1998 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

8-26-1998

United States v. Hsu

Precedential or Non-Precedential:

Docket 97-1965

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Recommended Citation

"United States v. Hsu" (1998). 1998 Decisions. Paper 205.

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Filed August 26, 1998 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 97-1965 

UNITED STATES OF AMERICA 

v. 

KAI-LO HSU, a/k/a JAMES HSU 

UNITED STATES OF AMERICA 

v. 

CHESTER S. HO 

United States of America, 

 Appellant 

ON APPEAL FROM THE 

UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

(D.C. Criminal Nos. 97-cr-323-1 and 97-cr-323-2) 

Argued: June 10, 1998 

Before: STAPLETON, COWEN, and RENDELL, 

Circuit Judges 

(Opinion Filed: August 26, 1998) 
 Michael R. Stiles 

 Walter S. Batty, Jr. 

 Richard W. Goldberg (ARGUED) 

 Louis D. Lappen 

 Office of the United States Attorney 

 615 Chestnut Street, Suite 1250 

 Philadelphia, PA 19106 

 Attorneys for Appellant 

 William E. McDaniels (ARGUED) 

 Paul Mogin 

 Williams & Connolly 

 725 Twelfth Street, N.W. 

 Washington, DC 20005 

 Thomas H. Suddath, Jr. 

 Montgomery, McCracken, Walker 

 & Rhoads, LLP 

 123 South Broad Street 

 Philadelphia, PA 19109 

 Attorneys for Appellee, 

 Chester S. Ho 

 Norman E. Greenspan 

 Ian M. Comisky 

 Blank Rome Comisky & 

 McCauley LLP 

 One Logan Square 

 Philadelphia, PA 19103 

 Attorneys for Appellee, 

 Kai-Lo Hsu 

OPINION OF THE COURT 

RENDELL, Circuit Judge: 

In this appeal we explore for the first time the 

relationship between the confidentiality provisions of the 

newly-enacted Economic Espionage Act of 1996, 18 U.S.C. 

S 1831, et seq., and principles of criminal law regarding 

discovery and disclosure of material evidence. The district 

court ordered the government to disclose alleged corporate 

trade secrets based upon a theory that we find does not 

 2 
apply. It also held that the defense of legal impossibility 

does not pertain to the attempt and conspiracy crimes with 

which the defendants are charged. We will affirm the 

court's holding regarding the applicability of the defense of 

legal impossibility, but will reverse its discovery order and 

remand for a review of other asserted defenses to the 

crimes in the indictment. 

I. FACTUAL AND PROCEDURAL BACKGROUND 

A. The Government's Sting Operation 

On July 10, 1997, a federal grand jury indicted Kai-Lo 

Hsu, Chester S. Ho, and Jessica Chou (collectively,"the 

defendants") for their involvement in an alleged conspiracy 

to steal corporate trade secrets from Bristol-Myers Squibb. 

The indictment alleges that the defendants sought to obtain 

the processes, methods, and formulas for manufacturing 

Taxol, an anti-cancer drug produced by Bristol-Myers and 

regarded by the company as a highly valuable trade secret.1 

According to the indictment, the defendants' conspiracy 

began on June 7, 1995, when Chou, the Manager of 

Business Development for Yuen Foong Paper Company in 

Taiwan ("YFP"), requested information about Taxol from 

John Hartmann, an undercover FBI agent whom Chou 

mistakenly believed to be a technological information 

broker in the United States. From August 28, 1995, until 

January 12, 1996, Chou allegedly contacted Hartmann

repeatedly to obtain information about Taxol manufacturing 

techniques and distribution. These contacts led to a 

meeting in Los Angeles on February 27, 1996, between 

Hartmann and Hsu, the Technical Director for YFP's 

operations. Hsu purportedly told Hartmann at that meeting 

that YFP wanted to diversify into biotechnology and to 

_________________________________________________________________ 

1. The factual summary that follows is based entirely on the as yet 

unproven allegations in the July 1997 indictment. Because this is an 

interlocutory appeal, the record is not complete, discovery has not 

concluded, and no determination of the facts has yet occurred. 

Therefore, we offer these facts as averred to provide a context for the 

issues on appeal, without vouching for the truth of any of the facts we 

recite. 

 3 
introduce technology from advanced countries into Taiwan. 

When Hartmann responded that Bristol-Myers would be

unlikely to share its secret technology with YFP, Hsu 

allegedly responded, "We'll get [it] another way," and told 

Hartmann to pursue paying Bristol-Myers employees for the 

confidential Taxol formulas. 

The indictment asserts that Hsu and Chou then 

"communicated many times" with Hartmann over the next 

fourteen months to discuss the transfer of Taxol technology 

and to negotiate a specific price for the acquisition of 

Bristol-Myers's trade secrets. In response, Hartmann told 

the defendants that a corrupt Bristol-Myers scientist would 

be willing to sell Taxol information to YFP. The"corrupt" 

scientist was actually a Bristol-Myers employee cooperating 

with the FBI. Intrigued by such a prospect, Chou allegedly 

sent an e-mail to Hartmann on March 13, 1997, outlining 

the "core technology" that YFP would need to complete a 

deal, including: 

 "1. The design and assembly of bioreactor with an 

 agreed scale 

 2. Light requirement 

 3. Media requirement for growth and production 

 4. Operating mode for the process, such as batch or 

 continuous 

 5. Yield, such as cell density, titers, taxane 

 constitution 

 6. Duration of culture to reach the maximal yield 

 7. Scientific names of yew species which are

 applicable to the bioreactor. 

 8. Cell lines excluded!!!" 

Chou also allegedly told Hartmann that she would offer 

$400,000 in cash, stock, and royalties to the Bristol-Myers 

scientist in exchange for his disclosure of the Taxol secrets. 

In addition, Chou and Hsu purportedly began making 

arrangements for a 1997 meeting between the parties, the 

purpose of which was for YFP to establish the authenticity 

of the "corrupt" scientist and to determine whether

Hartmann really could produce the Taxol trade secrets that 

Chou and Hsu had requested. 

Hartmann agreed to a meeting, and on June 14, 1997, he 

and the Bristol-Myers scientist met with three 

 4 
representatives from YFP, including Hsu, Ho, and another 

unidentified scientist, at the Four Seasons Hotel in 

Philadelphia. Ho was a professor of biotechnology and the 

Director of the Biotechnology Innovation Center at the 

National Chiao Tung University in Taiwan, and he had 

apparently been asked to evaluate the Taxol technology at 

the meeting as a favor to YFP. 

The indictment alleges that the bulk of the June 14

meeting consisted of detailed discussions regarding the 

manufacturing processes for Taxol. The Bristol-Myers 

scientist explained the background and history of Taxol 

production, and displayed copies of Bristol-Myers 

documents outlining specific technological processes and 

scientific data pertaining to the manufacture of the drug. 

According to the indictment, these documents contained 

trade secrets and were "clearly marked with Bristol-Myers 

identification as well as the block stamped word 

`CONFIDENTIAL.' " Hsu, Ho, and the other YFP employee 

reviewed the documents during the meeting and 

purportedly asked the Bristol-Myers scientist "numerous" 

questions regarding specific areas of Taxol technology. 

Finally, after Hartmann and the Bristol-Myers scientist left 

the room, the FBI rushed in and arrested Hsu and Ho at 

the hotel.2 

The indictment returned by the grand jury charged Hsu, 

Ho, and Chou with six counts of wire fraud in violation of 

18 U.S.C. S 1343, one count of general federal conspiracy in 

violation of 18 U.S.C. S 371, two counts of foreign and 

interstate travel to facilitate commercial bribery in violation 

of 18 U.S.C. S 1952(a)(3), one count of aiding and abetting 

in violation of 18 U.S.C. S 2, and, most importantly for our 

purposes, two counts of criminal activity under the

Economic Espionage Act of 1996 ("the EEA"), including 

attempted theft of trade secrets, and a conspiracy to steal 

trade secrets, in violation of 18 U.S.C. SS 1832 (a)(4) and 

(a)(5). 

_________________________________________________________________ 

2. An arrest warrant has since been issued for Chou, but she lives in 

Taiwan, which has no extradition treaty with the United States. 

 5 
B. The Government's Motion to Maintain the 

Confidentiality of the Bristol-Myers Trade Secrets 

Shortly after the indictment was returned, the defense 

requested in discovery a copy of the Bristol-Myers 

documents disclosed to Hsu and Ho at the June 14 

meeting. However, on August 12, 1997, the government 

filed a motion pursuant to 18 U.S.C. S 1835 and Fed. R. 

Crim. P. 16(d)(1) for a protective order to prevent the 

disclosure of the Bristol-Myers trade secrets allegedly 

contained in those documents.3 The government proposed 

that the district court enter an order under which the trial 

judge would review the documents and the proposed 

redactions by Bristol-Myers in camera, and would then 

permit redactions of proprietary secret information. The 

documents as redacted would be used at trial. The 

gravamen of the government's contention was that the 

defendants had no need for the actual trade secrets

themselves, because they had been charged only with

attempt and conspiracy to steal trade secrets, rather than 

with the actual theft of trade secrets, under the EEA. 

The defendants maintained, though, that unique 

constitutional and procedural requirements of criminal 

prosecutions dictated full access to the documents shown 

to them during the investigation. The defendants also 

contended that they needed the documents to establish the 

defense of legal impossibility, arguing that they could not 

be convicted of attempting to steal trade secrets if the 

documents did not actually contain trade secrets. 

Therefore, they proposed an order under which the 

proprietary information in the Bristol-Myers documents 

would be disclosed, but only to select members of the 

_________________________________________________________________ 

3. Section 1835 is part of the EEA and provides, inter alia, that "[i]n 

any 

prosecution or other proceeding under this chapter, the court shall enter 

such orders and take such other action as may be necessary and 

appropriate to preserve the confidentiality of trade secrets, consistent 

with the requirements of the Federal Rules of Criminal and Civil 

Procedure, the Federal Rules of Evidence, and all other applicable laws." 

Rule 16(d)(1) provides in relevant part that "[u]pon a sufficient showing 

the court may at any time order that the discovery or inspection be 

denied, restricted, or deferred, or make such other order as is 

appropriate." 

 6 
defense team, such as the defendants' attorneys and trial 

experts, and under which the documents would befiled 

under seal and returned or destroyed at the end of the 

case. 

The district court agreed with the defendants and 

adopted their version of the proposed protective order. See 

United States v. Hsu, 982 F. Supp. 1022 (E.D. Pa. 1997). 

The court held that legal impossibility is not a viable 

defense to the crime of attempted theft of trade secrets 

under the EEA, and it thus rejected the defendants'

argument that they needed the documents to establish that 

claim. Id. at 1028-29. Nevertheless, it ordered the

government to divulge the alleged trade secrets, because it 

found that the existence of a trade secret is an essential 

element of the crime of the theft of trade secrets, and that 

the existence of a trade secret in that prosecution is "a 

question of fact which the defendants have the right to have 

a jury decide." Id. at 1024. Believing the defendants to be 

charged both with actual theft and attempted theft of trade 

secrets, the court concluded that "if during discovery we 

deny to the defendants complete access to the Taxol

technology, we inhibit their constitutional right to effective 

cross-examination as well as their right to have a jury, 

rather than a judge, determine whether a `trade secret' 

exists." Id. at 1025. Therefore, the court held, the 

defendants "are entitled to review the June 14th documents 

to the extent of their constitutional rights." Id. at 1029. 

The district court's opinion "encourage[d]" the 

government to file an interlocutory appeal to clarify the 

"unsettled and important questions of law" raised by this 

case. Id. at 1022 n.1. Accordingly, the government appealed 

the district court's Order on November 25, 1997, pursuant 

to a section in the EEA providing that "[a]n interlocutory 

appeal by the United States shall lie from a decision or 

order of a district court authorizing or directing the 

disclosure of any trade secret." 18 U.S.C. S 1835. We now 

have jurisdiction under that section, and we exercise 

plenary review over the novel legal questions presented by 

 7 
the government's appeal. In re Grand Jury, 111 F.3d 1066, 

1069 n.4 (3d Cir. 1997).4 

We note at the outset that we disagree with the district 

court as to the offenses charged. The indictment is limited 

to charging the defendants with attempt and conspiracy 

and contains no charge of actual theft of trade secrets. As 

we will discuss below, we believe this changes the analysis 

greatly. We begin, though, with an overview of the EEA and 

an analysis of the relevant statutory provisions. 

II. THE ECONOMIC ESPIONAGE ACT OF 1996 

The EEA became law in October 1996 against a backdrop 

of increasing threats to corporate security and a rising tide 

of international and domestic economic espionage. The end 

of the Cold War sent government spies scurrying to the 

private sector to perform illicit work for businesses and 

corporations, S. Rep. No. 104-359, at 7 (1996), and by 

1996, studies revealed that nearly $24 billion of corporate 

intellectual property was being stolen each year. Richard J. 

Heffernan & Dan T. Swartwood, Trends in Intellectual 

Property Loss 4, 15 (1996). 

The problem was augmented by the absence of any 

comprehensive federal remedy targeting the theft of trade 

secrets, compelling prosecutors to shoehorn economic 

espionage crimes into statutes directed at other offenses.5 

_________________________________________________________________ 

4. The issues are "novel" in part because this is a matter of first 

impression in the federal courts. Only five EEA prosecutions were 

publicly announced in the first eighteen months of the statute's 

existence, and none had proceeded to trial as of March 1998. See Lorin 

L. Reisner, Criminal Prosecution of Trade Secret Theft, N.Y.L.J., March 

30, 1998, at 1. Furthermore, EEA prosecutions are likely to remain 

infrequent in the near future, because the Attorney General of the United 

States has pledged that the government will not, until October 2001, 

pursue charges under the EEA "without the personal approval of the 

Attorney General, the Deputy Attorney General, or the Assistant Attorney 

General for the Criminal Division (or the acting official in each of these 

positions if a position is filled by an acting official)." 142 Cong. Rec. 

S12,214 (daily ed. Oct. 2, 1996) (letter of Janet Reno). 

5. Prior to the passage of the EEA, the only federal statute directly 

prohibiting economic espionage was the Trade Secrets Act, 18 U.S.C. 

 8 
For example, the government often sought convictions 

under the National Stolen Property Act ("NSPA"), 18 U.S.C. 

S 2314, or the mail and wire fraud statutes, 18 U.S.C. 

SS 1341 and 1343. However, the NSPA "was drafted at a 

time when computers, biotechnology, and copy machines 

did not even exist," S. Rep. No. 104-359, at 10, 6 and 

industrial espionage often occurred without the use of mail 

or wire.7 Consequently, it soon became clear to legislators 

and commentators alike that a new federal strategy was 

_________________________________________________________________ 

S 1905, which forbids the unauthorized disclosure of confidential 

government information, including trade secrets, by a government 

employee. See, e.g., United States v. Wallington, 889 F.2d 573 (5th Cir. 

1989) (upholding a defendant's conviction under S 1905 for running 

background checks on persons whom the defendant's friend suspected of 

trafficking in narcotics). However, the Trade Secrets Act was of limited 

value, because it did not apply to private sector employees and it 

provided only minor criminal sanctions of a fine and not more than one 

year in prison. 

6. In fact, several cases cast serious doubt as to whether the NSPA even 

applies to the type of intangible information involved in modern schemes 

of corporate espionage. See, e.g., Dowling v. United States, 473 U.S. 214, 

216 (1985) (stating that the NSPA "seems clearly to contemplate a 

physical identity between the items unlawfully obtained and those 

eventually transported, and hence some prior physical taking of the 

subject goods"); United States v. Brown, 925 F.2d 1301, 1307-08 (10th 

Cir. 1991) (holding that the theft of purely intellectual property is not 

punishable by the NSPA because it is not physical property within the 

meaning of the statute). 

7. State remedies were also of little assistance. As of 1996, at least 

twenty-four states had criminal statutes directed at the theft of trade 

secrets, James H.A. Pooley, et al., Understanding the Economic Espionage 

Act of 1996, 5 Tex. Intell. Prop. L.J. 177, 186 (1997), and forty-four 

states and the District of Columbia had adopted some form of the 

Uniform Trade Secrets Act, which permits civil actions to enjoin and 

obtain damages for actual and attempted misappropriation of trade 

secrets. Victoria A. Cundiff, The Economic Espionage Act and You, 490 

PLI/Pat 9, 27 (1997). Yet the states often lacked sufficient resources to 

pursue espionage prosecutions, see Pooley, supra, at 186, and 

corporations eschewed bringing civil lawsuits, because they had to 

shoulder their own litigation costs, individual defendants were frequently 

judgment proof, and it proved difficult for the state courts to exercise 

jurisdiction over lawsuits involving out-of-state defendants. See Cundiff, 

supra, at 27. 

 9 
needed to combat the increasing prevalence of espionage in 

corporate America. Congress recognized "the importance of 

developing a systematic approach to the problem of 

economic espionage," H. Rep. No. 104-788, at 7 (1996), 

reprinted in 1996 U.S.C.C.A.N. 4021, 4025, and stressed 

that "[o]nly by adopting a national scheme to protect U.S. 

proprietary economic information can we hope to maintain 

our industrial and economic edge and thus safeguard our 

national security." S. Rep. No. 104-359, at 11. The House 

and Senate thus passed the Economic Espionage Act, and 

the President signed the bill into law on October 11, 1996. 

The EEA consists of nine sections which protect 

proprietary information from misappropriation. Three 

sections are of particular import to our analysis: what acts 

are penalized by the statute, how the law defines a "trade 

secret," and when trade secrets are to remain confidential. 

A. Criminal activities 

The EEA criminalizes two principal categories of 

corporate espionage, including "Economic espionage" as 

defined by 18 U.S.C. S 1831, and the "Theft of trade 

secrets" as defined by S 1832.8 The former provision 

punishes those who knowingly misappropriate, or attempt 

or conspire to misappropriate, trade secrets with the intent 

or knowledge that their offense will benefit a foreign 

government, foreign instrumentality, or foreign agent. The 

legislative history indicates that S 1831 is designed to apply 

only when there is "evidence of foreign government 

sponsored or coordinated intelligence activity." 142 Cong. 

Rec. S12,212 (daily ed. Oct. 2, 1996) (Managers' Statement 

for H.R. 3723). By contrast, S 1832, the section under 

which the defendants are charged, is a general criminal 

trade secrets provision. It applies to anyone who knowingly 

engages in the theft of trade secrets, or an attempt or 

conspiracy to do so, "with intent to convert a trade secret, 

that is related to or included in a product that is produced 

for or placed in interstate or foreign commerce, to the 

economic benefit of anyone other than the owner thereof, 

_________________________________________________________________ 

8. The EEA also permits parallel civil actions to "obtain appropriate 

injunctive relief against any violation" of the statute. 18 U.S.C. S 

1836(a). 

 10 
and intending or knowing that the offense will, injure any 

owner of that trade secret." Section 1832(a) makes clear 

that attempt and conspiracy are distinct offenses, and it 

lists them separately from those acts that constitute 

completed crimes under the statute. 

Section 1832 also contains at least three additional 

limitations not found in S 1831. First, a defendant charged 

under S 1832 must intend to convert a trade secret "to the 

economic benefit of anyone other than the owner thereof," 

including the defendant himself. This "economic benefit" 

requirement differs from S 1831, which states merely that 

the offense "benefit," in any manner, a foreign government, 

instrumentality, or agent. Therefore, prosecutions under 

S 1832 uniquely require that the defendant intend to confer 

an economic benefit on the defendant or another person or 

entity. Second, S 1832 states that the defendant must 

intend or know that the offense will injure an owner of the 

trade secret, a restriction not found in S 1831. The 

legislative history indicates that this requires "that the 

actor knew or was aware to a practical certainty that his 

conduct would cause such a result." S. Rep. No. 104-359, 

at 15. Finally, unlike S 1831, S 1832 also requires that the 

trade secret be "related to or included in a product that is 

produced for or placed in interstate or foreign commerce."9 

B. What constitutes a "trade secret" 

The EEA defines a "trade secret" to expressly extend 

protection to the misappropriation of intangible information 

for the first time under federal law. 18 U.S.C. S 1839(3) 

provides that a "trade secret" means: 

_________________________________________________________________ 

9. Section 1832 also imposes more lenient punishments than S 1831. 

Under S 1832, individuals can be sentenced to ten years in prison 

and/or fined $250,000, and organizations can befined up to $5 million. 

Section 1831, however, provides that individuals can be imprisoned for 

fifteen years and/or fined $500,000, and organizations can be fined a 

maximum of $10 million. Moreover, under both sections, defendants are 

subject to criminal forfeiture pursuant to 18 U.S.C.S 1834, which states 

that a person or entity shall forfeit any property constituting, or 

derived 

from, the proceeds of an EEA crime, and, if the sentencing court "in its 

discretion so determines," any property used, or intended to be used, to 

commit or facilitate an EEA offense. 

 11 
 all forms and types of financial, business, scientific, 

 technical, economic, or engineering information, 

 including patterns, plans, compilations, program 

 devices, formulas, designs, prototypes, methods, 

 techniques, processes, procedures, programs, or codes, 

 whether tangible or intangible, and whether or how 

 stored, compiled, or memorialized physically, 

 electronically, graphically, photographically, or in 

 writing if -- 

 (A) the owner thereof has taken reasonable measures 

 to keep such information secret; and 

 (B) the information derives independent economic 

 value, actual or potential, from not being generally 

 known to, and not being readily ascertainable through 

 proper means by, the public. 

The EEA's definition of a "trade secret" is similar to that 

found in a number of state civil statutes and the Uniform 

Trade Secrets Act ("UTSA"), a model ordinance which

permits civil actions for the misappropriation of trade 

secrets.10 There are, though, several critical differences 

which serve to broaden the EEA's scope. First, and most 

importantly, the EEA protects a wider variety of 

technological and intangible information than current civil 

laws. Trade secrets are no longer restricted to formulas, 

patterns, and compilations, but now include programs and 

codes, "whether tangible or intangible, and whether or how 

stored." Second, the EEA alters the relevant party from 

whom proprietary information must be kept confidential. 

Under the UTSA, information classified as a "trade secret" 

cannot be generally known by businesspersons or 

_________________________________________________________________ 

10. For example, S 1(4) of the UTSA states that a "trade secret" includes: 

 information, including a formula, pattern, compilation, program, 

 device, method, technique, or process, that:

 (i) derives independent economic value, actual or potential, from 

not 

 being generally known to, and not being readily ascertainable by 

 proper means by, other persons who can obtain economic value 

 from its disclosure or use, and 

 (ii) is the subject of efforts that are reasonable under the 

 circumstances to maintain its secrecy. 

 12 
competitors of the trade secret owner. UTSA S 1(4). The 

EEA, however, indicates that a trade secret must not be 

generally known to, or readily ascertainable by, the general 

public, rather than simply those who can obtain economic 

value from the secret's disclosure or use. Finally, the EEA 

contains a definition crafted to reach only illicit behavior. 

Although legislators eliminated language providing that 

general knowledge, skills, and experience are not"trade 

secrets," 142 Cong. Rec. S12,213 (daily ed. Oct. 2, 1996) 

(Managers' Statement), it is clear that Congress did not 

intend the definition of a trade secret to be so broad as to 

prohibit lawful competition such as the use of general skills 

or parallel development of a similar product. See, e.g., id. at 

S12,212 (noting that "[t]his legislation does not in any way 

prohibit companies, manufacturers, or inventors from using 

their skills, knowledge and experience to solve a problem or 

invent a product that they know someone else is working 

on"). 

C. Preservation of confidentiality 

The EEA also contains a provision designed to preserve 

the confidentiality of trade secrets during criminal 

prosecutions. 18 U.S.C. S 1835 states that a court:

 shall enter such orders and take such other action as 

 may be necessary and appropriate to preserve the 

 confidentiality of trade secrets, consistent with the 

 requirements of the Federal Rules of Criminal and Civil 

 Procedure, the Federal Rules of Evidence, and all other 

 applicable laws. An interlocutory appeal by the United 

 States shall lie from a decision or order of a district 

 court authorizing or directing the disclosure of any 

 trade secret. (emphasis added). 

This section does not, of course, abrogate existing

constitutional and statutory protections for criminal 

defendants. It does, however, represent a clear indication 

from Congress that trade secrets are to be protected to the 

fullest extent during EEA litigation. Moreover, it further 

encourages enforcement actions by protecting owners who 

might otherwise "be reluctant to cooperate in prosecutions 

for fear of further exposing their trade secrets to public 

 13 
view, thus further devaluing or even destroying their 

worth." H.R. Rep. No. 104-788, at 13, 1996 U.S.C.C.A.N. at 

4032. Therefore, as with the definition of trade secrets, the 

confidentiality provision aims to strike a balance between 

the protection of proprietary information and the unique 

considerations inherent in criminal prosecutions. 

III. DISCUSSION 

With this statutory framework in mind, we turn our 

attention to determining whether the district court properly 

ordered the government to disclose the alleged trade secrets 

in this case. We begin by recognizing that the defendants 

are charged only with attempting to steal, and conspiring to 

steal, trade secrets under S 1832. The district court believed 

that the defendants were charged with both attempted theft 

of trade secrets as well as with "the completed offense of 

unauthorized conveyance of a trade secret under 18 U.S.C. 

S 1832(2)." 982 F. Supp. at 1023 (emphasis added). It thus 

found that the defendants' constitutional rights to crossexamination and a fair trial would be violated absent full 

disclosure of the Bristol-Myers documents. 

However, the district court's analysis represents an 

incorrect reading of the indictment and a mistaken view of 

the charges lodged under the EEA. For one thing, there is 

no S 1832(2) in the statute. More importantly, the 

defendants are not charged with the completed offense of 

theft of trade secrets. They have been indicted only for 

attempting to steal, and conspiring to steal, trade secrets 

pursuant to SS 1832(a)(4) and (a)(5). Therefore, our task is 

to examine the defendants' entitlement to the information 

they seek, as defending against the attempt and conspiracy 

provisions of the EEA, rather than the completed theft 

provisions. We need not decide, as the district court did, 

whether a failure to disclose trade secrets would undermine 

the constitutional rights of defendants charged with a 

completed offense under the statute. 

The defendants argue that unfettered access to 

confidential documents is required even in EEA 

prosecutions for attempt and conspiracy. They assert that 

documents containing trade secrets are "material to the 

 14 
preparation of the defendant's defense," and therefore, that 

they must be disclosed consistent with the terms of Fed. R. 

Crim. P. 16(a)(1)(C).11 In particular, they contend that 

disclosure is warranted by (1) the availability of a legal 

impossibility defense, and (2) their need for access to the 

proprietary information as it relates to their defense of the 

allegations of the indictment and other defenses to the 

crimes charged.12 

A. Legal Impossibility: 

The Relationship of the Existence of 

Trade Secrets to the Crimes Charged 

As previously mentioned, the district court believed that 

the defendants had been charged with the substantive 

offense of theft of trade secrets, and, without addressing in 

any detail the EEA's concern for confidentiality of trade 

secrets in prosecutions under the statute, concluded that 

the defendants' constitutional rights required disclosure of 

the redacted material. The court premised its view on the 

fact that the existence of a trade secret was an element of 

the offense, and that the defendants thus had a 

constitutional right to access the alleged secrets based on 

the due process and fair trial guarantees of the Fifth and 

Sixth Amendments.13 We need not determine whether the 

_________________________________________________________________ 

11. It should be noted that the information sought to be disclosed here 

includes those portions of the documents used at the June 14 meeting 

which Bristol-Myers redacted before providing them to anyone, including 

their counsel. The district court did not examine the redactions or assess 

their true materiality. We have been advised by counsel for the 

government that the redactions consist of technical information that 

constitutes trade secrets under any definition. 

12. The defendants also argue that disclosure is warranted because the 

government has not met its burden of proving the need for a protective 

order precluding discovery of the documents. However, their argument is 

based entirely on the language of Federal Rule of Civil Procedure 26(c) 

and on the cases interpreting its requirements in civil actions. See, 

e.g., 

Smith v. BIC Corp., 869 F.2d 194, 199 (3d Cir. 1989). No such burdenshifting or elements of proof exist under the facts of this case, where 

the 

government seeks to protect trade secrets in a criminal prosecution 

under the provisions of the EEA. 

13. Although seeking to address the government's interests in the 

confidentiality of trade secrets, the district court concentrated on the 

defendants' rights and did not engage in any discussion of the 

relationship between the two. 
 15 
district court was correct in its ruling, because the crimes 

actually charged do not include the substantive offense of 

theft of trade secrets. Rather, the crimes charged-- 

attempt and conspiracy -- do not require proof of the 

existence of an actual trade secret, but, rather, proof only 

of one's attempt or conspiracy with intent to steal a trade 

secret. 18 U.S.C. S 1832(a).14 We must determine how and 

to what extent this alters the analytic landscape, including 

statutory and policy considerations regarding confidentiality 

under the EEA, and principles of disclosure of material 

information under the federal criminal rules. 

It should be noted at the outset that the confidentiality 

provision of the EEA does not exist in a vacuum. As the 

EEA provides in S 1835, confidentiality must coexist with or 

be tempered by other principles of the law, including a 

defendant's constitutional rights and the Federal Rules of 

Criminal Procedure. Therefore, we must first ask whether 

the non-disclosure of trade secret data does have 

implications if a defendant is defending against charges of 

attempt and conspiracy to steal trade secrets. The answer 

lies in the resolution of the question of whether the nonexistence of a trade secret matters in defense of an attempt 

or conspiracy crime. If the defense of legal impossibility is 

viable -- that is, if the defendants are not guilty of attempt 

if the material is not truly a trade secret -- then it could 

matter, and the defendants' constitutional or statutory 

rights could be implicated. If the defense of legal

impossibility is not cognizable, then the existence or nonexistence of an actual trade secret is of little consequence 

for an attempt or conspiracy crime. Thus, we willfirst 

_________________________________________________________________ 

14. See, e.g., Model Penal Code S 5.01(1)(c) (declaring a defendant guilty 

of attempt when, "acting with the kind of culpability otherwise required 

for commission of the crime, he ... purposely does or omits to do 

anything that, under the circumstances as he believes them to be, is an 

act or omission constituting a substantial step in a course of conduct 

planned to culminate in his commission of the crime"); id. at S 5.02(1)(a) 

(stating that a defendant is guilty of conspiracy with other persons if, 

"with the purpose of promoting or facilitating[the crime's] commission 

he agrees with such other person or persons that they or one or more of 

them will engage in conduct which constitutes such crime or an attempt 

or solicitation to commit such crime"). 

 16 
address the threshold question of whether legal 

impossibility is a defense to crimes of attempt and

conspiracy, as this discussion frames the remainder of our 

analysis.15 

1. Attempt 

The defendants' primary contention in the district court, 

and one of their principal arguments on appeal, is that they 

need to view the unredacted Taxol documents to prove their 

defense of legal impossibility. They assert that they can 

successfully defend against a charge of attempt to steal 

trade secrets if the documents used at the June 14, 1997, 

meeting did not actually contain trade secrets. Only by 

disclosure can they determine whether the materials did, in 

fact, contain proprietary information, and therefore mount 

their defense. 

The law of impossible attempts has received much 

scholarly attention, but remains a murky area of the law. 

The common law distinguishes between two types of 

impossibilities -- legal and factual -- and provides that the 

former is a defense while the latter is not. In this regard, 

"[l]egal impossibility is said to occur where the intended 

acts, even if completed, would not amount to a crime." 

United States v. Berrigan, 482 F.2d 171, 188 (3d Cir. 1973).16 

_________________________________________________________________ 

15. We emphasize that we need not reach, and are not determining, the 

issue addressed by the district court of whether the disclosure of trade 

secrets is mandated by the Constitution or the Federal Rules of Criminal 

Procedure if a defendant is charged with the actual theft of trade 

secrets. 

This is a complex issue. For one thing, whether information qualifies as 

an actual "trade secret" is precisely defined by the EEA, and centers on 

such factual questions as how the information has been guarded by its 

owner and whether it is ascertainable by the public, rather than on the 

content of the secret or the defendant's requests as such. This raises an 

issue as to whether the information or formula itself is in fact material 

to the existence of the trade secret. In addition, the other elements of 

the 

offense, and the available defenses, may differ significantly if the 

defendant is accused of a completed crime rather than a crime of 

attempt or conspiracy. 

16. This type of legal impossibility is actually what some commentators 

have termed "hybrid" legal impossibility, because the actor's goal is 

 17 
By contrast, "factual impossibility is said to occur when 

extraneous circumstances unknown to the actor or beyond 

his control prevent consummation of the intended crime." 

Id. For example, legal impossibility occurs when A shoots a 

corpse believing it to be alive and intending to commit 

murder; the attempt does not amount to murder even if 

completed. Factual impossibility occurs when A fires a gun 

at a bed intending to kill V, and V is not on the bed; the 

crime cannot be completed because of extraneous factors 

beyond A's control. 

The difficulty, of course, is that the distinction between 

factual and legal impossibility is essentially a matter of 

semantics, for every case of legal impossibility can 

reasonably be characterized as a factual impossibility. For 

instance, the fact that A shoots a corpse, rather than a 

person, is also a product of circumstances beyond A's 

control; A did not commit murder because the person he 

intended to kill was already dead. Likewise, in the case at 

bar, the defendants argue that their crimes would have 

been legally impossible if the redacted portions of the June 

14 documents did not contain trade secrets. Yet this could 

just as easily be characterized as a factual impossibility, 

because extraneous circumstances unknown to the 

defendants, i.e., that documents they believed to contain 

trade secrets really did not, would have prevented the 

consummation of their crime. 

As a result, the great majority of jurisdictions have now 

recognized that legal and factual impossibility are "logically 

indistinguishable," United States v. Darnell, 545 F.2d 595, 

_________________________________________________________________ 

illegal, but commission of the offense is somehow rendered impossible by 

attendant circumstances. See, e.g., Joshua Dressler, Understanding 

Criminal Law, S 27.07[D], at 372 (2d ed. 1995). Another type of legal 

impossibility -- "pure" legal impossibility-- occurs when the law does 

not even "proscribe the goal that the defendant sought to achieve." Ira P. 

Robbins, Attempting the Impossible: The Emerging Consensus, 23 Harv. 

J. on Legis. 377, 389 (1986). Pure legal impossibility is always a 

defense. 

For example, a hunter cannot be convicted of attempting to shoot a deer 

if the law does not prohibit shooting deer in thefirst place. Therefore, 

we 

make clear that our discussion refers only to "hybrid" legal impossibility 

as we have defined it. 

 18 
597 (8th Cir. 1976), and have abolished impossibility as a 

defense. See, e.g., United States v. Quijada, 588 F.2d 1253, 

1255 (9th Cir. 1978) (eschewing any effort to distinguish 

between the two concepts); United States v. Duran, 884 F. 

Supp. 577, 580 n.5 (D.D.C. 1995) (noting that "categorizing 

a case as involving legal versus factual impossibility is 

difficult, if not pointless."), aff'd , 96 F.3d 1495 (D.C. Cir. 

1996). 

In fact, we are the only circuit which continues to

recognize a common law defense of legal impossibility. We 

established its validity in United States v. Berrigan, 482 

F.2d at 190, where we held that legal impossibility is a 

defense to certain crimes of attempt. Berrigan involved a 

federal prisoner convicted of attempting to smuggle letters 

in and out of a federal prison without the knowledge and 

consent of the warden, in violation of 18 U.S.C.S 1791 and 

28 C.F.R. S 6.1. The evidence showed that the defendant 

used another prisoner on study-release as a courier for his 

mail, believing all along that the warden was not aware of 

the duo's scheme. However, the warden had learned of the 

defendant's first correspondence, and, working with the 

police, he allowed the courier to carry all subsequent letters 

with his knowledge and consent. Thus, the defendant

argued that his crime was legally impossible; he had been 

charged with attempt to smuggle letters without the

warden's knowledge and consent, and yet the warden both 

knew and consented to the crime. 

On appeal, we agreed with the defendant and held that 

his crime was legally impossible. We recognized that 

"elimination of impossibility as a defense . . . is consistent 

with the overwhelming modern view," 482 F.2d at 186

(quotation omitted), but we concluded that legal 

impossibility remains a valid defense to common law crimes 

of attempt in this circuit. Emphasizing that "[f]ederal 

criminal law is purely statutory," id. at 185, we wrote that 

we had no choice but to recognize a defense of legal 

impossibility in the absence of a federal statute providing 

otherwise. Id. at 190. Therefore, we stated,"attempting to 

do that which is not a crime is not attempting to commit a 

crime." Id. 

 19 
In subsequent years, however, we have explored and 

defined Berrigan's reach and have recognized exceptions to 

the Berrigan rule. In United States v. Everett, we held that 

legal impossibility was "no defense to the charge of 

attempted distribution of a controlled substance under 21 

U.S.C. S 846 (1976)." 700 F.2d 900, 908 (3d Cir. 1983). In 

that case, a jury convicted the defendant of attempting to 

distribute the drug phenyl-2-propanone in violation of the 

Comprehensive Drug Abuse Prevention and Control Act

("the Drug Control Act"). However, the liquid Everett gave to 

an undercover agent was not, in fact, a controlled 

substance. Relying on Berrigan, Everett thus argued that 

his conviction should be set aside as having been legally 

impossible; he was convicted of an attempt to distribute 

drugs, but the substance he distributed was not actually a 

narcotic. 

We rejected Everett's argument and held that Berrigan 

did not apply to the Drug Control Act. We noted that 

Berrigan was a case of statutory interpretation, and we 

found that we should limit its reasoning to the particular 

law in that case (18 U.S.C. S 1791). As our opinion stated, 

"[w]e cannot rest on Berrigan's interpretation of what 

Congress meant by the word `attempts' when it enacted 18 

U.S.C. S 1791. Instead we must examine legislative intent 

anew. If Congress chose in enacting [the Drug Control Act] 

to define `attempt' to punish efforts to [distribute narcotics] 

regardless of impossibility, that intent governs." 700 F.2d at 

904. Therefore, we reviewed the legislative history of the 

Drug Control Act, and we concluded that "Congress 

intended to eliminate the defense of impossibility when it 

enacted section 846." Id. 

We agree with Everett's analysis and we believe it should 

be employed in this case. Consistent with Everett, we 

should resort to legislative intent to determine whether 

Congress meant to permit a defense of impossibility to an 

"attempt" crime under the EEA. When Congress uses a

common law term such as "attempt," we generally presume 

that it intended to adopt the term's widely-accepted 

common law meaning, including any common law defenses 

such as impossibility. United States v. Cicco, 10 F.3d 980, 

984 (3d Cir. 1993). However, as Everett recognized, "the 

 20 
courts will not impose that meaning if there are `grounds 

for inferring an affirmative instruction from Congress' to 

define it otherwise." 700 F.2d at 904 (quoting Morissette v. 

United States, 342 U.S. 246, 273 (1952)). 

After reviewing the legislative history of the EEA, we 

conclude that Congress did not intend to allow legal 

impossibility to be asserted as a defense to attempt crimes 

created by its terms. Congress never spoke directly as to 

why it used the term "attempt," or as to the issue of legal 

impossibility, in any of the reports or debates on the 

statute. We find, however, that, as we held in Everett, the 

underlying purposes of the law provide substantial evidence 

of a congressional intent that the defense of legal

impossibility should not apply. 

One of the key findings in Everett was that the Drug 

Control Act was designed to offer a "comprehensive"

solution to narcotics offenses. 700 F.2d at 906-07. We 

concluded from this that Congress could not have intended 

to adopt the impossibility defense, "whose viability at 

common law was questionable at best," because doing so 

would only "hamper federal efforts to enforce the drug 

laws." Id. at 907. 

Here, the very same goals, and the very same language, 

appear throughout the legislative history of the EEA. Just 

as the Drug Control Act embraced a "comprehensive" 

solution for drug trafficking, so too does the EEA attempt to 

provide a "comprehensive" mechanism for curtailing the 

escalating threat of corporate espionage. The Senate Report 

includes an entire section entitled "Need for a 

Comprehensive Federal Law," and "underscore[s] the 

importance of developing a systematic approach to the 

problem of economic espionage." S. Rep. No. 104-359, at 

11. The Report notes that "a Federal criminal statute will 

provide a comprehensive approach to [the theft of trade 

secrets] -- with clear extraterritoriality, criminal forfeiture, 

and import-export sanction provisions." Id. at 12. Likewise, 

the House Report states that the EEA is designed to provide 

a "systematic approach" to trade secret theft, and asserts 

that "a comprehensive federal criminal statute will better 

facilitate the investigation and prosecution of this crime." 

H.R. Rep. No. 104-788, at 7, 1996 U.S.C.C.A.N. at 4025. 

 21 
The House also explained that the EEA was crafted to 

punish virtually every form of illegal industrial espionage, 

"from the foreign government that uses its classic espionage 

apparatus to spy on a company, to the two American 

companies that are attempting to uncover each other's bid 

proposals, or to the disgruntled former employee who walks 

out of his former company with a computer diskette full of 

engineering schematics." Id. at 5, 1996 U.S.C.C.A.N. at 

4024.17 

In an effort to undermine this evidence of intent, the 

defendants offer the statement of Senator Herbert Kohl, a 

co-sponsor of the trade secrets legislation, who commented 

that the EEA should "only be used in flagrant and 

egregious cases of information theft." 142 Cong. Rec. 

S12,212 (daily ed. Oct. 2, 1996). The defendants contend 

that this demonstrates an intent to limit the statute's 

reach. However, the Senator's remarks are taken out of 

context. His entire statement reads, in pertinent part, as 

follows: 

 [W]e have carefully drafted these measures to ensure 

 that they can only be used in flagrant and egregious 

 cases of information theft. Moreover, trade secrets are 

 carefully defined so that the general knowledge and 

 experience that a person gains from working at a job is 

 not covered. 

 Mr. President, we do not want this law used to stifle 

 the free flow of information or of people from job to job. 

 But we built in a number of safeguards to prevent 

 exactly these problems. 

Id. Senator Kohl did not intend to limit the statute's 

comprehensive scope. He meant merely to allay any fears 

that the government would use the EEA to police clearly 

_________________________________________________________________ 

17. Individual legislators echoed these goals as well, declaring that the 

EEA would serve as a "comprehensive statute" to combat corporate 

espionage. 142 Cong. Rec. H10,461 (daily ed. Sept. 17, 1996) (statement 

of Rep. Hyde). Even the President himself stated upon signing the bill 

that "[t]his Act establishes a comprehensive and systematic approach to 

trade secret theft and economic espionage." Statement by President 

William J. Clinton Upon Signing H.R. 3723, reprinted in 1996 

U.S.C.C.A.N. 4034, 4034. 

 22 
innocuous and otherwise lawful behavior, such as occurs 

when employees change jobs or start their own companies 

using general knowledge that they have acquired through 

prior employment. See, e.g., Sen. Rep. No. 104-359, at 12 

(clarifying that the EEA "does not apply to innocent 

innovators or to individuals who seek to capitalize on their 

lawfully developed knowledge, skill or abilities"). We do not 

read Senator Kohl's comments as undermining the 

comprehensiveness of the statute as it pertains to the theft 

of trade secrets. We believe that the great weight of the 

EEA's legislative history evinces an intent to create a 

comprehensive solution to economic espionage, and wefind 

it highly unlikely that Congress would have wanted the 

courts to thwart that solution by permitting defendants to 

assert the common law defense of legal impossibility. 

We also find it significant, as Everett did, that the statute 

we are considering was drafted at a time when "the doctrine 

of impossibility had become mired in fine distinctions and 

had lost whatever acceptance at common law it may have 

possessed when the statute considered in Berrigan was first 

enacted in 1930." 700 F.2d at 905. The EEA was drafted in 

1996, more than twenty-five years after the National 

Commission on Reform of the Federal Criminal Laws had 

concluded that the abolition of legal impossibility was 

already "the overwhelming modern position." Id. (quotation 

omitted). In fact, to this day, "[a]side from the Third Circuit 

in Berrigan, every Circuit that has considered the defense 

of impossibility has rejected it." Duran, 884 F. Supp. at 580 

(emphasis added). Thus, we doubt that Congress meant to 

permit legal impossibility to be asserted as a defense to 

EEA crimes. 

Finally, we are mindful, as Everett was, 700 F.2d at 907 

n.16, of the potential damage that the defendants' position 

could work on law enforcement under the statute. If we 

were to hold that legal impossibility is a defense to the 

attempted theft of trade secrets, the government would be 

compelled to use actual trade secrets during undercover 

operations in order to obtain convictions underS 1832(a)(4).18 

_________________________________________________________________ 

18. The government claims that it used documents containing actual 

trade secrets in this case, only "because of the difficulty in preparing 

on 

short notice documents which appeared to be authentic for presentation 

to the trained scientists brought to the meeting by Hsu." (Gov't. Reply 

Br. at 4 n.3.) 

 23 
Aside from the logistical difficulties this would create, it 

would also have the bizarre effect of forcing the government 

to disclose trade secrets to the very persons suspected of 

trying to steal them, thus gutting enforcement efforts under 

the EEA. We believe Congress could not have intended such 

a result, inasmuch as it was striving to prevent economic 

espionage and to maintain the confidentiality of trade 

secrets. Therefore, given the strong indicia of legislative 

intent, and given the practical import of a contrary finding, 

we conclude that Congress could not have intended EEA 

attempt crimes to be subject to the somewhat obscure and 

rarely used common law defense of legal impossibility. 

Accordingly, we hold that legal impossibility is not a 

defense to a charge of attempted misappropriation of trade 

secrets in violation of 18 U.S.C. S 1832(a)(4). We agree with 

the district court's conclusion that a charge of "attempt" 

under the EEA requires proof of the same elements used in 

other modern attempt statutes, including the Model Penal 

Code. A defendant is guilty of attempting to misappropriate 

trade secrets if, "acting with the kind of culpability 

otherwise required for commission of the crime, he ... 

purposely does or omits to do anything that, under the 

circumstances as he believes them to be, is an act or 

omission constituting a substantial step in a course of 

conduct planned to culminate in his commission of the 

crime." Model Penal Code S 5.01(1)(c) (1985).19 Thus, the 

defendant must (1) have the intent needed to commit a 

crime defined by the EEA, and must (2) perform an act 

amounting to a "substantial step" toward the commission of 

that crime. See Cicco, 10 F.3d at 984-85 (attempt crimes 

_________________________________________________________________ 

19. We adopt the Model Penal Code ("MPC") test for attempt because it 

is consistent with our own caselaw and with the great weight of modern 

precedent. We have indicated that the MPC constitutes "well-settled 

principles of the law of attempt," United States v. Kikumura, 918 F.2d 

1084, 1108 (3d Cir. 1990), we have found that it"is logical and in 

conformity with the purposes of the criminal law," United States v. CruzJimenz, 977 F.2d 95, 102 n.10 (3d Cir. 1992), and we have employed its 

principles on several occasions. See, e.g., id.; Cicco, 10 F.3d at 984-85; 

Everett, 700 F.2d at 908. Moreover, the majority of federal courts have 

now embraced the MPC test for attempts as well. See Cruz-Jimenz, 977 

F.2d at 102 n.8 (citing cases); Dressler, supra, at S 27.09[A]. 

 24 
require a showing of intent and "evidence of conduct 

constituting a substantial step toward commission of the 

crime in pursuit of the culpable intent"); Everett, 700 F.2d 

at 908 (conviction for attempt requires proof of intent and 

"some measure of objective evidence corroborating the 

attempted" crime). 

It naturally follows that the government need not prove 

that an actual trade secret was used during an EEA 

investigation, because a defendant's culpability for a charge 

of attempt depends only on "the circumstances as he

believes them to be," not as they really are. The government 

can satisfy its burden under S 1832(a)(4) by proving beyond 

a reasonable doubt that the defendant sought to acquire 

information which he or she believed to be a trade secret, 

regardless of whether the information actually qualified as 

such. Consequently, in the instant case, the defendants 

have no arguable constitutional or statutory right to view 

the unredacted portion of the Taxol documents in order to 

defend against charges of attempt on the basis of legal 

impossibility. 

2. Conspiracy 

We also hold that the defendants have no need for the 

Taxol documents to defend against the government's 

charges of conspiracy, because we conclude that legal 

impossibility is not a defense to conspiracy. Although we 

have stated that impossibility may be a valid defense to 

attempt crimes, Berrigan, 482 F.2d at 190, we have never 

recognized the defense for conspiracy charges, and we are 

persuaded by the views of our district courts, and by the 

decisions of our sister circuits, that the impossibility of 

achieving the goal of a conspiracy is irrelevant to the crime 

itself. See, e.g., United States v. Wallach, 935 F.2d 445, 470 

(2d Cir. 1991); United States v. LaBudda, 882 F.2d 244, 

248 (7th Cir. 1989); United States v. Petit, 841 F.2d 1546, 

1550 (11th Cir. 1988); United States v. Everett, 692 F.2d 

596, 599 (9th Cir. 1982); Yepes v. United States, Civ. A. No. 

93-2310, 1993 WL 525578, at *4 (D.N.J. Dec. 15, 1993). 

It is well-settled that conspiracy and attempt serve 

different roles in the criminal law. The law of attempts was 

 25 
traditionally viewed as a way "to deal with conduct which 

create[d] a risk of immediate harmful consequences." 

Wayne R. LaFave & Austin W. Scott, Jr., Substantive

Criminal Law, S 6.5(b), at 91 (2d ed. 1986). Even under the 

modern view, attempt prosecutions generally proceed only 

against those who have taken a "substantial step" toward 

commission of a substantive crime. See Model Penal Code 

S 5.01(1)(c) (1985). However, the law of conspiracy is much 

more preventive, aiming to nip criminal conduct in the bud 

before it has the chance to flourish into more ominous 

behavior. See Wallach, 935 F.2d at 470 (noting that

conspiracy serves to protect society and prevent criminal 

behavior "in its early stages"); LaFave & Scott, supra, 

S 6.5(b), at 91 (stating that "[c]ourts have generally taken a 

broader view of the purposes of conspiracy"). As the 

Supreme Court has written, 

 [t]he law of conspiracy identifies the agreement to 

 engage in a criminal venture as an event of sufficient 

 threat to social order to permit the imposition of 

 criminal sanctions for the agreement alone, plus an 

 overt act in pursuit of it, regardless of whether the 

 crime agreed upon actually is committed. Criminal 

 intent has crystallized, and the likelihood of actual, 

 fulfilled commission warrants preventive action. 

United States v. Feola, 420 U.S. 671, 694 (1975) (citations 

omitted). 

It is thus the conspiratorial agreement itself, and not the 

underlying substantive acts, that forms the basis for 

conspiracy charges. United States v. Jannotti, 673 F.2d 578, 

591 (3d Cir. 1982) (en banc). The "illegality of the 

agreement does not depend on the achievement of its ends," 

and it is "irrelevant that the ends of the conspiracy were 

from the very inception of the agreement objectively 

unattainable." Id.; see also United States v. Olgin, 745 F.2d 

263, 273 (3d Cir. 1984) (stating that "the objective 

impossibility of attaining the goals of a conspiracy is 

irrelevant to the guilt of those who conspire"). 

Consequently, it is equally irrelevant that the commission 

of a substantive offense may have been legally impossible 

for the conspiracy to achieve all along. We therefore join 

our sister circuits, and the district courts in our own 

 26 
circuit, in squarely holding that legal impossibility is not a 

defense to conspiracy.20 

As a result, the Taxol trade secrets in the Bristol-Myers 

documents are not "material" to the preparation of the 

defendants' impossibility defense, because proof that the 

defendants sought to steal actual trade secrets is not an 

element of the crimes of attempt or conspiracy under the 

EEA. A defendant can be convicted of attempt or conspiracy 

pursuant to 18 U.S.C. SS 1832(a)(4) or (a)(5) even if his 

intended acts were legally impossible. 

_________________________________________________________________ 

20. We are aware of only three federal appellate decisions even implying 

that legal impossibility is a defense to conspiracy, but none of these 

cases is probative of the issue before us. First, in Ventimiglia v. United 

States, the Fourth Circuit reversed the convictions of three defendants 

accused of conspiring to violate a Taft-Hartley Act provision forbidding 

the payment of money by an employer to "any representative of any of 

his employees." 242 F.2d 620 (4th Cir. 1957). Because the defendants 

had paid a person who was not, in fact, a "representative of " their 

employees, the court held that the conviction for conspiracy was legally 

impossible. However, the defendants in that case knew that the 

individual in question was not a "representative" within the meaning of 

the statute. Id. at 266. Therefore, the court's comments regarding legal 

impossibility were entirely in dicta; the convictions were reversed 

because the defendants did not even have the specific intent needed to 

sustain a charge of conspiracy. 

Second, in O'Kelley v. United States, the Eighth Circuit held that 

several defendants could not be convicted of a conspiracy to steal goods 

in interstate commerce where the goods were not in interstate commerce. 

116 F.2d 966, 968 (8th Cir. 1941). However, this statement was also 

dicta, because there was no jurisdiction to prosecute the defendants 

absent proof of an effect on interstate commerce, and, as in Ventimiglia, 

there was no showing that the defendants possessed the requisite 

criminal intent. 

Finally, in Woo Wai v. United States, the Ninth Circuit reversed a 

conviction for a conspiracy to smuggle aliens into the U.S., because, 

inter 

alia, the act would not have been a crime even if completed. 223 F. 412, 

414-15 (9th Cir. 1915). Yet Woo Wai was an entrapment case, and any 

references to the impossibility of the crime were wholly extraneous to the 

holding. Moreover, to the extent that Woo Wai states that impossibility 

is a defense to conspiracy in the Ninth Circuit, the Ninth Circuit has 

since rejected that claim expressly. See, e.g., Everett, 692 F.2d at 599; 

United States v. Sanford, 547 F.2d 1085, 1091 (9th Cir. 1976). 

 27 
B. Relevance of Purported Secret Information to 

Other Aspects of the Defense Strategy 

Having concluded that the defendants' right to access 

actual trade secrets is not required in order to defend 

against an element of the government's case, the question 

remains whether the defendants' right of access to the 

information as it relates to other defenses passes muster 

under the test of materiality. The defendants argue that the 

unredacted documents are also material to the preparation 

of the potential defenses of entrapment, outrageous

government conduct, and jurisdiction, and contend that the 

documents are needed to defend against the elements of 

attempt and conspiracy, the allegations of the indictment, 

and the evidence that the government intends to introduce 

at trial. 

As an initial matter, we note that we are skeptical of the 

materiality, let alone relevance, of the redacted trade secret 

information to these issues. For example, the defendants 

argue that they need the unredacted documents to disprove 

the intent and "substantial step" elements of attempt and 

the "overt act" requirement of conspiracy.21 However, proof 

of these factors is necessarily independent of any trade 

secrets contained in the Bristol-Myers documents, because 

the defendants can be guilty of attempt and conspiracy to 

steal trade secrets even if the documents contained no 

confidential information at all. See MPC S 5.01(1)(c) 

(attempt), S 5.02(1)(a) (conspiracy).22 

_________________________________________________________________ 

21. Conspiracy charges under S 1832 require both an agreement and 

an "overt act" in furtherance of the conspiratorial objective. See 18 

U.S.C. S 1832(a)(5) (providing that a defendant is guilty of conspiracy if 

he "conspires with one or more other persons" to commit an offense 

proscribed by S 1832, and if "one or more of such persons do any act to 

effect the object of the conspiracy"). 

22. Moreover, the government has assured us that it has no intention 

to use or refer to the alleged trade secrets at trial. The government 

intends to prove its allegations instead by using other materials that 

reflect an attempt and a conspiracy to violate the EEA. For example, the 

government has stated that it may offer the e-mail list that Chou 

allegedly sent to Hartmann on March 13, 1997, outlining the "core 

technology" that YFP would need to complete a deal. By this list the 

government intends to prove that the defendants attempted to steal what 

they believed to be "trade secrets" without ever revealing the actual 

trade 

secrets themselves. The jury will thus never learn-- and will have no 

reason to learn -- of the content of the redacted material. 

 28 
However, we will not address defendants' claim of need 

for the redactions as to any other defense or aspect of the 

case for two reasons. First, the defendants never raised the 

materiality of the redacted information as to any other 

defenses before the district court, and the court never 

addressed these other arguments in its opinion. The

defendants' briefs to the district court argued only that the 

government must prove the existence of an actual trade 

secret in a prosecution for attempt and conspiracy and that 

legal impossibility remains a viable defense. We will not 

examine other contentions as to the materiality or relevance 

of trade secret information that are being raised for the first 

time on appeal. See Harris v. City of Philadelphia, 35 F.3d 

840, 845 (3d Cir. 1994) ("This court has consistently held 

that it will not consider issues that are raised for the first 

time on appeal.").23 

Further, no one -- not this Court, not the district court, 

not even the parties themselves -- knows the content of the 

redacted Bristol-Myers documents at issue in this case. It 

was stated at oral argument that the documents have been 

reviewed and edited for trade secrets by Bristol-Myers 

employees alone, without any oversight by the court, the 

government, or the defense. Thus, while we might be

skeptical of the defendants' asserted need for this

information, we will not decide whether they have a right to 

access documents that could conceivably reveal information 

needed to preserve their rights to a fair trial. Only defense 

counsel know the precise contours of the defendants' case, 

and we are not in a position to make judgments about the 

_________________________________________________________________ 

23. In some situations, we provide direction to the parties by 

addressing issues that are certain to arise upon a remand of the case, 

even if the issues were not discussed initially by the district court. 

See, 

e.g., New Jersey Coalition of Rooming and Boarding House Owners v. 

Mayor of Asbury Park, ___ F.3d ___, No. 97-5483, 1998 WL 427231, at 

*2 (3d Cir. July 30, 1998) (highlighting statutory and constitutional 

claims "that may require further consideration" upon remand). Here, 

however, we are unable to offer informed guidance, because we are 

without the benefit of a full review of the redacted materials. The 

complete breadth of the defendants' arguments cannot be determined 

unless and until this case is remanded and the district court examines 

the potential defenses in light of the content of the Bristol-Myers 

documents. 

 29 
impact of the redacted material without having seen the 

material ourselves. 

Accordingly, we will remand this action to the district 

court. If the defendants raise before the district court the 

additional arguments that they have urged on appeal, we 

would expect the district court to conduct an in camera 

review to determine whether the documents have been

properly redacted to exclude only confidential information 

and to assess whether what was redacted is "material" to 

the defense. 

In such event, because "public policy requires protection 

of portions of a document, . . . in camera inspection by the 

trial judge or magistrate is unavoidable." Bogosian v. Gulf 

Oil Corp., 738 F.2d 587, 596 (3d Cir. 1984). Even if proof 

of an actual trade secret is not an element of SS 1832(a)(4) 

and (a)(5), an independent assessment of whether materials 

are nonetheless discoverable is anticipated in the language 

of S 1835, which provides that the district court "shall enter 

such orders and take such other action as may be 

necessary and appropriate to preserve the confidentiality of 

trade secrets, consistent with the requirements of the 

Federal Rules of Criminal and Civil Procedure, the Federal 

Rules of Evidence, and all other applicable laws." Rule 

16(a)(1)(C) of the Federal Rules of Criminal Procedure 

enables the defendants to obtain documents in the 

government's possession that are material to the 

preparation of their defense, or are intended for use by the 

government as evidence in chief at trial. These principles 

suggest that the district court should examine the relevant 

portions of the Bristol-Myers documents to assess the 

materiality of those portions of the documents sought to be 

withheld. See United States v. Bocra, 623 F.2d 281, 285 (3d 

Cir. 1980) ("The submission of discovery materials to the 

court for an in camera inspection and decision as to which 

materials are discoverable is commonly used when the 

Government's need for preserving confidentiality over the 

materials must be balanced with the defendant's 

constitutional right to evidence material to his defense."). 

We leave to the district court the ultimate resolution of 

these issues if raised on remand by the defendants.

 30 
IV. CONCLUSION 

The district court's Order dated October 27, 1997, will be 

reversed, and the cause will be remanded for further 

proceedings consistent with this opinion. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

 31