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Former Microsoft employee pleads guilty to theft of trade secrets

Former Microsoft Corp. employee Alex Kibkalo pleaded guilty on Monday in United States District Court in Seattle to leaking confidential company information to a technology blogger in July and August 2012.

Kibkalo was charged last month with theft of trade secrets after uploading pre-release software updates for Windows 8 RT and ARM devices, as well as Microsoft's Activation Software Development Kit (SDK), according to charging documents.

Monday's plea agreement notes that prosecutors agreed to recommend that Kibkalo serve three months in federal prison and pay Microsoft $22,500, with credit for any amounts already paid.

Kibkalo, who is currently in custody, is scheduled to be sentenced July 1 by U.S. District Judge John Coughenour, according to a court executive /clerk.

Microsoft’s investigation revealed instant messaging conversations on Kibkalo’s Hotmail account between Kibkalo and the blogger discussing transferring data between themselves, Kibkalo leaking the information as well as discussions about how they might get caught, charging papers read.

In response to the news coverage about the Kibkalo case, Microsoft’s Brad Smith released a post, “We’re listening: Additional steps to protect your privacy,” on March 28 on the company’s blog.

“Over the past week, we’ve had the opportunity to reflect further on this issue, and as a result of conversations we’ve had internally and with advocacy groups and other experts, we’ve decided to take an additional step and make an important change to our privacy practices.

“Effective immediately, if we receive information indicating that someone is using our services to traffic in stolen intellectual or physical property from Microsoft, we will not inspect a customer’s private content ourselves. Instead, we will refer the matter to law enforcement if further action is required,” wrote Microsoft’s general counsel and executive vice president of Legal and Corporate Affairs.

Kibkalo, a Russian national who had been in Lebanon at the time, transmitted the information to a technology blogger in France.

According to court documents, Kibkalo pleads guilty to knowingly stealing and sending a trade secret; knowing that the trade secret was related to or included in a product produced for or placed in interstate or foreign commerce; had the intent of economically benefitting someone other than the trade secret’s owner; and intending or knowing that his action would injure the trade secret’s owner.

 

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