by Dennis Crouch
For our patent law course today, the students read the Justice O’Connor unanimous opinion in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989).
Bonito Boats centers on a Florida statute prohibiting copying of unpatented boat hulls via direct molding. The Florida courts had refused to enforce the law because it conflicted with Federal Patent Law. And the Supreme Court affirmed — holding that the “carefully crafted bargain” embodied by the US patent system occupies the entire space and thus preempts any further state action offering patent-like rights.
From their inception, the federal patent laws have embodied a careful balance between the need to promote innovation and the recognition that imitation and refinement through imitation are both necessary to invention itself and the very lifeblood of a competitive economy.
Id. The “balance” recognized by the Court is that some innovations are patentable, but only under the strict requirements found in sections 101-112 of the Patent Act. And, once a patent expires (or is refused or forfeited by public use), the balance allows “free access to copy whatever the federal patent and copyright laws leave in the public domain.” Compco Corp. v. Day–Brite Lighting, Inc., 376 U.S. 234 (1964). In its analysis, the court had to contend with its prior statements permitting state regulation of trade secrets covering innovations that could have been patented. See Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974). The key difference is that the Boat Hull statute offered rights to inventions available to the public, while trade secret rights only apply information outside of public awareness. And, in addition the court noted that trade secrets protect a “most fundamental human right, that of privacy.” Id. In other words, there is a substantial state interest in protecting trade secrets that fall outside of the realm of the patent balance. Kewanee also made an assertion that trade secrets are so weak that they are unlikely to shift innovator activities. That final assertion has become dubious in my mind as trade secrets have become more important within certain industries, alongside the expansion of patent eligibility exclusions.
One reason we read Bonito Boats early in the semester is because of the way that O’Connor walks through the various patentability doctrines, explaining how each serves an important role in the patent balance.
The novelty requirement [operates] to exclude from consideration for patent protection knowledge that is already available to the public. [The provisions] express a congressional determination that the creation of a monopoly in such information would not only serve no socially useful purpose, but would in fact injure the public by removing existing knowledge from public use. . . . As the holding of Pennock makes clear, the federal patent scheme creates a limited opportunity to obtain a property right in an idea. Once an inventor has decided to lift the veil of secrecy from his work, he must choose the protection of a federal patent or the dedication of his idea to the public at large. As Judge Learned Hand once put it: “[I]t is a condition upon the inventor’s right to a patent that he shall not exploit his discovery competitively after it is ready for patenting; he must content himself with either secrecy or legal monopoly.” Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516 (2nd Cir. 1946).
In addition to the requirements of novelty and utility, the federal patent law has long required that an innovation not be anticipated by the prior art in the field. Even if a particular combination of elements is “novel” in the literal sense of the term, it will not qualify for federal patent protection if its contours are so traced by the existing technology in the field that the “improvement is the work of the skillful mechanic, not that of the inventor.” Hotchkiss v. Greenwood, 11 How. 248 (1851). In 1952, Congress codified this judicially developed requirement in 35 U.S.C. § 103, which refuses protection to new developments where “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 of ordinary skill in the art to which said subject matter pertains.” The nonobviousness requirement extends the field of unpatentable material beyond that which is known to the public under § 102, to include that which could readily be deduced from publicly available material by a person of ordinary skill in the pertinent field of endeavor. Taken together, the novelty and nonobviousness requirements express a congressional determination that the purposes behind the Patent Clause are best served by free competition and exploitation of either that which is already available to the public or that which may be readily discerned from publicly available material.
The applicant whose invention satisfies the requirements of novelty, nonobviousness, and utility, and who is willing to reveal to the public the substance of his discovery and “the best mode … of carrying out his invention,” 35 U.S.C. § 112, is granted “the right to exclude others from making, using, or selling the invention throughout the United States,” for a period of 17 years. 35 U.S.C. § 154. The federal patent system thus embodies a carefully crafted bargain for encouraging the creation and disclosure of new, useful, and nonobvious advances in technology and design in return for the exclusive right to practice the invention for a period of years.
Bonito Boats. Of course one interesting bit of the story that the SUpreme Court admits is that Congress was not fully aware of what it was doing throughout all this careful crafting.
The Bonito Boats decision continues to have important influence on state activities. For instance, in its 2020 Jackson decision, the Second Circuit applied Bonito Boats in the copyright context to hold that copyright law impliedly preempted a particular right of publicity claim made by Curtis Jackson, aka “50 Cent.” In re Jackson, 972 F.3d 25 (2d Cir. 2020). Jackson had sold his copyrights to his record label, but was attempting to use rights of publicity to effectively control reproduction of his works.