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

Department of Justice


Trade Secret/Economic Espionage Cases

January 16, 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

Los Angeles Man Indicted For Theft of Trade Secrets

For Stealing Information Pertaining to DirecTV’s Most Advanced Conditional Access Card

In the first federal criminal case in Los Angeles involving the theft of trade secrets, a Los Angeles man was indicted today on three felony counts for allegedly stealing sensitive information belonging to satellite entertainment provider DirecTV. The indictment, which was returned this afternoon by a federal grand jury in Los Angeles, charges that Igor Serebryany, a 19-year-old student at the University of Chicago, stole trade secrets pertaining to DirecTV’s latest and most sophisticated conditional access card, the “Period 4” access card. The trade secrets were stolen from the law offices of DirecTV’s legal counsel, Jones Day Reavis & Pogue in Los Angeles. DirecTV had provided this information to Jones Day in connection with civil litigation between DirecTV and one of its security vendors, NDS Americas, Inc. Serebryany allegedly stole the information while working for a document-imaging company that Jones Day had retained in the DirecTV litigation. DirecTV delivers digital 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 Period 4 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.

Jones Day was outside counsel for DirecTV and represented the company in civil litigation that was commenced on September 6, 2002 by DirecTV against NDS, the developer and supplier of the proprietary encryption and smart card technology for DirecTV. 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 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. The Indictment charges that in September 2002, some of this most highly sensitive trade secret information was stolen from DirecTV and distributed by Serebryany. These secrets included confidential internal design notes and correspondence between DirecTV and NDS regarding the Period 4 access card architecture and security features. Serebryany is charged with three counts of theft of trade secrets, each one of which carries a statutory maximum sentence of 10 years in federal prison. Serebryany is scheduled to be arraigned on the indictment on January 27. The case was investigated by the Federal Bureau of Investigation. CONTACT: Assistant United States Attorney James W. Spertus (213) 894-5872

Release No. 02-007


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