Fascinating story in the Economist about the case of Sergey Aleynikov, a Goldman Sachs programmer, who was convicted in December 2010 of stealing code tied to Goldman’s lucrative high-speed proprietary-trading operations for use by a new employer.

On February 16th, after he had spent nearly a year in prison, three judges in a federal appeals court unanimously reversed his conviction in a hearing that lasted just a single morning. Their written opinion is now eagerly awaited.

Mr Aleynikov admitted to taking code with him on his way out of Goldman, but argued successfully that this did not constitute a crime, or, to be more specific, a federal crime. He benefited from the help of a thorough lawyer, who adroitly knocked down two key claims. Because the computer trading system was not licensed or offered for sale, claimed Kevin Marino, the defendant’s lawyer, it was not a product to be bought or sold for interstate commerce, a key provision for a federal case. Because computer coding constitutes intangible intellectual property, Mr Marino said, it did not qualify under the goods, wares or merchandise components that are protected under the corporate-espionage act.

The judges quickly accepted these arguments. It is possible that lesser charges could be brought in a state court by a different prosecutor. But as it stands, the ruling raises questions about what sort of legal protection financial firms enjoy for technical knowledge that has become as important as capital or clients and that sits with a few highly mobile employees. The banks may have no choice but to inspire loyalty in their programmers so they don’t leave in the first place.