Bonito Boats v. Thunder Craft (901422128)

Read for 1/21/11

Reading Notes

• Bonito Boats developed a hull design for a fiberglass recreational boat
• No patent application filed
• Filed action in Florida Circuit Court
  • Alleged Thunder Craft Boats has violated a statute by reverse engineering the hull and knowingly selling the hull duplicated in this manner
• Trial court dismissed on the grounds that statute conflicted with federal patent law
  • Upheld by Florida Appeals and Supreme Courts
• State law must yield when it clashed with the federal balance between public right and private monopoly
  • Florida statute offered patent-like protection for unprotected ideas
• This right is granted to patent holder but not part of state protection
• Federal Constitution does not deprive States of adopting rules in fields that Congress has left free
  • Law of unfair competition
  • State trade secret law

• Florida Supreme Court came to a contrary conclusion from the Federal Circuit Appeals Court on a California law
  • Affirmed judgment of FSC
• Dissenting FSC judges said it only prohibited one form of copying an unpatented item

• Cited Sears and Compco as relevant to this case
  • Sears determined (this brief upholds) that states cannot offer patent-like protection for creations which would be unprotected under federal law
• Kewanee Court
  • Trade secret protection did not conflict
  • Determined that states can regulate IP which may or may not be patentable as long as it is not inconsistent with federal law
• USSC reaffirms reasoning of Sears and Compco
  • Florida statute substantially impedes public use of unprotected design
• Unfair competition protects consumers
  • Ergo is not applicable in this situation
• USSC found reasoning in Interpart Corp. v. Italia defective

Reasoning

• Bonito released its design to the public and is therefore viewed as unpatentable
  • Florida statute allows Bonito to assert a property right in the idea, conflicting with federal law
• Statute conflicts even though it only limits one method of reproduction
• Competitive reality of reverse engineering may act as a spur to create patentable inventions
• Statute provides a negative precedent for future laws which may substantially threaten the patent system's ability to promote progress in the useful arts
  • Could allow states to offer protection to special-interest industries to keep them in-state
• Florida law "blurs [the] clear federal demarcation between public and private property
• States are not free to offer protection to ideas which Congress has determined belong to the public
  • States can promote originality and creativity in their own domains
• Statute offers protection beyond unfair competition or trade secret

History

• Patent Clause is a balance between innovation and monopolization
• Patent Act of 1790 was first
  • Created "Commissioners for the promotion of Useful Arts"
  • Thomas Jefferson driving force
• Patent law prevents the removal of existing knowledge from public use
  • Secrecy or legal monopoly
• Requirements
  • Novelty
  • utility
  • Nonobviousness
• Patents protect for 17 years

Class Notes

• Florida Law passed in 1983 prohibited “direct molding”
  • TC (TN) direct molded BB’s (FL) hull, created in 1976
  • BB petitioned TC, TC moved to have case dismissed on grounds of conflicting with federal law
• Petitioned does not necessarily mean that the company is suing the other, they are the company who is appealing previous ruling
• Began in trial court (dismissed) in Orange County, FL
  • Moved to Florida appellate court (dismissed)
  • Then to Florida Supreme Court (dismissed)
  • Finally decide in USSC (dismissed)
    • Decided to review to clarify another case that was decided differently in the Court of Appeals for the Federal Circuit (began in California)
      • BB likely used this as the basis for their case
• USSC was checking for conflict with federal patent law
  • Ultimately decided that it did because the Florida statute was inconsistent with the purpose of the patent laws (ergo violating Supremacy Clause)
• The design of the hull took substantial effort by BB
• Discusses both novelty and non-obviousness requirements

Summary

1. Supremacy clause issues
2. Policy: limited monopoly to encourage innovation
3. Novelty: supports policy (35 USC 102)
4. Non-obviousness (35 USC 103)
5. Utility
6. Disclosure

Facts of Patent Law

• Appeals courts only look at the record of the court below
  • No new evidence or calling of witnesses
  • Certiorari is an order by which a higher court can request information to review a case decided in a lower court
• Supremacy Clause states that federal laws will always take precedent over state laws regarding the same issue
  • Article 6 of the Constitution
• Article 1 Section 8 states what Congress can do  “promote the progress of science and useful arts” through patent law
  • Purpose is to promote progress
  • States protection is for limited time
  • Grants “inventors the exclusive rights to their respective writings and discoveries”
  • Main attribute of property is you can keep other people from using it
• Patents aim to give incentive to invest in new discoveries, etc.
• Patent clause presents a balance between promoting innovation and preventing monopolies
• Patent Act of 1790
  • Novelty
  • Utility
• Thomas Jefferson was the driving force between initial patent laws
• Disclosure is part of the balance between innovation and monopoly
  • If a person is granted exclusive rights they should give something in exchange
  • Granted exclusive rights for 20 years from date of filing to reap benefits and exclude others from making, using, or selling the invention
• USC Section 154 discusses the rights granted to a patent holder
  • ”…the right to exclude other from making, using, offering for sale, or selling the invention throughout the US or importing the invention into the US…”
• USC Title 35 Section 102 describes novelty in patents stating one is entitled to a patent unless:

1. 1. The invention was known or used by other in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent

• • • Distinction between domestic and foreign is a result of relative ease of knowledge of foreign publications and difficulty of knowledge of happenings in other countries

1. 1. The invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for the patent in the US

• • • If something is already out in the public domain without a patent, it should be free for use
• An invention is not patentable if a person of ordinary skill could have created the same invention based on prior art
  • Key words: anticipated
• USC Section 103 discusses conditions for non-obviousness

1. 1. A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains

• Alternatively to obtaining a patent, an inventor may keep an invention secret and reap benefits indefinitely

Guidelines for patentability

• Utility
• Novelty
• Non-obviousness