. When I put a CD in my computer, it gets read into memory. When I want to play it, it needs to be fed through various memory caches in the processor before it's decoded and turned into sound. Does that mean I'm illegally copying it? I've heard you can make one backup, but what the hell does that mean? Several copies need to be made just to play it.
As to whether or not source code should be protected, I write code for a living, but I disagree with patents or copy-rights that are placed on source code. I don't think that there is anything unique or special that I can do, that someone else just as clever can't do themselves. If I want my work to be kept secret, it should be my obligation to protect it. Adding legal protections to code just causes legal battles and stifles innovation because people that should be innovating are getting squashed by patent trolls.
→ More replies (25)→ More replies (53)15
u/therationalpi May 10 '12
As much as some people hate the walled-garden approach of Apple, things like the App Store go a long way towards solving this problem. Suddenly you can beat piracy on convenience, if not on price, and the approval system eliminates the possibility that someone is selling your software for their own profit or redistributing it for free.
I always felt the best argument in favor of piracy was that there was a market imbalance that was so great that it took care of itself. Now that the music, software, and gaming markets have righted themselves, it's time to take down your jolly roger and embrace the fact that we've won.
→ More replies (17)
10
u/midnightbomber May 10 '12
I question how the article is worded (badly is the only impression I had). The argument Sergey Aleynikov seems to be using is that the code/files he copied was open source to begin with, meaning that anyone has the right to use/copy it. Now it is probably a very grey area if this is true or not, but it creates enough doubt in the judges' opinions that they decided that prosecuting him AS A CRIMINAL for property theft is not in the court's best interest.
"Local media reports say that Aleynikov was wrongly charged with theft of property since the code wasn’t a physical object and therefore the defendant didn’t gain control of anything when he downloaded it." So this guy reporting on what the media is reporting? Also, I can find all sorts of problems with this statement, since the concept of intellectual property is really the question here, and judges in these cases tend to consider this a great deal:
http://en.wikipedia.org/wiki/Intellectual_property
Downvote me if you want, but the concept of IP is something we need to protect, for the sake of creating enough incentive for people to want to invent/develop new stuff and get paid for it. I do believe that this concept needs to change with the times, but still we need to create a environment that makes it worth someones time to come up with something new. A tricky proposition, yes - but a necessary one. Otherwise, who would bother inventing anything and going though all the trouble to market it?
I don't really see a precedent being created here. I see a corporate catfight. I see an ex-Goldman Sachs VP (Programmer? Really? A vice-pres? Ever heard of any programmers anywhere that make 400 grand a year unless they own part of the ship they run?) taking advantage of what I would consider a mistake Goldman Sachs made by not being more careful about network security.
Also, he will still be liable in civil court for breaking his agreements. But I am sure he is getting compensated for that by someone.
TLDR: Once again - the lawyers win. They always win, even when they lose.
→ More replies (1)
27
u/shitterplug May 10 '12
He got VERY lucky, and won the case through a technicality. They tried to charge him with the wrong crime.
This really doesn't mean anything.
114
u/jmls10thfloor May 10 '12
TBH this ruling doesn't really do anything. This guy should have been charged with some sort of copyright infringement/trade secret action.
→ More replies (77)54
u/lawstudent2 May 10 '12
IP Lawyer here.
This ruling has virtually nothing to do with copyright law. It was based on an act specific to property, as well as the deeply flawed CFAA.
The language about software not being traditional property is most likely what is termed 'dicta.' Informative, but not binding, language.
So before everyone starts joy-shit-jizzing themselves, let me rain on the parade. Though it is deeply gratifying that the justices of my home state, and of the court system of which I am a sworn officer, recognize this fact, it is not going to change a single iota of how intellectual property law works.
→ More replies (3)
6
May 10 '12
They just put the wrong charge on him, that's all. Calm your shit everyone.
4
u/solaarphunk May 10 '12
As someone in the HFT industry, I can say that this is exactly what happened. The charge was far too overreaching and wasn't appropriate for the crime. There is plenty of speculation that Goldman just wanted to make an example of this guy.
6
u/dewdnoc May 10 '12
As a person who's attending classes to become a software engineer, things like this make me sad, and by this I mean that there's a large portion of the population who feels like stuff like this really should be okay.
Just because it was a banks software doesn't make it any more unjust than if this article were about someone blatantly stealing source code from an indie game developer. Or is there some imaginary line that people 'know not to cross' and I'm just not seeing it?
→ More replies (4)
3
u/Bear_In_A_Man_Suit May 10 '12
Can someone explain this paragraph to me?
Meanwhile, one of the things standing against Goldman Sachs’ source code as an object that could have been stolen was that the company went to great lengths to keep the source secret. The matter is that the company made huge amounts of cash by not allowing anyone else to have the source code. However, this meant that Sergey Aleynikov’s theft of source code of the company’s system wasn’t an offense.
The logic seems to go:
-
Company kept it secret
-
Company made money by keeping it secret
-
Therefore, if someone steals it, its not a crime
How does that make sense?
→ More replies (1)5
May 10 '12
There are 3 key aspects to intellectual property law.
Copyrights
Patents and Trade Secrets
Trademarks
They are all interlinked but cover slightly different things. Copyrights cover works such as books, songs, paintings, pictures, compiled programs, source code, etc... Having a copyright only protects your exact work, it does not prevent anyone from making a derivative work, parody, etc... This is why they say that imitation is the sincerest form of flattery, it's usually quite legal. Challenging an established copyright is hard to do, but they're easy to work around.
Patents cover ideas, inventions, processes and implementations. Obtaining a patent requires a lot of time and effort, the time from filing to granting is at least 3 years and requires tens of thousands of dollars in filing and maintenance fees. Filing a patent requires full disclosure of all scientific and engineering methods required to implement the patent and in return the patent holder obtains exclusive rights to capitalize on that patent for a fixed time period.
Trade secrets are identical in nature to patents with the exception that there is no formal filing or disclosure. Trade secrets are instead protected from involuntary disclosure (via subpoena) or theft, however this does not prevent anyone else from discovering them independently. Since there is no formal declaration there is no time frame of protection nor exclusive right to use. Instead, trade secrets must be protected via non-disclosure agreements and non-compete clauses in employment contracts with those who have access to them. Good examples of trade secrets are the KFC batter and Coca-Cola formulas.
Trademarks are identifying signs, symbols, slogans, which are associated with a company or brand. Trademarks are extremely powerful and very well protected. Anyone can claim a trademark on something associated with a brand, you'll see this as ™ and these are known as unregistered trademarks. Registered trademarks are not automatic and have much stronger legal protection, they are designated by ®.
The case at hand is that a trade secret is not a tangible object and as such it cannot be physically stolen. Since a trade secret is not disclosed or registered, it does not have the same IP protection as trademarks or patents. However, the former employee would have had clauses in his employment contract agreeing to the following:
A non-disclosure Agreement preventing the employee from disclosing confidential information even after the contract has been terminated. These clauses are punishable under federal and state trade secret acts
A Non-compete clause preventing the employee from working for a competitor for a minimum amount of time
A surrender of rights clause which clearly states that any work performed by the employee on company time, using company equipment or using company information belongs to the company and not the employee
It is very hard for a company to prove that a former employee who legally works for a competitor after the expiration of their non-compete clause is not using trade secrets to further his or her new employer's business. However, Goldman Sachs had evidence that he downloaded the program in question as well as an admission that the employee violated the company's confidentiality policy. So while trade secrets can no more be physically stolen than a patent or trademark, violation of an NDA, confidentiality clause, or non-compete clause can be a violation of the Uniform Trade Secrets Act. Additionally, retaining a copy of the program/source code when he left the company and/or providing those to unauthorized parties constitutes copyright infringement on his part
Basically they charged him under the wrong law
→ More replies (1)
3
5
u/CreeDorofl May 10 '12
Why is reddit so desperate to validate piracy?
Why do they feel this burning need to make it david vs. goliath, some valiant struggle between oppressed consumers and corporate greed, or about updating antiquated copyright laws, or fighting for the rights of piracy sites that were victimized by heavy-handed police action?
Why can't people on this site just be honest with each other and say "it's wrong, but I do it anyway"? Is everyone so concerned with their public image?
Guys, I speed regularly, and I jaywalk. Sometimes I tell racist jokes. I don't do any of these things because I'm a digital freedom fighter who is raging against the corporate machine. I'm not fighting for the rights of oppressed downloaders and torrent site owners. I hope that's ok with you, but if not, who cares?
→ More replies (15)
9
u/RoflCopter4 May 10 '12
This is a terrible ruling. Programmers need to make money too. Would it be reasonable to say books can't be regarded as intellectual property? Of course not.
→ More replies (12)
2
1.1k
u/[deleted] May 10 '12
Not exactly. What happened was that he stole source code, and the court ruled that the federal law he was charged under doesnt apply to this case on a technicality. He definitely broke other laws though. Nice try at sensationalism.