Ex-Microsoft worker accused of trade-secret leaks (Update)

March 20, 2014

FBI agents arrested a former Microsoft employee Wednesday on charges that he stole trade secrets from the company and leaked them to a blogger.

Federal prosecutors are accusing Alex A. Kibkalo of stealing trade secrets related to pre-release software updates for Windows 8 and Microsoft's "Activation Server Software Development Kit," and giving that information to a tech blogger in France.

Kibkalo is a Russian national and former seven-year Microsoft employee who worked as a software architect in Lebanon, according to a complaint filed Monday in U.S. District Court in Western Washington.

Federal agents made the arrest Wednesday morning in Bellevue, where he apparently was traveling. He lives in Russia, The Seattle Times reported.

The complaint says an internal investigation by Microsoft concluded that in July and August 2012, Kibkalo uploaded the proprietary software to a computer in Redmond and then to his personal SkyDrive account.

Kibkalo then allegedly provided the blogger with links to the files on his account and encouraged the blogger to share the software development kit with those "who might be able to reverse engineer the software and write 'fake activation server' code," the complaint says.

Microsoft investigators interviewed Kibkalo in September 2012, and Kibkalo admitted he had provided confidential Microsoft products and information to the blogger, including "internal unreleased 'hotfixes' for Windows 8, 'code for the PID generator' (a technical description of the SDK), unreleased versions of Windows Live messenger and documents and presentations about products," an FBI agent said in the complaint.

The Windows 8 hotfixes were intended to update and correct critical operating system flaws prior to the release of the operating system.

The blogger to whom Kibkalo allegedly provided the information is unnamed in the complaint but "was known to those in the Microsoft blogging community for posting screenshots of pre-release versions of the Windows Operating System." That blogger "deliberately hid his identity," the complaint says.

The blogger allegedly admitted in an interview to "knowingly obtaining confidential and proprietary Microsoft IP from Kibkalo, and selling Windows Server activation keys on eBay." The complaint also says computer files found in the blogger's home showed the blogger trying to get Kibkalo to find pre-release software, attempting to use Kibkalo's corporate network access to get into Microsoft servers, and discussing Kibkalo leaking data.

Microsoft issued a statement Wednesday, saying: "We take protection of our intellectual property very seriously, including cooperating with law enforcement agencies who are investigating potential criminal actions by our employees or others."

Kibkalo could not be immediately reached for comment.

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