United States v. Liew, No. 14-10367 (9th Cir. 2017)
Annotate this CaseWalter Liew and his company, USAPTI, challenged eight counts of conviction under the Economic Espionage Act of 1996 (EEA), 18 U.S.C. 1831(a), for charges related to their unauthorized use of DuPont chloride-route technology for producing titanium dioxide. Defendants also appealed their convictions for conspiracy to tamper with witnesses and evidence. The Ninth Circuit held that the district court did not err by giving a jury instruction regarding compilations; by rejecting a public-disclosure instruction; and by rejecting the reverse engineering and general knowledge instructions. The Ninth Circuit also held that defendants waived their right to have their argument related to the conspiracy and attempt instructions reviewed; even if this issue were reviewable, an intervening Ninth Circuit decision resolved it (United States v. Nosal). The Ninth Circuit rejected challenges to the sufficiency of trade secret evidence regarding substantive trade secret counts. However, the Ninth Circuit reversed defendants' convictions as to conspiracy to obstruct justice where the statement at issue tacked too close to a general denial to constitute obstruction of justice, and as to witness tampering where the evidence was insufficient to prove beyond a reasonable doubt that Liew intimidated, threatened or corruptly persuaded a witness. Finally, the Ninth Circuit held that the district court did not err by not requiring the prosecution to disclose rough notes of the FBI's interviews with a deceased coconspirator. Accordingly, the Ninth Circuit affirmed in part, reversed in part, vacated in part, and remanded.
Court Description: Criminal Law. The panel affirmed in part, reversed in part, vacated in part, and remanded, in a case in which Walter Liew and his company USA Performance Technology, Inc. were convicted of multiple offenses including conspiracy and attempt to commit economic espionage and theft of trade secrets, possession of misappropriated trade secrets, and conveying trade secrets related to E.I. du Pont de Nemours and Company chloride-route technology for producing titanium dioxide (TiO2). The panel held that the district court did not commit reversible error in giving a jury instruction regarding compilations; or in rejecting a public-disclosure instruction, an instruction regarding disclosure to a single recipient, and reverse-engineering/general-knowledge instructions. The panel held that the defendants waived their right to obtain review of their arguments that the district court’s conspiracy and attempt instructions constructively amended the indictment and erroneously allowed the jury to convict UNITED STATES V. LIEW 3 without finding that the trade secrets involved were in fact trade secrets. The panel held that even if the issue were reviewable, United States v. Nosal, 844 F.3d 1024 (9th Cir. 2016), establishes that the conspiracy and attempt instructions were legally correct and did not constructively amend the indictment; and that any error was harmless. The panel rejected the defendants’ sufficiency-of-the- evidence challenges relating to substantive trade secret counts. The panel explained that the government was not required to prove that no disclosures of DuPont’s TiO2 technology occurred; instead, it needed to establish that DuPont took reasonable measures to guard that technology. The panel held that the defendants failed to show that the sale of an Ashtabula, Ohio factory was unreasonable, particularly under the Economic Espionage Act’s then-requirement that trade secrets not be generally known to “the public.” The panel concluded that a rational juror could have found that the high-grade ore technology used at the Antioch, California and Ashtabula plants was not part of the trade secrets covered by Counts 6–9, which involved low-grade ore technology; that DuPont took reasonable measures to protect its technology; and that such technology was not readily ascertainable by or generally known to the public. The panel reversed the defendants’ convictions for conspiracy to obstruct justice by agreeing to file a false answer in civil litigation with DuPont. The panel wrote that the statement in the defendants’ answer – that they “never misappropriated any information from DuPont or any of its locations” – tacked too close to a general denial to constitute obstruction of justice. 4 UNITED STATES V. LIEW The panel reversed Liew’s conviction for witness tampering. The panel wrote that standing alone, evidence that Liew told a witness not to mention anything about former DuPont employees who worked for USA Performance Technology because doing so would not be good for the witness or his family was insufficient to prove beyond a reasonable doubt that Liew intimidated, threatened, or corruptly persuaded the witness to prevent the use of his testimony in the DuPont lawsuit. The panel held that the district court erred by not requiring the prosecution to disclose the FBI’s interviews with a deceased co-conspirator, where the defendants produced a declaration by the co-conspirator’s attorney that supported an inference that the rough notes contained favorable material. The panel remanded for in camera review of the material to determine whether disclosure might have affected the outcome of the trial.
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