## Facts

- Portions of Microsoft Windows NT 4.0 and Windows 2000 source code appeared online in February 2004.
- The indictment alleged William P. Genovese, Jr. downloaded the source code and offered it for sale through his website.
- Genovese posted an advertisement stating the “win2000 source code [was] jacked” and offered to provide a password to his FTP server in exchange for payment.
- A Microsoft-retained investigator paid Genovese and received password-protected FTP access to the code; Microsoft then contacted the FBI.
- In July 2004, an undercover federal agent separately purchased access to the source code from Genovese through the same FTP method.
- Genovese was indicted for violating 18 U.S.C. § 1832(a)(2) based on alleged unauthorized downloading, copying, and selling of trade secrets.

## Issues

1. Whether 18 U.S.C. § 1832(a)(2) is facially overbroad under the First Amendment because it could reach protected speech involving source code.
2. Whether § 1832 is unconstitutionally vague as applied where the source code had already been posted on the Internet by unknown third parties.

## Decision

- The court denied the motion to dismiss the indictment under Federal Rule of Criminal Procedure 12(b)(3)(B).
- The court held § 1832(a)(2) is not facially overbroad because it targets unauthorized, economically motivated misappropriation and trafficking in trade secrets, not protected expression.
- The court held § 1832 is not unconstitutionally vague as applied because the statute’s definitions and mens rea requirements provide adequate notice and limit arbitrary enforcement.
- The court concluded that the prior online appearance of the code did not, at the pleading stage, defeat the allegation that it remained a trade secret or that Genovese knew he was trafficking in misappropriated proprietary information.

## Legal Principles

- Computer source code may have First Amendment protection, but statutes aimed at unauthorized acquisition and commercialization of trade secrets regulate conduct, not protected speech, when tied to economic-conversion and injury-to-owner intent elements.
- A facial overbreadth challenge fails absent a showing that unconstitutional applications are substantial relative to the statute’s legitimate sweep.
- The Economic Espionage Act’s definition of “trade secret” (reasonable secrecy measures and economic value from not being generally known), combined with knowledge and intent requirements, can supply constitutionally sufficient notice for vagueness purposes.
- Material posted online by third parties does not automatically eliminate trade-secret status as a matter of law at the indictment stage; allegations of continued secrecy measures and value are assumed true on a motion to dismiss.
- A defendant’s statements and sales methods (e.g., describing code as “jacked” and selling password-protected access) may support inferences of knowledge that the information was proprietary and improperly obtained.

## Conclusion

The court allowed the prosecution to proceed, holding that § 1832 validly criminalizes unauthorized, economically motivated dealings in trade secrets and that the statute gave Genovese sufficient notice, notwithstanding the code’s prior appearance on the Internet.


United States v. Genovese, 409 F. Supp. 2d 253 (S.D.N.Y. 2005)