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May 2, 2003

Second-year pleads guilty to stealing secret from satellite TV provider

Igor Serebryany, a second-year in the College, pleaded guilty Monday to stealing DirecTV trade secrets, striking a deal with prosecutors in Los Angeles that will likely keep him from a decade-long prison sentence.

Though experts say Serebryany's confession keeps his case from becoming the basis for precedent of intellectual theft, the swirl factors involved here--computer hacking, freedom of speech, and the sheer magnitude of DirecTV's market-share--presents a compelling case in the short history of intellectual law.

At a summer job last year Serebryany gained access to password cards that allow DirecTV customers to receive programming. He then passed the sensitive information across the Internet.

DirecTV, the nation's largest satellite TV service, spent approximately $25 million to develop the access card, according to the FBI. Last fall, DirecTV caught 50,000 customers using counterfeit access cards, perhaps due in part to Serebryany's distribution.

"I did something stupid--plain and simple," Serebryany said.

Serebryany will pay almost $150,000 for the theft.

Meanwhile, prosecutors dropped two of the three counts of trade-secret theft and recommended probation, lowering Serebryany's possible jail sentence from 30 to 10 years.

While Serebryany may be sent to prison, courts generally follow prosecutors' recommendations with respect to sentencing, according to Lior Strahilevitz, assistant law professor at the Law School.

"Had Serebryany gone to trial, he would have risked severe punishment," Strahilevitz said.

Of the $146,085 Serebryany will pay in restitution, $68,048 will go to reimbursing DirecTV for its pricey investigation into the theft of the access card.

The card is inserted into a viewer's satellite box and controls which channels each customer can watch.

"I could have caused a lot of damage to a company that has every right to protect its products and to earn money," Serebryany said. "Money which would pay the salaries of hundreds or even thousands of people."

Serebryany's crime is amplified by the magnitude of DirecTV's share of the market. Since they have approximately 11 million subscribers, the economic stakes are high.

"My client has taken full responsibility for his actions," said Nina Marino, Serebryany's attorney.

"He has learned a life-altering lesson, which carries permanent consequences to his future and the loss of his civil liberties."

Serebryany is being prosecuted under the Economic Espionage Act (EEA), a 1996 prohibition of sharing trade secrets for financial benefit, though Serebryany distributed the codes for free.

Enacted during the Clinton administration, the EEA was designed to prevent employees from taking advantage of confidential information gained, discovered, copied, or taken while employed elsewhere.

"You can break the law by either stealing a trade secret or distributing a trade secret, and the government evidently accused Serebryany of doing both," Strahilevitz said.

According to Strahilevitz, Sebebryany's profile seems similar to that of many hackers: well educated, technically skilled, and young.

"Many people are drawn to this type of crime because they enjoy the challenge and adrenaline rush associated with breaking the law or believe that intellectual property should be available to the public for free," Strahilevitz said.

Strahilevitz said judges often issue lenient sentences to people who fit this profile because they believe that the perpetrators are unlikely to break the law again.

"They want to reserve the harshest sentences for those convicted of violent crimes or drug crimes," Strahilevitz said.

Serebryany's case also brings into focus the issue of how freedom of speech relates to the surge of expression of ideas over the Internet, and the contrasting extents to which different generations understand their rights.

"I thought that it was no big deal simply because it was on a computer, on the Internet," Serebryany said.

"One might argue that the First Amendment prohibits the government from punishing the publication of truthful information, even if it is a trade secret."

Strahilevitz added that though the issue of free speech in Serebryany's case is debatable, he still clearly broke the law.

"Even a valid First Amendment defense wouldn't have gotten him off the hook for the theft," Strahilevitz said.

Serebryany said the University community has supported him during his ordeal. Looking forward to moving on with his life, he said he has learned a great lesson.

"I took things that did not belong to me, and in the process, I hurt myself and my family," Serebryany said.

"I only hope that I will be able to continue my studies and somehow make up for al the trouble that I've caused everyone."

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