The Theft of Trade Secrets Clarification Act of 2012

On Tuesday, November 27, 2012, the United States Senate unanimously passed the Theft of Trade Secrets Clarification Act of 2012 (“Clarification Act”). Introduced by Sen. Patrick Leahy (D-Vt.) and retiring Sen. Herb Kohl (D-Wis.), the Clarification Act amends specific language in the Economic Espionage Act (“EEA”) in response to a recent court decision that had potentially limited the EEA's reach.

In United States v. Aleynikov, the United States Court of Appeals for the Second Circuit recently vacated former Goldman Sachs computer programmer Sergey Aleynikov’s conviction for theft of trade secrets under the EEA. A jury convicted Aleynikov of criminal trade secrets theft after he copied hundreds of thousands of lines of code related to Goldman Sachs' high-frequency trading business to his home computer; he had planned to use the code to develop a similar trading platform. However, on appeal, the Second Circuit determined that the source code in question was not related to a product "produced for . . . interstate or foreign commerce" as required by the EEA.

As discussed in TSI’s Case Report on Aleynikov, the controversial “ decision called into question the government's ability to prosecute theft of internal trading systems or other internal financial instruments under the Economic Espionage Act.” In response to this judicial “narrowing,” the Clarification Act broadens the EEA’s reach by striking the relevant language in § 1832(a) (i.e. ‘‘or included in a product that is produced for or placed in’’) and inserting ‘‘a product or service used in or intended for use in’’.