By Miles Moore, Senior Washington Reporter
KNOXVILLE, Tenn. (Feb. 5, 2013) — The Sixth Circuit Court of Appeals has upheld the convictions of two former Wyko Tire Technology Inc. engineers for stealing trade secrets from Goodyear, but reversed and remanded their sentences to the Knoxville federal district court.
Clark Alan Roberts and Sean Edward Howley were found guilty in December 2010 of 10 counts of stealing trade secrets and wire fraud.
According to the indictment, Messrs. Roberts and Howley visited Goodyear's Topeka, Kan., plant on May 30-31, 2007. Ostensibly, they were there to service Wyko equipment at the facility, but instead they surreptitiously took pictures of Goodyear's proprietary "swab-down" device that applies the inner bead of an off-the-road tire to the wheel hub.
Messrs. Roberts and Howley then emailed seven pictures of the device to a Wyko subsidiary in England. The plan, according to the court, was to use the photos to design and build a similar device for Haohua South China Guilin Rubber Co. Ltd.
The two men were sentenced in August 2011 to four months of house arrest, 150 hours of community service and four years' probation. Judge Thomas W. Phillips also fined them each $1,000, but waived the fines because of their inability to pay.
Messrs. Roberts and Howley had faced maximum sentences of 10 years in prison for each trade secret count, 20 years for each wire fraud count and $2.5 million in fines. Judge Phillips, however, passed the lighter sentences because the duo had committed no previous crimes and because of the character witnesses called on their behalf.
Judge Phillips also did not allow an expert witness for Goodyear to testify, ruling that his estimates of the financial damage caused by Messrs. Roberts' and Howley's actions were not supported by documentation.
Both the U.S. Justice Department and the defendants appealed the verdict. The government argued that the sentences were too lenient; Messrs. Roberts and Howley argued that their actions did not meet the statutory definitions of trade secret theft or wire fraud.
The appeals court, however, found the evidence easily met the legal standard. Goodyear's security precautions alone demonstrated that it saw the need to keep its machinery designs secret, it said in its Feb. 4 decision.
"The behavior of the key players in this case also shows that Roberts and Howley stole information that they could not obtain through public means," the court said. "If Wyko could have learned how to design tire assembly machines on its own, why all this fuss?"
Messrs. Roberts and Howley argued that the trade secrets statute is unconstitutionally vague, according to the decision. "This contention faces a serious impediment: We considered an identical challenge 11 years ago and rejected it," the court said.
The appeals court also found the trial court in error for not considering the financial losses to Goodyear.
"On remand, the district court need not be exactly," the appeals court said. "But the court must at least provide an estimate (of damages) and reasons for it."
Goodyear spokesmen and attorneys for the defendants could not be reached for comment.
To reach this reporter: [email protected]; 202-662-7211.