A case out of the U.S. District Court for the Middle District of Florida provides a textbook example of trade dress infringement and misappropriation of trade secrets claims. It involved two competing boat manufacturers: Yellowfin Yachts, an established company, and Barker Boatworks, a relative newcomer. An important piece of information: Kevin Barker launched Barker Boatworks shortly after he stopped working for Yellowfin. Yellowfin sued Barker Boatworks under the Lanham Act claiming the Barker’s boats were too similar in design to theirs and that Barker’s president had stolen the company’s trade secrets. Barker moved to dismiss the complaint for failure to state a claim.
At issue was the design of the competing companies’ open fisherman-style boats. Yellowfin claimed all of its models had a “unique sheer line”. For those who are not familiar with boating or yachting, a sheer line is the line formed between the deck of a boat and its hull. According to Yellowfin, this sheer line was a feature unique to Yellowfin boats and was a feature that people associated with the brand. As a result, Yellowfin alleged that Barker’s use of the sheer line design was causing customer confusion among boating enthuisiasts.
TRADE DRESS INFRINGEMENT
The court first defined trade dress as the “image of a product” that involves features such as shape, color, textures, or even sales techniques. Then, it laid out the elements of a trade dress infringement claim: (1) the product must have acquired a secondary meaning, (2) the features of the product design must be primarily non-functional, and (3) the product design of the two products in question must be similar and confusing to a consumer.
As to the first element, the court considered the following factors in determining whether the Yellowfin sheer line design had acquired a secondary meaning: length of its use, extent of advertising and promotion, and the degree to which the public identified the product as that of the manufacturer. The facts in Yellowfin’s complaint showed that it had used its sheer line for 15 years. Various boating magazines had run articles featuring Yellowfin’s sheer line. And finally, the public had come to associate the sheer line with Yellowfin boats. As to the second element, the court found that Yellowfin had adequately shown the sheer line to be an “ornamental and aesthetic feature” rather than a functional one.
The third element – customer confusion – was a bit more complicated. On one hand, the court looked at side-by-side pictures of Yellowfin boats and Barker’s boats and found a visibly similar sheer line. But on the other hand, it determined that Yellowfin and Barker sold their boats through completely different channels. In other words, there was no evidence of any real world situations in which a consumer shopping for one boat would come across the other boat and be confused. As such, Yellowfin had failed to provide any evidence of actual consumer confusion. Instead, it had alleged only the possibility of consumer confusion. Nonetheless, under a totality of circumstances analysis, the court held that there was a likelihood of costumer confusion and that Yellowfin had provided sufficient facts to withstand a motion to dismiss.
MISAPPROPRIATION OF TRADE SECRETS
On the trade secret claim, the court began by laying out the elements of a claim for misappropriation of trade secrets under the Florida Uniform Trade Secrets Act, Florida Statutes 688.001: (1) the plaintiff possessed a trade secret and took reasonable steps to conceal it and (2) the secret was misappropriated by a party who knew or should have known the secret was improperly taken or used improper means to take it and (3) the secret was economically valuable in that it was not readily ascertainable by others. According to the complaint, when Kevin Barker left Yellowfin, he took certain secret company information with him, including customer information and information related to boat manufacturing and costs. Yellowfin alleged that Barker copied all of this information prior to leaving the company. At the pleading stage, the court held that Yellowfin had met its burden of pleading a claim for theft of trade secrets under Florida law.
This case is Yellowfin Yachts, Inc. v. Barker Boatworks, LLC et. al., No. 8:15-cv-990-T-23TGW, 2015 WL 6736792 (M.D. Fla. 2015).
Jonathan Pollard is a competition lawyer based in Fort Lauderdale, Florida. The firm has extensive experience representing clients in non-compete, trade secret and unfair competition cases. The firm represents clients throughout the state of Florida and beyond and routinely represents clients in Fort Lauderdale, Miami, West Palm Beach, Tampa, Orlando, and Jacksonville. Their office can be reached at 954-332-2380.