Defendant Sails to Victory in Trade Secret Case

In Yellowfin Yachts, Inc. v. Barker Boatworks, LLC, 2018 WL 3734344 (11th Cir. Aug. 7, 2018), the Eleventh Circuit upheld the dismissal of trade-secret claims related to the manufacture and sale of fishing boats.  Yellowfin Yachts is a manufacturer of high-end fishing boats, allegedly known in the marketplace for the “swept sheer line” of their boats.

Yellowfin hired Kevin Barker in 2006 as a vice president of sales. Although Yellowfin presented Barker with a proposed employment agreement including confidentiality clauses, Barker never executed the agreement.  Barker left Yellowfin in 2014—not encumbered by a noncompetition or nonsolicitation contract—and founded a competitor, Barker Boatworks, LLC.  On his last day at Yellowfin, Barker downloaded hundreds of files from Yellowfin’s main server.  These files contained “detailed purchasing history and specifications for all of Yellowfin’s customers,” as well as “drawings” and “style images” for Yellowfin boats and “related manufacturing information.”

After leaving Yellowfin, Barker hired a marine architect to design a fishing boat based on Barker’s specifications.  Yellowfin contends that these specifications came directly from Yellowfin’s own bay boats.

Yellowfin filed its complaint in the United States District Court for the Middle District of Florida, alleging claims for trade dress infringement and false designation of origin under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); common-law unfair competition; common-law trade dress infringement; and violation of Florida’s Trade Secret Act.  The district court dismissed Yellowfin’s complaint, holding that Yellowfin had not described any distinctive feature of its line that would have caused a potential buyer to confuse the two boats.

The Eleventh Circuit affirmed the district court’s dismissal of the Lanham Act claims, holding that no reasonable jury could find a likelihood of confusion between the Barker and Yellowfin boats.  The Lanham Act provides a cause of action for “trade dress infringement,” resulting from infringement of “the total image of a product.”  To prevail, a plaintiff must prove that their design is inherently distinctive or has acquired secondary meaning; that its trade dress is non-functional; and that the defendant’s trade dress is confusingly similar.  Yellowfin’s trade dress argument was not that a consumer would accidentally buy a Barker boat, thinking it a Yellowfin boat, but instead that after purchase, boaters might see a Barker boat and mistake it for a Yellowfin boat.  In affirming the dismissal of these Lanham Act claims, the court included photographs of the two boats in its opinion, and noted that the boats contain several prominent differences that would permit a consumer buyer to distinguish the two boats.

The court likewise dismissed Yellowfin’s trade-secret claim, holding that the files that Barker downloaded before he left Yellowfin were not trade secrets.  Primarily, Yellowfin contended that information about how it sources its boats was a trade secret.  The court rejected this argument, finding that this information was not a trade secret and noting that suppliers oftentimes prominently brand their parts, making Yellowfin’s suppliers identifiable by looking at a Yellowfin boat.  The court also rejected Yellowfin’s contention that its customer information was a trade secret, noting that Yellowfin did not make reasonable efforts to maintain the secrecy of that information.

Posted by Margaret Flatt.

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