Boat Company’s Trade Dress, Trade Secrets Claims Spring a Leak
Addressing a fishing boat company’s claim for trade dress infringement and misappropriation of trade secrets, the US Court of Appeals for the 11th Circuit affirmed a grant of summary judgment for the defendant, a rival company, where there was no likelihood of confusion or protectable trade secret. Yellowfin Yachts v. Barker Boatworks, LLC, et al., Case No. 17-11176 (11th Cir. Aug. 7, 2018) (Tjoflat, J).
Yellowfin Yachts manufactures high-end, center-consoled fishing boats that, according to Yellowfin, all feature unique trade dress described as “the same swept sheer line, meaning a gently sloped ‘s’-shaped line that runs upward from the point at which a boat’s hull intersects with the deck to the boat’s lofted bow.” In 2006, Kevin Barker began working for Yellowfin as vice president of sales. In 2014 he left to start his own boat manufacturing company, Barker Boatworks. While working for Yellowfin, Barker never signed an employment agreement, and on his last day, Barker downloaded files from Yellowfin’s computer server detailing consumer purchasing history and manufacturing information, including drawings. When Yellowfin discovered that Barker’s competing boats also featured a sheer line, it sued Barker Boatworks for trade dress infringement and violation of Florida’s Trade Secret Act.
The district court granted Barker’s motion for summary judgment on all claims, finding that (1) “Yellowfin did not adequately describe any distinctive feature of its sheer line,” (2) “its sheer line is functional and thus not protectable as trade dress,” and (3) “no reasonable jury could conclude that a potential buyer would likely confuse a Barker boat for a Yellowfin.” Furthermore, the district court found that Yellowfin had not identified a protectable trade secret, and that even if it could, Yellowfin did not make “reasonable efforts” to protect those trade secrets. Yellowfin appealed.
Yellowfin needed to prove three elements to prevail on the trade dress claim:
- Its unique trade dress is inherently distinctive (or has acquired secondary meaning).
- The trade dress is not functional.
- The defendant’s trade dress is such that it is likely to cause confusion with Yellowfin’s.
In this case, the Court found that the third factor was dispositive, and it therefore did not analyze the other two requirements.
Yellowfin argued that the likelihood of confusion occurred after the sale of the product, i.e., post-sale confusion. The Court found that many boats utilized the “sweeping sheer line,” however, and that Yellowfin’s trade dress was therefore relatively weak. Moreover, it was “unreasonable” to assume that the relevant sophisticated and “discerning” consumers would confuse a Yellowfin boat with a Barker boat given the prominent and distinct logos on the boats and the differences in the overall design, including the boat hull.
For its trade secrets claim, Yellowfin contended that its relevant trade secrets were the “source information” (the identity of and contracts with various sources) and “customer information” (information about past customers, including contact information and previous order specifications) that Barker took with him on his last day. The Florida Uniform Trade Secrets Act defines a trade secret as (1) information that (2) derives economic value from not being generally known by parties that could use it for financial gain, and (3) is subject to efforts to maintain its secrecy. The Court affirmed the district court’s decision based on Yellowfin’s failure to protect these alleged trade secrets. Specifically, the Court noted that Yellowfin let Barker keep the customer information on his personal laptop and phone (and did not ask him to delete this information when he left the company) and had failed to label the information as “confidential.”