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Trade Secret/Economic Espionage Cases - U.S. v. Serebryany (C.D. Cal.)

Department of Justice


Trade Secret/Economic Espionage Cases

April 28, 2003

U.S. Department of Justice
United States Attorney
Central District of California
Debra W. Yang
Thom Mrozek
Public Affairs Officer
Phone (213) 894-6947
Contact: James W. Spertus
Assistant United States Attorney
Phone: (213) 894-5872

L.A. Man Pleads Guilty to Theft of Trade Secrets for Stealing Information to DirecTV ‘Smart Card’

In the first criminal case in Los Angeles involving the theft of trade secrets, a student pleaded guilty today to stealing sensitive trade secret information belonging to DirecTV.

The trade secrets were stolen from the law offices of DirecTV’s legal counsel, Jones Day Reavis & Pogue in Los Angeles, by Igor Serebryany, a student at the University of Chicago. Serebryany, a 19-year-old Hollywood resident, admitted stealing the trade secrets from the law firm while he was working there assisting the firm with its document management needs.

The stolen trade secret information pertained to DirecTV’s latest and most sophisticated conditional access card, the “Period 4” access card. DirecTV had provided the secret information to Jones Day in connection with civil litigation between DirecTV and one of its security vendors, NDS Americas, Inc. DirecTV delivers digital entertainment and television programming to millions of homes and businesses throughout the United States. A consumer wishing to subscribe to DirecTV programming must first obtain necessary hardware items, including a conditional access card, to receive the satellite signals. The access card is a key component in the security and integrity system for DirecTV satellite programming.

DirecTV invested more than $25 million to develop the latest generation access card with the assistance of its security venders. The three previous generations of DirecTV access cards have all been compromised by hackers who have developed ways to circumvent DirecTV’s conditional access technologies. The Period 4 access card is the only DirecTV access card that has yet to be compromised by the pirate community.

Jones Day was outside counsel for DirecTV and represented DirecTV in civil litigation that was commenced in September 2002 by DirecTV against NDS. In preparation for this litigation, DirecTV and Jones Day had been actively reviewing documents pertaining to the development of the Period 4 card, and in August 2002 DirecTV delivered the trade secrets to Jones Day. Some of the trade secret information was so secret and valuable to DirecTV that DirecTV had previously maintained the information only in encrypted format on computer hard drives secured at DirecTV facilities. Serebryany stole the information after gaining access to the secrets while employed by a document imaging company that had been retained by Jones Day in relation to the litigation.

Serebryany faces a statutory maximum sentence of 10 years in federal prison when he is sentenced by United States District Judge Lourdes G. Baird on September 8.

The case was investigated by the Federal Bureau of Investigation. CONTACT: Assistant United States Attorney James W. Spertus

(213) 894-5872 Release No. 03-068


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