BONITO BOATS VS. THUNDER CRAFT, 489 U.S. 141 (1989)

Situation

•Bonito Boats Develops a hull (bottom of the boat) design for a fiberglass recreational boat – Bonito Boat Model 5VBR

•Manufacturing process involves creating a mold which is then used to produce final product for sale

•No patent for either utility/design of the hull or manufacturing process

•After 6 years on the market Florida legislature enacts statute that “prohibits the use of a direct molding process to duplicate unpatented boat hulls, and forbids the knowing sale of hulls so duplicated.”

Accusation

Bonito Boats sues Thunder Craft Boats for using the molding process to duplicate the 5VBR hull, and knowingly selling the duplicate

Outcome

Court rules against Bonito Boats, stating that the statute conflicted with federal patent laws and was thus, invalid (Supremacy Clause of Federal Constitution).

Ruling held in Florida Court of Appeals, Florida Supreme Court, and finally the U.S. Supreme Court

Reasoning

“…federal patent system depends upon substantially free trade in publicly known, unpatented design and utilitarian conceptions. A state law that interferes with the enjoyment of such a conception contravenes the ultimate goal of public disclosure and use that is the centerpiece of federal patent policy. Moreover, through the creation of patent-like rights, the States could essentially redirect inventive efforts away from the careful criteria of patentability developed by Congress over the last 200 years.”

•Unpatented designs/utility must be available for free trade- Florida interfered with this basic principle, undermining the “ultimate goal of public disclosure and use” Also, the statue undercuts the criteria for patentability developed by Congress over the past 200 years

•If there is no patent – free trade must be allowed!

State issued patent-like laws “contravene the congressional intent to create a uniform system for determining the boundaries of public and private right in utilitarian and design ideas”

•The Florida statue, gives Bonito Boats the right to prohibit reverse engineering of the 5VBR in circulation  this is a similar right provided by a U.S. patent; thus represents a contradiction to the uniform system

Patents must be filed before the novelty becomes open to public use; at that point the inventor forfeits his rights; patent law “exclude[s] from consideration for patent protection knowledge that is already available to the public”

•Bonito Boats had been manufacturing and selling the 5VBR for nearly six years before the statute came into effect - under federal law the hull and manufacturing process are unpatentable because they had been in public use

Precedent

•Sears, Roebuck & Co. v. Stiffel Co

“Publically known design and utilitarian ideas which were unprotected by patent occupied much the same position as the subject matter of an expired patent” – similarly, Bonito Boats hull can be considered an “expired” patent-like

Illinois unfair competition law upheld – states have the right to protect businesses in use of trademarks/labels/distinctive dress so as to prevent others from confusing consumers by pretending to be a different company

--This is not what is going on in the Bonito Boats case – the Florida statute is trying to prevent reverse engineering of a publicly traded product – reverse engineering is a right covered by federal patent law; thus, the conflict

•Kewanee

States have the right to protect a business’s trade secrets, but trade secrets are not the dame as reverse engineering (publically traded products are no longer a secret)

In Class

• Basic "property" the companies are fighting over = hull shape. Thundercraft basically took a Bonito Boat and copied the hull design to create a mold = direct molding.
  • Florida statute outlaws that type of direct molding.

• Time frame: Bonito Boat=1976, Thundercraft=1983, Court action started=1984

• Thundercraft, although a Tennessee company, was probably selling the boat in Florida, which is why Bonito can bring the case

• California case - U.S. district court found exact opposite ruling - thus, the U.S. Supreme Court took the case to resolve the conflict. Certiorari-order from a higher court to a lower court to send all documents so the case can be reviewed

• Order of courts: Trial court (circuit court) - this is where the traditional trial takes place; FL Appellate Court, FL Supreme Court (this would be much shorter presentation of facts, about an hour decision), U.S. Supreme court
  • Supreme court got involved also to decide if there was a conflict with federal patent law

• Main attribute of property = if you own something, you can keep other people from using it

• Balance of patents: encouraging innovation(patent rights make people $$), and creating competition/avoiding monopolies (a person can't have rights forever)
  • Novelty- device or improvement "not before known or used"

• Thomas Jefferson add on - the people must benefit from granting patents - you have to tell people how it works. Also, the patent can't be for something that is already publicly known

• Title 35, Section 102
  • A person can get a patent, unless:
    • The invention was known by others in this country or described in a printed publication in a foreign country
    • The invention was patented or described in publication, or in public use for more than one year
• Title 35, Section 103
  • Key language: "prior art," cannot be obvious to a person of "ordinary skill in the art" - one way to prove this in court is to call a person of "ordinary skill (mechanic...)" or an expert to determine if the invention is of an obvious nature

• Supremacy clause valid even if the rights are not exactly the same, but along the same vein

• Important Points:
  • 0)Supremacy clause issues
  • 1) Policy: limited monopoly to encourage innovation
  • 2) Novelty: supports policy (#1) - now in 35 U.S.C. 102
  • 3) Non-obvious: Invention cannot be anticipated, or "readily deduced from publicly available material by a person of ordinary skill in the pertinent field of endeavor" - an invention has to be something that an ordinary person couldn't come up with
  • 4) Utility
  • 5) Disclosure

If you meet the above criteria you get a patent - you get exclusive rights to reap the benefits of your invention and exclude others from making, using, or selling the invention