United States v. Howley
707 F.3d 575 (2013)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Information is a trade secret under 18 U.S.C. § 1839(3) if its owner takes reasonable measures to keep it secret and it derives independent economic value from not being generally known or readily ascertainable. Unauthorized photography of such information with the intent to injure its owner constitutes theft of a trade secret under 18 U.S.C. § 1832(a).
Facts:
- Clark Roberts and Sean Howley were engineers at Wyko Tire Technology, a company that supplied parts to Goodyear.
- Wyko entered into a contract with a Chinese company, HaoHua, to build tire-assembly machine parts, which Wyko had never produced before.
- Goodyear asked Wyko to repair tire-assembly machines at its plant in Topeka, Kansas.
- Before their visit, Roberts and Howley signed secrecy agreements, acknowledging they might see Goodyear's trade secrets and agreeing not to use or disclose them without permission.
- Upon arrival, a Goodyear security guard reminded Roberts and Howley that no cameras were allowed inside the factory.
- During a moment when they were left unescorted, Howley used his cell phone camera to take seven photos of a 'swabbing-down' device on one of Goodyear’s machines.
- Howley later emailed the photos to Roberts, who then forwarded them to other Wyko team members working on the HaoHua project.
- The Wyko design team used the photographs to understand Goodyear's machine design and solve problems with their own drafts for HaoHua.
Procedural Posture:
- The United States government indicted Clark Roberts and Sean Howley in federal district court.
- A jury trial was held, after which the jury convicted Roberts and Howley of seven counts related to theft of trade secrets and three counts related to wire fraud.
- The district court sentenced each defendant to four months of home confinement, 150 hours of community service, and four years of probation, after finding the government failed to prove any economic loss.
- Roberts and Howley, as appellants, appealed their convictions to the U.S. Court of Appeals for the Sixth Circuit.
- The United States government, as appellee, filed a cross-appeal challenging the sentences as procedurally unreasonable.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does information about a tire-assembly machine's design constitute a 'trade secret' under 18 U.S.C. § 1839(3) when its owner uses factory-wide security, requires visitors to sign confidentiality agreements, and prohibits photography, but does not keep the machine under lock and key?
Opinions:
Majority - Sutton, Circuit Judge
Yes. The information about Goodyear's machine design qualifies as a trade secret because sufficient evidence was presented for a jury to find that Goodyear took reasonable measures to protect it and that the information possessed independent economic value. The government presented sufficient evidence for a rational jury to find Roberts and Howley guilty of stealing trade secrets. Goodyear's protective measures—including a fenced factory, security checkpoints, visitor permission protocols, confidentiality agreements, and a no-photography rule—were reasonable, even without physically locking up the machinery. The information's economic value was demonstrated by the fact that only a few companies possess this manufacturing know-how, developing it is costly, and the defendants' own surreptitious conduct showed they could not obtain the information through proper means and believed it to be valuable for helping Goodyear's competitor. The evidence also supported the finding that Roberts and Howley knew their actions would injure Goodyear.
Analysis:
This decision clarifies the 'reasonable measures' standard for trade secret protection under the Economic Espionage Act. The court affirmed that a combination of physical security, explicit rules, and contractual obligations (like non-disclosure agreements) is sufficient, even if vendors are given access to the secret for legitimate business purposes. The ruling reinforces that a defendant's own clandestine behavior can serve as powerful evidence of both the information's value and the defendant's criminal intent. It provides a practical guide for companies on what constitutes adequate protection and for prosecutors on the evidence needed to secure a conviction.
Unlock the full brief for United States v. Howley