2nd Circuit holds theft of computer code not covered under National Stolen Property Act

The Second Circuit has joined a list of courts in finding that the National Stolen Property Act does not criminalize the theft of "purely intangible property." United States v. Aleynikov, 2012 U.S. App. LEXIS 7439 (2d Cir. 2012).

Aleynikov encrypted and uploaded 500,000 lines of code to a server on his last day of work before beginning a new job. He later downloaded the source code onto his home computer, was arrested nearly a month later, and was charged with violations of the CFAA and NSPA. The CFAA charge was dismissed because he "was authorized to access the Goldman computer and did not exceed the scope of his authorization."

The NSPA criminalizes when a person "transports, transmits, or transfers in interstate or foreign commerce any goods, wares, merchandise, securities or money, of the value of $5,000 or more, knowing the same to have been stolen, converted or taken by fraud." The statute does not define the terms, and the Second Circuit determined that requiring "the taking of a physical thing 'comports with the common-sense meaning of the statutory language.'" The conviction was reversed as the code is intangible and the theft did not "deprive its owner of its use."

The Tenth Circuit (finding that "purely intellectual property is not within the category" of the NSPA (United States v. Brown, 925 F.2d 1301, 1309 (10th Cir. 1991)), Seventh Circuit (codes are "information" and not "goods" (United States v. Stafford, 136 F.3d 1109 (7th Cir. 1998)), and the First Circuit (United States v. Martin, 228 F.3d 1 (1st Cir. 2000)) have held similarly that intangible property is not covered.

All of the circuits addressing the NSPA have dealt with intellectual property. In finding that property is essentially either physical or intellectual, the courts appear to have ignored the possibility of virtual property. Though the concept of property in virtual worlds hasn't become a hot topic in American courts, many European courts have recognized such rights (see, for example, this article detailing a Dutch conviction for theft of a virtual  world amulet and shield).