[00:00:00] Speaker 03:
Case number 20-3010, United States of America versus Shanchu Appellants.

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Mr. Darrington for the appellant, Ms.

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Ralston for the appellee.

[00:00:12] Speaker 01:
Good morning, Mr. Darrington.

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We will hear from you.

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Thank you.

[00:00:18] Speaker 00:
Good morning, Your Honor, and may it please the court.

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Mike Darrington on behalf of defendant appellant Dr. Shan Shi.

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Your honors, the insufficiency of the evidence in this case is nothing short of staggering.

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Dr. Xi was convicted of one count of conspiracy to steal trade secrets, even though the government's star cooperating witness, Quibo, whom the government described as Dr. Xi's right-hand man and who admitted during trial that he was highly motivated to testify against Dr. Xi, flatly denied that Dr. Xi was part of any agreement to steal or use any information from Trelleborg.

[00:00:53] Speaker 00:
the victim company um counsel the question that was put to him didn't say uh steal or use it said steal right uh your honor you're correct the question did say steal um and the government makes much of that point by seeming to argue that um mr boh parsed the language of the actus reus within the statute and silently differentiated between the act of stealing and the act of using stolen information

[00:01:22] Speaker 00:
So while your honor is correct that the word used was steal, we think that it's fairly clear that Bo was testifying that there was nothing, there was no information stolen, no agreement to steal information and no agreement to use stolen information in any way.

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How is that consistent with our obligation to consider the evidence in the light most favorable to the government and give the government the benefit of all inferences?

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You want the benefit of that inference here, right?

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Respectfully, no, Your Honor, we think that that inference would actually be unreasonable for the jury to have concluded that Bo silently parsed the statue and quietly thought there might be an agreement to do something with stolen information, but not to steal information.

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And in any event, the burden here is on the government, and the government chose not to even redirect Bo and Starr Witness, who had just denied that there had been an agreement to steal trade secrets from Trela Borg.

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So we think that speaks volumes.

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The government, rather than trying to draw, risking drawing attention to this

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statement that entirely exculpates Dr. Xi chose to just let it be.

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So we think because it's the government's burden to prove that there was a conspiracy and an agreement beyond a reasonable doubt, the fact that the star witness denied that there was an agreement to steal trade secrets from Trelloborg constitutes enough that there couldn't be a reasonable inference he meant something else, that there was stolen information in play here.

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Dr. Shi met with a company called Cuming to discuss with them the possibility of some sort of a joint venture.

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And the evidence was that during those negotiations and discussions, Shi was told that Cuming's technology was proprietary and they would not disclose specifics of their formulations for these microspheres, macrospheres.

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Isn't that correct?

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Your Honor, Cumming is an entirely different company from Trelleborg.

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So I understand.

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But the point is, is that she would have learned from that that formulations of macrospheres is proprietary confidential trade secret information.

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Well, as an initial matter, Your Honor, I'm not sure that the record would indicate to the level of detail you're talking about, but the types of specifications that are involved with Trelleborg were actually involved with Cumming.

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And to contextualize the testimony regarding... You don't need to know that these specific specifications are confidential.

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You need to know... Let me just cut to the chase here.

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Doesn't that evidence plus the fact that she saw settlement slash confidentiality agreements from two former Trelleborg employees that describe, you know, proprietary data, specifications, manufacturing techniques, et cetera, is confidential information.

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Doesn't that establish

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that she knew that this sort of specific formulation data of macrospheres was confidential information.

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Your honor respectfully, we would submit the answer to that question is no now to be clear There's two elements that are missing from the government's case and the first one is the agreement and the second one is the not lack I'm gonna get to the agreement in a minute, but I want to talk about whether that is sufficient to give The government adequate proof of knowledge we would say no your honor and the reason is because

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These boilerplate confidentiality agreements at Trelloborg were circular in nature.

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They specified that confidential information and proprietary information is confidential and must be kept confidential.

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The question is whether Dr. Xi thought, whether there's proof beyond a reasonable doubt that Dr. Xi would have concluded that the particular information, putting aside coming, the particular information that his two employees

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at CMI privately used and passed off as their own, constituted confidential and trade secret information.

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Well, the particular information that his employees got from Trelleborg was the same type of information that Cumming had told them was proprietary.

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I'm not sure that we would agree with that characterization of the record, Your Honor.

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But moreover, there's a... What does the record say?

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Tell me why I'm wrong.

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What in the testimony

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said differently than that?

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Well, we're dealing here with seven specific pieces of information that the government has alleged constitute trade secrets, and that Dr. Xi allegedly knew or believed constitute trade secrets.

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So if we're talking in particular about the specifications, as an initial matter, the evidence was wholly deficient to prove beyond a reasonable doubt that Dr. Xi even knew that information came from Trellberg, those specifications.

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Well, some of them had Trelleborg, at least one spreadsheet had Trelleborg's name on it that was emailed to Dr. Xi.

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So, Your Honor, in order to develop and prove beyond a reasonable doubt knowledge that Dr. Xi thought that information came from Trelleborg and constituted trade secrets, there would have to be a string of inferences that starts with the inference that Dr. Xi opened the email

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There was no metadata presented to prove that.

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Second, that Dr. Shee opened the native file of the attachment, because if you print it out, as many do, when looking at a hard copy, you wouldn't see the word Trelleborg at the bottom.

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So we can't infer that Dr. Shee read and opened an email that was sent to him.

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That's not what a jury could reasonably infer, giving the government the benefit of all efforts.

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In some circumstances, a jury could infer that one would look at an email that they receive if, in fact, there was evidence that the person reviews their email.

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Some people get thousands of emails, don't even review the email.

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So we're not willing to concede that it's a fair inference in any circumstance.

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Opening an email means you're reviewing an attachment, means you're reviewing it in native, means you see the notation that says reference Trello board, and means that that, to you, triggers another inference on top of those inferences

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that the information actually came from Trellberg, and then on top of that, that the information constituted a trade secret and wasn't something that was even permissibly held by the person who sent it, Lou.

[00:08:06] Speaker 01:
Well, let's move on to the agreement issue.

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May I ask you a question first before you get into the legal question?

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Counsel, are you familiar with the Curley case and the Jackson case in the Supreme Court dealing with the interrelationship between

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the requirement that the government prove its case beyond a reasonable doubt, on the one hand, and the legitimate instances that the jury, that the government gets.

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Are you familiar with that case?

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If your honor would be so willing as to refresh my recollection about the specific aspects of the case at issue, I'd appreciate that.

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Well, this is a case that goes back to the 20s, written by Judge Prettyman, when it was the Supreme Court

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of the District of Columbia.

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The court was called that, but it was our court.

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And it's a very famous case, which has been followed by all the circuits, except recently by the Fifth Circuit.

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And it's basically called the equipoise theory, trying to figure out how you bring together the jury's obligation to decide beyond a reasonable doubt with, on the one hand, with the

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legitimate inferences that the government gets.

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And the law in this circuit is, if the case is in equipoise, then the government loses in the court of appeals.

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Are you familiar with that case?

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It's certainly important to your case here.

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Your honor, I'd like to answer your question.

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I see I'm out of time.

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I would like to reserve, but I'd like to answer your question if I may.

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This is not a hostile question, counsel.

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We very much appreciate your point, Judge Silverman, and we agree with you that in this circumstance, even if the evidence were an equal poise, then the conviction must be reversed.

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But we think it's actually a case that if this were a civil case,

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a jury, rational jury would have ruled in our favor.

[00:10:13] Speaker 02:
I mean, the government's star witness did not- First of all, you should understand that there's a two-step process under our law backed up by the Supreme Court.

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The first is the government gets all the legitimate inferences.

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Now, you argue that some of the inferences they're asserting are unreasonable, and that's an important step, but they get all the legitimate reasonable inferences.

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Then after you've done that, you compare the evidence on the other side.

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And if we conclude they're an equipoise, then we should reverse.

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That's our law.

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I would have thought you would have been on that, certainly helpful.

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to your case?

[00:10:59] Speaker 00:
Your Honor, if the court would find that to be helpful, we would be happy to submit supplemental briefing on those points.

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But it is, we appreciate the court's consideration of those cases, and we'll certainly take a look at how they apply in the circumstances.

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But we agree with the court's conclusion or Judge Silverman's conclusion or suggestion in that circumstance, particularly when the emails Judge Wilkins was mentioning that said in a particular point, reference Trellaboard,

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were sent by someone that the star witness, again, Bo, denied there was a conspiracy involving.

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So appreciate that point, Judge Silver.

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Bo also testified that the information from Treleborg was confidential.

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He testified to that at J1077 and 78 on cross-examination by the defense.

[00:11:49] Speaker 01:
Right.

[00:11:49] Speaker 00:
Well, Judge Wilkins, whether the information that issue is confidential is a certainly a disputed issue and depending on the particular trade secret we're speaking about many of the Trello board personnel themselves, including the president of the company and the head of innovation and technology.

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conceded that some of the information, it was unclear if there was even a requirement that they not disclose it, for instance, some of the pricing information.

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Other of the information, it was unclear to them whether it even came from Trellberg in the first place.

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You're saying that there's a dispute, but that's not, as Judge Silberman pointed out, that's not what we're here to do now, is to look to see whether you disputed evidence, where to look at the evidence in the light most favorable to the government.

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And what I'm saying to you,

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is that Trellaborke witnesses, even if you could say that they weren't crystal clear that all of the alleged trade secrets were confidential, they were very clear that many of them were.

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And Bo, co-conspirator, said that he believed that they were.

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So that pretty much

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demonstrates that your argument that the government didn't prove beyond the reasonable doubt that these were even trade secrets is one that we have to reject, doesn't it?

[00:13:18] Speaker 00:
No, Your Honor.

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Respectfully, what the standard is, and this is in the jury instructions in the case law, particularly in the Ninth Circuit, would be that the government had to prove beyond a reasonable doubt that Dr. Xi had knowledge or belief, and the same of at least one alleged co-conspirator, that the information was subject to reasonable measures at Treleport to keep it secret.

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So the mere fact that the information could have been confidential is plainly deficient under the case law.

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On top of that, even if the information were confidential, and we respectfully think the evidence shows to the contrary in many of these instances, there's insufficient evidence to prove that Dr. Shee even knew the information came from Trelleborg.

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Well, when Dr. Shee interviewed two of the former Trelleborg employees, they both told him during the interview

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that there was information that they could either had kept from Trelleborg or that they could get from Trelleborg that could help them do the job, right?

[00:14:24] Speaker 00:
Well, Your Honor, I would suggest that it's slightly more nuanced than that.

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So just to be clear, Ogo, for example, it appears volunteered that there was some information he might need to, he could reach out to friends and get, but he didn't specify that that was confidential information.

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He didn't specify certainly that it was trade secret information.

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He didn't specify there was information he shouldn't be able to get from Trellaborger that wasn't available on the internet.

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And then if you look at what happened next, so not only did Dr. Shi not ask him about that, never asked him to reach out to someone at Trellaborger to get information, this was just a unilateral comment during a lengthy interview.

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If you look at what happened next, it makes clear what Ogo's intentions were here.

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Ogo took the information from two of his friends

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told one of them he wouldn't share.

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He swore to God he wouldn't share it with anyone.

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He just needed it because it was basic information to re-familiarize himself because he had already overstated his job.

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So you're getting down into the weeds.

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The point I'm trying to make here is that if Dr. Xi wanted to manufacture macrospheres and he goes to a company, one of the leading company

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and discusses that with them, and they tell him that the specific formulations and data with respect to that is confidential information.

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And he knows as a general matter that that sort of data is confidential information.

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And then if he goes to hire people who were former Trelleborg employees,

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and ask them, can you help me manufacture macrospheres?

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And they say yes, and that they're going to use information that they either kept from Trelleborg or would get from Trelleborg to specifically help them determine the specific formulations for macrospheres.

[00:16:17] Speaker 01:
Then he knows that that information

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Is the type of proprietary information that the human was prepared was protecting and by hiring them, knowing that they're going to use that proprietary information, whether they say it or not.

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He's entered into a tacit agreement with them to use stolen information to do the job.

[00:16:50] Speaker 01:
Why isn't that

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a completely reasonable way to look at the evidence in the light most favorable to the government.

[00:16:57] Speaker 00:
Well, there are several reasons, Your Honor.

[00:17:00] Speaker 00:
And I would start with the one that the star witness, whom the government described as Dr. Shee's right-hand man, who would have been at the center of this conspiracy, according to the government, denied that there was any such agreement.

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So that dispels any of those other inferences that can be stacked in suspicions that one juror might consider in a normal case.

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This is not a case about credibility of witnesses, the weight of evidence competing.

[00:17:22] Speaker 01:
So you say that our case law supports that if there's a denial that

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that trumps and overrules all the other evidence?

[00:17:33] Speaker 00:
Your Honor, in this particular case, and in fact, in other cases that have come before this court, I think where the decisions come out is that when the key witnesses who would know whether their defendant was involved in a conspiracy and who are highly motivated and admit that fact that they would testify against the defendant, if he was involved in the conspiracy, deny it, then yes, a rational juror would not be able to reasonably conclude that the defendant was part of the conspiracy.

[00:17:55] Speaker 00:
And in those cases, Gaskins and Wilson, for example, there were instances where there was evidence that a juror might consider of the kind that you just described, Your Honor, such as in Gaskins, the employee worked for a drug front.

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It was an investigation company.

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He called in plane tickets or had his name on the lease where the drugs were being

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where the drugs were being packaged.

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There were bad facts in those cases, but at the end of the day, those who would have known and those who were called by the government in order to prove the element that there was an agreement, denied that there was an agreement.

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So a rational juror... Do you think that there should be a different rule for proving a conspiracy to participate in a drug offense than there should in a case of conspiracy to misappropriate trade secrets?

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Well, Your Honor, I'd like to answer that question.

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And if I may go back to some of the premises in your question, because we don't agree with some of those premises as well.

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But in answer to your question, we think that there is an overarching principle here, whether it be in a drug distribution case or whether it be in a murder of a witness case, as was the situation and circumstances presented in the Wilson case.

[00:19:02] Speaker 00:
But the overarching principle that one can glean from those cases is that the government

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in conspiracy cases, chooses to charge a conspiracy.

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And it gets certain benefits of the doubt when it does that, as opposed to a substantive charge.

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And one of the things that has to prove those difficulties is the agreement.

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So what the government does is it flips co-conspirators.

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And that's what it did in Gaskins, and that's what it did in Wilson.

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And it calls them to the stand, because these are people who wouldn't know if the defendant was involved in a charged conspiracy.

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And it asks them that question.

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In almost every case that's ever been brought by the government,

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The answer is, from the co-conspirators, yes.

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This is what the defendant was involved with, with the conspiracy.

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These are the conversations we had about the substantive crimes that we wanted to be committed.

[00:19:46] Speaker 03:
I mean, Mr. Dearington, are you suggesting that cases like Gaskin's create a kind of per se rule that when co-conspirators don't testify to the conspiracy that there cannot be one?

[00:20:02] Speaker 03:
That seems to be over reading Gaskins.

[00:20:06] Speaker 00:
Your honor, it's a good question.

[00:20:08] Speaker 00:
And we certainly don't need a per se rule in order to get a reversal of the conviction in this case, which is warranted.

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I suppose some judges might think that this is such a obvious insufficiency and defect in the government's case when its star witnesses actually go the other way.

[00:20:25] Speaker 00:
So maybe there is some room for a per se rule here, but certainly in a sufficiency case, we don't need to rely on a per se rule here.

[00:20:31] Speaker 00:
We just need to look at the evidence in the record, the arguments in the briefs, and we think that we're confident that when the court looks at the briefs and the court looks at the record evidence, it will conclude that it is not the first court to ever decide that in circumstances presented here where the government's co-conspirators, none of them implicate the defendant, that that can be upheld.

[00:20:50] Speaker 03:
Do you think there's something about the employer-employee relationship here that further makes the inferences reasonable where you have a small company with only a handful of employees and an employer-employee relationship where the employer is saying, you know, you need to go out and get this type of information.

[00:21:09] Speaker 03:
And we know that he had possession of some of those documents.

[00:21:14] Speaker 03:
I mean, is there something about the employer-employee relationship that also supports the inferences?

[00:21:20] Speaker 00:
Well, again, Your Honor, we would disagree with that premise.

[00:21:23] Speaker 00:
So Dr. Shi, the evidence is clear, didn't ask Lou to go out and get any information.

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He didn't ask Ogo to go out and get any information.

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During a lengthy interview, they volunteered that they could potentially have access to some unspecified information.

[00:21:35] Speaker 00:
But to your question about the employer-employee relationship, to the contrary, we think that actually

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created a lot of grounds for jury confusion here.

[00:21:42] Speaker 00:
Because Dr. Shi set out to run a startup, legitimate, registered, tax-funded operation.

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And when you do that, you hire employees with experience.

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You don't hire people in a startup when you're trying to create a better product who have no experience.

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You want to hire people who work at good companies, have their own ideas, but have the experience to be able to make spheres.

[00:21:59] Speaker 00:
And these things were around for 50 years or so.

[00:22:02] Speaker 00:
I think it was more than that.

[00:22:03] Speaker 00:
So people in the industry knew the basics of how to make spheres.

[00:22:06] Speaker 00:
So you go out and you hire people with experience.

[00:22:09] Speaker 00:
And yes, maybe some of them will say during an interview, oh, I have friends.

[00:22:12] Speaker 00:
I have contacts.

[00:22:13] Speaker 00:
I have network.

[00:22:14] Speaker 00:
I could get other people to maybe work here too.

[00:22:16] Speaker 00:
That comes up in a lot of these interviews.

[00:22:18] Speaker 00:
But to think that a legitimate business somehow becomes a conspiracy because of the association, that contravenes settled Supreme Court precedent that says a mere association is not enough to demonstrate a conspiracy.

[00:22:28] Speaker 00:
So we're actually of the opposite mind, which is that the jurors might have seen two employees

[00:22:33] Speaker 00:
who had their own conspiracies in the case of Ogo and Uche, that was a two-person conspiracy, and then Lou, who acted unilaterally, and see that they're under the umbrella of this organization and default to some sort of respondent superior theory of liability that imputes their conduct to Dr. Shih, just because it's his company, when that's contrary to well-settled case law.

[00:22:52] Speaker 01:
What about the fact that Shih was told that this data that they were using came from Trello Board?

[00:23:04] Speaker 00:
I'm sorry, your honor.

[00:23:05] Speaker 00:
I don't believe that that's in the record.

[00:23:08] Speaker 00:
Where specifically are you referencing?

[00:23:13] Speaker 01:
You told she that they were using Trelleborg's recipe.

[00:23:20] Speaker 00:
I'm sorry.

[00:23:20] Speaker 00:
Could you give me a pin site on that?

[00:23:25] Speaker 01:
No.

[00:23:26] Speaker 01:
Okay.

[00:23:27] Speaker 01:
You were, you're familiar with the record.

[00:23:30] Speaker 01:
I mean, there was, um,

[00:23:32] Speaker 01:
it's discussed in the briefs, where you say that Lou was saying that he was concerned that Trelleborg would discover she's recipe because she's recipe was better, but it's an equal inference from the testimony that Lou was telling

[00:24:01] Speaker 01:
she that he was concerned that Trelleborg would discover that they had copied Trelleborg's recipe.

[00:24:13] Speaker 00:
Well, Your Honor, we think the testimony is actually fairly clear on that point.

[00:24:17] Speaker 00:
The government used the word stole in its brief, which appeared nowhere in the record when referring to that instant.

[00:24:22] Speaker 00:
And what actually happened according to the record is that Lou was concerned that if

[00:24:30] Speaker 00:
CBMI provided its recipe for testing and evaluation to Trelleborg.

[00:24:35] Speaker 00:
And its recipe was, in fact, proven to be better than Trelleborg's.

[00:24:38] Speaker 00:
The Trelleborg would see what the recipe is, be able to reverse engineer it and recreate it.

[00:24:43] Speaker 00:
But the record is clear that Lew wasn't concerned that, according to Bo, that Trelleborg would see CBMI took the recipe.

[00:24:50] Speaker 00:
Actually, to the contrary, CBMI had already provided the spheres to Trelleborg for testing and evaluation.

[00:24:56] Speaker 00:
Then they came out better.

[00:24:57] Speaker 01:
Okay, I'm going to read to you the question and the answer.

[00:25:02] Speaker 01:
This is at JA 1077 and 78.

[00:25:05] Speaker 01:
So was Gang Liu expressing some concern that the spheres you were selling to Trelleborg had the same recipe?

[00:25:13] Speaker 01:
Yes.

[00:25:15] Speaker 01:
And this was in the presence of Shanxi?

[00:25:18] Speaker 01:
Yes.

[00:25:20] Speaker 00:
So your honor, as we pointed out in our briefs, and I'll try to find the pin site while I speak, I believe it was cross-examination.

[00:25:28] Speaker 00:
Bo actually refreshed his recollection and came out the other way.

[00:25:32] Speaker 00:
He said, actually, oh, you're right.

[00:25:34] Speaker 00:
Lou was actually expressing concern that CBMI's recipe was wrong.

[00:25:39] Speaker 01:
So what if I don't agree with you that he came out the other way?

[00:25:45] Speaker 01:
If I look at this in the light most favorable to the to the government.

[00:25:49] Speaker 01:
What am I supposed to do with that testimony that I just read to you.

[00:25:53] Speaker 00:
Your honor, we think that the only reasonable inference when a witness is says one thing on direct testimony says X and then on cross examination cross examination to witness memory is refreshed and comes out and says not X and on redirect.

[00:26:10] Speaker 01:
There's no I asked you a question.

[00:26:12] Speaker 01:
I'd like for you to answer my question because I told you that I don't agree with with your characterization of what happened on redirect

[00:26:22] Speaker 01:
So let's assume that I don't.

[00:26:24] Speaker 01:
What am I supposed to do with that testimony that I just read to you?

[00:26:30] Speaker 02:
You mean cross rather than redirect, don't you?

[00:26:32] Speaker 01:
Or cross, yeah.

[00:26:35] Speaker 00:
So Your Honor, I want to make sure I'm answering your question properly.

[00:26:38] Speaker 00:
So is the question that if Bo's testimony that Lou was concerned were not refreshed

[00:26:49] Speaker 00:
updated change, depending on how you look at it.

[00:26:52] Speaker 00:
What should the court do with Lou's initial testimony?

[00:26:55] Speaker 01:
Yes.

[00:26:57] Speaker 01:
Well, doesn't it establish that she was told that they were using the same recipe as Trello board?

[00:27:06] Speaker 00:
So putting aside our obvious disagreement with the premise of the question, if the testimony had stopped after the initial Liu testimony, the first thing we would point to is the fact that Bo, who was the very person testifying here, already said, he testified very clearly, there was no agreement involving Liu to steal trade secrets.

[00:27:27] Speaker 00:
So you could take your initial inference and compare it to the fact that there is no agreement and it clearly dispels, this is not competing inferences, one piece is a direct testimony from the charged right-hand man in the middle of the conspiracy saying you can't make that inference.

[00:27:43] Speaker 00:
And that wasn't crossed by the government.

[00:27:46] Speaker 00:
So the second point is that even taking that initial Lue testimony, we don't think that actually would constitute, putting aside the refreshing of the memory, an admission that this data came from Trelleborg or that Dr. Sheed knew it or that Dr. Sheed actually agreed to it.

[00:28:03] Speaker 00:
Even in this kind of a different factual scenario than is presented here, the case law is clear that even acquiescence or approval in the substantive crime is not enough.

[00:28:12] Speaker 00:
It's not an agreement.

[00:28:13] Speaker 01:
All right.

[00:28:14] Speaker 01:
Thank you.

[00:28:15] Speaker 01:
Any other panel members have questions?

[00:28:20] Speaker 00:
No.

[00:28:22] Speaker 01:
Go ahead.

[00:28:23] Speaker 01:
All right.

[00:28:24] Speaker 01:
We'll hear from the government.

[00:28:26] Speaker 00:
Thank you, Your Honors.

[00:28:28] Speaker 04:
Good morning, Your Honors.

[00:28:29] Speaker 04:
May it please the court, Sonia Ralston for the United States.

[00:28:33] Speaker 04:
I'd like to pick up where the panel left off with one clarification about the record.

[00:28:37] Speaker 04:
that on redirect examination, there was further clarification in Bo's testimony at pages 1154 to 1155 of the Joint Appendix.

[00:28:47] Speaker 04:
They talk about, was, question, was, what was Gang Liu's concerns in the conversation?

[00:28:52] Speaker 04:
Answer, about doing that TGA test, Trelleborg might be able to find out the recipe of CBMI.

[00:28:58] Speaker 04:
Question, and was he concerned about whether Trelleborg would know its own ingredients were in that recipe?

[00:29:03] Speaker 04:
Answer, yes.

[00:29:05] Speaker 04:
And then he says, there's a different test question, and that's a different test from the test in the email that Mr. Zeidenberg, the defense counsel, showed you.

[00:29:12] Speaker 04:
Yes.

[00:29:14] Speaker 04:
So even if you want to take the legal premise of defense counsel's argument, the factual premise is not true.

[00:29:21] Speaker 04:
It was clarified again on redirect examination.

[00:29:24] Speaker 04:
And Bo is very clear that this oral conversation occurred after the email that's referenced on Cross.

[00:29:30] Speaker 04:
And in that conversation, Lou was very clear that the test trial board could do

[00:29:35] Speaker 04:
would identify that its belonging to Trelloborg's recipe was being used to manufacture the spheres at CBMI.

[00:29:45] Speaker 02:
Council, I have a number of questions for you.

[00:29:49] Speaker 02:
First of all, I'd like to ask you, you cited two prior cases.

[00:29:53] Speaker 02:
They're not particularly relevant or crucial.

[00:29:57] Speaker 02:
One of them, you parenthetical that Kavanagh had decided had written the opinion and the other, Ruth Ginsburg.

[00:30:06] Speaker 02:
Why did you do that?

[00:30:08] Speaker 02:
Why is that relevant?

[00:30:10] Speaker 02:
The two colleagues of ours who went to the Supreme Court decided that case or wrote the opinion.

[00:30:18] Speaker 02:
Why is that relevant?

[00:30:19] Speaker 02:
You realize that we're all equal black robe judges.

[00:30:24] Speaker 02:
Did you think we should give particular deference to the fact that a prior colleague who's now a Supreme Court justice or was a Supreme Court justice wrote the opinion?

[00:30:36] Speaker 04:
No, Your Honor, not a special deference.

[00:30:38] Speaker 04:
It's just a fact that courts are sometimes interested in.

[00:30:40] Speaker 04:
It occurs often in court meetings.

[00:30:42] Speaker 02:
Not appropriately interested in.

[00:30:45] Speaker 02:
I think it's Bush League advocacy.

[00:30:49] Speaker 02:
Anyway, let me start.

[00:30:50] Speaker 02:
That annoyed me right at the start.

[00:30:52] Speaker 02:
But let me go on to say, I want to pick up on a point that my colleague raised, which I think it's the key to the case.

[00:31:02] Speaker 02:
In page 22, you say,

[00:31:05] Speaker 02:
First, she was the micromanaging boss of a very small company in which two other members pleaded guilty to the charged conspiracy.

[00:31:18] Speaker 02:
Isn't that absolutely illegal for you to state that?

[00:31:25] Speaker 02:
If that argument had been made to the jury and there was an objection, what would the district judge have said?

[00:31:35] Speaker 04:
I'm sorry, Your Honor.

[00:31:36] Speaker 04:
The fact that Ogo and Bo pleaded guilty was presented to the jury.

[00:31:41] Speaker 02:
It was testimony.

[00:31:42] Speaker 02:
And what was the instruction the judge gave concerning that?

[00:31:47] Speaker 02:
I don't have it at my fingertips.

[00:31:49] Speaker 02:
Well, I do.

[00:31:50] Speaker 02:
It was that you cannot use the guilty plea of these other two against she, and yet you're doing it on appeal.

[00:32:02] Speaker 04:
Your Honor, it's not

[00:32:06] Speaker 04:
I disagree, Your Honor.

[00:32:07] Speaker 04:
It's not substantive evidence of she's guilt.

[00:32:10] Speaker 04:
It is evidence that in this company there.

[00:32:13] Speaker 04:
This is not a 500 person company where he might have no idea what's going on.

[00:32:17] Speaker 04:
It's a very small company where there are only a couple of people and essentially Correct counsel that the district judge properly instructed the jury.

[00:32:27] Speaker 02:
They could not take into account

[00:32:30] Speaker 02:
in determining whether she was part of a conspiracy, that two subordinates had pled guilty to a conspiracy?

[00:32:38] Speaker 04:
That's correct.

[00:32:39] Speaker 04:
The mere fact of their plea is not substantive evidence.

[00:32:42] Speaker 02:
Then why are you using it on appeal?

[00:32:49] Speaker 04:
Your honor, it's shorthand for the fact that they admitted that they were involved in a conspiracy, which they did.

[00:32:54] Speaker 02:
It's absolutely improper to use to infer

[00:32:59] Speaker 02:
that she is part of a conspiracy.

[00:33:02] Speaker 02:
If you had made that statement as counsel before the jury, there would have been an immediate objection and a move for a mistrial.

[00:33:11] Speaker 04:
Your honor, they testified that they were guilty of the crime charge.

[00:33:14] Speaker 04:
That doesn't mean that she was necessarily guilty, but it is evidence that- No, it's not evidence.

[00:33:21] Speaker 02:
It's evidence that the district judge properly instructed the jury they cannot use that factor

[00:33:28] Speaker 02:
as evidence against she.

[00:33:32] Speaker 02:
And yet you're using it on appeal.

[00:33:35] Speaker 02:
Now I suspect that that's exactly why the jury decided as it did, but that's improper, isn't it?

[00:33:43] Speaker 04:
It is improper to convict someone of a conspiracy merely because their co-conspirator has pleaded guilty.

[00:33:48] Speaker 04:
That's true.

[00:33:49] Speaker 04:
But I think even as my friend on the other side would agree, that if someone testifies, I joined a conspiracy and the defendant was in it with me, that the jury... That's not the issue.

[00:34:01] Speaker 02:
You're saying here in your brief that because two other members plead guilty to the child's conspiracy and a very small company, that could be used against the boss, she.

[00:34:13] Speaker 02:
And that's improper.

[00:34:16] Speaker 02:
That's grotesquely improper.

[00:34:20] Speaker 04:
Your Honor, I apologize for the wording.

[00:34:22] Speaker 04:
The point is that two other members of the company that only had four people in it were involved in the conspiracy.

[00:34:31] Speaker 04:
They testified at trial about what was happening at the company, about their actions, and about what happened in front of Xi.

[00:34:38] Speaker 04:
The point is, Your Honor, that

[00:34:40] Speaker 04:
In this tiny environment, it is simply implausible to conceive that she did not understand what was going on.

[00:34:50] Speaker 02:
I see.

[00:34:52] Speaker 02:
I guess we will just be in disagreement about whether what you did was appropriate.

[00:34:57] Speaker 02:
Let me go on to some of the other statements you make.

[00:35:00] Speaker 02:
In your statement of facts, you're accurate, but in the body of the brief, it seems to me you make some misstatements.

[00:35:08] Speaker 02:
Let me start with

[00:35:10] Speaker 02:
Ogo and Leo, who both told him during their interviews that they would need Trelleberg data to do what she wanted them to do.

[00:35:21] Speaker 02:
Isn't that incorrect?

[00:35:24] Speaker 04:
Ogo testified that he would need the data to compare with.

[00:35:26] Speaker 04:
That's at 1168.

[00:35:31] Speaker 02:
Leo did not say he needed Trelleberg data.

[00:35:34] Speaker 04:
He said that he had kept the technical data.

[00:35:36] Speaker 02:
Yes, but that is not the same thing as saying he needed Trelleberg data.

[00:35:40] Speaker 02:
So you misstated that.

[00:35:43] Speaker 04:
I apologize, Your Honor.

[00:35:45] Speaker 02:
And Ogo didn't say he needed Trelleberg data.

[00:35:50] Speaker 04:
I believe he said I would need the data to compare with.

[00:35:53] Speaker 02:
He would need data to which he would compare the sphere he produced.

[00:35:58] Speaker 04:
And that he could get the data from Trelleberg.

[00:36:00] Speaker 02:
No, that's not what he said.

[00:36:01] Speaker 02:
He had friends at Trelleberg that he can contact to help him get the data.

[00:36:06] Speaker 02:
Now, that data could be public or could be

[00:36:10] Speaker 02:
spread throughout the industry.

[00:36:14] Speaker 04:
Your honor, I disagree that that's a fair inference.

[00:36:18] Speaker 02:
You might have argued that there's a fair inference, but you've stated flatly, which is a misstatement, that Ogo and Liu had told them during the interview that they would need Trellberg data to do what she wanted them to do.

[00:36:33] Speaker 02:
So I'm very troubled that that's a misstatement.

[00:36:36] Speaker 02:
Now, you might have argued

[00:36:37] Speaker 02:
that a legitimate inference could be raised to that, but you didn't say that.

[00:36:42] Speaker 02:
Now let me go on.

[00:36:44] Speaker 02:
You said she paid Ogo substantially more than he was paid at previous jobs.

[00:36:52] Speaker 02:
What record evidence do you have of that?

[00:36:54] Speaker 02:
Isn't that a false statement?

[00:36:56] Speaker 04:
No, Your Honor, it's an inference.

[00:36:59] Speaker 02:
What do you mean it's an inference?

[00:37:00] Speaker 02:
You said she paid to Ogo substantially more than he was paid at previous jobs.

[00:37:05] Speaker 02:
Do you have any evidence to support that?

[00:37:07] Speaker 04:
The evidence, the testimony, I'm looking for the page, I think it's 1069, is that he was paid more.

[00:37:13] Speaker 02:
The modifier is an inference.

[00:37:16] Speaker 02:
It could have been $10.

[00:37:20] Speaker 02:
You never ask the question, how much more?

[00:37:23] Speaker 02:
It could have been 10 bucks.

[00:37:26] Speaker 02:
So where do you get substantially more?

[00:37:28] Speaker 02:
That's a misstatement too, isn't it?

[00:37:31] Speaker 04:
Your honor, in the argument portion of our brief, we're arguing the inferences that support... No, no, you didn't say this is an inference.

[00:37:37] Speaker 02:
You said, she paid Ogo substantially more.

[00:37:41] Speaker 02:
That's a factual statement.

[00:37:43] Speaker 02:
It is not supported by anything in the record.

[00:37:48] Speaker 04:
The modifier is not in the testimony.

[00:37:51] Speaker 02:
You're darn right.

[00:37:52] Speaker 02:
It could have been $10.

[00:37:55] Speaker 02:
And obviously, it wasn't very much because you would have asked the question at trial.

[00:38:01] Speaker 02:
Now let me go on.

[00:38:05] Speaker 02:
You say she substantially did, excuse me, initially did not think Leo would be worthwhile hire and change his mind only after he learned that Leo had kept Trelleberg documents.

[00:38:24] Speaker 02:
What it was this business that he changed his mind?

[00:38:28] Speaker 02:
I don't see that.

[00:38:33] Speaker 04:
Your honor, he initially did not think Lou would be worth hiring because he didn't have a PhD.

[00:38:38] Speaker 04:
And then he hired him.

[00:38:40] Speaker 04:
That is not correct.

[00:38:43] Speaker 02:
He wouldn't have interviewed him.

[00:38:44] Speaker 02:
He knew before he interviewed him, he didn't have a PhD.

[00:38:48] Speaker 02:
And he thought he might be a worthwhile hire down the line, just based on his record.

[00:38:55] Speaker 02:
So he liked him.

[00:38:56] Speaker 02:
So it's not fair to say that he changed his mind about Leo

[00:39:03] Speaker 02:
being a worthwhile employee after he interviewed him, he wouldn't have interviewed him without thinking he was a possible.

[00:39:09] Speaker 02:
So again, you're exaggerating.

[00:39:11] Speaker 04:
I disagree, Your Honor.

[00:39:12] Speaker 04:
Even if he thought that down the line, Lou might be worthwhile, the fact that he hired Lou immediately after the interview and then didn't even wait for the conflict check indicates that he did have a change of heart.

[00:39:24] Speaker 02:
It's your statement that bothers me.

[00:39:26] Speaker 02:
She initially did not think Leo would be a worthwhile hire.

[00:39:29] Speaker 02:
That's not supported.

[00:39:32] Speaker 04:
Bo testified that when he first showed Lou's resume to Xi, Xi dismissed him because he didn't have a PhD.

[00:39:38] Speaker 02:
But he wouldn't have interviewed him if he didn't think it was worthwhile.

[00:39:43] Speaker 02:
Potentially in the future.

[00:39:45] Speaker 02:
So in other words, you might have argued there's an inference you could draw from there, but you made a statement of fact, which is an exaggeration at best.

[00:39:54] Speaker 02:
Oh, now here's the one that's more serious even.

[00:39:59] Speaker 02:
at page 19 of your brief.

[00:40:01] Speaker 02:
She hired both men knowing they would use Trelleberg's secrets to do their work for him.

[00:40:08] Speaker 02:
No record citations there.

[00:40:11] Speaker 02:
Isn't that a dreadful overstatement?

[00:40:15] Speaker 02:
She hired both men knowing they would use Trelleberg's secrets to do their work for him.

[00:40:22] Speaker 04:
Your honor, that's our argument of what the inferences from the evidence prove.

[00:40:26] Speaker 02:
That's not what's today.

[00:40:28] Speaker 04:
That's not what you say.

[00:40:30] Speaker 04:
Respectfully, Your Honor, this is in the argument section of our brief.

[00:40:32] Speaker 04:
It's the argument.

[00:40:33] Speaker 02:
I know that you might legitimately argue there's an inference, but you made it as a statement of fact.

[00:40:46] Speaker 02:
And it's also quite a stretch.

[00:40:50] Speaker 02:
Now, let me go on.

[00:40:54] Speaker 02:
Because this is another statement in your brief.

[00:41:00] Speaker 02:
It was obvious that trying to extract the spheres would damage them beyond the point of useful reverse engineering.

[00:41:13] Speaker 02:
Is that obvious?

[00:41:14] Speaker 02:
Where is that in the record?

[00:41:18] Speaker 04:
Kip Carlisle testifying that if you try to take the foam apart, the spheres rupture and break, and then you can't test them or see what their density is.

[00:41:27] Speaker 02:
Actually, his testimony is some reverse engineering like that is possible at varied expense, depending on how much you need to know.

[00:41:36] Speaker 02:
So again, there's nothing in the record can be true to suggest that it's obvious that it's impossible to reverse engineering spheres.

[00:41:44] Speaker 02:
So that's a misstatement too, council.

[00:41:48] Speaker 04:
Your Honor, there was testimony about how the DBRMs are made when you put the resin around the spheres, that it's liquid, and it solidifies, and it's hard.

[00:41:59] Speaker 04:
I understand.

[00:41:59] Speaker 04:
I think it's obvious that if you try to break hard plastic, it splinters.

[00:42:04] Speaker 02:
You think it's obvious, but you don't have record testimony for that at all.

[00:42:08] Speaker 02:
You have no record reference at all.

[00:42:11] Speaker 02:
And you don't argue that this is an inference I can draw from something that, this is just obvious.

[00:42:16] Speaker 02:
It's not obvious at all.

[00:42:17] Speaker 02:
The testimony is contrary.

[00:42:19] Speaker 02:
Okay, how about Ogo was sending Shi testing data on spheres when CBM International had no manufacturing capacity to make spheres.

[00:42:36] Speaker 02:
This is unsupported, isn't it?

[00:42:38] Speaker 04:
It's not, Your Honor.

[00:42:39] Speaker 04:
He sent the data in January 2015.

[00:42:42] Speaker 04:
And there's testimony that they didn't develop the laboratory capacity to make the spheres until April.

[00:42:50] Speaker 04:
And that at that time, they were still trying to set up a lab.

[00:42:54] Speaker 02:
But Ogo testified that he deleted all confidential testing data and produced his own results, which he sent to Sheik.

[00:43:02] Speaker 02:
He produced a template.

[00:43:06] Speaker 02:
So he didn't.

[00:43:07] Speaker 02:
So why would he delete all confidential testing data and produce his own results if she was part of the conspiracy?

[00:43:17] Speaker 04:
So this is exhibit 25 that we're talking about?

[00:43:20] Speaker 02:
JA 1176.

[00:43:24] Speaker 02:
Right.

[00:43:24] Speaker 04:
So this is the test procedure, and he takes it to make a template that he can use

[00:43:35] Speaker 04:
to show Xi that they can, how they do the test.

[00:43:38] Speaker 04:
I think if you look at the seven trade secrets, that's probably the weakest of them.

[00:43:43] Speaker 02:
If Xi is part of the conspiracy, why the devil would Ogo eliminate any reference to confidential testing data?

[00:43:52] Speaker 04:
He testified several times that he eliminated the Trouborg markings and data, well, the markings that identify things as Trouborg, because he knew that Xi was going to send them outside.

[00:44:04] Speaker 04:
outside, he says, at 1209.

[00:44:07] Speaker 02:
And he didn't testify at all.

[00:44:09] Speaker 02:
But that suggests that she wasn't part of the conspiracy.

[00:44:14] Speaker 04:
Respectfully, Your Honor, they made that argument to the jury, and the jury didn't buy it.

[00:44:18] Speaker 04:
I think the jury was entitled not to believe it, and that this court, on the deferential review that we're here today, should let the jury have that choice.

[00:44:27] Speaker 02:
Yeah, that's possible.

[00:44:28] Speaker 02:
That's a legitimate argument, but that's not what you said in your brief.

[00:44:38] Speaker 02:
How about, how about, uh, Ogo was prohibited from appearing at the company's booth, even though he knew the most about the product.

[00:44:51] Speaker 02:
Uh, now the evidence is that she explained that he wanted a Chinese national who speaks Chinese to represent them at the Chinese at the China pavilion.

[00:45:05] Speaker 02:
Now the jury's entitled to reasonable inferences, but isn't it much more reasonable that Xi did not want Ogo to appear because he didn't speak Chinese?

[00:45:22] Speaker 02:
It's such an obvious reason.

[00:45:24] Speaker 04:
And I'd like to combine that piece of not appearing at the convention with two other pieces of evidence, which is that she told Ogo not to tell the phone suppliers that they were trying to make macros fears who knew that go might have worked for 12 work.

[00:45:40] Speaker 04:
and that when she hired Lou, he hired him at a different company to hide the fact that he was working for a Trellborg competitor.

[00:45:49] Speaker 04:
So when you put those three things together, I think it's a fair inference that the jury could draw that what she was trying to do was hide the fact that he was using former Trellborg engineers to produce this product.

[00:46:03] Speaker 02:
Well, I finally make the point that throughout the brief,

[00:46:09] Speaker 02:
you make the insinuation that the guilty pleas of the subordinates should be considered by the jury in determining whether she was part of the agreement.

[00:46:24] Speaker 02:
And that I think is possibly what happened in the case, but it's certainly inappropriate.

[00:46:33] Speaker 02:
Now, one last point here.

[00:46:43] Speaker 02:
No, I have a few more.

[00:46:50] Speaker 02:
You have a statement.

[00:46:57] Speaker 02:
Well, we've already talked about Bo.

[00:47:04] Speaker 02:
Oh, I know.

[00:47:05] Speaker 02:
Here it is.

[00:47:07] Speaker 02:
This is your statement.

[00:47:08] Speaker 02:
Bo testified that he did not agree to steal the technology.

[00:47:12] Speaker 02:
but admitted in his plea agreement to have committed the charge of offense, which includes possess.

[00:47:21] Speaker 02:
Thus, the jury could either have interpreted Bo's testimony in light of his plea agreement and conclude that Bo agreed to take the trade secrets, discount Bo's testimony, and credit his plea agreement.

[00:47:35] Speaker 02:
Now, again, you're using the plea agreement against Xi.

[00:47:41] Speaker 02:
And isn't that improper?

[00:47:44] Speaker 04:
No, Your Honor, we're using it to assess Bo's credibility, which is the proper use of a plea agreement admitted against a testifying witness.

[00:47:52] Speaker 04:
His credibility where he's saying something in his testimony that, you know, arguably isn't, I mean, you can interpret that he's just asking about Steele and so that

[00:48:05] Speaker 04:
He's not saying he's truthful when he says we didn't steal.

[00:48:08] Speaker 02:
Do you think that's a reasonable inference?

[00:48:11] Speaker 02:
That was a point that was discussed with your colleague.

[00:48:16] Speaker 02:
But do you think that's a reasonable inference that he would be so sophisticated a lawyer that he would distinguish between steal and use?

[00:48:25] Speaker 04:
I don't think it takes sophistication to see the difference between steal and possess.

[00:48:31] Speaker 02:
Doesn't it suggest that the government didn't

[00:48:35] Speaker 02:
ask him that question because it didn't want the answer?

[00:48:40] Speaker 04:
Your honor, I think it goes both ways.

[00:48:42] Speaker 04:
The defense only asked about steel.

[00:48:44] Speaker 04:
They didn't ask about the seven other verbs.

[00:48:46] Speaker 04:
And you're right, it wasn't addressed on redirect when it could have been.

[00:48:49] Speaker 04:
But I think the redirect was focused on things that were more interesting about his testimony, like the conversation with Lou about the testing.

[00:49:02] Speaker 02:
All right, let me go on to my last point.

[00:49:05] Speaker 02:
You say in your brief, the evidence established that she's planned for growing a drill riser buoyancy models was to misappropriate other technology.

[00:49:17] Speaker 02:
Isn't that false?

[00:49:19] Speaker 02:
Is that statement accurate?

[00:49:25] Speaker 04:
I'm sorry, where is that in the argument section?

[00:49:29] Speaker 02:
Page 24 of your brief.

[00:49:31] Speaker 02:
Right, okay.

[00:49:31] Speaker 02:
The evidence established that she's planned for growing

[00:49:35] Speaker 02:
a drill riser, buoyancy modules, was the misappropriate others' technology.

[00:49:44] Speaker 04:
So I think that's a fair inference from the testimony, from the record, from all of the documents.

[00:49:50] Speaker 02:
Of course it would be appropriate brief writing to argue that there's an inference here, but you just stated it as a flat fact.

[00:50:01] Speaker 04:
Your Honor, when I say the evidence established, it's fair to say that the circumstantial evidence established.

[00:50:06] Speaker 04:
As this court's precedent say, direct and circumstantial evidence are on equal footing.

[00:50:11] Speaker 04:
So when we look at the circumstantial evidence, I think it does establish that that was his plan.

[00:50:16] Speaker 04:
Because the circumstantial evidence is that he interviewed these people, and when Ogo said, I'm going to need 12-borg data to do my job, he hired him anyway.

[00:50:25] Speaker 02:
And when Lou said, That's an overstatement.

[00:50:29] Speaker 02:
He did not say, I need Trellberg data to do my job.

[00:50:34] Speaker 04:
Your Honor, he said, I need the data.

[00:50:36] Speaker 04:
And then the next sentence is, and I could get it from my friends at Trellborg.

[00:50:41] Speaker 02:
What did he say exactly?

[00:50:47] Speaker 04:
It's at 1168.

[00:51:01] Speaker 04:
So the data you said you would need to compare with, is that something you said during the interview?

[00:51:05] Speaker 04:
That's correct.

[00:51:06] Speaker 04:
And did you indicate where you would get the data from?

[00:51:08] Speaker 04:
I remember saying that, yes, I have friends at Trailborg that I can contact, yes.

[00:51:12] Speaker 04:
And did you explain what you needed the data for?

[00:51:14] Speaker 04:
Why did you need it?

[00:51:16] Speaker 04:
And then he goes on to explain how complicated it is to make the spheres.

[00:51:19] Speaker 02:
Yes, but first of all, that doesn't refer to trade secrets, number one.

[00:51:24] Speaker 02:
Number two, the data could be generally known in public information.

[00:51:34] Speaker 04:
Two responses, Your Honor.

[00:51:35] Speaker 04:
I think if it were publicly known, if he could get it off the internet, he wouldn't say, I could get it from my friends at Trauborg, he would say, get it off the internet.

[00:51:42] Speaker 02:
My friends with Trellberg would help me finding it.

[00:51:45] Speaker 02:
That doesn't mean it could come from Trellberg.

[00:51:48] Speaker 04:
Your Honor, that's a competing inference that could have been drawn, and they argued that to the jury, and the jury rejected it.

[00:51:53] Speaker 02:
And the second point is that when they... I agree, but if I had been writing the brief, I would have argued that there's an inference.

[00:52:00] Speaker 02:
rather than making a statement of fact.

[00:52:03] Speaker 02:
Anyway, the most important thing that bothers me is your argument in the brief that would have been almost grounds for mistrial presented before the jury.

[00:52:17] Speaker 02:
All right, I'm finished questioning counsel.

[00:52:20] Speaker 02:
But suppose I conclude that in your argument, you've made a number of misstatements.

[00:52:29] Speaker 02:
How does that weigh in determining whether you should prevail in this case or not?

[00:52:36] Speaker 02:
Your honor, I apologize sincerely that it came out that way.

[00:52:40] Speaker 02:
No, I'm asking if I'm correct, because you've made a number of misstatements.

[00:52:44] Speaker 02:
Does that weaken your case in the Court of Appeals?

[00:52:48] Speaker 04:
No.

[00:52:49] Speaker 04:
If the court feels that I've handled myself poorly, then I apologize, and I will tell the department that.

[00:52:57] Speaker 04:
But you should not hold my behavior against my client.

[00:53:00] Speaker 04:
If the evidence is sufficient, the evidence is sufficient.

[00:53:03] Speaker 02:
I have to look at the cases between two parties.

[00:53:09] Speaker 02:
If it was a civil case in which one of the parties made misstatements in his or her brief, I would hold that against the party.

[00:53:23] Speaker 04:
Your Honor, we pointed to the record citations that we believe support the argument.

[00:53:27] Speaker 04:
In the beginning of the argument, we identified the law that says that the standard is to take the inferences in favor of the verdict.

[00:53:34] Speaker 04:
And that's the premise on which we made the argument.

[00:53:37] Speaker 02:
OK.

[00:53:37] Speaker 04:
That is the law.

[00:53:38] Speaker 04:
And I think that that's.

[00:53:40] Speaker 02:
Are you familiar with the cases that I referred to when questioning your colleague?

[00:53:46] Speaker 02:
Mm-hmm.

[00:53:47] Speaker 02:
I am.

[00:53:49] Speaker 02:
And the way in which we should, as appellate judges, look at this case

[00:53:53] Speaker 02:
We give you all reasonable inferences and then conclude if the inferences or the evidence from the other side is an equipoise with yours, then we have to reverse.

[00:54:06] Speaker 02:
You're familiar with the Curley case.

[00:54:09] Speaker 04:
Yes, Your Honor, and I understand that principle.

[00:54:10] Speaker 04:
And as Your Honor articulated, the critical first step is to take the inferences in favor of the verdict.

[00:54:17] Speaker 04:
I think when you do that here, the evidence is not an equipoise.

[00:54:21] Speaker 04:
that the defense made a bunch of arguments to the jury, and they were reasonable jury arguments, and the jury rejected them.

[00:54:28] Speaker 04:
And at this point, the opposite influences are in order.

[00:54:32] Speaker 02:
Isn't the most important evidence that they had, is your own witness, Bo, testified there was no agreement?

[00:54:43] Speaker 02:
I know you make the distinction between steal and use, but I don't think that's a reasonable influence.

[00:54:48] Speaker 02:
If that's the only testimony, whether or not there was an agreement and it runs in favor of the defendant, why isn't it necessarily the case in equipoise?

[00:55:02] Speaker 04:
So two responses, one factual and one legal.

[00:55:05] Speaker 04:
The first is that, as the district court noted, that that also could refer to whether there's a written or formal agreement and that's not required.

[00:55:15] Speaker 02:
I frankly think that's almost a ridiculous inference.

[00:55:20] Speaker 04:
The second legal point is that the there's no requirement that a particular that we even put on cooperators or that we have somebody answer that question.

[00:55:30] Speaker 04:
The question is, when you look at all of the evidence together.

[00:55:34] Speaker 04:
Is there evidence that the defendant agreed?

[00:55:37] Speaker 04:
And there is, if you look at all of the information that he sent, the emails, there are several emails that say this information is from Trail Borg right in the email.

[00:55:44] Speaker 04:
You don't even have to open the documents.

[00:55:46] Speaker 02:
You're talking about the reference at the bottom of the page?

[00:55:50] Speaker 04:
No, Your Honor.

[00:55:50] Speaker 04:
No, I'm not.

[00:55:51] Speaker 04:
So put that to the side for the second.

[00:55:54] Speaker 04:
You have in page 362, they're talking about the email in the body of the email.

[00:56:00] Speaker 04:
It says the information received from Trail Borg.

[00:56:03] Speaker 04:
And then you have, again, when they're talking about exhibit 144, they say the reference standard of Trellborg.

[00:56:13] Speaker 04:
And that's in the email.

[00:56:14] Speaker 04:
That's at page 378 of the record.

[00:56:17] Speaker 04:
What Lou says, what I provided was the protection standard of Trellborg.

[00:56:20] Speaker 04:
And that information, there's testimony at trial, matches exactly some information at Trellborg, and is substantively the same as the information

[00:56:31] Speaker 04:
in exhibits 28 and 30, which is trade secret four.

[00:56:35] Speaker 04:
And that information, you know, I think that's probably the strongest one.

[00:56:39] Speaker 04:
If you look at that for his knowledge, because he takes 28, which is the, when he gets it from she, from Lou, and he doesn't just forward that email where you could infer that he didn't look at it or anything.

[00:56:53] Speaker 04:
He takes the document and then attaches it to a new email and sends that onto Beau.

[00:56:58] Speaker 04:
I think that that act makes it much more likely that he opened the document when you open it.

[00:57:03] Speaker 04:
It's very obvious right at the bottom.

[00:57:04] Speaker 04:
It says reference trouble.

[00:57:07] Speaker 04:
And also like that's the home run data that tells you You know the density of the spheres to where they're going to survive and the fact that they survive under pressure is the most important part of making a reliable product.

[00:57:22] Speaker 04:
It's not going to survive under pressure.

[00:57:23] Speaker 04:
It can't do its job.

[00:57:25] Speaker 04:
And then you get the other data that says how many coats you have to put on it, which given the amount of competition between these companies, it's really important to not use more material than is necessary because it's really expensive.

[00:57:38] Speaker 04:
So knowing the exact number of times to coat the sphere saves you a lot of money and a lot of time in having to figure that out.

[00:57:49] Speaker 04:
You know, I think also,

[00:57:53] Speaker 04:
In their reply brief, they want to say that we've misrepresented, that Lu kept the data.

[00:57:58] Speaker 04:
And I think if you read the whole sentence at page 1066, Bo testifies.

[00:58:04] Speaker 04:
She says, yeah, Gang Lu is the guy we've been looking for.

[00:58:09] Speaker 04:
And also, he mentioned Gang Lu kept some technical data from Trail Board.

[00:58:13] Speaker 04:
So it's all one piece right there altogether that this is the same thought.

[00:58:20] Speaker 04:
I think the evidence, if you put it together, is

[00:58:23] Speaker 04:
I think clear, but at least rational for the jury to have concluded that she was guilty.

[00:58:32] Speaker 01:
Any further questions, Judge Rao?

[00:58:36] Speaker 01:
Judge Silberman?

[00:58:37] Speaker 01:
No, I don't.

[00:58:39] Speaker 01:
All right.

[00:58:40] Speaker 04:
Again, I apologize, Your Honor, for the wording in our brief.

[00:58:45] Speaker 01:
All right.

[00:58:45] Speaker 01:
Thank you, Ms.

[00:58:46] Speaker 01:
Raulston.

[00:58:47] Speaker 01:
All right, Mr. Darrington, you are out of time, but we'll give you two minutes on rebuttal.

[00:58:52] Speaker 00:
Appreciate that, Your Honor.

[00:58:54] Speaker 00:
Just a few quick points I'd like to cover.

[00:58:56] Speaker 00:
First, appreciate the panel's careful review of the record in this case.

[00:58:59] Speaker 00:
It is extraordinarily complicated.

[00:59:00] Speaker 00:
There's thousands of pages and exhibits, and that's one of the reasons we frankly think the jury just got it wrong respectfully.

[00:59:06] Speaker 00:
It's one of those cases.

[00:59:07] Speaker 00:
Second, the government argued it's implausible that Dr. Xi didn't know that this was going on in his company.

[00:59:13] Speaker 00:
But that statement there is almost a concession in its own right.

[00:59:17] Speaker 00:
Carelessness and not knowing that your employees are committing misconduct or not connecting the dots, as the prosecutor expressly said in closing arguments of the jury, is not an agreement.

[00:59:27] Speaker 00:
And that seems fairly clear in the case law.

[00:59:29] Speaker 00:
As to the government's point about circumstantial evidence, it's all belied by direct evidence.

[00:59:37] Speaker 00:
And while the government is correct that they weren't required to call the co-conspirators, they did.

[00:59:41] Speaker 00:
And their own co-conspirators admitted that they were highly motivated to testify against Dr. Sheaf for frankly some fairly particular reasons.

[00:59:50] Speaker 00:
And still one of them denied it and the other didn't testify there was ever a conversation or agreement about stealing trade secrets.

[00:59:57] Speaker 00:
Third, as to the point about Mr. Ogo's removal of the Trelleborg notation before sending it to CBMF, not Dr. Shi, his explanation is simply nonsensical.

[01:00:11] Speaker 00:
I mean, CBMF was charged as a co-conspirator, so it doesn't make sense that Ogo would remove the notation to try to hide it from a co-conspirator.

[01:00:20] Speaker 00:
As for trade secret four, as we know in our brief, it's unclear that that information even came from Trellabor, let alone was a trade secret.

[01:00:27] Speaker 00:
And finally, as to the, or penultimately, as to the reasonable measures argument, because we didn't get up into that much in my opening argument, that's our second argument, and there's just no evidence

[01:00:38] Speaker 00:
certainly not enough to prove beyond a reasonable doubt that Dr. Xi had knowledge or belief that there were reasonable measures or what they were to keep this information secret.

[01:00:47] Speaker 00:
And the government didn't even argue it as to an alleged co-conspirator, which we submit is a waiver on that point.

[01:00:52] Speaker 00:
So unless the court has other questions, we really appreciate.

[01:00:54] Speaker 02:
Would you repeat that last point?

[01:00:57] Speaker 00:
Yes, Your Honor.

[01:00:59] Speaker 00:
So we argued in part for our second argument that there was insufficient evidence to prove beyond a reasonable doubt that Dr. Xi and at least one alleged co-conspirator knew or believed that the information at issue constituted a trade secret

[01:01:14] Speaker 00:
which is a statutory term that's defined within the meaning of the statute.

[01:01:18] Speaker 00:
And from our review of the government's briefs, we actually think that that is waived.

[01:01:22] Speaker 00:
We didn't see if this fleshed out an argument, any grounds or reason why there was evidence that a co-conspirator had that knowledge or belief.

[01:01:32] Speaker 00:
It's simply something the government chose not to respond to.

[01:01:35] Speaker 00:
And we think that was for a good reason, because there was little, if any, evidence that a co-conspirator knew or believed the information at issue was subject to reasonable measures to keep it secret.

[01:01:45] Speaker 00:
That's prong A, under 1839.3, or B, and this is less of our argument, but was independently economically valuable.

[01:01:54] Speaker 00:
And that just applies to certain of them.

[01:01:55] Speaker 00:
But the first one, that there were no reasonable measures to keep it secret.

[01:01:58] Speaker 00:
While the government only needs to prove knowledge or belief that there are reasonable measures, not actual reasonable measures, it failed to satisfy that requirement.

[01:02:06] Speaker 00:
And in fact, many of the alleged co-conspirators here worked at Trello Board, so they would have known the fact that this information wasn't kept secret.

[01:02:14] Speaker 01:
For instance, for... If a co-conspirator says that the evidence was confidential,

[01:02:21] Speaker 01:
You're telling me that that's not evidence that the information was subject to measures to keep it secret?

[01:02:30] Speaker 00:
Well, Your Honor, I'm not sure where in the record one of the co-conspirators said confidential information that was provided to Dr. Shee was confidential or that he knew it was... Let's assume that there is evidence in the record of that.

[01:02:46] Speaker 00:
Well, then Your Honor,

[01:02:47] Speaker 00:
No, the answer is no, because the statute, and this has been litigated as the jury instructions, in fact, in this case included.

[01:02:55] Speaker 00:
The case law is fairly clear, we think, that what is required is that Dr. Xi and at least one alleged co-conspirator knew that it was a trade secret, not that it was confidential.

[01:03:03] Speaker 00:
The government has frequently argued that all that is necessary is that the government prove that the defendant knew or believed the information was proprietary.

[01:03:11] Speaker 00:
or confidential, but that's not what the statute says.

[01:03:14] Speaker 00:
The statute defines trade secret and it defines it in such a way that it has to be subject to reasonable measures.

[01:03:19] Speaker 00:
So in most cases, it's fairly straightforward.

[01:03:21] Speaker 00:
Most of the cases that involve conspiracy to steal trade secrets, the defendant is a company insider or a former company insider.

[01:03:28] Speaker 00:
It knows exactly how the information is treated.

[01:03:30] Speaker 00:
It's highly unusual for the government to charge a conspiracy involving an outsider in the company who didn't pay someone inside the company

[01:03:38] Speaker 00:
for the information.

[01:03:40] Speaker 00:
For example, exchanging a briefcase in a hotel room in one of the cases in order to get the information, knowing that it was subject to measures to keep it secret.

[01:03:48] Speaker 00:
So here, the government's trying to build this connect the dot theory of Dr. Xi's knowledge and agreement, and it just stretches the evidence way too far.

[01:03:57] Speaker 01:
I go back to one of the first questions that I asked during your opening argument, which was that

[01:04:05] Speaker 01:
She started out by trying to get this sort of data from other companies and was told that we're not giving you that data, that you can't have that data.

[01:04:22] Speaker 00:
Well, Your Honor, in that particular situation involving Cumming and Mark Schlegel, who I believe was then president, Schlegel was trying to pitch, according to the evidence, a joint venture in which he was going to receive $6 million for a couple, he and his partner, $6 million for a couple months of work.

[01:04:40] Speaker 00:
So it's not something that Dr. Xi would have necessarily agreed that whatever unknown data, and I don't think it's clear from the record what Cumming was referring to or whether it was analogous to the data at Trelloborg,

[01:04:51] Speaker 00:
was trade secret data.

[01:04:53] Speaker 00:
But even if it were, just to be clear here, your honor, if Treleborg doesn't keep the information secret, and Dr. Xi doesn't know that Treleborg kept the information secret, he doesn't have the requisite knowledge.

[01:05:04] Speaker 00:
And the government could have come in here, they could have put an expert on the stand and said that Dr. Xi, with his background and his experience, would know that this information, A, could not have been developed from CBMI, to the contrary, as a footnote,

[01:05:18] Speaker 01:
They don't need an expert when they can just argue the same thing from the inferences.

[01:05:22] Speaker 01:
I mean, what do we do with the fact that there are only four companies in the whole world that create these spheres?

[01:05:31] Speaker 01:
So we're supposed to say that the critical data that you need to produce these spheres is public and that's why only four companies can do it?

[01:05:43] Speaker 00:
Well, Your Honor, just to clarify, CBMF, the parent company to CBMI, is a large notable corporation that has a long history of creating manufacturing in the sphere space.

[01:05:52] Speaker 01:
I believe the testimony was that none of their spheres were qualified.

[01:05:58] Speaker 01:
You say that in your brief, and I don't have time to go through all of the misstatements in your brief.

[01:06:05] Speaker 01:
But the testimony in every instance that you cited, the person qualified it and said that they specified that the spheres that were created by the Chinese parent were not qualified spheres.

[01:06:26] Speaker 01:
Am I wrong about that?

[01:06:29] Speaker 00:
Your honor, I'd have to check the pin site to be clear, to confirm that, but I have no reason to necessarily doubt that your characterization of the testimony.

[01:06:38] Speaker 01:
But CBMF, the point is this is not a fly by night operation, CBMI, that sprouted up and suddenly started trying to- If they could create these exact same spheres and be commercially successful at doing it, then why did they hire Dr. Shee and create this company?

[01:06:57] Speaker 01:
to figure out how to make them.

[01:07:02] Speaker 01:
My point is that there's four companies in the whole world that makes these spheres, but you're arguing that somehow it's a stretch for a jury to infer that the precise data that you need to make them is really a trade secret, even though there's only four companies in the whole world that can make them.

[01:07:23] Speaker 01:
That's your argument?

[01:07:25] Speaker 00:
Your honor,

[01:07:29] Speaker 00:
We're not arguing that CBMF was fully capable of manufacturing the high quality spheres that CBMI did that exceeded Trail of Borg or any of that.

[01:07:36] Speaker 00:
We're just arguing that this is The notion that CBMI had no resources.

[01:07:41] Speaker 00:
It was a startup that was heavily funded by a parent company that had a rich history of manufacturing.

[01:07:46] Speaker 00:
But to your point, the fact that there are four companies that create this

[01:07:49] Speaker 00:
these spheres.

[01:07:50] Speaker 00:
I mean, these have been around for a very long time.

[01:07:53] Speaker 00:
This is not some new technology that you had to either license the information or steal trade secrets in order to do.

[01:08:02] Speaker 00:
Like any startup in an industry that

[01:08:05] Speaker 00:
has some saturation, frankly, and there were four companies, but these were large companies.

[01:08:09] Speaker 00:
And like any startup, what you would do is you would proceed by trying to, you would consider as a business person, whether to, whether you could cheaply license the technology.

[01:08:17] Speaker 00:
And they found out that wasn't the case.

[01:08:19] Speaker 00:
So you hire people who already have the experience to come up with their own ideas about how to develop an already extant process in a way that it actually exceeds

[01:08:27] Speaker 00:
the quality and is cheaper than all of the competitors.

[01:08:30] Speaker 00:
And that's exactly what they did.

[01:08:32] Speaker 00:
So the notion that Dr. Xi, just because someone, Mark Schlegel told him, we have some information that we're willing to go in on a joint venture, and we're not gonna tell you that, I don't think you can transpose that to a different company involving a different set of circumstances and say that's enough to satisfy a statutory element that Dr. Xi knew or believed, and at least one alleged co-conspirator knew or believed the information constituted trade secrets, especially when you have an avalanche of evidence to the contrary.

[01:08:56] Speaker 01:
You've answered my question and you've gone well over your time.

[01:09:02] Speaker 01:
We'll take the case under under advisement.

[01:09:05] Speaker 01:
Thank you, Council.

[01:09:05] Speaker 00:
Thank you very much, Your Honors.

[01:09:06] Speaker 00:
I appreciate it.