Why Sergey Aleynikov was freed, and why this doesn't make it any easier to lift code from a former employer

Sergey Aleynikov, the former Goldman Sachs programmer who was sentenced to eight years in prison last year for allegedly stealing proprietary code from the bank, is now officially a free man.

Aleynikov was originally charged under the National Stolen Property Act (NSPA), which makes it illegal to steal trade secrets. However, the act doesn't criminalise the theft of 'intangible' things – that would fall under copyright or other intellectual property laws - and the conviction was reversed in February.

"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 NSPA," wrote chief judge Dennis Jacobs. "We decline to stretch or update statutory words of plain and ordinary meaning in order to better accommodate the digital age."

While this essentially sets a legal precedent that physically 'stealing' code is not currently possible under law (in the US at least) any banking technologists assuming this is a victory for developers wanting to maintain the intellectual rights to the code they write for the banks will be mistaken.

Any bank hiring a developer will simply ensure that both the copyright and intellectual property of the code remains firmly with the employer, says Jill Tomasin, partner at law firm Gateley who advises banks on intellectual property issues related to electronic trading platforms.

"If an employee takes the code they've written they're likely to be infringing copyright and it's also a breach of confidence and their employment contract," she says. "The only exception could be if IT worker is sub-contracted in, meaning they're essentially self-employed, but still working on proprietary systems on behalf of the bank."

It is, of course, unlikely that investment banks would leave such a gaping loophole around code that gives them such a competitive advantage. Rather than tying contractors down with copyright or intellectual property conditions, contractors are required to sign confidentiality agreements, says Martin Rennison, head of the investment banking IT contractor division at recruiters JM Group.

"These are standard practice and banks vigorously enforce them," he says. "During the tube strike last year one contractor sent work to his home computer without notifying his line manager. He was immediately dismissed, despite being well-regarded within the organisation."

Contractors are also not immune to criminal prosecution, as the case involving Bo Zhang – a developer charged with allegedly stealing proprietary code from the Federal Reserve Bank of New York earlier this year – demonstrates.

From an employment perspective, stealing code from a former employer is unlikely to do you any favours. Aside from the fact that it's illegal, any new company taking you on is doing so in the hope your skills will help it develop a bigger and better trading platform than your previous firm's. Simply replicating something you've achieved elsewhere isn't going to win any plaudits.