United States v. Krumrei

David Krumrei (defendant) worked for Federal Industrial Services (FIS), which was contracted to help Vactec Coatings, Inc., apply a new process developed by Wilsonart for adding hard coatings to laminate contact surfaces of caul plates. Wilsonart spent a significant amount of money and effort to develop the technology and to ensure its employees safeguarded its proprietary technology and information. In addition, Wilsonart entered into verbal and written confidentiality agreements with Robert Amis of Vactec Coatings. Amis hired FIS and informed Krumrei personally that the work they were doing was confidential. While the work was ongoing, Krumrei reached out to a competitor of Wilsonart and offered to help it develop the Wilsonart coating process for money. The competitor informed Wilsonart of Krumrei’s outreach, and Wilsonart hired Ken Taylor to pose as a representative of its competitor and talk to Krumrei about his offer. Wilsonart also involved the Federal Bureau of Investigation. Krumrei offered Taylor $350,000 for Wilsonart’s coating-process information and shared some of Wilsonart’s confidential information. Krumrei was arrested and charged with violating the Economic Espionage Act of 1996 (EEA) by knowingly and without authorization transmitting a trade secret a company had taken reasonable measures to keep secret. Krumrei moved to dismiss the indictment, alleging that the EEA’s definition of trade secret was unconstitutionally vague because it did not define reasonable measures. Krumrei argued that he had no notice of any security measures Wilsonart had taken to keep its information secret. The district court denied his motion, and Krumrei pled guilty while preserving his right to appeal the constitutional issue. During his guilty-plea hearing, Krumrei conceded that he understood that the information Amis shared with him was proprietary and admitted that he should have known that the information he intended to sell was a trade secret.