numbers thirteen sixteen zero six thirteen sixteen zero seven thirteen seventeen seventy eight thirteen seventeen eighty one united states of america versus to the judges here to judge cook my name is elizabeth jacobs i represent she and she can do i'd like to reserve three minutes of time for my rebuttal and also for argument on the cross appeal the sentencing issue address the sufficiency issue there are two issues that i want to address under sufficiency the second one is going to i'm going to talk about the intent to convert and that it was absent in this case the first issue i want to talk about has to do with trade secrets if the documents that miss to disaster were not trade secrets then they do not deserve federal protection federal statutory protection there right where is the test for it's whether the company there are three whether the company took reasonable measures to protect the information whether the documents were not generally known to the public and whether the information derives independent economic value from being secret and i want to talk about that first one about whether reasonable measures were taken by g m g m did have a policy and their policy was that the documents that they possessed were proprietary that they were classified either as nine classified or classified material under classified there were two there were two classifications one is g m secret and the other is g confidential the document was g m secret it was mandatory that it be encrypted if it was going to be used in any kind of electronics was going to be sent by e mail it was mandatory that it would be encrypted  confidential documents i think it was a little bit more there was a little bit more room to move in this case not one document was marked secret none of the documents were encrypted so although g m has a policy it is a policy that it's not enforced and therefore it can't be reasonable because the staff to ted had to have taken reasonable measures and the policy in name only is not a real it's not a reasonable policy the evidence at trial suggests that g m teaches constantly their employees about their security policy and they tell them that if  secret it's encrypted and you cannot disclose it so the question one of the questions that you're faced with is what is an employee who has been trained to know that if it and it's even if it's not encrypted correct you can't disclose it and no document in front of her had the words secret the policy help me understand a little bit better how the system operated because isn't part of the reasonable measures to keep the information secret the generic things that g m did in the system itself you're talking about the sharing of documents within the protected system yes correct so so you're talking about whether they have to be encoded even when they're shipped internally but wasn't there a significant amount of external protection from others to get into the system and is that is that not a qualifying explanation under the law and in your estimation are you referring to things like if it was password protected the information was there it was a locked facility that there was a badge and firewall protections the kind of standard things that are done to prevent someone in the public which is part of the issue here from accessing those documents and i think this is a very different case i mean you're right there were all of those procedures in place but those are the kinds of procedures that are used to protect i think i referred to this in my brief this twentieth century security procedures for twentieth century technology so you could have all of the locks and all of the secret codes that you want in your and the computer room and put a computer in there but if i can dial up that computer and get information about their computer there hasn't been any reasonable measure taken to protect secrets you know were they would have educate me a little more on technology because i'm struggling with i know it has to be reasonable but we know at what pace technology changes and i don't imagine there are many offices even in large corporate offices that keep pace everyone struggles to do that and it's very expensive so i would like you to educate me on what it is the wall requires from the technology i'm looking kind of at my generic list it's password protected barbe remote access which is the public issue firewall protected internal network from outside intrusion additional password protections on folders in addition to the security training the very thing that's going on if you've got security personnel who purportedly check bags and employees carry it in and out of the building you've got nondisclosure agreements no system is going to be perfect what does why do those not rise to the level of indicating a reasonable effort to maintain privacy i think that if you were g m and you have a security officer i think his name was in this particular intellectual property officer that you have and you have all the engineers in the world at your disposal that you you do try and take reasonable measures to keep up to date this was this occurred in two thousand and three we pad e mails and access to computers for ten to twenty years now g m did have a policy we had a policy about thumb drives we're not sure what it is because g m s policy or not  cleared did you have to have permission to use a thumb drive or could you could you just use a thumb drive and take documents home with you so they understood what twenty first century technology was they just went and forcing it and my argument is that if you've system well it's password protected there's a need to know basis and in this particular instance my client came into the she had authorization for the possession of these documents so the need to know and password protection that they at a reasonable measure but she had authority in this particular case there's a problem because the prosecution tried to use the try do to take an intent to convert and claim that that she did not have authority to use the to have these documents and therefore you can infer an intent to convert however she did have authority she there's no evidence that she hacked into the system there is evidence that she that some of these documents were given to her by a man named slobodan get a rock who came up from allied transmission in allowed it's allowed its personnel to take these documents home with them and that's not a reasonable match or they should have been cryptic i think that the defense expert talked about there i did not try the case the evidence fails to show that mr chen in this case knew that these were trade secrets because again the trade secrets were not mark he was external to the corporation he was an electrical engineer in the field he was a professor and he knows that the information is largely in the public domain also as to that part of the g m specific application that was not in the public domain his wife was carrying this information home on a thumb drive and that would suggest to mr chen that they aren't being treated as trade secrets by g m he's not an employee so in contrast to some of the other cases you'll see he wasn't trained as to these documents he didn't sign a confidentiality agreement the he got them from he didn't testify on you know the government argued that he got them from his wife how in cases distinguishable in an answer in the answer when your question is could there ever be a trade secrets case based upon this argument in the howly case you had a contract employee that was external to a good year or go into the facility bring a little a little camera and then take pictures of the of the machine that  needed for his own company so yes that would be there are situations in which this could happen in terms of the intent to convert if mr chen knows about g m s trade secrets without an intention to convert that technology he's not guilty of this offense the suitcase as you from the third circuit has held that this legislation does not in any way prohibit companies or inventors from using their skills knowledge and experience to solve a his company did not utilize hybrid technology of g m whatsoever so there's two different companies one is this cherry motors plan and that was a plan that was supposed to go to china it's very clear from the e mails and from the planned work up itself that that did not contain g m technology and in fact they had done an analysis of their plan which was generated by doctors and they had compared their plan to what g m was using which had already been to market in the s s ten and they had found that their plan was better so they weren't even going to use g m technology in the cherry motors plant and there's really no evidence that in i they were going to use the g m technology either so what you have in this case with respect to mr mr chin is that you have someone who is a professor who is also trying to help his wife was not being very productive with her  not being very productive at g m he's knowing it ok so he's i he obviously has access all this information and he's knowing it but there were the statute requires more it requires an intent to convert and in this case it also you also can use the howling case again just to see what is missing here in the howly case the go in the white go engineer went into goodyear and he already had a plan in action and they actually were comparing their plan to what goodyear had in terms of the the steel radial tire and there was a swapping down device and what they said and what the evidence showed is their plan the wake up plane was inferior so they really needed to get in and see what goodyear was doing that's the opposite of what's happening here here they had already determined that their plan was better so all you're taking here is knowledge and knowledge alone is not sufficient under the statute the wire fraud evidence was also insufficient the statute requires obtaining of property by means of a misrepresentation it's not enough to have someone obtain property and have some false statement somewhere else temporarily or logically in the process the statute requires a nexus and that's what was missing here the government states the carpenter case united states supreme court in carpenter wall street journal reporter knows that his article will have an effect on the stock market for a fee he disclosed in advance stock brokers and they all do insider trading there at the supreme court found that the government had met all the elements and that there was a convergence between them there was a logical and temporal convergence the reporter was deceiving his newspaper and misappropriating the journal's property convey others that constituted the fried because there was a nexus between the deceit and the taking of property this case is just a ball from the card from the carpenter case the flair for be evidence issue we believe that the four for b challenge was preserved here there was an in women a motion filed early on the defense prevailed there was an interlocutory appeal to by the government the defense prevailed and when there was a case came to trial the government debt dumped a he said i don't want to talk about that now object as they are proffered so when the tape comes up the very first clip he doesn't object to the first clip but doing clip number three that's twenty six point three he asked during the playing of it he wants to approach the judge says let's complete this first they finished playing clip number three he asked to approach again before clip number four she overrules him at that point up at the bench she admits it into evidence she sa in lying what happens the next day that would be november eighth confirms our interpretation of this whole preservation issue the defense counsel moves to strike because it says all of this testimony because she has he has forbidden for for be evidence there was no four for be evidence or notice and it's prejudicial the trial judge rules that if she says it's not true or for be material it's part of the chain of what happened it's not another crime the government never claims at any time during that that there had not been an objection the purpose of the contemporaneous objection rules to for trial counsel an opportunity to cure the problem this claim was preserved here the judge understood everybody understood what the objection was and the judge ruled on it obviously the evidence that was presented the extensive evidence that was presented it's clear though from that happen and the policy was not that all information all documents all technology containing trade secret information had to be mark classified or secret there were a number of engineers who testified to that policy that they testified that it was not the case that all trade secret information had to be marked as such the chief information officer testified as well that that was not the case the district court's conclusion that there was an abundance of evidence on reason measures is fully supported by the evidence with respect to defendant does argument that there was no there was insufficient evidence with respect her intent to convert because she had authorization to possess all the trade secret information again the evidence presented at trial was to the contrary defendant duce manager testified that information that was in her possession and that was found on personal computer devices did not relate to her work and secondly when she left she certainly didn't have the authorization to have trade secret information after that point with respect  to defendant shin's argument that the evidence was insufficient on intent to convert because to finish and had to know that the technology that he possessed was trade secret information we would argue first that that argument has been waived that it was not raised below at the close of the government's proof it certainly has not been developed in the breeze it was referenced but just barely and that issue is a complex an issue for instance is defendant in a defendant shen claiming that the government was required to prove that he knew that the technology he possessed met every element of the definition of trade secrets that is did defendant should have to know the reasonable measures that g m had taken to protect their information the government position would be absolutely not that there is no element within the trade secret statute that requires the defendant know that the information within its possession meets the statutory definition of trade secrets so and that would be that if that's the position that would be certainly difficult for for the government to me not necessarily in this case but in other cases where you have an outsider or hacker who has stolen trade secret information of a company  no your honor to the contrary there are safeguards that are within the other elements of the offense for instance the government has to show that the defendants knew that they possessed g m proprietary information the government has to prove that the defendants knew that they possessed that information without authorization so they had no claim to the information they know that they've basically stolen i t and so that would  secret they know that they have information that doesn't belong to them that's correct that is correct but the government still has to prove that the information is in fact trade secret information to be to meet it burden with respect to the substantive offense we still have to show absolutely acceptable to him even though it belong they can say that belongs to g m but there's no problem with me having it now the they would have to know that they have no claim to it they have to know that they have it they possess it without authorization that is the the if they said well i just thought that i that it was in the public  well that wouldn't that wouldn't satisfy crack that because the government would have to show that that they knew that they did not have a claim to it well they would have a claim to it if it's in the public domain it would have the or have the authorization happened so but in this case i guess what i'm trying to say is that that is it is a complicated issue it's not been briefed the government certainly would have wanted to not to be to breach that legal issue in the event the the court does nonetheless go in that direction there certainly was evidence in this case that defendant ssion knew that what he has possessed was in fact trade secrets the documents many of them were marked with proprietary warnings the nature of the technology we're talking about hybrid vehicle technology that shannon his own email described as cutting edge technology he certainly didn't get the trade secret technology from the public domain in this case you can get it off the internet and hide his various actions constituting consciousness of guilt his shredding of among other things the g m source code indicates that he well knew that what he  was he certainly wasn't entitled to it and had value and belonged to someone else with respect to the intend or know that the offense woods injure the owner of the trade secret they were instructed on the elements of the definition of trade secret including reasonable measures and the government had to prove beyond a reasonable doubt that the technology at issue met the criteria in the in the definition of trade secrets and eight hundred thirty nine so the government had well the courts certainly did the court instructed the jury on the four mens rea a criteria that are set forth in the statute that knowingly possess the information knowing that the information has been stolen or appropriated or converted without authorization center stage because it is an important issue not just for this case but for other cases as well with respect to the his respects to the other evidence on  intent to convert others in addition to defendant doos lack of authorization to possess the trade secrets and and for that matter defend chin's as well there was certainly abundant evidence of the defense intent to convert for instance and i'm not going to go through all that obviously but in the fall of two thousand and three there were e mails relating to this cheery venture do expresses her interest to transfer into the unit that is dealing with motor control technology there is a business plan that is formulated it lays out the technology that's to be provided by the u s side to cherry and that is motor control technology do is named as one of three principal participants in that business plan within days after starting her job in the motor control area she copies trade secret information some of which doesn't relate to her work into a folder marked m t i projects and he has the name of the defendants private company and there was testimony that the technology that was called for in the cherry venture had many similarities with the g m information that there are many features in common between the g m technology and the technology called for by the cherry venture and there was also evidence that the defense did not possess any hybrid vehicle motor control technology other then the g m technology the chin did not have any work experience in the hybrid vehicle area that his one academic paper would not be sufficient give sufficient expertise to develop what was called for in the cherry venture the two to three to engineers could not develop the technology that was called by the terry venture and that now the only engineer other than the deuce his only expertise was in hardware scuse me one his only expertise was in hardware and years and barons and not motor control technology the electronics that goes into the component that controls the motor the with the e mails themselves because they counsel described them as e mails to investors looking for investors for charity and they're actually quite more than that there are their e mails that are among the participants to the venture to the charity venture they set for steps to pursue that venture to set up the presentation with cherry to meet with cherry to present a white paper setting forth the technology that was to be offered  so it's clear that the e mails were a step toward realizing the fruits of the fraud that was the whole purpose of taking or one of the primary purposes in stealing g m technology in the on the floor for be evidence i think the record is clear when it is examined that there was not a specific objection on the basis raised here an appeal to government exhibits to the government exhibit the recorded statements and it certainly was not evidence that was barred by this court's decision in the interlocutory appeal with the time i have remaining i'd like to turn to the government's because of the passage of time and the claim of facts during that that passage of time and this court has not decided when if ever the passage of time alone can be taken into account and persecution actually in china their family circumstances education need to prevent sentencing disparity i'm not sure i'm not sure that the evidence supports your claim that the consideration of improper collateral consequences was the basis of this court's downward well i think first of all the court itself said that the district court said that she gives that she was giving weight that she did consider it the right but she also referenced other things she did she there's no question she did some of what she referenced though really undercut over duction in the sense she emphasized the very serious nature of the offense the fact that it should be punished by harsh punishment to deter others from from committing similar offenses you're right she did she did reference other factors within kind of characteristics and the history of the defendants but also struggling with the expectation that underlies your argument is that a district judge can make a distinction and must make a distinction between the at the right that a judge has to consider one's mental health and what a may out of that mental health problem relates to the world lights to the timing of the prosecution do you think that do you expect a judge to make that kind of division so that you can or are you expecting them not to consider mental health at all which i think is a variance with what they're authorised to do i think it's what the what the cases make clear is that there are consequences flowing from an investigation of prosecution to include mental health consequences are not consequences that that it is that a sense in court should take into account in determining whether someone is deserving of a reduction in their sentence but my question is how do you make that decision because a court has a right to look at someone's mental health to consider it so how is the court going to say you know you are really suffering from mental issues but you had them before so i can consider them as opposed to you develop them during the what with their a seven year seven year prosecution well in this case i'm not convinced counsel and i'm you're going to have to give me some more information as to why you would childhood event preexisting p t s d no your honor it sounds to me like you want the court to have to make that division that your your argument is that the court must exclude from mental health by some divine ng how much of it relates to the collateral consequences of prosecution and how much of it relates to other matters i guess what i'm saying here your honor is that there isn't any ambiguity in the record that that the claim is that the mental health consequences were were as a result of the f search in two thousand and six and thereafter because of the investigation of prosecution and so in the or did so find that the anxiety and depression that the defendant suffered in the court's words were due to this case so i'm not sure that it was that it was that it was so difficult i'm i'm saying bad that's that no the court should not have taken into account saying that the court should take into account the mental health of a defendant that it's not appropriate to look whether there is appropriate facilities and treatment  at's cracked but but the cure the court some cases indicate that that it's not appropriate to take into account when fashioning and sentence just in terms of the pepple case the suffering that the defendants  underwent during the five years so that her prosecution this court last year said that that was not appropriate and and when you think about it there are good reasons not to allow reductions in sentences based on the passage of time and the effects mental facts that that causes because think about who that benefits when did that what he says our goal longest in terms of investigation or prosecution white collar cases who suffers the most because because i think if you do take it into account particularly looking here where it's the passage of time that you're going to build then disparate treatment for the privilege because white collar cases are the cases that last the longest who is who is more likely to suffer mental or emotional trauma from being from being put into the grim of criminal justice system in all likelihood for the first time or most often for the first time what what they are what to what was going on there was a consideration of the crime and saying you've suffered enough i'm not going to i'm not going to give you any jail time but we're talking about a factor that the guidelines explicitly permits a judge to consider in the context of other factors and i think maybe we just disagree about what the record reflects but we have your arguments with your shiite those performance review signed by the manager hubbard in which she logs her for growing expertise in motor control theory and forty eight relates to motor control theory there are four separate categories in which he lauds her  they all relate to what she was working on and they all relate to the the alleged trade secret oh and one other factor miss due was not part of the of this charity motors venture her husband put her name on a document but as they have progressed her name was removed she was never c c done any e mails there is nothing to show that cheap endure husband was taking part in this venture i want to turn to the sentence because i have very little time left peple and rapids and cases the sentences in those cases which were seven days one day and probation they created a disparity there was one thing the sentencing guidelines the the major motivation in  four was to get rid of disparities and get some kind of nationwide consistency that i know is do really ended up with a larger amount of time if you're going to look at the disparity those other cases created a disparity this a boy the disparity an escort is that this this the trial judge went through all of the factors she said she was going to give some way to delay and what that delay engendered in robinson strike that in davis the only thing that happened in that delay the gentleman turned seventy he was going to turn seventy anyways in this case nothing said that miss due was going to district courts so i would ask the court to be sentenced i thank you very much and the element of knowledge of the trade secret we did discuss it ph ten to fourteen of the reply brief wire general objection at the time in the lower court would satisfy this element second of all we did argue in the yes we haven't we have an issue and it has that page forty four to forty seven they responded factually they didn't resist they didn't respond i didn't think there was a really any legit a dispute as to whether or not you had to have that knowingly modified information and the information in this case is trade secret so our contention is that knowingly modifies this they didn't argue that the other way was i didn't think there was any really does dispute here i think there's a distinction that just being made here that the defendant doesn't have to know all of the measures that general motors has taken to protect the secrets that's the crime rate case what we're saying is he does have to know that it's trade secret otherwise you're not requiring mens rea so i do think it's been preserved and that is our claim in it i think we should prevail on that thirty five fifty three p actors only as mr chen i would say this family was decimated by this process they had a twelve year old son when the started he lost most of his childhood to this mr chen was a functioning wife he lost a series of jobs so clearly the thirty five fifty feet three factors required a sense in court to look at the individual in front of that and these individuals were absolutely changed and and harmed by this in terms of just briefly the proffer be the evidence was clearly admissible there are two clips in particular there's clip number four and that's where mr chavez is confronting mr chin did you ever tell an employee past or present that you had a three phase u p s that seem content was covered in page four of this court's opinion and the the court talked about the three faves uninterruptible power supply system so this is covered by the interlocutory appeal clips three mr taseer says that you're violating conflict of interest rules in essence you're betraying a hundred families that depended on you the three of us started this country company together this was horribly prejudicial and it was inadmissible this is a consciousness of guilt evidence relating to another bad act it wasn't even relating to the charges here