## Facts

- The United States prosecuted Kai-Lo Hsu under the Economic Espionage Act of 1996 (EEA), including 18 U.S.C. § 1832 (theft of trade secrets).
- The indictment included counts charging conspiracy to steal trade secrets (§ 1832(a)(5)) and attempted theft of trade secrets (§ 1832(a)(4)), tied to Bristol-Myers Squibb’s “second generation” Taxol technology.
- The government alleged that Hsu sought confidential Taxol-related information, believed the information contained trade secrets, and thought he could obtain it only by bribing a Bristol-Myers employee to provide confidential documents.
- In litigation involving in camera review and related appellate proceedings, it emerged that many documents at issue contained public-domain information, creating disputes over whether specific documents qualified as trade secrets.
- Hsu moved pretrial to dismiss the EEA attempt and conspiracy counts, arguing the statute was unconstitutionally vague.

## Issues

1. Whether § 1832 is unconstitutionally vague because it does not define the phrase “related to or included in” a product produced for or placed in interstate or foreign commerce.
2. Whether the statutory definition of “trade secret” in § 1839(3) is unconstitutionally vague because it uses standards such as “reasonable measures” to maintain secrecy and whether information is “generally known” or “readily ascertainable.”

## Decision

- The court denied the motion to dismiss the EEA counts.
- The court held the EEA was not unconstitutionally vague as applied to Hsu.
- The court concluded that “related to or included in” provides adequate notice and can reach research and development information connected to products intended for interstate or foreign commerce.
- The court held that the trade-secret definition’s use of terms such as “reasonable measures,” “generally known,” and “readily ascertainable” was sufficiently definite in this prosecution.
- The court emphasized that attempt and conspiracy charges focus on intent and substantial steps or agreement, reducing the significance of uncertainty about whether particular documents ultimately met the trade-secret definition.

## Legal Principles

- A criminal statute satisfies due process if it provides fair notice of prohibited conduct to ordinary people and contains sufficient standards to limit arbitrary enforcement.
- The EEA’s interstate-commerce nexus (“related to or included in” a product produced for or placed in commerce) can encompass pre-commercial research and development information when tied to products destined for commerce.
- Statutory use of flexible, standards-based terms (e.g., “reasonable measures”) is not automatically void for vagueness; context and existing legal and commercial understandings can supply workable meaning.
- In as-applied vagueness analysis, a defendant’s alleged knowledge that information was proprietary and efforts to obtain it through improper means can support fair notice that the conduct falls within the statute’s core.
- For EEA attempt and conspiracy charges, the government must prove intent and substantial steps (attempt) or agreement and intent (conspiracy), not that the targeted material ultimately satisfies every element of a completed trade-secret theft.

## Conclusion

The court allowed EEA attempt and conspiracy counts to proceed, holding that the Act’s commerce nexus and trade-secret definition gave sufficient notice and enforcement standards as applied to alleged efforts to obtain proprietary technology through bribery and other improper means.


United States v. Hsu, 40 F. Supp. 2d 623 (E.D. Pa. 1999)