Amicus Curiae Brief — Bonito Boats, Inc. v. Thunder Craft Boats, Inc.

In the Supreme Court of the United States

OCTOBER TERM, 1987

BONITO BOATS, INC.,

Petitioner,

VS.

THUNDER CRAFT BOATS, INC.,

Respondent.

On Warr or CERTIORARI TO THE SUPREME CouRT oF FLORIDA

BRIEF OF AMICI CURIAE MARINE INDUSTRIES

ASSOCIATION OF SOUTH FLORIDA AND THE

ATTORNEY GENERAL OF THE STATE OF

FLORIDA IN SUPPORT OF PETITIONER

(Counsel on Inside Front Cover)

E. L. Meworwuatt, Ivc., 926 Cherry Street, Kansas City, Mo. 64106, (816) 421-3080

Jutius F. Parker, Jr.*

Jack M. SKELDING, JR.

JENNIFER PARKER LAVIA

Parker, SKELDING, McVoy & LABASKY

Post Office Box 669

Tallahassee, Florida 32302

(904) 222-3730

Counsel for Marine Industries

Association of South Florida

James W. Yorxk*

Deputy Attorney General

of the State of Florida

Rosert A. BUTTERWORTH

Attorney General of

the State of Florida

Office of the Attorney General

Suite PL 01

The Capitol

Tallahassee, Florida 32399-1050

(904) 487-1963

Counsel for the Attorney General

of the State of Florida

ED

*Counsel of Record

TABLE OF CONTENTS

ELE I

a ceseennaqusoeuenonnes II

Interest of the Amicus Curiae nnn... l

Summary of the Argument... ee. i

lactis eeneececeeecenedetenccnenencseceeseenneee ssaiiadaiie 2

I. Florida Statutes Section 559.94 Is Not Pre-

Empted By Federal Patent Law....................... 2

A. Congress Has Not Expressly Stated That

State Law Is Entirely Pre-Empted By

Federal Patent Law _.... a a 3

B. Room Exists For Supplemental States

Regulation Of Unpatentable Articles... 3

C. Section 559.94 Does Not Clash With The

Objectives of Federal Patent Law

1. Section 559.94 like the Patent laws,

seeks to foster and reward invention. _—_—i6

2. Section 559.94 does not conflict with

the patent policy of disclosure... .. 8

3. Section 559.94 does not remove items

from the public domain ................... 10

II. The Supreme Court Of Florida Erroneously

Distinguished Kewanee And Aronson From

| Ee {PTGS ee 13

Nee ccemmsnatstonsoeneceumenmees 17

Teen ee ercresnatnasscciensnenensncemnenetit Al

II Ill

TABLE OF AUTHORITIES

Cases Constitutions

Aronson v. Quick Point Pencil Co., 440 U.S. 257 US. Const. art, 1, $8, Ch. 8 .....---ecccssceeeessennseeeeees

| RE snenatnedmeaniiiiaal 3, 4, 5, 15, 16 A GS lye

"anaes ae =” a ate 14 meaaenibrrgsseocaas

(Fla. I ccieenepntermateonaizdeail , 13,

California Federal Savings & Loan Association v. ~— pth alt aes ce tea

pong ny USS. ......... 93 L.Ed.2d 613, 107 S.Ct. 9 (on file with committee) 2.000000

Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S.

234 (1964) _............ aesantstenaciinieasibaailn cnicaheminiaeen 7, 10, 11,13

Ehat v. Tanner, 780 F.2d 876 (10th Cir. 1985),

cert. denied, 93 L.Ed.2d 39, 107 S.Ct. 86 (1986) 4

Goldstein v. California, 412 U.S. 546 (1973) ..... 11, 12

Hines v. Davidowitz, 312 U.S. 52 (1941) .............. 4

Interpart Corp. v. Italia, 777 F.2d 678 (Fed. Cir.

1985) _........ iotiesingcpenaeanerhaedniebeetinstasiensseangiaiiinnesigialaeasiaie 12, 13

Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470

I Gicidvccn aes sasuseaeoneaann passim

Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225

GENIE ‘snccettnstiiscitiitatiniiqeniipatindstialeniamnnl ....4, 5, 10, 11, 12-13

State of Florida ex rel. Shevin v. Kerwin, 279

en: eee: Gk {ND ‘enaiisindiétaannsenee l

Zenith Radio Corp. v. Hazeltine Research, Inc.,

See? WED: UE IY ncsstascinatatnienenieiiiaiaitedietaetee 12

Statutes

sr 3,4

Fla. Stat. £559.94 (1987) _... sectetuesebeinaiieieiionemaabi passim

Fla. Stat. $16.01(4) (1987)

Cal. Bus. & Prof. Code £17300 (West Supp. 1985) 12

INTEREST OF THE AMICI CURIAE

\

Marine Industries Association of South Florida is a non-

profit trade association incorporated in Florida since 1967

as a $501(c)(6) corporation. The Association represents

members of the recreational boating industry in South

Florida, especially the area of Broward, Dade and Palm

Beach Counties. The Association consists of over 500 mem-

bers of which approximately 40 firms, including Bertram

Yacht and Chris-Craft, are boat manufacturers. The Asso-

ciation, therefore, has a vital interest in the validity of

Fla. Stat. §559.94 (1987) which protects boat manufacturers

from unfair competition.

The Attorney General of the State of Florida is the

chief state legal officer, Fla. Const. art. IV, §4(c), and is

a proper party in any action in which the constitutionality

of a state statute is challenged. State of Floriia ex rel.

Shevin v. Kerwin, 279 So.2d 836 (Fla. 1973); Fla. Stat.

$16.01(4) (1987). The attorney general has not previously

been heard in the case at bar.

SUMMARY OF ARGUMENT

The Supreme Court of Florida erroneously distin-

guished precedents of this Court and held that Fla. Stat.

*559.94 which prohibits the copying of unpatented boat

hulls by the direct molding method is pre-empted by federal

patent laws. Section 559.94 is not pre-empted by any of

the three possible methods of pre-emption. Congress has

not expressly pre-empted state laws such as section 559.94,

and has left room in the area of patent law for state regula-

tions which do not conflict with the objectives of the fed-

eral patent laws. Section 559.94 does not conflict with the

federal patent law policies of encouraging invention and

disclosure and ensuring that ideas remain in the public

domain.

2

Although this Court has held that states may not pro-

hibit copying of unpatented articles, states remain free to

regulate unfair methods of competition. The State of

Florida validly exercised this power by enacting section

559.94 to prevent one unfair method of copying unpatented

boat hulls. Section 559.94 does not prohibit the copying

of unpatented boat hulls and component vessel parts; it

merely restricts one of many possible methods of copying,

and falls far short of providing the equivalent of a patent.

Additionally, section 559.94 does not remove any article

from the public domain. The unpatented boat hulls remain

in the public domain and may be copied at will. Until Con-

gress takes affirmative action to the contrary, states should

remain free to regulate unfair methods of manufacture.

This Court should reverse the decision of the Supreme

Court of Florida and find section 559.94 constitutional.

ARGUMENT

I. Florida Statutes Section 559.94 Is Net Pre-Empted

By Federal Patent Law

In California Federal Savings & Loan Association v.

Guerra, 479 U.S. ......., 93 L.Ed.2d 613, 107 S.Ct. 683 (1987),

this Court recognized that, while pre-emption of state law

is not to be lightly presumed, federal law may supersede

state law in three instances. First, when acting within

constitutional limits, Congress is empowered to pre-empt

state law by so stating in express terms. Second, where

the scheme of federal regulation is sufficiently comprehen-

sive to make reasonable the inference that Congress has

left no room for supplementary state regulation, congres-

sional intent to pre-empt state law in a particular area may

be inferred. Third, state law may be pre-empted to the

extent that it actually conflicts with federal law. 93 L.Ed

2d at 623.

3

Section 559.94 is not pre-empted by any of these pos-

sible means. First, Congress has not expressly pre-empted

state laws regarding the direct molding process. Second,

although federal patent law is comprehensive, Congress

has left room for supplementary state regulation. Finally,

section 559.94 does not conflict with federal law.

A. Congress Has Not Expressly Stated That State

Law Is Entirely Pre-Empted By Federal

Patent Law

Congress has not expressly stated that state law is

entirely pre-empted by federal patent law. In the anal-

ogous area of copyrights, Congress has passed a specific

statute on the issue of pre-emption, 17 U.S.C. §301(a)

(1982), but no similar statute exists regarding the patert

laws. Therefore, state law is pre-empted only if Congress

has left no room for supplementary state regulation or if

it actually conflicts with federal law.

B. Room Exists For Supplemental State Regula-

tion of Unpaientable Articles

Congress has left room for state regulation of un-

patentable articles. Despite the assertion to the contrary

by the Supreme Court of Florida, Congressional failure to

protect certain articles with a patent does not pre-empt

states from providing some protection for those articles.

For example, in Aronson v. Quick Point Pencil Co., 440

U.S. 257 (1979), this Court recognized a state’s power to

regulate the use of intellectual property in any manner

not inconsistent with federal law. Id. at 262 (citing Ke-

wanee Oil Co. v. Bicron Corp., 416 U.S. 470, 479 (1974) ).

Similarly, in the analogous area of copyright law, Con-

gress clearly stated its intent to pre-empt only those state

created rights which are the equivalent of the exclusive

4

rights created by federal copyright law. 17 USC. §301

(a) (1982). For example. in Ehat v. Tanner, 780 F.2d

876 (10th Cir. 1985), cert. denied, 93 L.Ed.2d 39, 107

S.Ct. 86 (1986), the Tenth Circuit found that the Plain-

tiffs common law claims were pre-empted by federal

copyright law, stating that Congress clearly intended to

pre-empt any attempt to provide the equivalent of copy-

right protection to works which could not qualify for fed-

eral copyright protection. Id. at 878. In the analogous

area of patent law, although Congress has not explicitly

stated its intent, presumably Congress intended to leave

some room for state regulation. Congress knows how to

expressly pre-empt the states from providing any protec-

tion whatsoever to unpatentable articles. This Court has

correctly interpreted Congressional intent as allowing

states to provide some protection to unpatentable articles

if the protection is not the equivalent of patent rights.

Kewanee, 416 U.S. 470.

C. Section 559.94 Does Not Clash With The Ob-

jectives Of Federal Patent Law

Under the foregoing analysis, since Congress has not

expressly pre-empted state law. and since room exists for

supplemental state regulation, state law is not pre-empted

unless it “clashes with the objectives of the federal patent

laws.” Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225,

231 (1963). In determining whether a conflict exists be-

tween state and federal law, the analysis “involves a con-

sideration of whether the law stands as an obstacle to the

accomplishment and execution of the full purposes and

objectives of Congress.” Aronson, 440 U.S. at 262 (quoting

Hines v. Davidowitz, 312 U.S. 52, 67 (1941)). If no con-

flict exists, state law governs. Id.

Respondent argued to the Supreme Court of Florida

that the three objectives of federal patent laws are: “1)

5

free competition; 2) promotion of invention; and 3) ulti-

mate full disclosure of the details of the novel article.”

Answer Brief of Appellee at 15-16. Furthermore, Respon-

dent argued that the effect which a state law has on free

competition is the threshold question. However, Respon-

dent cited no authority for its assertions. Apparently Re-

spondent relied on this Court’s statement that “the patent

system is one in which uniform federal standards are

carefully used to promote invention while at the same

time preserving free competition.” Sears, 376 U.S. at 230-

31 (footnote omitted).

Despite Respondent's argument to the contrary, no-

where in Sears did :his Court state that the preservation

of free competition is the central policy objective of the

patent laws. Indeed, fifteen years later in Aronson this

Court specifically enunciated the purposes of federal

patent laws.

First, patent law seeks to foster and reward inven-

tion; second, it permits disclosure of inventions to

stimulate further innovation and to permit the public

practice the invention once the patent expires;

third, the stringent requirements for patent protec-

tion seek to assure that ideas in the public domain

remain there for the free use of the public.

440 US. at 262. Section 559.94 does not stand as an

obstacle to the accomplishment and execution of these

objectives and, therefore, does not clash with federal

patent laws. The Supreme Court of Florida failed to

consider whether section 559.94 can exist in harmony with

federal patent laws. As a thorough analysis reveals, the

statute does not conflict with the stated objectives of

the patent laws and, in fact, furthers those objectives.

s

1. Section 559.94, like the Patent laws, seeks

to foster and reward invention

Section 559.94 prohibits one specific method of manu-

facture: the direct molding method in the manufacture

of boat hulls and component parts. This method of

manufacture allows a competitor to sit idle and wait

for another manufacturer to invest the time, effort and

cost necessary to develop and perfect an original hull.

The Florida Legislature estimates that “the cost to an

original manufacturer for the design, engineering, and

tooling (mold) for the average [twenty-six] foot boat

is in excess of one hundred thousand dollars.” Staff

of Fla. S. Comm. on Transportation, SB 880 (1983) Staff

Analysis (April 29, 1983) (on file with committee) (copy

contained in the Appendix to this Brief). However, by

using the direct molding method, a competitor avoids

these extensive research and development costs by ob-

taining an original hull and using it as a “plug” for

making a female mold. The competitor then sells its

product at a price substantially less than the original

manufacturer’s cost. To prevent this unscrupulous form

of competition, the Florida Legislature enacted section

559.94. This statute merely prohibits use of the direct

molding process in the manufacture of boat hulls or

component parts The statute does not prohibit copying

the design of the product; competitors may copy the

product in every detail.

The direct molding process, if permitted to persist,

will result in ruinous competition. Under this process,

an original manufacturer is unable to recover the costs

invested in the research and development of new boat

designs. As a result, manufacturers have no incentive

7

to engage in research and development activities. Indeed,

with the direct molding process available, the prudent

manufacturer waits for a competitor to assume the ex-

pense and labor of designing and constructing the tooling

required to produce a new design. Thus, the direct

molding process acts as a hinderance to the discovery

and invention of new boat designs by removing the in-

centive necessary to induce independent design and manu-

facture. Prohibiting this method of manufacture, how-

ever, induces innovative designs and fosters development

by preventing unscrupulous and ultimately ruinous com-

petition.

At the same time, the statute preserves free com-

petition by allowing boat hulls to be copied in every

detail by competitors. Thus, even assuming free compe-

tition is a central policy of the patent laws, section 559.94

does not conflict with that policy. “Free competition”

does not mean unfair competition. Nor does it mean

completely unregulated competition. Free competition is

permitted in the manufacture of boat hulls. The only

restriction is that competitors may. not use the direct

molding method, otherwise the boat hulls “can be copied

at will.” Compco Corp. v. Day-Brite Lighting, Inc., 376

U.S. 234, 238 (1964). Therefore, the statute, like the pat-

ent laws, seeks to foster and reward invention while pre-

serving free competition. “Certainly, the patent policy

of encouraging invention is not disturbed by the exis-

tence of another form of incentive to invention. In this

respect the systems are not and never would be in con-

flict." Kewanee, 416 U.S. at 484.

2. Section 559.94 does not conflict with the

patent policy of disclosure

The Constitution empowers Congress “To promote the

progress of science and useful arts by securing for limited

times to authors and inventors the exclusive right to their

respective writings and discoveries.” U.S. Const. art. I, §8,

cl. 8. In return for this right of exclusion, the patent laws

require the inventor to disclose a “full and clear descrip-

tion of the invention and of the manner and process of

making and using [the invention].” Kewanee, 416 U.S.

at 480-81. The additions to the general store of knowledge

provided by such disclosure

are of such importance to the public weal that the

Federal Government is willing to pay the high price

of 17 years exclusive use for its disclosure, which dis-

closure, it is assumed, will stimulate ideas and the

eventual development of further significant advances

on the art.

Id. at 481.

In Kewanee, this Court addressed the issue of whether

state trade secret protection is pre-empted by operation of

the federal patent law. The Court analyzed the effect of

Ohio's trade secret law on three categories of discoveries:

those which are unpatentable, those which are doubtfully

patentable, and those which are patentable. In holding

that Ohio's trade secret laws were not pre-empted, this

Court observed that, in the realm of unpatentable discov-

eries, “the holder of such a discovery would have no reason

to apply for a patent whether trade secret protection existed

or not. Abolition of trade secret protection would, there-

fore. not result in increased disclosure to the public... .”

416 U.S. at 483. The same is true with respect to Florida's

anti-direct molding statute. If a vessel hull is clearly un-

patentable, the patent policy of disclosure will not be fur-

thered by abolition of section 559.94. Regardless of the

existence of the statute, no patent could be issued and the

manner and process of making the discovery is not dis-

closed. However, the statute, by prohibiting use of the

direct molding process, provides incentive to manufactur-

ers to design and disclose a wider selection of boat designs.

Once designed, the hull is disclosed by being placed in the

public domain. Competitors are free to copy the new hull

in every detail.

This Court also recognized that the patent policy of

disclosure will not be furthered by the abolition of state

trade secret protection in the realm of doubtfully patent-

able discoveries. The Court reasoned that, due to the in-

crease in patent applications, more invalid patents would

probably be issued if trade secret laws were abolished.

Since an invalid patent is so serious a threat to the free

use of ideas already in the public domain, “|e]liminating

trade secret !aw for the doubtfully patentable invention

is . . . likely to have deleterious effects on society and

patent policy....” Id. at 488-89. The same is true with

respect to Florida's anti-direct molding statute. Aboli-

tion of this statute will encourage some manufacturers with

vessel hulls of doubtful patentability to apply for a patent

who otherwise would not have done so. For “some of those

[manufacturers] so encouraged, no patent will be granted

and the result will [be] an unnecessary postponement in

the divulging of the [mew vessel design to the public).”

Id. at 488.

Similarly, if a discovery is patentable, this Court rec-

ognized that the patent policy of disclosure would not be

harmed by the existence of trade secret laws which provide

far weaker protection than the patent laws. Florida's anti-

direct molding statute provides far weaker protection than

the patent laws. Therefore, the statute will not deter

manufacturers from seeking patent protection for clearly

patentable designs. The statute merely prohibits competi-

tors from using the direct molding process, while “patent

law operates against the world, forbidding any use of the

invention for whatever purpose for a significant length of

time.” Id. at 489-90 (emphasis added). Thus, Florida's

anti-direct molding statute will not interfere with the

patent policy of disclosure, regardless of whether the dis-

covery is unpatentable, doubtfully patentable, or patent-

able.

3. Section 559.94 dees not remove items from

the public demain

The Supreme Court of Florida relied om the deci-

sions of this Court in Sears and Compco in declaring

section 559.94 unconstitutional, However, this reliance

is misplaced. The state laws at issue in Sears and Compco

each provided the functional equivalent of a patent to

unpatentable items by prohibiting all methods of copying

the unpatented articles. These laws “had the effect of

removing the unpatented items from the public domain,

thus, conflicting with federal patent policy. In contrast,

Section 559.94, Florida Statutes (1983), does not prohibit

the copying of an unpatented item. It prohibits one

method of copying; the item remains im the public do-

main.” Bonito Boats, Inc. v. Thunder Craft Boats, Inc.,

515 So.2d 220, 223 (Fla. 1987) (Shaw, J., dissenting).

The Sears-Compco court was not presented with, nor

did it address the issue presented by the case at bar.

Le. whether a state may prohibit one unfair method of

plete prohibition of copying unpatented articles, which

the Court saw as “too great an encroachment on the

federal patent sysiem to be tolerated.” 376 U.S. at 232.

The Court observed that states could not be permitted

off from the public something which federal

said belongs to the public.” Id. (emphasis

decision could not stand “/s|ince the judgment below

forbids the sale of a copy of an unpatented article... .”

376 U.S. at 239 (emphasis added). Similarly, this Court

reversed the lower Court’s judgment in Sears because

the effect of the judgment below “gave Stiffel the equiv-

alent of a patent monopoly on its unpatented lamp.”

376 U.S. at 233 (emphasis added). Clearly, a state may

not provide the functional equivalent of a patent to an

unpatentable article nor forbid the selling of a copy of

an unpatentable article. Any state law which attempts

to do so will certainly conflict with the federal patent

laws. Indeed, as this Court observed in Goldstein v.

California, 412 U.S. 546 (1973):

Congress [has] balanced the need to encourage inno-

vation and original.iy of invention against the need

to insure competition in the sale of identical or sub-

stantially identical products. [Thus] ... [t}jhe ap-

plication of state law in [the realm of patent law]

to prevent the copying of articles which [do] not

meet the requirements for federal protection [will

disturb] the careful balance which Congress [has]

12

drawn and thereby necessarily [give] way under the

Supremacy Clause of the Constitution.

Id. at 569-70 (emphasis added). However, section 559.94

does not prevent the copying of unpatentable articles.

Similarly, the statute does not provide the equivalent

of a patent monopoly nor otherwise conflict with the

federal patent laws.

In Zenith Radio Corp. v. Hazeltine Research, Inc., 395

U.S. 100 (1969), this Court observed that the patent

laws provide “{a| patentee |with] the exclusive right

to manufacture, use, and sell his invention.” Id. at 135

(emphasis added) (citations omitted). However, in in-

terpreting California’s anti-direct molding statute’ in

Interpart Corp. v. Italia, 777 F.2d 678 (Fed. Cir. 1985),

a statute substantially similar to section 559.94, the Fed-

eral Circuit Court concluded the statute:

does not give the creator of the product the right

to exclude others from making, using, or selling the

product as does the patent law. The statute does

not preclude one from photographing, measuring, or

in any way utilizing the concept of the design of

the product. It does not preclude copying the product

by hand, by using sophisticated machinery, or by

any method other than the direct molding process.

Id. at 684-85. The same is true with respect to Florida’s

anti-direct molding statute. Thus, section 559.94 does

not provide the functional equivalent of a patent, nor

violate this Court’s mandate that “[a]n unpatentable

article .. . is in the public domain and may be made

and sold by whoever chooses to do so.” Sears, 376 US.

1. Cal. Bus. & Prof. Code §17300 (West Supp. 1985).

13

at 231 (emphasis added). Indeed, the public and com-

petitors have “every right to do [this under the stat-

ute].” Id.

The Supreme Court of Florida dismissed the Federal

Circuit’s decision in Interpart as “a misapplication of the

Sears/Compco doctrine.” Bonito Boats, 515 So.2d at 223.

However, the Florida Court, not the Federal Circuit,

misapplied this doctrine. This Court’s principle “that

when an article is unprotected by a patent or a copyright,

state law may not forbid others to copy that article”

is not violated by section 559.94. Compco, 376 US. at

237. The statute does not forbid the copying of an un-

patented article, it merely limits the way a competitor

may manufacture an original manufacturer’s vessel hull

by prohibiting one method of manufacture, which the

Florida legislature considers unfair.

II. The Supreme Court of Florida Erroneously Dis-

tinguished Kewanee And Aronson From The Case

At Bar

The Supreme Court of Florida attempted to distinguish

Kewanee from the case at bar by stating that Kewanee

involved trade secrets, which by definition are not in the

public domain. This attempted distinction, however, is un-

convincing for several reasons. Kewanee stands for the

general proposition that states may provide some protection

to articles which are unpatentable as long as that protection

is not the functional equivalent of a patent and does not

conflict with federal patent laws. This Court held “that

the cl 8 grant of power to Congress was not exclusive.”

Kewanee, 416 U.S. at 478. This Court has never held, and

should not now hold, that if an item is unpatentable it must

remain entirely unprotected by state law. The Supreme

Court of Florida asserted below, “Either an article in the

14

public domain is fully protected by patent or it may be

copied in any manner.” 515 So.2d at 222 (emphasis added).

The Florida court did not cite any authority for its broad

assertion, as indeed it could not, for no such authority

exists. This Court has never held that an unpatentable

article must remain entirely unprotected. The Supreme

Court of Florida stated, “The United States Supreme Court

has never ruled that the states may selectively enact bar-

riers against some methods of copying unpatented articles.”

Id. at 222 (emphasis added). The converse is also true:

the United States Supreme Court has never ruled that the

states may not selectively enact barriers against some un-

fair methods of copying unpatented articles. Indeed, by

implication this Court has held that states may prohibit

some methods of copying unpatented articles. This Court

held, for example, that states may constitutionally protect

trade secrets. Kewanee, 416 U.S. 470. Obtaining trade

secrets by unfair means is one method of copying and man-

ufacturing unpatented articles. Thus, this Court has

allowed states to prohibit at least one method of copying

and manufacturing unpatented articles.

The Supreme Court of Florida attempted to distinguish

trade secrets from the direct molding method because trade

secrets are not in the public domain. The distinction fails,

however, because the mold which is produced by the direct

molding process is not in the public domain. The boat hull

is in the public domain, but the mold from which the hull

is cast, like a trade secret, is not in the public domain.

Indeed, a trade secret may include “a pattern for a ma-

chine or other device.” Kewanee, 416 U.S. at 475 (quoting

Restatement of Torts §757, comment b (1939) ).

Section 559.94 is analogous to the trade secret law

upheld by this Court in Kewanee. Both seek to encourage

15

innovation by preventing competitors from unfairly ob-

taining information about the original manufacturer's pro-

cess. Yet neither law prevents “discovery by fair and

honest means, such as by independent invention, accidental

disclosure, or by so-called reverse engineering, that is by

starting with the known product and working backward

to divine the process which aided in its development or

manufacture.” 416 U.S. at 476. Both laws encourage in-

vention by preventing the inventor’s competitor from

using unfair means to obtain knowledge “without himself

paying the price in labor, money, or machines expended

by the discoverer.” Kewanee, 416 U.S. at 482 (citations

omitted). In addition, both laws promote the “maintenance

of commercial ethics,” and

encourage invention in areas where patent law does

not reach, and will prompt the independent innovator

to proceed with the discovery and exploitation of his

invention. Competition is fostered and is

not deprived of the use of valuable, if not

able invention.

Id. at 481, 485 (footnote omitted).

laws accomplish the desired result wi

article from the public domain. The

the public domain and may be

by competitors by any number of methods except one

particular method, determined by state law to be an un-

fair method.

The Supreme Court of Florida also erroneously dis-

tinguished Aronson. The court’s attempt to distinguish

Aronson is even less convincing than the attempts to dis-

tinguish Kewanee. The court found Aronson distinguish-

able because enforcement of the contract did not conflict

16

with federal patent laws “because anyone could copy the

article.” The court apparently overlooked the fact that one

competitor, the respondent in Aronson, was prohibited

from copying the article unless a royalty fee was paid to

the inventor, even though the article was unpatentable.

Section 559.94 allows anyone to copy the article using any

method except one method which the Florida legislature

has determined to be unfair.

Kewanee and Aronson together stand for the proposi-

tion that states may provide some protection to unpatent-

able articles as long as the state laws do not clash with the

objectives of the federal patent laws. Section 559.94 does

not clash with such objectives. In fact, section 559.94 fur-

thers the patent law objectives of encouraging invention

and disclosure and ensuring that articles in the public do-

main remain there.

17

Based upon the foregoing, this Court should declare

section 559.94, Florida Statutes, constitutional and reverse

the decision of the Supreme Court of Florida.

Respectfully submitted,

Jutrus F. Parker, Jr.*

Jack M. SKELpING, Jr.

JENNIFER PARKER LaVIA

ParKER, SKELDING, McVoy & LasaskKY

Post Office Box 669

Tallahassee, Florida 32302

(904) 222-3730

Counsel for Marine Industries

Association of South Florida

James W. York*

Deputy Attorney General

of the State of Florida

Rosert A. BUTTERWORTH

Attorney General of

the State of Florida

Office of the Attorney General

Suite PL 01

The Capitol

Tallahassee, Florida 32399-1050

(904) 487-1963

Counsel for the Attorney General

of the State of Florida

Dated July 15, 1988

*Counsel of Record

SOURS cncemsmemese BILL NO. SB 880

DATE: April 29, 1983 Page 1

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SENATE STAFF ANALYSIS AND ECONOMIC

IMPACT STATEMENT

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SUBJECT BILL NO. AND SPONSOR

Vessels SB 880 by

I. SUMMARY:

A. Present Situation:

Because of the type of materials and techniques

employed, original manufacturers of fiberglass

boats are confronted with the problem of hull

“splashing” or “popping” (duplication by the di-

rect molding process) by bootleg manufacturers.

Presently there is no legal mechanism available

to protect an original manufacturer. In addition,

federal law requires that certain vessels have

located on its’ transom a hull identification num-

ber, however, these numbers are easily altered

or removed. Because of the easy alteration many

manufacturers have also placed secondary num-

bers in a concealed location.

A2

B. Effect of Proposed Changes:

Section One: Requires al] vessels manufactured

after the effective date to have a hull identifica-

tion number prior to sale in accordance with fed-

eral rules. In addition, this section would re-

quire manufacturers who are required by federal

law to number their vessels to provide a unique

secondary concealed number in the event the

identification number is altered or destroyed.

Section Two: Provides a definition for the di-

rect molding process and makes it unlawful for

a person to use the process in duplicating the

hull of a vessel made by another without the

written permission of that person. This section

also prohibits anyone from knowingly selling a

duplicated vessel and provides injunctive relief

for persons injured by anyone violating the bill's

ECONOMIC IMPACT AND FISCAL NOTE:

A. Public: None

B. Government: None

COMMENTS:

It is estimated the cost to an original manufac-

turer for the design, engineering, and tooling

(mold) for the average 26 foot boat is in excess

of one hundred thousand dollars. Such a bill

should provide protection to those legitimate

companies in the boat building business. Sim-

ilar laws exist in California, Texas, and Michigan

and bills have been introduced in Tennessee and

IV. AMENDMENTS: None