United States v. Sean Howley
707 F.3d 575
| 6th Cir. | 2013Background
- Two Wyko engineers, Roberts and Howley, were convicted of seven counts of stealing trade secrets and three counts of wire fraud regarding Goodyear’s swabbing-down tire-machine designs.
- Goodyear’s Topeka plant was the site of the trade secrets; visitors signed confidentiality agreements and photography was restricted.
- Howley covertly photographed a swabbing-down device with a cell phone and emailed the photos to Wyko; Roberts forwarded them to Wyko’s team and Jones, a Wyko executive.
- Wyko pursued HaoHua, a Chinese-government-owned company, to supply four parts for eight machines, based on the Goodyear designs.
- Wyko’s IT manager later traced the photos and Goodyear notified the FBI, leading to indictments and trial lasting seven days.
- District court sentenced Roberts and Howley to four months of home confinement, 150 hours of community service, and four years of probation, with the government appealing the sentences as too lenient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence for trade-secret theft | Government evidence supported secrecy and value. | Defense argued insufficiency or misapplication of the secrecy standard. | Yes; reasonable jury could find elements proven beyond reasonable doubt. |
| Vagueness of 18 U.S.C. § 1832 | Statute not unconstitutionally vague as applied. | Statute unconstitutionally vague. | Not vague as applied; constitutionality preserved. |
| Sufficiency of wire-fraud proof | Taking and transmitting photos was a material misrepresentation. | Insufficient proof of misrepresentation or intent to deprive. | Court upheld wire-fraud convictions. |
| Sentencing and loss calculation on remand | District court should use reliable loss estimate; possible zero or near-zero loss. | Court failed to provide adequate explanation for loss figure; reliance on Daubert issues. | Remand for resentencing with a reasoned, reasonable loss estimate. |
Key Cases Cited
- United States v. Yang, 281 F.3d 534 (6th Cir. 2002) (vagueness challenge to § 1832 rejected earlier)
- United States v. Lange, 312 F.3d 263 (7th Cir. 2002) (reasonableness of trade-secret protections acknowledged)
- Rockwell Graphic Sys., Inc. v. DEV Indus., Inc., 925 F.2d 174 (7th Cir. 1991) (vendor confidentiality imputed to disclosing party)
- Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1984) (trade secrets as property; IP value basis)
- United States v. Warshak, 631 F.3d 266 (6th Cir. 2010) (necessity of explaining loss estimates under U.S.S.G. 2B1.1)
- United States v. McCarty, 628 F.3d 284 (6th Cir. 2010) (guidelines loss estimates must be reasonable and explained)