## Facts

- Wilsonart International, Inc. developed a proprietary process for applying hard coatings to laminate contact surfaces of caul plates.
- Wilsonart contracted with Vactec Coatings, Inc. for research and testing; Vactec’s owner, Robert Amis, hired Federal Industrial Services, Inc. to help prepare equipment for the testing process.
- David T. Krumrei, a Federal Industrial Services employee, assisted Amis with the coating machine and learned information through observation and discussions with Amis.
- Wilsonart invested significant effort to safeguard proprietary technology and business information, and Wilsonart and Amis agreed (ultimately in writing) to “absolute confidentiality” regarding the work.
- Amis personally told Krumrei the work was confidential.
- In 1996, Krumrei approached CSR Limited, a Wilsonart competitor, offering to help CSR develop Wilsonart’s coating process.
- After CSR notified Wilsonart, a private investigator (working with law enforcement) posed as a CSR representative and met with Krumrei.
- At a January 10, 1997 meeting, Krumrei offered to sell confidential information about the process for $350,000 and disclosed some of the information.
- Krumrei was indicted under 18 U.S.C. § 1832(a)(2); after the district court denied his motion to dismiss for vagueness, he entered a conditional guilty plea preserving the vagueness issue.

## Issues

1. Whether the Economic Espionage Act’s definition of “trade secret,” including the requirement that the owner take “reasonable measures” to maintain secrecy, is unconstitutionally vague as applied to Krumrei.

## Decision

- The Sixth Circuit affirmed the denial of Krumrei’s motion to dismiss and affirmed the judgment of conviction.
- The court held that 18 U.S.C. § 1839(3) is not unconstitutionally vague as applied to Krumrei.
- The court found Krumrei had adequate notice that the information he sought to sell fell within the statute’s trade-secret definition.
- The court concluded that the evidence showed Wilsonart took reasonable steps to keep the information secret, and the statute did not invite arbitrary enforcement on these facts.

## Legal Principles

- Vagueness challenges to criminal statutes are evaluated as applied to the defendant’s conduct; the question is whether the statute provides fair notice and guards against arbitrary enforcement in the case at hand.
- The EEA’s “reasonable measures” secrecy requirement uses a reasonableness standard commonly applied in trade secret law and need not enumerate specific security procedures to satisfy due process.
- A defendant’s knowledge that information is proprietary and confidential, together with evidence of actual confidentiality practices and agreements, supports application of the EEA’s trade-secret definition and defeats an as-applied vagueness claim.
- Due process permits Congress to employ flexible statutory terms such as “reasonable” when the standard has established legal meaning and is workable in concrete applications.

## Conclusion

The Sixth Circuit upheld Krumrei’s conviction, ruling that the EEA’s trade-secret definition—including its “reasonable measures” secrecy element—gave sufficient notice and was not vague as applied where the owner used confidentiality protections and the defendant understood he was attempting to sell proprietary, secret information.


United States v. Krumrei, 258 F.3d 535 (6th Cir. 2001)