22 Preemption 22 Preemption
PART 3. Protecting Intellectual Property Rights
22.1 Spartan Food Systems, Inc. v. HFS Corp. 22.1 Spartan Food Systems, Inc. v. HFS Corp.
Trademark
SPARTAN FOOD SYSTEMS, INC., Plaintiff-Appellant, v. HFS CORPORATION, Defendant-Appellee.
No. 86-2092.
United States Court of Appeals, Fourth Circuit.
Argued Jan. 8, 1987.
Decided March 13, 1987.
*1281Barry Eastburn Bretschneider (Douglas P. Mueller, Gerald L. Lett, Wegner & Bretschneider, Washington, D.C., Louis P. Howell, Spartanburg, S.C., Spartan Food Systems, Inc., on brief), for plaintiff-appellant.
John Sidney Hale (Gipple & Hale, David McC. Eastbrook, Washington, D.C., Creeger & Creeger, on brief), for defendant-appellee.
Before WIDENER, Circuit Judge, BUTZNER, Senior Circuit Judge, and SIMONS, Senior District Judge for the District of South Carolina, sitting by designation.
Spartan Food Systems appeals from the district court’s judgment dismissing its complaint against H.F.S. Corporation and from the district court’s injunction restraining Spartan from using its federally registered service mark, QUINCY’S, for restaurant services throughout Virginia. Because H.F.S. is not entitled to bar Spartan from using its mark in all areas of the state, we reverse dismissal of the complaint, dissolve the injunction, and remand the case for further proceedings.
Spartan, a Delaware corporation whose principal place of business is in Spartan-burg, South Carolina, has continuously used the service mark, QUINCY’S, in connection with restaurant services in interstate commerce since 1976. Spartan operates 219 QUINCY’S restaurants in the states of North Carolina, South Carolina, Florida, Georgia, Alabama, Tennessee, and since about November 1985, Newport News, Hampton, and Martinsville, Virginia. Spartan advertises its QUINCY’S restaurants through newspapers, signs, and radio. On August 21, 1984, Spartan registered its service mark with the United States Patent and Trademark office, based on its date of first use in interstate commerce of September 1, 1976.
Also using the QUINCY’S service mark is H.F.S., a Virginia corporation with its principal place of business in Arlington, Virginia. H.F.S. has operated two restaurants in Arlington and McLean, northern Virginia suburbs of Washington, D.C., since September 1979. H.F.S. advertises those restaurants through newspapers, including the Washington Post, and through signs and radio. H.F.S. obtained a Virginia registration on March 9, 1982, for its mark. Before Spartan opened its Virginia restaurants it knew that H.F.S. used the QUINCY’S mark in the northern part of the state.
Spartan sought a declaratory judgment of its rights as a federal registrant under the Lanham Act to use the QUINCY’S mark in its Virginia restaurants and in other parts of the state except Arlington and McLean. H.F.S. counterclaimed for service mark infringement in violation of common law, the Virginia Trademark and Service Mark Act, Va.Code § 59.1-77 — 92, and § 43(a) of the Lanham Act. H.F.S. asserts entitlement to exclusive use of the QUINCY’S mark throughout Virginia.
The district court held that because Spartan’s federal registration was not incontestable, H.F.S. could assert its state registration as a defense to Spartan’s claim that the Lanham Act afforded it the right to use its mark in all areas of the state except northern Virginia. The court construed Virginia’s trademark statute and common law as giving H.F.S. statewide right to the QUINCY’S mark and enjoined Spartan from using its federally registered mark anywhere in Virginia.
I
Spartan’s registration has not been in effect five years, so its right to use the mark is not incontestable. Consequently, § 33(a) of the Lanham Act, 15 U.S.C. § 1115(a) is applicable. This section provides:
(a) Any registration ... of a mark registered on the principal register provided by this chapter and owned by a party to an action shall be admissible in evidence and shall be prima facie evidence of registrant’s exclusive right to use the registered mark in commerce on the goods or services specified in the registration *1282subject to any conditions or limitations stated therein, but shall not preclude an opposing party from proving any legal or equitable defense or defect which might have been asserted if such mark had not been registered.
Section 33(a) enables H.F.S. to rebut Spartan’s prima facie evidence of exclusive right to use the mark, QUINCY’S. Section 43(a) of the Act, 15 U.S.C. § 1125(a) enables H.F.S. to seek injunctive relief against Spartan’s use of the mark. H.F.S. has offered no proof that Spartan’s registration is invalid or defective. Therefore, the scope of its defense under § 33(a) and the geographical extent of the injunction it seeks under § 43(a) are governed by common law as expounded by the Supreme Court. See Natural Footwear Ltd. v. Hart, Schaffner & Marx, 760 F.2d 1383 (3d Cir.1985); Minuteman-Press International v. Minute-Men Press, 219 U.S.P.Q. 428, 431 (N.D.Cal.1983); 2 J. McCarthy, Trademarks and Unfair Competition, § 26.18, p. 331 (2d ed. 1984).
Hanover Star Milling Co. v. Metcalf, 240 U.S. 403, 36 S.Ct. 357, 60 L.Ed. 713 (1916), and United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 39 S.Ct. 48, 63 L.Ed. 141 (1918), explain the applicable common law. These cases hold that a junior user, who in good faith adopted a mark for use at a place remote from the place of senior use of a similar mark, has a right to continue its use of the mark superi- or to the right of the senior user. H.F.S. used the QUINCY’S mark in good faith in northern Virginia, a place remote from Spartan’s senior use of the mark. Consequently, H.F.S. can continue to use the QUINCY’S mark on its restaurants in northern Virginia, and Spartan cannot use the mark there. This much Spartan concedes.
II
H.F.S. contends, however, that its use of the QUINCY’S mark is not limited to northern Virginia. It asserts that it has the right of exclusive use of the mark throughout Virginia and that Spartan must be barred from using the mark anywhere in the state. The following passage from Hanover Milling, 240 U.S. at 415-16, forecloses these claims:
That property in a trade-mark is not limited in its enjoyment by territorial bounds, but may be asserted and protected wherever the law affords a remedy for wrongs, is true in a limited sense. Into whatever markets the use of a trade-mark has extended, or its meaning has become known, there will the manufacturer or trader whose trade is pirated by an infringing use be entitled to protection and redress. But this is not to say that the proprietor of a trade-mark, good in the markets where it has been employed, can monopolize markets that his trade has never reached and where the mark signifies not his goods but those of another____ “Since it is the trade, and not the mark, that is to be protected, a trade-mark acknowledges no territorial boundaries of municipalities or states or nations, but extends to every market where the trader’s goods have become known and identified by his use of the mark. But the mark, of itself, cannot travel to markets where there is no article to wear the badge and no trader to offer the article.”
In a concurring opinion, Justice Holmes stated that he thought a trademark established in one part of a state cannot be used by another person in any part of that state. 240 U.S. at 426, 36 S.Ct. at 365. A majority of courts, however, have not accepted the Holmes dictum. See, e.g., Natural Footwear Ltd. v. Hart Schaffner & Marx, 760 F.2d 1383, 1398 n. 34 (3d Cir.1985); Food Fair Stores v. Square Deal Market Co., 206 F.2d 482, 484-85 (D.C.Cir.1953). See also 2 J. McCarthy, Trademarks and Unfair Competition, § 26:12, pp. 309-11 (2d ed. 1984). Although Hanover Milling and United Drug were decided before passage of the Lanham Act, their common law exposition of trademark rights applies today. The common law rights are restricted to the locality where the mark is used and to the area of probable expansion. See In re Beatrice Foods Co., 429 F.2d 466, 472 (CCPA 1970).
*1283Notwithstanding Hanover Milling and United Drug, H.F.S. asserts that this circuit recognizes statewide rights for trademarks regardless of their limited use. In support of this proposition it cites Armand’s Subway, Inc. v. Doctor’s Associates, Inc., 604 F.2d 849, 850-51 n. 3 (4th Cir.1979), which states:
In delineating geographical areas for trademark use, whole States are the usual unit. Wrist-Rocket [Mfg. Co., Inc. v. Saunders Archery Co.], supra, 578 F.2d [72] at 732 [8th Cir.1978]; Hanover Star Milling Co., supra, 240 U.S. at 416 [36 S.Ct. at 361]. This may be a historical survival of the origin of trademark protection as part of the law of unfair competition. Perhaps individual areas less than statewide might be appropriate under certain circumstances. The sandwich shops in the instant case draw walk-in trade from a small surrounding area. The manufacture of brick is another local industry, where high transportation costs limit penetration of a wide market.
Armand’s does not hold that in this circuit trademark rights encompass an entire state. The footnote is dicta. Moreover, as the court recognized, areas less than statewide may be appropriate for local business, such as sandwich shops or restaurants. The court also acknowledged that the critical factor, even in a single state, is the likelihood of confusion engendered by competing uses of similar marks rather than state lines. 604 F.2d at 850-51.
Apart from its claim to use the mark throughout Virginia on the basis of Armand’s dicta, H.F.S. asserts that it is entitled to statewide use because of market penetration and potential expansion. In support of this contention it relies on establishment of two restaurants in northern Virginia, its advertising in the Washington Post, which circulates throughout Virginia, and plans to expand to other parts of the state.
Some courts have interpreted the area of use to include a “zone of natural expansion,” Minuteman Press International, Inc. v. Minute-Men Press, 219 U.S.P.Q. 426, 432 (N.D.Cal.1983), or comparably, the prior claimant’s area of “market penetration.” Natural Footwear Ltd. v. Hart, Schaffner & Marx, 760 F.2d 1383, 1398 (3d Cir.1985). Courts that follow the “zone of natural expansion” theory have applied the following five-part test: “the party’s (1) previous business activity; (2) previous expansion or lack thereof; (3) dominance of contiguous areas; (4) presently-planned expansion; and, where applicable (5) possible market penetration by means of products brought in from other areas.” See Weiner King, Inc. v. Wiener King Corp., 615 F.2d 512, 523 (C.C.P.A.1980). To determine “market penetration,” courts have considered four factors: “(1) the volume of sales of the trademarked product; (2) the growth trends ... in the area; (3) the number of persons actually purchasing the product in relation to the potential number of customers; and (4) the amount of product advertising in the area.” Natural Footwear, 760 F.2d at 1398-99.
Under neither theory has H.F.S. established a claim to any area beyond northern Virginia. The “zone of natural expansion” gives H.F.S. no additional rights, for under the Weiner King test, H.F.S.’s previous business activity has involved only its two restaurants, with no expansion and nothing to suggest it dominates contiguous areas. Evidence of H.F. S.’s plans to expand outside northern Virginia is limited to a 1981-82 demographic study of Richmond, which H.F.S. did not keep. H.F.S. has no concrete plans for expansion throughout the state. Nor does H.F.S. fare better under the “market penetration” test of Natural Footwear. H.F.S. argues that it advertises widely in Virginia but presents evidence only that the Washington Post circulates throughout Virginia. Advertising alone cannot establish common law rights. Wrist-Rocket Manufacturing Co., Inc. v. Saunders Archery Company, 578 F.2d 727, 732 (8th Cir.1978). Moreover, the evidence shows that the Washington Post’s Virginia circulation is primarily confined to suburbs in the metropolitan Washington, D.C., area. But even if H.F.S. had demonstrated significant advertising throughout Virginia, this would not show the effect of such advertís*1284ing. H.F.S. presented no evidence that its advertising brought customers from throughout Virginia to its restaurants.
The basic test for trademark infringement under common law and the Lanham Act is the likelihood of confusion. See 2 J. McCarthy, Trademarks and Unfair Competition, § 23:1 (2d ed. 1984). The district court found no evidence of actual confusion or the likelihood of confusion between Spartan’s restaurants in southern Virginia and H.F.S.’s restaurants in the northern Virginia suburbs of the Washington, D.C., metropolitan area. We do not infer confusion from the mere co-existence of both service marks in the state of Virginia. The market areas of Spartan and H.F.S. are distinct and geographically separate.
In sum, common law limits H.F.S.’s defense under § 33(a) of the Lanham Act to the area of its prior use in northern Virginia. Common law also limits the injunctive relief under § 43(a) to exclude Spartan’s use of the mark only in northern Virginia. Hanover Milling, 240 U.S. at 415-16, 36 S.Ct. at 361, and United Drug, 248 U.S. at 100-02, 39 S.Ct. at 51-52, set forth the principles of common law that govern this aspect of the case.
Ill
H.F.S. also contends that Virginia common law and the Virginia Trademark and Service Mark Act give it the exclusive right to use the mark, QUINCY’S, throughout the state despite Spartan’s federal registration.
Even if we were to assume that state law confers rights as broad as H.F.S. proposes, H.F.S. cannot prevail. The difficulty with H.F.S.’s reliance on state law is the Lanham Act’s limited preemption of state law. Federal registration fulfills the express purpose of Congress in regulating commerce within its control, “to protect registered marks used in such commerce from interference by State, or territorial legislation ...” §45 Lanham Act, 15 U.S.C. § 1127. If a conflict arises between federal and state law, including state registration statutes, the Lanham Act effects a limited preemption of state law, resolving the conflict in favor of the federal registrant’s rights. Burger King of Florida, Inc. v. Hoots, 403 F.2d 904, 907-08 (7th Cir.1968); Minuteman Press International, Inc. v. Minute-Men Press, 219 U.S.P.Q. 426, 432 (N.D.Cal.1983)
It is undisputed that Spartan’s mark is used in interstate commerce. Therefore, even though Spartan’s registration is not incontestable, § 22 of the Lanham Act, 15 U.S.C. § 1072, provides constructive notice of Spartan’s claim of ownership. See 4A Callman, Unfair Competition, Trademarks, and Monopolies, § 25.05, p. 21 (4th ed. 1983). Section 22 thus affords nationwide protection to registered marks. See Dawn Donut Company v. Hart’s Food Stores, Inc., 267 F.2d 358, 362 (2d Cir.1959). But because Spartan’s mark is not incontestable, the nationwide protection afforded by § 22 is circumscribed by § 33(a) of the Act under which H.F.S. proved its exclusive right to use the mark in northern Virginia, as explained in Part I of this opinion.
H.F.S.'s reliance on state law to assert exclusive use of the mark throughout Virginia directly conflicts with §§ 22 and 33(a) of the Lanham Act that enable Spartan to use its registered marks in areas of Virginia where H.F.S. did not use the mark prior to Spartan’s federal registration. The express terms of § 45 of the Act which provide for its preemption of state law require that the conflict between Spartan’s federal protection and H.F.S.’s state law claims must be resolved in favor of Spartan.
IV
As an additional ground for reversal, Spartan urges us to hold that neither Virginia common law nor the Virginia Trademark statute affords statewide rights to a state registrant who, like H.F.S., has used its mark in only a limited area of the state.
Decision of this issue is unnecessary. The Lanham Act does not preempt all state law pertaining to trademarks. The right of *1285a state registrant to bar intrastate use of a mark that is not federally registered may be broader than Spartan insists. But this is an issue we should not decide without benefit of the Virginia Supreme Court’s explanation of the geographical extent of rights afforded by state law. See Minuteman Press International, Inc. v. Minute-Men Press, Inc., 219 U.S.P.Q. 426, 433 (N.D.Cal.1983).
V
The judgment dismissing Spartan’s complaint is reversed. The injunction restraining Spartan from using its mark throughout Virginia is dissolved. The case is remanded, and the district court is directed to delineate the area of northern Virginia where H.F.S., as a junior user prior to the date of Spartan’s federal registration, is entitled to exclude Spartan’s use of its mark. Spartan shall recover its costs.
22.2 Sears, Roebuck & Co. v. Stiffel Co. 22.2 Sears, Roebuck & Co. v. Stiffel Co.
Patents
SEARS, ROEBUCK & CO. v. STIFFEL COMPANY.
No. 108.
Argued January 16, 1964.
Decided March 9, 1964.
Will Freeman argued the cause for petitioner. With him on the briefs were Frank H. Marks, D. D. Allegretti and George B. Newitt.
Warren C. Horton argued the cause for respondent. With him on the brief was Max R. Kraus.
Solicitor General Cox, Assistant Attorney General Orrick, Daniel M. Friedman and Lionel Kestenbaum filed a brief for the United States, as amicus curiae, urging reversal.
delivered the opinion of the Court.
The question in this case is whether a State’s unfair competition law can, consistently with the federal patent laws, impose liability for or prohibit the copying of an article which is protected by neither a federal patent nor a copyright. The respondent, Stiffel Company, secured design and mechanical patents on a “pole lamp” — a ver*226tical tube having lamp fixtures along the outside, the tube being made so that it will stand upright between the floor and ceiling of a room. Pole lamps proved a decided commercial success, and soon after Stiffel brought them on the market Sears, Roebuck & Company put on the market a substantially identical lamp, which it sold more cheaply, Sears’ retail price being about the same as Stiffel’s wholesale price. Stiffel then brought this action against Sears in the United States District Court for the Northern District of Illinois, claiming in its first count that by copying its design Sears had infringed Stiffel’s patents and in its second count that by selling copies of Stiffel’s lamp Sears had caused confusion in the trade as to the source of the lamps and had thereby engaged in unfair competition under Illinois law. There was evidence that identifying tags were not attached to the Sears lamps although labels appeared on the cartons in which they were delivered to customers, that customers had asked Stiffel whether its lamps differed from Sears’, and that in two cases customers who had bought Stiffel lamps had complained to Stiffel on learning that Sears was selling substantially identical lamps at a much lower price.
The District Court, after holding the patents invalid for want of invention, went on to find as a fact that Sears’ lamp was “a substantially exact copy” of Stiffel’s and that the two lamps were so much alike, both in appearance and in functional details, “that confusion between them is likely, and some confusion has already occurred.” On these findings the court held Sears guilty of unfair competition, enjoined Sears “from unfairly competing with [Stiffel] by selling or attempting to sell pole lamps identical to or confusingly similar to” Stiffel’s lamp, and ordered an accounting to fix profits and damages resulting from Sears’ “unfair competition.”
*227The Court of Appeals affirmed.1 313 F. 2d 115. That court held that, to make out a case of unfair competition under Illinois law, there was no need to show that Sears had been “palming off” its lamps as Stiffel lamps; Stiffel had only to prove that there was a “likelihood of confusion as to the source of the products” — that the two articles were .sufficiently identical that customers could not tell who had made a particular one. Impressed by the “remarkable sameness of appearance” of the lamps, the Court of Appeals upheld the trial court’s findings of likelihood of confusion and some actual confusion, findings which the appellate court construed to mean confusion “as to the source of the lamps.” The Court of Appeals thought this enough under Illinois law to sustain the trial court’s holding of unfair competition, and thus held Sears liable under Illinois law for doing no more than copying and marketing an unpatented article.2 We granted certiorari to consider whether this *228use of a State’s law of unfair competition is compatible with the federal patent law. 374 U. S. 826.
Before the Constitution was adopted, some States had granted patents either by special act or by general statute,3 but when the Constitution was adopted provision for a federal patent law was made one of the enumerated powers of Congress because, as Madison put it in The Federalist No. 43, the States “cannot separately make effectual provision” for either patents or copyrights.4 That constitutional provision is Art. I, § 8, cl. .8, which 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.” Pursuant to this constitu*229tional authority, Congress in 1790 enacted the first federal patent and copyright law, 1 Stat. 109, and ever since that time has fixed the conditions upon which patents and copyrights shall be granted, see 17 U. S. C. §§ 1-216; 35 U. S. C. §§ 1-293. These laws, like other laws of the United States enacted pursuant to constitutional authority, are the supreme law of the land. See Sperry v. Florida, 373 U. S. 379 (1963). When state law touches upon the area of these federal statutes, it is “familiar doctrine” that the federal policy “may not be set at naught, or its benefits denied” by the state law. Sola Elec. Co. v. Jefferson Elec. Co., 317 U. S. 173, 176 (1942). This is true, of course, even if the state law is enacted in the exercise of otherwise undoubted state power.
The grant of a patent is the grant of a statutory monopoly;5 indeed, the grant of patents in England was an explicit exception to the statute of James I prohibiting monopolies.6 Patents are not given as favors, as was the case of monopolies given by the Tudor monarchs, see The Case of Monopolies (Darcy v. Allein), 11 Co. Rep. 84 b., 77 Eng. Rep. 1260 (K. B. 1602), but are meant to encourage invention by rewarding the inventor with the right, limited to a term of years fixed by the patent, to exclude others from the use of his invention. During that' period of time no one may make, use, or sell the patented *230product without the patentee’s authority. 35 U. S. C. § 271. But in rewarding useful invention, the “rights and welfare of the community must be fairly dealt with and effectually guarded.” Kendall v. Winsor, 21 How. 322, 329 (1859). To that end the prerequisites to obtaining a patent are strictly observed, and when the patent has issued the limitations on its exercise are equally strictly enforced. To begin with, a genuine “invention” or “discovery” must be demonstrated “lest in the constant demand for new appliances the heavy hand of tribute be laid on each slight technological advance in an art.” Cuno Engineering Corp. v. Automatic Devices Corp., 314 U. S. 84, 92 (1941); see Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U. S. 147, 152-153 (1950); Atlantic Works v. Brady, 107 U. S. 192,199-200 (1883). Once the patent issues, it is strictly construed, United States v. Masonite Corp., 316 U. S. 265, 280 (1942), it cannot be used to secure any monopoly beyond that contained in the patent, Morton Salt Co. v. G. S. Suppiger Co., 314 U. S. 488, 492 (1942), the pat-entee’s control over the product when it leaves his hands is sharply limited, see United States v. Univis Lens Co., 316 U. S. 241, 250-252 (1942), and the patent monopoly may not be used in disregard of the antitrust laws, see International Business Machines Corp. v. United States, 298 U. S. 131 (1936); United Shoe Machinery Corp. v. United States, 258 U. S. 451, 463-464 (1922). Finally, and especially relevant here, when the patent expires the monopoly created by it expires, too, and the right to make the article — including the right to make it in precisely the shape it carried when patented — passes to the public. Kellogg Co. v. National Biscuit Co., 305 U. S. 111, 120-122 (1938); Singer Mfg. Co. v. June Mfg. Co., 163 U. S. 169, 185 (1896).
Thus the patent system is one in which uniform federal standards are carefully used to promote invention *231while at the same time preserving free competition.7 Obviously a State could not, consistently with the Supremacy Clause of the Constitution,8 extend the life of a patent beyond its expiration date or give a patent on an article which lacked the level of invention required for federal patents. To do either would run counter to the policy of Congress of granting patents only to true inventions, and then only for a limited time. Just as a State cannot encroach upon the federal patent laws directly, it cannot, under some other law, such as that forbidding unfair competition, give protection of a kind that clashes with the objectives of the federal patent laws.
In the present case the “pole lamp” sold by Stiffel has been held not to be entitled to the protection of either a mechanical or a design patent. An unpatentable article, like an article on which the patent has expired, is in the public domain and may be made and sold by whoever chooses to do so. What Sears did was to copy Stiffens design and to sell lamps almost identical to those sold by Stiffel. This it had every right to do under the federal patent laws. That Stiffel originated the pole lamp and made it popular is immaterial. “Sharing in the goodwill of an article unprotected by patent or trade-mark is the exercise of a right possessed by all — and in the free exercise of which the consuming public is deeply interested.” Kellogg Co. v. National Biscuit Co., supra, 305 U. S., at 122. To allow a State by use of its law of unfair competition to prevent the copying of an article which rep*232resents too slight an advance to be patented would be to permit the State to block off from the public something which federal law has said belongs to the public. The result would be that while federal law grants only 14 or 17 years’ protection to genuine inventions, see 35 U. S. C. §§ 154, 173, States could allow perpetual protection to articles too lacking in novelty to merit any patent at all under federal constitutional standards. This would be too great an encroachment on the federal patent system to be tolerated.
Sears has been held liable here for unfair competition because of a finding of likelihood of confusion based only on the fact .that Sears’ lamp was copied from Stiffel’s unpatented lamp and that consequently the two looked exactly alike. Of course there could be “confusion” as to who had manufactured these nearly identical articles. But mere inability of the public to tell two identical articles apart is not enough to support an injunction against copying or an award of damages for copying that which the federal patent laws permit to be copied. Doubtless a State may, in appropriate circumstances, require that goods, whether patented or unpatented, be labeled or that other precautionary steps be taken to prevent customers from being misled as to the source, just as it may protect businesses in the use of their trademarks, labels, or distinctive dress in the packaging of goods so as to prevent others, by imitating such markings, from misleading purchasers as to the source of the goods.9 But because of the federal patent laws a State may not, when the article is unpatented and uncopyrighted, prohibit the *233copying of the article itself or award damages for such copying. Cf. G. Ricordi & Co. v. Haendler, 194 F. 2d 914, 916 (C. A. 2d Cir. 1952). The judgment below did both and in so doing gave Stiffel the equivalent of a patent monopoly on its unpatented lamp. That was error, and Sears is entitled to a judgment in its favor.
Reversed.
[For concurring opinion of Mr. Justice Harlan, see post, p. 239.]
22.3 Compco Corp. v. Day-Brite Lighting, Inc. 22.3 Compco Corp. v. Day-Brite Lighting, Inc.
Patents
COMPCO CORPORATION v. DAY-BRITE LIGHTING, INC.
No. 106.
Argued January 16, 1964.
Decided March 9, 1964.
Jerome F. Fallon argued the cause for petitioner. With him on the briefs were Horace Dawson and John H. O. Clarke.
Owen J. Ooms argued the cause for respondent. With him on the brief was Roy A. Lieder.
Solicitor General Cox, Assistant Attorney General Orrick, Daniel M. Friedman and Lionel Kestenbaum filed a brief for the United States, as amicus curiae, urging reversal.
delivered the opinion of the Court.
As in Sears, Roebuck & Co. v. Stiffel Co., ante, p. 225, the question here is whether the use of a state unfair competition law to give relief against the copying of an unpatented industrial design conflicts with the federal patent laws. Both Compeo and Day-Brite are manufacturers of fluorescent lighting fixtures of a kind widely used in offices and stores. Day-Brite in 1955 secured from the Patent Office a design patent on a reflector having cross-ribs claimed to give both strength and attractiveness to the fixture. Day-Brite also sought, but was refused, a mechanical patent on the same device. After Day-Brite *235had begun selling its fixture, Compco’s predecessor1 began making and selling fixtures very similar to Day-Brite’s. This action was then brought by Day-Brite. One count alleged that Compco had infringed Day-Brite’s design patent; a second count charged that the public and the trade had come to associate this particular design with Day-Brite, that Compco had copied Day-Brite’s distinctive design so as to confuse and deceive purchasers into thinking Compco’s fixtures were actually Day-Brite’s, and that by doing this Compco had unfairly competed with Day-Brite. The complaint prayed for both an accounting and an injunction.
The District Court held the design patent invalid; but as to the second count, while the court did not find that Compco had engaged in any deceptive or fraudulent practices, it did hold that Compco had been guilty of unfair competition under Illinois law. The court found that the overall appearance of Compco’s fixture was “the same, to the eye of the ordinary observer, as the overall appearance” of Day-Brite’s reflector, which embodied the design of the invalidated patent; that the appearance of Day-Brite’s design had “the capacity to identify [Day-Brite] in the trade and does in fact so identify [it] to the trade”; that the concurrent sale of the two products was “likely to cause confusion in the trade”; and that “[a]ctual confusion has occurred.” On these findings the court adjudged Compco guilty of unfair competition in the sale of its fixtures, ordered Compco to *236account to Day-Brite for damages, and enjoined Compco “from unfairly competing with plaintiff by the sale or attempted sale of reflectors identical to, or confusingly similar to” those made by Day-Brite. The Court of Appeals held there was substantial evidence in the record to support the District Court’s finding of likely confusion and that this finding was sufficient to support a holding of unfair competition under Illinois law.2 311 F. 2d 26. Although the District Court had not made such a finding, the appellate court observed that “several choices of ribbing were apparently available to meet the functional needs of the product,” yet Compco “chose precisely the same design used by the plaintiff and followed it so closely as to make confusion likely.” 311 F. 2d, at 30. A design which identifies its maker to the trade, the Court of Appeals held, is a “protectable” right under Illinois law, even though the design is unpatentable.3 We granted certiorari. 374 U. S. 825.
To support its findings of likelihood of confusion and actual confusion, the trial court was able to refer to only one circumstance in the record. A plant manager who had installed some of Compco’s fixtures later asked Day-Brite to service the fixtures, thinking they had been made by Day-Brite. There was no testimony given by a purchaser or by anyone else that any customer had ever been misled, deceived, or “confused,” that is, that anyone had ever bought a Compco fixture thinking it was a Day-Brite fixture. All the record shows, as to the one instance cited by the trial court, is that both Compco and Day-Brite fixtures had been installed in the same plant, that three years later some repairs were needed, and that *237the manager viewing the Compco fixtures — hung at least 15 feet above the floor and arranged end to end in a continuous line so that identifying marks were hidden— thought they were Day-Brite fixtures and asked Day-Brite to service them.4 Not only is this incident suggestive only of confusion after a purchase had been made, but also there is considerable evidence of the care taken by Compco to prevent customer confusion, including clearly labeling both the fixtures and the containers in which they were shipped and not selling through manufacturers’ representatives who handled competing lines.
Notwithstanding the thinness of the evidence to support findings of likely and actual confusion among purchasers, we do not find it necessary in this case to determine whether there is “clear error” in these findings. They, like those in Sears, Roebuck & Co. v. Stiffel Co., supra, were based wholly on the fact that selling an article which is an exact copy of another unpatented article is likely to produce and did in this case produce confusion as to the source of the article. Even accepting the findings, we hold that the order for an accounting for damages and the injunction are in conflict with the federal patent laws. Today we have held in Sears, Roebuck & Co. v. Stiffel Co., supra, that when an article is unprotected by a patent or a copyright, state law may not forbid others to copy that article. To forbid copying would interfere with the federal policy, found in Art. I, § 8, cl. 8, of the Constitution and in the implementing federal statutes, of allowing free access to copy whatever the federal patent and copyright laws leave in the public domain. Here Day-Brite’s fixture has been held not to be entitled to a design or mechanical patent. Under the federal pat*238ent laws it is, therefore, in the public domain and can be copied in every detail by whoever pleases. It is true that the trial court found that the configuration of Day-Brite’s fixture identified Day-Brite to the trade because the arrangement of the ribbing had, like a trademark, acquired a “secondary meaning” by which that particular design was associated with Day-Brite. But if the design is not entitled to a design patent or other federal statutory protection, then it can be copied at will.
As we have said in Sears, while the federal patent laws prevent a State from prohibiting the copying and selling of unpatented articles, they do not stand in the way of state law, statutory or decisional, which requires those who make and sell copies to take precautions to identify their products as their own. A State of course has power to impose liability upon those who, knowing that the public is relying upon an original manufacturer’s reputation for quality and integrity, deceive the public by palming off their copies as the original. That an article copied from an unpatented article could be made in some other way, that the design is “nonfunctional” and not essential to the use of either article, that the configuration of the article copied may have a “secondary meaning” which identifies the maker to the trade, or that there may be “confusion” among purchasers as to which article is which or as to who is the maker, may be relevant evidence in applying a State’s law requiring such precautions as labeling; however, and regardless of the copier’s motives, neither these facts nor any others can furnish a basis for imposing liability for or prohibiting the actual acts of copying and selling. Cf. Kellogg Co. v. National Biscuit Co., 305 U. S. 111, 120 (1938). And of course a State cannot hold a copier accountable in damages for failure to label or otherwise to identify his goods unless his failure is in violation of valid state statutory or decisional law requiring the copier to label or take other precautions to *239prevent confusion of customers as to the source of the goods.5
Since the judgment below forbids the sale of a copy of an unpatented article and orders an accounting for damages for such copying, it cannot stand.
Reversed.
concurring in the result.*
In one respect I would give the States more leeway in unfair competition “copying” cases than the Court’s opinions would allow. If copying is found, other than by an inference arising from the mere act of copying, to have been undertaken with the dominant purpose and effect of palming off one’s goods as those of another or of confusing customers as to the source of such goods, I see no reason why the State may not impose reasonable restrictions on the future “copying” itself. Vindication of the paramount federal interest at stake does not require a State to tolerate such specifically oriented predatory business practices. Apart from this, I am in accord with the opinions of the Court, and concur in both judgments since neither case presents the point on which I find myself in disagreement.
22.4 Bonito Boats, Inc. v. Thunder Craft Boats, Inc. 22.4 Bonito Boats, Inc. v. Thunder Craft Boats, Inc.
Patents
BONITO BOATS, INC. v. THUNDER CRAFT BOATS, INC.
No. 87-1346.
Argued December 5, 1988
Decided February 21, 1989
*143O’Connor, J., delivered the opinion for a unanimous Court.
Tomas Morgan Russell argued the cause for petitioner. With him on the briefs were Granger Cook, Jr., and John S. Sehoene.
Charles E. Lipsey, by appointment of the Court, 487 U. S. 1231, argued the cause as amicus curiae in support of the judgment below. With him on the brief was Donald R. Dunner. *
delivered the opinion of the Court.
We must decide today what limits the operation of the federal patent system places on the States’ ability to offer substantial protection to utilitarian and design ideas which the patent laws leave otherwise unprotected. In Interpart *144 Corp. v. Italia, 777 F. 2d 678 (1985), the Court of Appeals for the Federal Circuit concluded that a California law prohibiting the use of the “direct molding process” to duplicate unpat-ented articles posed no threat to the policies behind the federal patent laws. In this case, the Florida Supreme Court came to a contrary conclusion. It struck down a Florida statute which prohibits the use of the direct molding process to duplicate unpatented boat hulls, finding that the protection offered by the Florida law conflicted with the balance struck by Congress in the federal patent statute between the encouragement of invention and free competition in unpatented ideas. 515 So. 2d 220 (1987). We granted certiorari to resolve the conflict, 486 U. S. 1004 (1988), and we now affirm the judgment of the Florida Supreme Court.
I
In September 1976, petitioner Bonito Boats, Inc. (Bonito), a Florida corporation, developed a hull design for a fiberglass recreational boat which it marketed under the trade name Bonito Boat Model 5VBR. App. 5. Designing the boat hull required substantial effort on the part of Bonito. A set of engineering drawings was prepared, from which a hardwood model was created. The hardwood model was then sprayed with fiberglass to create a mold, which then served to produce the finished fiberglass boats for sale. The 5VBR was placed on the market sometime in September 1976. There is no indication in the record that a patent application was ever filed for protection of the utilitarian or design aspects of the hull, or for the process by which the hull was manufactured. The 5VBR was favorably received by the boating public, and “a broad interstate market” developed for its sale. Ibid.
In May 1983, after the Bonito 5VBR had been available to the public for over six years, the Florida Legislature enacted Fla. Stat. §559.94 (1987). The statute makes “[i]t . . . unlawful for any person to use the direct molding process to du*145plicate for the purpose of sale any manufactured vessel hull or component part of a vessel made by another without the written permission of that other person.” § 559.94(2). The statute also makes it unlawful for a person to “knowingly sell a vessel hull or component part of a vessel duplicated in violation of subsection (2).” §559.94(3). Damages, injunctive relief, and attorney’s fees are made available to “[a]ny person who suffers injury or damage as the result of a violation” of the statute. §559.94(4). The statute was made applicable to vessel hulls or component parts duplicated through the use of direct molding after July 1, 1983. §559.94(5).
On December 21, 1984, Bonito filed this action in the Circuit Court of Orange County, Florida. The complaint alleged that respondent here, Thunder Craft Boats, Inc. (Thunder Craft), a Tennessee corporation, had violated the Florida statute by using the direct molding process to duplicate the Bonito 5VBR fiberglass hull, and had knowingly sold such duplicates in violation of the Florida statute. Bonito sought “a temporary and permanent injunction prohibiting [Thunder Craft] from continuing to unlawfully duplicate and sell Bonito Boat hulls or components,” as well as an accounting of profits, treble damages, punitive damages, and attorney’s fees. App. 6, 7. Respondent filed a motion to dismiss the complaint, arguing that under this Court’s decisions in Sears, Roebuck & Co. v. Stiffel Co., 376 U. S. 225 (1964), and Compco Corp. v. Day-Brite Lighting, Inc., 376 U. S. 234 (1964), the Florida statute conflicted with federal patent law and was therefore invalid under the Supremacy Clause of the Federal Constitution. App. 8-9. The trial court granted respondent’s motion, id,., at 10-11, and a divided Court of Appeals affirmed the dismissal of petitioner’s complaint. 487 So. 2d 395 (1986).
On appeal, a sharply divided Florida Supreme Court agreed with the lower courts’ conclusion that the Florida law impermissibly interfered with the scheme established by the federal patent laws. See 515 So. 2d 220 (1987). The major*146ity read our decisions in Sears and Compco for the proposition that “when an article is introduced into the public domain, only a patent can eliminate the inherent risk of competition and then but for a limited time.” 516 So. 2d, at 222. Relying on the Federal Circuit’s decision in the Interpart case, the three dissenting judges argued that the Florida antidirect molding provision “does not prohibit the copying of an unpatented item. It prohibits one method of copying; the item remains in the public domain.” 515 So. 2d, at 223 (Shaw, J., dissenting).
HH ► — I
Article I, §8, cl. 8, of the Constitution gives Congress the ‘ power “[t]o 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. ” The Patent Clause itself reflects a balance between the need to encourage innovation and the avoidance of monopolies which stifle competition without any concomitant advance in the “Progress of Science and useful Arts.” As we have noted in the past, the Clause contains both a grant of power and certain limitations upon the exercise of that power. Congress may not create patent monopolies of unlimited duration, nor may it “authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available.” Graham v. John Deere Co. of Kansas City, 383 U. S. 1, 6 (1966).
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. Soon after the adoption of the Constitution, the First Congress enacted the Patent Act of 1790, which allowed the grant of a limited monopoly of 14 years to any applicant that “hath . . . invented or discov*147ered any useful art, manufacture, ... or device, or any improvement therein not before known or used.” 1 Stat. 109, 110. In addition to novelty, the 1790 Act required that the invention be “sufficiently useful and important” to merit the 14-year right of exclusion. Ibid. Section 2 of the Act required that the patentee deposit with the Secretary of State, a specification and if possible a model of the new invention, “which specification shall be so particular, and said models so exact, as not only to distinguish the invention or discovery from other things before known and used, but also to enable a workman or other person skilled in the art or manufacture . . . to make, construct, or use the same, to the end that the public may have the full benefit thereof, after the expiration of the patent term.” Ibid.
The first Patent Act established an agency known by self-designation as the “Commissioners for the promotion of Useful Arts,” composed of the Secretary of State, the Secretary of the Department of War, and the Attorney General, any two of whom could grant a patent. Thomas Jefferson was the first Secretary of State, and the driving force behind early federal patent policy. For Jefferson, a central tenet of the patent system in a free market economy was that “a machine of which we were possessed, might be applied by every man to any use of which it is susceptible.” 13 Writings of Thomas Jefferson 335 (Memorial ed. 1904). He viewed a grant of patent rights in an idea already disclosed to the public as akin to an ex post facto law, “obstructing] others in the use of what they possessed before.” Id., at 326-327. Jefferson also played a large role in the drafting of our Nation’s second Patent Act, - which became law in 1793. The Patent Act of 1793 carried over the requirement that the subject of a patent application be “not known or used before the application.” Ch. 11, 1 Stat. 318, 319. A defense to an infringement action was created where “the thing, thus secured by patent, was not originally discovered by the patentee, but had been in use, or had been described in some public work *148anterior to the supposed discovery of the patentee.” Id., at 822. Thus, from the outset, federal patent law has been about the difficult business “of drawing a line between the things which are worth to the public the embarrassment of an exclusive patent, and those which are not.” 13 Writings of Thomas Jefferson, supra, at 335.
Today’s patent statute is remarkably similar to the law as known to Jefferson in 1793. Protection is offered to “[whoever .invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U. S. C. §101. Since 1842, Congress has also made protection available for “any new,-original and ornamental design for an article of manufacture.” 35 U. S. C. § 171. To qualify for protection, a design must present an aesthetically pleasing appearance that is not dictated by function alone, and must satisfy the other criteria of patentability. The novelty requirement of pat-entability is presently expressed in 35 U. S. C. §§ 102(a) and (b), which provide:
“A person shall be entitled to a patent unless —
“(a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or
“(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country more than one year prior to the date of application for patent in the United States . . . .”
Sections 102(a) and (b) operate in tandem to exclude from consideration for patent protection knowledge that is already available to the public. They 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. From the Patent Act of 1790 to the present day, *149the public sale of an unpatented article has acted as a complete bar to federal protection of the idea embodied in the article thus placed in public commerce.
In the case of Pennock v. Dialogue, 2 Pet. 1 (1829), Justice Story applied these principles under the patent law of 1800. The patentee had developed a new technique for the manufacture of rubber hose for the conveyance of air and fluids. The invention was reduced to practice in 1811, but letters patent were not sought and granted until 1818. In the interval, the patentee had licensed a third party to market the hose, and over 13,000 feet of the new product had been sold in the city of Philadelphia alone. The Court concluded that the patent was invalid due to the prior public sale, indicating that, “if [an inventor] suffers the thing he invented to go into public use, or to be publicly sold for use” “[h]is voluntary act or acquiescence in the public sale and use is an abandonment of his right. ” Id., at 23-24. The Court noted that under the common law of England, letters patent were unavailable for the protection of articles in public commerce at the time of the application, id., at 20, and that this same doctrine was immediately embodied in the first patent laws passed in this country. Id., at 21-22.
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, 520 (CA2), cert. denied, 328 U. S. 840 (1946).
In addition to the requirements of novelty and utility, the federal patent law has long required that an innovation not be *150anticipated 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, 267 (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 unpat-entable 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. See Graham, 383 U. S., at 15. 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. See Aronson v. Quick Point Pencil Co., 440 U. S. 257, 262 (1979) (“[T]he stringent requirements for patent protection seek to ensure that ideas in the public domain remain there for the use of the public”).
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 en*151couraging the creation and disclosure of new, useful, and non-obvious advances in technology and design in return for the exclusive right to practice the invention for a period of years. “[The inventor] may keep his invention secret and reap its fruits indefinitely. In consideration of its disclosure and the consequent benefit to the community, the patent is granted. An exclusive enjoyment is guaranteed him for seventeen years, but upon expiration of that period, the knowledge of the invention inures to the people, who are thus enabled without restriction to practice it and profit by its use.” United States v. Dubilier Condenser Corp., 289 U. S. 178, 186-187 (1933).
The attractiveness of such a bargain, and its effectiveness in inducing creative effort and disclosure of the results of that effort, depend almost entirely on a backdrop of free competition in the exploitation of unpatented designs and innovations. The novelty and nonobviousness requirements of pat-entability embody a congressional understanding, implicit in the Patent Clause itself, that free exploitation of ideas will be the rule, to which the protection of a federal patent is the exception. Moreover, the ultimate goal of the patent system is to bring new designs and technologies into the public domain through disclosure. State law protection for techniques and designs whose disclosure has already been induced by market rewards may conflict with the very purpose of the patent laws by decreasing the range of ideas available as the building blocks of further innovation. The offer of federal protection from competitive exploitation of intellectual property would be rendered meaningless in a world where substantially similar state law protections were readily available. To a limited extent, the federal patent laws must determine not only what is protected, but also what is free for all to use. Cf. Arkansas Electric Cooperative Corp. v. Arkansas Public Service Comm’n, 461 U. S. 375, 384 (1983) (“[A] federal decision to forgo regulation in a given area may imply an authoritative federal determination that the area is best left zmregu-*152lated, and in that event would have as much pre-emptive force as a decision to regulate”) (emphasis in original).
Thus our past decisions have made clear that state regulation of intellectual property must yield to the extent that it clashes with the balance struck by Congress in our patent laws. The tension between the desire to freely exploit the full potential of our inventive resources and the need to create an incentive to deploy those resources is constant. Where it is clear how the patent laws strike that balance in a particular circumstance, that is not a judgment the States may second-guess. We have long held that after the expiration of a federal patent, the subject matter of the patent passes to the free use of the public as a matter of federal law. See Coats v. Merrick Thread Co., 149 U. S. 562, 572 (1893) (“[Plaintiffs’ right to the use of the embossed periphery expired with their patent, and the public had the same right to make use of it as if it had never been patented”); Kellogg Co. v. National Biscuit Co., 305 U. S. 111 (1938); Singer Mfg. Co. v. June Mfg. Co., 163 U. S. 169 (1896). Where the public has paid the congressionally mandated price for disclosure, the States may not render the exchange fruitless by offering patent-like protection to the subject matter of the expired patent. “It is self-evident that on the expiration of a patent the monopoly created by it ceases to exist, and the right to make the thing formerly covered by the patent becomes public property.” Singer, supra, at 185.
In our decisions in Sears, Roebuck & Co. v. Stiffel Co., 376 U. S. 225 (1964), and Compco Corp. v. Day-Brite Lighting, Inc., 376 U. S. 234 (1964), we found that publicly known design and utilitarian ideas which were unprotected by patent occupied much the same position as the subject matter of an expired patent. The Sears case involved a pole lamp originally designed by the plaintiff Stiffel, who had secured both design and mechanical patents on the lamp. Sears purchased unauthorized copies of the lamps, and was able to sell them at a retail price practically equivalent to the wholesale *153price of the original manufacturer. Sears, supra, at 226. Stiffel brought an action against Sears in Federal District Court, alleging infringement of the two federal patents and unfair competition under Illinois law. The District Court found that Stiffel’s patents were invalid due to anticipation in the prior art, but nonetheless enjoined Sears from further sales of the duplicate lamps based on a finding of consumer confusion under the Illinois law of unfair competition. The Court of Appeals affirmed, coming to the conclusion that the Illinois law of unfair competition prohibited product simulation even in the absence of evidence that the defendant took. some further action to induce confusion as to source.
This Court reversed, finding that the unlimited protection against copying which the Illinois law accorded an unpatentable item whose design had been fully disclosed through public sales conflicted with the federal policy embodied in the patent laws. The Court stated:
“In the present case the ‘pole lamp’ sold by Stiffel has been held not to be entitled to the protection of either a mechanical or a design patent. An unpatentable article, like an article on which the patent has expired, is in the public domain and may be made and sold by whoever chooses to do so. What Sears did was to copy Stiffel’s design and sell lamps almost identical to those sold by Stiffel. This it had every right to do under the federal patent laws.” 376 U. S., at 231.
A similar conclusion was reached in Compco, where the District Court had extended the protection of Illinois’ unfair competition law to the functional aspects of an unpatented fluorescent lighting system. The injunction against copying of an unpatented article, freely available to the public, imper-missibly “interfere[d] with the federal policy, found in Art. I, § 8, cl. 8, of the Constitution and in the implementing federal statutes, of allowing free access to copy whatever the federal patent and copyright laws leave in the public domain.” Compco, supra, at 237.
*154The pre-emptive sweep of our decisions in Sears and Compeo has been the subject of heated scholarly and judicial debate. See, e. g., Symposium, Product Simulation: A Right or a Wrong?, 64 Colum. L. Rev. 1178 (1964); Lear, Inc. v. Adkins, 395 U. S. 653, 676 (1969) (Black, J,, concurring in part and dissenting in part). Read at their highest level of generality, the two decisions could be taken to stand for the proposition that the States are completely disabled from offering any form of protection to articles or processes which fall within the broad scope of patentable subject matter. See id., at 677. Since the potentially patentable includes “anything under the sun that is made by man,” Diamond v. Chakrabarty, 447 U. S. 303, 309 (1980) (citation omitted), the broadest reading of Sears would prohibit the States from regulating the deceptive simulation of trade dress or the tor-tious appropriation of private information.
That the extrapolation of such a broad pre-emptive principle from Sears is inappropriate is clear from the balance struck in Sears itself. The Sears Court made it plain that the States “may protect businesses in the use of their trademarks, labels, or distinctive dress in the packaging of goods so as to prevent others, by imitating such markings, from misleading purchasers as to the source of the goods.” Sears, supra, at 232 (footnote omitted). Trade dress is, of course, potentially the subject matter of design patents. See W. T. Rogers Co. v. Keene, 778 F. 2d 334, 337 (CA7 1985). Yet our decision in Sears clearly indicates that the States may place limited regulations on the circumstances in which such designs are used in order to prevent consumer confusion as to source. Thus, while Sears speaks in absolutist terms, its conclusion that the States may place some conditions on the use of trade dress indicates an implicit recognition that all state regulation of potentially patentable but unpatented subject matter is not ipso facto pre-empted by the federal patent laws.
*155What was implicit in our decision in Sears, we have made explicit in our subsequent decisions concerning the scope of federal pre-emption of state regulation of the subject matter of patent. Thus, in Kewanee Oil Co. v. Bicron Corp., 416 U. S. 470 (1974), we held that state protection of trade secrets did not operate to frustrate the achievement of the congressional objectives served by the patent laws. Despite the fact that state law protection was available for ideas which clearly fell within the subject matter of patent, the Court concluded that the nature and degree of state protection did not conflict with the federal policies of encouragement of patentable invention and the prompt disclosure of such innovations.
Several factors were critical to this conclusion. First, because the public awareness of a trade secret is by definition limited, the Court noted that “the policy that matter once in the public domain must remain in the public domain is not incompatible with the existence of trade secret protection.” Id., at 484. Second, the Kewanee Court emphasized that “[tirade secret law provides far weaker protection in many respects than the patent law.” Id., at 489-490. This point was central to the Court’s conclusion that trade secret protection did not conflict with either the encouragement or disclosure policies of the federal patent law. The public at large remained free to discover and exploit the trade secret through reverse engineering of products in the public domain or by independent creation. Id., at 490. Thus, the possibility that trade secret protection would divert inventors from the creative effort necessary to satisfy the rigorous demands of patent protection was remote indeed. Ibid. Finally, certain aspects of trade secret law operated to protect non-economic interests outside the sphere of congressional concern in the patent laws. As the Court noted, “[A] most fundamental human right, that of privacy, is threatened when industrial espionage is condoned or is made profitable.” Id., at 487 (footnote omitted). There was no indication that Con*156gress had considered this interest in the balance struck by the patent laws, or that state protection for it would interfere with the policies behind the patent system.
We have since reaffirmed the pragmatic approach which Kewanee takes to the pre-emption of state laws dealing with the protection of intellectual property. See Aronson, 440 U. S., at 262 (“State law is not displaced merely because the contract relates to intellectual property which may or may not be patentable; the states are free to regulate the use of such intellectual property in any manner not inconsistent with federal law”). At the same time, we have consistently reiterated the teaching of Sears and Compco that ideas once placed before the public without the protection of a valid patent are subject to appropriation without significant restraint. Aronson, supra, at 263.
At the heart of Sears and Compco is the conclusion that the efficient operation of the federal patent system depends upon substantially free trade in publicly known, unpatented design and utilitarian conceptions. In Sears, the state law offered “the equivalent of a patent monopoly,” 376 U. S., at 233, in the functional aspects of a product which had been placed in public commerce absent the protection of a valid patent. While, as noted above, our decisions since Sears have taken a decidedly less rigid view of the scope of federal pre-emption under the patent laws, e. g., Kewanee, supra, at 479-480, we believe that the Sears Court correctly concluded that the States may not offer patent-like protection to intellectual creations which would otherwise remain unprotected as a matter of federal law. Both the novelty and the nonobviousness requirements of federal patent law are grounded in the notion that concepts within the public grasp, or those so obvious that they readily could be, are the tools of creation available to all. They provide the baseline of free competition upon which the patent system’s incentive to creative effort depends. A state law that substantially interferes with the enjoyment of an unpatented utilitarian or design conception *157which has been freely disclosed by its author to the public at large impermissibly contravenes the ultimate goal of public disclosure and use which is the centerpiece of federal patent policy. Moreover, through the creation of patent-like rights, the States could essentially redirect inventive efforts away from the careful criteria of patentability developed by Congress over the last 200 years. We understand this to be the reasoning at the core of our decisions in Sears and Compco, and we reaffirm that reasoning today.
III
We believe that the Florida statute at issue m this case so substantially impedes the public use of the otherwise unprotected design and utilitarian ideas embodied in unpatented boat hulls as to run afoul of the teaching of our decisions in., Sears and Compco. It is readily apparent that the Florida* statute does not operate to prohibit “unfair competition” in the usual sense that the term is understood. The law of unfair competition has its roots in the common-law tort of deceit: its general concern is with protecting consumers from confusion as to source. While that concern may result in the creation of “quasi-property rights” in communicative symbols, the focus is on the protection of consumers, not the protection of producers as an incentive to product innovation. Judge Hand captured the distinction well in Crescent Tool Co. v. Kilborn & Bishop Co., 247 F. 299, 301 (CA2 1917), where he wrote:
“[T]he plaintiff has the right not to lose his customers through false representations that those are his wares which in fact are not, but he may not monopolize any design or pattern, however trifling. The defendant, on the other hand, may copy plaintiff’s goods slavishly down to the minutest detail: but he may not represent himself as the plaintiff in their sale.”
With some notable exceptions, including the interpretation of the Illinois law of unfair competition at issue in Sears and *158 Compco, see Sears, supra, at 227-228, n. 2, the common-law tort of unfair competition has been limited to protection against copying of nonfunctional aspects of consumer products which have acquired secondary meaning such that they operate as a designation of source. See generally P. Kauf-mann, Passing Off and Misappropriation, in 9 International Review of Industrial Property and Copyright Law, Studies in Industrial Property and Copyright Law 100-109 (1986). The “protection” granted a particular design under the law of unfair competition is thus limited to one context where consumer confusion is likely to result; the design “idea” itself may be freely exploited in all other contexts.
In contrast to the operation of unfair competition law, the Florida statute is aimed directly at preventing the exploitation of the design and utilitarian conceptions embodied in the product itself. The sparse legislative history surrounding its enactment indicates that it was intended to create an inducement for the improvement of boat hull designs. See Tr. of Meeting of Transportation Committee, Florida House of Representatives, May 3, 1983, reprinted at App. 22 (“[T]here is no inducement for [a] quality boat manufacturer to improve these designs and secondly, if he does, it is immediately copied. This would prevent that and allow him recourse in circuit court”). To accomplish this goal, the Florida statute endows the original boat hull manufacturer with rights against the world, similar in scope and operation to the rights accorded a federal patentee. Like the patentee, the beneficiary of the Florida statute may prevent a competitor from “making” the product in what is evidently the most efficient manner available and from “selling” the product when it is produced in that fashion. Compare 35 U. S. C. §154.* *159The Florida scheme offers this protection for an unlimited number of years to all boat hulls and their component parts, without regard to their ornamental or technological merit. Protection is available for subject matter for which patent protection has been denied or has expired, as well as for designs which have been freely revealed to the consuming public by their creators.
In this case, the Bonito 5VBR fiberglass hull has been freely exposed to the public for a period in excess of six years. For purposes of federal law, it stands in the same stead as an item for which a patent has expired or been denied: it is unpatented and unpatentable. See 35 U. S. C. § 102(b). Whether because of a determination of unpat-entability or other commercial concerns, petitioner chose to expose its hull design to the public in the marketplace, eschewing the bargain held out by the federal patent system of disclosure in exchange for exclusive use. Yet, the Florida statute allows petitioner to reassert a substantial property right in the idea, thereby constricting the spectrum of useful public knowledge. Moreover, it does so without the careful protections of high standards of innovation and limited monopoly contained in the federal scheme. We think it clear that such protection conflicts with the federal policy “that all ideas in general circulation be dedicated to the common good *160unless they are protected by a valid patent.” Lear, Inc. v. Adkins, 395 U. S., at 668.
That the Florida statute does not remove all means of reproduction and sale does not eliminate the conflict with the federal scheme. See Kellogg, 305 U. S., at 122. In essence, the Florida law prohibits the entire public from engaging in a form of reverse engineering of a product in the public domain. This is clearly one of the rights vested in the federal patent holder, but has never been a part of state protection under the law of unfair competition or trade secrets. See Kewanee, 416 U. S., at 476 (“A trade secret law, however, does not offer protection against discovery 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”); see also Chicago Lock Co. v. Fanberg, 676 F. 2d 400, 405 (CA9 1982) (“A lock purchaser’s own reverse-engineering of his own lock, and subsequent publication of the serial number-key code correlation, is an example of the independent invention and reverse engineering expressly allowed by trade secret doctrine”). The duplication of boat hulls and their component parts may be an essential part of innovation in the field of hydrodynamic design. Variations as to size and combination of various elements may lead to significant advances in the field. Reverse engineering of chemical and mechanical articles in the public domain often leads to significant advances in technology. If Florida may prohibit this particular method of study and recomposition of an unpatented article, we fail to see the principle that would prohibit a State from banning the use of chromatography in the reconstitution of unpatented chemical compounds, or the use of robotics in the duplication of machinery in the public domain.
Moreover, as we noted in Keivanee, the competitive reality of reverse engineering may act as a spur to the inventor, creating an incentive to develop inventions that meet the rigorous requirements of patentability. 416 U. S., at 489-490. *163of property in ideas, and the great power such property has to cause harm to the competitive policies which underlay the federal patent laws, the demarcation of broad zones of public and private right is “the type of regulation that demands a uniform national rule.” Ray v. Atlantic Richfield Co., 435 U. S. 151, 179 (1978). Absent such a federal rule, each State could afford patent-like protection to particularly favored home industries, effectively insulating them from competition from outside the State.
Petitioner and its supporting amici place great weight on the contrary decision of the Court of Appeals for the Federal Circuit in Interpart Corp. v. Italia. In upholding the application of the California “antidirect molding” statute to the duplication of unpatented automobile mirrors, the Federal Circuit stated: “The statute prevents unscrupulous competitors from obtaining a product and using it as the ‘plug’ for making a mold. The statute does not prohibit copying the design of the product in any other way; the latter if in the public domain, is free for anyone to make, use or sell.” 777 F. 2d, at 685. The court went on to indicate that “the patent laws ‘say nothing about the right to copy or the right to use, they speak only in terms of the right to exclude.’” Ibid., quoting Mine Safety Appliances Co. v. Electric Storage Battery Co., 56 C. C. P. A. (Pat.) 863, 864, n. 2, 405 F. 2d 901, 902, n. 2 (1969).
We find this reasoning defective in several respects. The Federal Circuit apparently viewed the direct molding statute at issue in Interpart as a mere regulation of the use of chattels. Yet, the very purpose of antidirect molding statutes is to “reward” the “inventor” by offering substantial protection against public exploitation of his or her idea embodied in the product. Such statutes would be an exercise in futility if they did not have precisely the effect of substantially limiting the ability of the public to exploit an otherwise unprotected idea. As amicus points out, the direct molding process itself has been in use since the early 1950’s. See Brief for Charles *164E. Lipsey as Amicus Curiae 3, n. 2. Indeed, U. S. Patent No. 3,419,646, issued to Robert L. Smith in 1968, explictly discloses and claims a method for the direct molding of boat hulls. The specifications of the Smith Patent indicate that “[i]t is a major object of the present invention to provide a method for making large molded boat hull molds at very low cost, once a prototype hull has been provided.” App. to Brief for Charles E. Lipsey as Amicus Curiae 15a. In fact, it appears that Bonito employed a similar process in the creation of its own production mold. See supra, at 144. It is difficult to conceive of a more effective method of creating substantial property rights in an intellectual creation than to eliminate the most efficient method for its exploitation. Sears and Compco protect more than the right of the public to contemplate the abstract beauty of an otherwise unprotected intellectual creation — they assure its efficient reduction to practice and sale in the marketplace.
Appending the conclusionary label “unscrupulous” to such competitive behavior merely endorses a policy judgment which the patent laws do not leave the States free to make. Where an item in general circulation is unprotected by patent, “[Reproduction of a functional attribute is legitimate competitive activity.” Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U. S. 844, 863 (1982) (White, J., concurring in result). See also Bailey v. Logan Square Typographers, Inc., 441 F. 2d 47, 51 (CA7 1971) (Stevens, J.) (“[T]hat which is published may be freely copied as a matter of federal right”).
Finally, we are somewhat troubled by the Interpart court’s reference to the Mine Safety case for the proposition that the patent laws say “nothing about the right to copy or the right to use.” As noted above, the federal standards for pat-entability, at a minimum, express the congressional determination that patent-like protection is unwarranted as to certain classes of intellectual property. The States are simply not free in this regard to offer equivalent protections to ideas *165■which Congress has determined should belong to all. For almost 100 years it has been well established that in the case of an expired patent, the federal patent laws do create a federal right to “copy and to use.” Sears and Compco extended that rule to potentially patentable ideas which are fully exposed to the public. The Interpart court’s assertion to the contrary is puzzling and flies in the face of the same court’s decisions applying the teaching of Sears and Compco in other contexts. See Power Controls Corp. v. Hybrinetics, Inc., 806 F. 2d 234, 240 (CA Fed. 1986) (“It is well established . . . that an action for unfair competition cannot be based upon a functional design”); Gemveto Jewelry Co. v. Jeff Cooper Inc., 800 F. 2d 256, 259 (CA Fed. 1986) (vacating injunction against copying of jewelry designs issued under state law of unfair competition “in view of the Sears and Compco decisions which hold that copying of the article itself that is unprotected by the federal patent and copyright laws cannot be protected by state law”).
Our decisions since Sears and Compco have made it clear that the Patent and Copyright Clauses do not, by their own force or by negative implication, deprive the States of the power to adopt rules for the promotion of intellectual creation within their own jurisdictions. See Aronson, 440 U. S., at 262; Goldstein v. California, 412 U. S. 546, 552-561 (1973); Kewanee, 416 U. S., at 478-479. Thus, where “Congress determines that neither federal protection nor freedom from restraint is required by the national interest,” Goldstein, supra, at 559, the States remain free to promote originality and creativity in their own domains.
Nor does the fact that a particular item lies within the subject matter of the federal patent laws necessarily preclude the States from offering limited protection which does not im-permissibly interfere with the federal patent scheme. As Sears itself makes clear, States may place limited regulations on the use of unpatented designs in order to prevent consumer confusion as to source. In Kewanee, we found that *166state protection of trade secrets, as applied to both patentable and unpatentable subject matter, did not conflict with the federal patent laws. In both situations, state protection was not aimed exclusively at the promotion of invention itself, and the state restrictions on the use of unpatented ideas were limited to those necessary to promote goals outside the contemplation of the federal patent scheme. Both the law of unfair competition and state trade secret law have coexisted harmoniously with federal patent protection for almost 200 years, and Congress has given no indication that their operation is inconsistent with the operation of the federal patent laws. See Florida Lime & Avocado Growers, Inc. v. Paul, 373 U. S. 132, 144 (1963); United States v. Bass, 404 U. S. 336, 349 (1971).
Indeed, there are affirmative indications from Congress that both the law of unfair competition and trade secret protection are consistent with the balance struck by the patent laws. Section 43(a) of the Lanham Act, 60 Stat. 441, 15 U. S. C. § 1125(a), creates a federal remedy for making “a false designation of origin, or any false description or representation, including words or other symbols tending falsely to describe or represent the same . . . .” Congress has thus given federal recognition to many of the concerns that underlie the state tort of unfair competition, and the application of Sears and Compco to nonfunctional aspects of a product which have been shown to identify source must take account of competing federal policies in this regard. Similarly, as Justice Marshall noted in his concurring opinion in Kewanee: “State trade secret laws and the federal patent laws have co-existed for many, many, years. During this time, Congress has repeatedly demonstrated its full awareness of the existence of the trade secret system, without any indication of disapproval. Indeed, Congress has in a number of instances given explicit federal protection to trade secret information provided to federal agencies.” Kewanee, supra, at 494 (concurring in result) (citation omitted). The case for *167federal pre-emption is particularly weak where Congress has indicated its awareness of the operation of state law in a field of federal interest, and has nonetheless decided to “stand by both concepts and to tolerate whatever tension there [is] between them.” Silkwood v. Kerr-McGee Corp., 464 U. S. 238, 256 (1984). The same cannot be said of the Florida statute at issue here, which offers protection beyond that available under the law of unfair competition or trade secret, without any showing of consumer confusion, or breach of trust or secrecy.
The Florida statute is aimed directly at the promotion of intellectual creation by substantially restricting the public’s ability to exploit ideas that the patent system mandates shall be free for all to use. Like the interpretation of Illinois unfair competition law in Sears and Compco, the Florida statute represents a break with the tradition of peaceful co-' existence between state market regulation and federal patent policy. The Florida law substantially restricts the public’s ability to exploit an unpatented design in general circulation, raising the specter of state-created monopolies in a host of useful shapes and processes for which patent protection has been denied or is otherwise unobtainable. It thus enters a field of regulation which the patent laws have reserved to Congress. The patent statute’s careful balance between public right and private monopoly to promote certain creative activity is a “scheme of federal regulation ... so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it.” Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230 (1947).
Congress has considered extending various forms of limited protection to industrial design either through the copyright laws or by relaxing the restrictions on the availability of design patents. See generally Brown, Design Protection: An Overview, 34 UCLA L. Rev. 1341 (1987). Congress explicitly refused to take this step in the copyright laws, see 17 U. S. C. § 101; H. R. Rep. No. 94-1476, p. 55 (1976), and de*168spite sustained criticism for a number of years, it has declined to alter the patent protections presently available for industrial design. See Report of the President’s Commission on the Patent System, S. Doc. No. 5, 90th Cong., 1st Sess., 20-21 (1967); Lindgren, The Sanctity of the Design Patent: Illusion or Reality?, 10 Okla. City L. Rev. 195 (1985). It is for Congress to determine if the present system of design and utility patents is ineffectual in promoting the useful arts in the context of industrial design. By offering patent-like protection for ideas deemed unprotected under the present federal scheme, the Florida statute conflicts with the “strong federal policy favoring free competition in ideas which do not merit patent protection.” Lear, Inc., 395 U. S., at 656. We therefore agree with the majority of the Florida Supreme Court that the Florida statute is preempted by the Supremacy Clause, and the judgment of that court is hereby affirmed.
It is so ordered.
22.5 Brown v. Ames 22.5 Brown v. Ames
Copyright
Leonard BROWN; et al., Plaintiffs, Leonard Brown; Walter Price; Pete Mayes; James Nelson; Clarence Parker; Lee J. Frazier, also known as Skipper Lee Frazier; Joe Hughes, also known as Joe “Guitar” Hughes; Rayfield Jackson, also known as Houston Guitar Slim; Freddie Collins, also known as Big Roger Collins; Alfred R. Bettis; Falieta Green; Thomas Dardar, formerly known as Tommy Dardar, presently known as; Debra L. Nickerson; Weldon Bonner, presently known as Juke Boy Bonner; Lizette Cobb; Arnett Cobb; Kinney Abair, Plaintiffs-Appellees, v. Roy C. AMES, Etc.; et al., Defendants, Roy C. Ames, doing business as Clarity Music & Home Cooking Records, Defendant-Appellant, *655Collectibles Inc., doing business as Collectibles Records, Movant-Appellant.
No. 98-20736.
United States Court of Appeals, Fifth Circuit.
Feb. 7, 2000.
Rehearing Denied March 23, 2000.
*656David W. Showalter (argued), Bellaire, TX, for Plaintiffs-Appellees.
Gregory P. Eveline (argued), Mark J. Davis, Eveline, Davis & Phillips, New Orleans, LA, for Defendant-Appellant Roy C. Ames.
Robert P. Latham (argued), Houston, TX, for Defendant-Appellant Collectibles, Inc.
Before JONES and DENNIS, Circuit Judges, and PRADO 1, District Judge.
Appellants Collectibles and Ames principally appeal the district court’s determination that appellees’ state law claims for violation of their rights of publicity are not preempted by the Copyright Act. The misappropriation consisted of appellants’ unauthorized use of appellees’ names and likenesses to market appellees’ musical performances on CD’s and audio cassettes for which appellants also lacked copyrights. Because a person’s name and likeness in themselves are not copyrightable, and because the state law tort for misappropriation does not conflict with federal copyright law, appellees’ claims are not preempted. As the other issues raised on appeal lack merit, the judgment is affirmed.
I. FACTUAL & PROCEDURAL HISTORY
Collectibles is a record label that distributes and sells music recordings, especially repackaged vintage recordings. Ames is a music producer specializing in Texas blues. Appellees are individual blues musicians, songwriters, music producers or heirs of such.
Around 1990, Ames, d/b/a Home Cooking Records, licensed to Collectibles for commercial exploitation master recordings that included performances by appellees. The written license agreements also purported to give Collectibles the right to use the names, photographs, likenesses and biographical material of all those whose performances were on the master recordings. Ames represented and warranted to Collectibles that Ames was entitled to convey these rights. Using the master recordings, Collectibles manufactured and distributed cassettes and CD’s, as well as music catalogs, with the names and sometimes the likenesses of the performers on or in them. In addition, Ames, but not Collectibles, sold posters or videotapes *657with the names or likenesses of the plaintiffs.
In 1994, appellees sued Ames, Collectibles and Jerry and Nina Greene, the owners of Collectibles. Before trial, the district court dismissed appellees’ negligence and conversion claims as preempted by the Copyright Act, and dismissed without prejudice the copyright claims of those appel-lees who had not timely obtained registration certificates. Appellees’ actions for copyright infringement, violations of the Lanham Act and for misappropriation of name or likeness under Texas state law proceeded to a jury trial. At the close of appellees’ case, the Court granted judgment as matter of law for defendants Jerry and Nina Greene, and the jury found in favor of all defendants on the Lanham Act claims. These rulings have not been appealed.
The jury also found that the defendants had misappropriated the names and likenesses of the appellees and had infringed (in the case of Collectibles, innocently) copyrights held by some of the appellees. Finally, the jury found that Weldon Bonner had not executed a Recording Agreement with Roy Ames. The jury awarded the appellees misappropriation damages of $127,000 — $100,000 from Ames and $27,000 from Collectibles. In its final judgment of August 3, 1998, the court held Collectibles liable for $1,800 for copyright infringement and for $27,000 for misappropriation and Ames liable for $22,500 for copyright infringement and for $100,000 for misappropriation.
Collectibles and Ames have appealed on several grounds. First, they assert that the Copyright Act preempts the misappropriation claims. Second, they assert that the district court should have enforced the allegedly notarized January 1975 Recording Agreement between Ames and Weldon Bonner, notwithstanding the jury verdict that Bonner did not sign it, and that the district court incorrectly instructed the jury on the burden of proof. Third, they claim that the district court improperly awarded a copyright to Leonard Brown for “Ain’t Got Much” because 'his wife wrote the song and he lacked a written assignment from her. Finally, Collectibles, but not Ames, asserts that the plaintiffs did not present legally sufficient evidence to support the misappropriation damages award.
II. DISCUSSION
A. Preemption
This Court reviews a district court’s conclusions of law de novo. See Pebble Beach Co. v. Tour 18 I Ltd., 155 F.3d 526, 537 (5th Cir.1998).
The Copyright Act provides that:
On or after January 1, 1978, all legal and equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103, whether created before or after that date and whether published or unpublished, are governed exclusively by this title....
17 U.S.C. § 301(a). Section 301 requires the fulfillment of two conditions. First, the content of the protected right must fall in the subject matter of copyright. Second, the nature of the rights granted under state law must be equivalent to any of the exclusive rights in the general scope of a federal copyright. See Daboub v. Gibbons, 42 F.3d 285, 289 (5th Cir.1995); see also 1 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 1.01[B] (1999).
In Texas, the tort of misappropriation provides protection from the unauthorized appropriation of one’s name, image or likeness. See Moore v. Big Picture Co., 828 F.2d 270, 275 (5th Cir.1987). It is best understood as a species of the right of publicity or of privacy. See id. To prevail, a plaintiff must prove that (1) *658the defendant misappropriated the plaintiffs name or likeness for the value associated with it and not in an incidental manner or for a newsworthy purpose; (2) the plaintiff can be identified from the publication; and (3) the defendant derived some advantage or benefit. See Matthews v. Wozencraft, 15 F.3d 432, 437 (5th Cir. 1994).
Appellants argue strenuously that appellees have not presented an independent action for misappropriation. Because appellees’ names and/or likenesses were used to identify their musical works in Collectibles’ CD’s, tapes and catalogs, appellants assert that the core of the misappropriation and copyright infringement claims is the same, compelling preemption under section 301 of the misappropriation claims.
Appellants’ argument ignores, however, that the content of the right protected by the misappropriation tort does not fall into the subject matter of copyright, as section 301 requires. As the district court correctly recognized, the tort for misappropriation of name or likeness protects “the interest of the individual in the exclusive use of his own identity, in so far as it is represented by his name or likeness, and in so far as the use may be of benefit to him or to others.” Restatement (Second) of Torts § 652C (1977). In other words, the tort of misappropriation of name or likeness protects a person’s persona. A persona does not fall within the subject matter of copyright — it does not consist of “a ‘writing’ of an ‘author’ within the meaning of the Copyright Clause of the Constitution.” Nimmer, supra, § 1.01[B][l][c]; Jarvis v. A&M Records, 827 F.Supp. 282, 297 (D.N.J.1993); Bi-Rite Enterprises, Inc. v. Button Master, 555 F.Supp. 1188, 1201 (S.D.N.Y.1983); Apigram Publishing Co. v. Factors, Etc., Inc., 1980 WL 2047 (N.D.Ohio July 30, 1980)(available on WESTLAW); Lugosi v. Universal Pictures, 25 Cal.3d 813, 849, 160 Cal.Rptr. 323, 603 P.2d 425 (1979)(Bird, C.J., dissenting). Furthermore, contrary to appellants’ implications, appellees’ names and likenesses do not become copyrightable simply because they are used to identify the source of a copyrighted work. Therefore, their misappropriation claims do not fit the terms of § 301 preemption.
Given the fact that a name or likeness is not copyrightable, appellants’ reliance on Daboub is unavailing. In Daboub, the plaintiffs alleged that ZZ Top had both infringed their copyright in and misappropriated one of their songs, and this Court held that section 301 of the Copyright Act preempted the state law misappropriation claim. See Daboub, 42 F.3d at 287, 290. The crucial difference between the two cases is that in Daboub the basis of the misappropriation claim, as well as the copyright infringement claim, was the song itself, bringing it within section 301’s ambit, whereas here the basis of the misappropriation claim was defendants’ use of plaintiffs’ names and/or likenesses.
The appellants also cite Fleet v. CBS, Inc., 50 Cal.App.4th 1911, 58 Cal.Rptr.2d 645 (1996), which, although more similar, shares the same factual difference. In Fleet, plaintiffs were actors in a copyrighted film who alleged that the exploitation of the copyrighted work itself infringed their state right of publicity. See id. at 647. They complained not only about the showing of the film, but also about the use of pictures from the film for advertising. See id. Because the individual performances in the film were copyrightable, the court held their claims preempted by federal copyright law. See id. at 650. Thus, Fleet, like Daboub, involved a claim of misappropriation of something — in Fleet, dramatic performances; in Daboub, songs — within the subject matter of copyright. This case, in contrast, involves a claim of misappropriation of name and/or likeness, which is not within the subject matter of copyright.
This Court finds the Ninth Circuit’s opinions in Midler v. Ford Motor Co., 849 F.2d 460 (9th Cir.1988), and Waits v. Fri-to-Lay, Inc., 978 F.2d 1093 (9th Cir.1992), *659more persuasive than the case law urged - by appellants. These cases, which the district court relied upon, involved the misappropriation of the vocal styles of Bette Midler and Tom Waits. The Ninth Circuit held that because vocal style is not “fixed,” it is not copyrightable, consequently, section 301 of the Copyright Act did not preempt a claim of misappropriation of the singer’s vocal style. See Waits, 978 F.2d at 1100; Midler, 849 F.2d at 462. In Daboub’s language, the content of the protected right (in these cases, the singers’ vocal styles) did not fall in the subject matter of copyright. Midler foreshadows the result in this case, reasoning that “[a] voice is as distinctive and personal as a face.” 849 F.2d at 463.2
One arguably analogous case has held to the contrary. In Baltimore Orioles v. Major League Baseball Players Ass’n, 805 F.2d 663 (7th Cir.1986), the Seventh Circuit held that the Copyright Act preempted baseball players’ rights of publicity in their performances. The court’s conclusion turned on its controversial decision that performances in a baseball game were within the subject matter of copyright because the videotape of the game fixed the players’ performances in tangible form. See id. at 674-76.3 Baltimore Orioles, however, has been heavily criticized for holding that a baseball game is a protecta-ble work of authorship simply because the performance was recorded on videotape that was itself copyrightable. See, e.g., Nimmer, swpra, §§ 1.01[B][l][c] and 2.09[F]; David E. Shipley, Three Strikes and They’re Out at the Old Ball Game: Preemption of Performers’ Rights of Publicity under the Copyright Act of 1976, 20 Ariz. St. L.J. 369, 384-88 (1988); Shelley Ross Saxer; Baltimore Orioles, Inc. v. Major League Baseball Players Association: The Right of Publicity in Game Performances and Federal Copyright Preemption, 36 U.C.L.A. L.Rev. 861, 870 (1989). In any event, Baltimore Orioles is distinguishable from this case because the right of publicity claimed by the baseball players was essentially a right to prevent rebroadcast of games whose broadcast rights were already owned by the clubs. Viewed in this way, the case is the same as Fleet, Inc. v. CBS, supra. The case before us offers no such complication, as the appellee performers did not give permission to the appellants to market their recordings or photographs. We decline appellants’ invitation to find name or likeness copyrightable simply because they are placed on CD’s and tapes or in catalogs that have copyrightable subject matter recorded on them.
The fact that section 301 does not apply does not end the inquiry, however. Although section 301 preemption is not appropriate, conflict preemption might be. The Supremacy Clause dictates that a state law that obstructs the accomplishment of the full purposes and objectives of *660Congress is preempted. See Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941).
The major purpose of the Copyright Act is, as the Constitution states, “to promote the progress of Science and useful arts.” U.S. Const., art. I, § 8, cl. 8. The legislative history of the Copyright Act describes several other objectives: 1) to promote national uniformity and avoid the difficulties of determining and enforcing rights under different state laws; 2) to have copyright protection last for a limited time period, so that scholars and the public can benefit from the dissemination of copyrighted materials; and 3) to improve our international dealings in copyrighted materials. See House Report at 132, reprinted in 1976 U.S.C.C.A.N. at 5745-46; see also Goldstein v. California, 412 U.S. 546, 554-56, 93 S.Ct. 2303, 2308-10, 37 L.Ed.2d 163 (1973).
Although appellants argue vigorously that not preempting appellees’ misappropriation claims would undermine the copyright system, several considerations belie this claim. First, the right of publicity that the misappropriation tort protects promotes the major objective of the Copyright Act — to support and encourage artistic and scientific endeavors.4 Second, the record here indicates that industry practice may be to transfer rights in a performer’s name or likeness when the copyright is transferred.5 If that is the case, right of publicity claims will rarely interfere with a copyright holder’s use of the creator’s name or likeness in connection with the copyright. Third, common law on the right of publicity appears ordinarily to permit an authorized publisher or distributor to use name or likeness to identify truthfully the author or creator of the goods.6 See Zim v. Western Publishing Co., 573 F.2d 1318, 1327 (5th Cir.l978)(holding that authorization to publish author’s work provided implicit authorization to use author’s name to identify work); Neyland v. Home Pattern Co., 65 F.2d 363, 364 (2d Cir.l933)(holding that an implied license to use the name to sell goods arises if the goods have been sold or disposed of); Kamakazi Music Corp. v. Robbins Music Corp., 534 F.Supp. 69, 77 (S.D.N.Y.1982)(holding that the right to use a composer’s name or likeness accompanies the grant of the right to use the underlying compositions); Brinkley v. Casablancas, 80 A.D.2d 428, 438 N.Y.S.2d 1004 (1981)(holding that an unauthorized distribution of a model’s name or likeness was actionable); Restatement (Third) of Unfair Competition § 47; 2 J. Thomas McCarthy, The Rights of Publicity or Privacy § 7.4 (1999).
Only if states allowed similar claims against authorized publishers or distributors of a work (whether through copyright or the public domain) would the purposes and objectives of the Copyright Act be adversely affected.7 Such suits would interfere to some extent with the uniformity of the copyright system and the exploitation of works in the public domain. Currently, however, no state seems to have such a law, and the general rule is as described above. See McCarthy, supra, *661§ 7.4. Thus, because the tort would currently not be sustainable against valid copyright holders, allowing the claim in this context does not impede the transfer of copyrights or the uniformity of the copyright system.
Supreme Court precedent suggesting that courts should steer a middle ground in considering Copyright Act preemption cases supports our conclusion that appel-lees’ misappropriation claims are not preempted. The leading Supreme Court case on preemption in the intellectual property field, Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 109 S.Ct. 971, 103 L.Ed.2d 118 (1989), found that a state statute providing patent-like protection for ideas deemed unprotected under federal patent law was preempted, but warned that “the States remain free to promote originality and creativity in their own domains.” Id. at 165, 109 S.Ct. 971. The Court went on to state that: “the case for federal pre-emption is particularly weak where Congress has indicated its awareness of the operation of state law in a field of federal interest, and has nonetheless decided to ‘stand by both concepts and to tolerate whatever tension there [is] between them.’ ” Id. at 166-67, 109 S.Ct. 971 (citing Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 256, 104 S.Ct. 615, 625, 78 L.Ed.2d 443 (1984)). As noted in the legislative history of section 301, Congress was aware of the operation of state law on the rights of privacy and publicity, and indicated its intention that such state law causes of action remain.8 See House Report at 132, reprinted in 1976 U.S.C.C.A.N. at 5748.
Since appellees’ misappropriation claims neither fall within the subject matter of copyright nor conflict with the purposes and objectives of the Copyright Act, the claims were not preempted.9
B. Damages
The jury found that Collectibles owed plaintiffs, in the aggregate, $27,000 for the misappropriation of their names and/or likenesses. Collectibles argues that the plaintiffs did not present legally sufficient evidence on the commercial damage suffered as a result of Collectibles’ use of their names and/or likenesses. We disagree. An assessment of damages is not reversed unless it is clearly erroneous, and review and approval of the verdict by the trial judge, such as occurred here, makes appellate review even more deferential. See Ham Marine, Inc. v. Dresser Industries, Inc., 72 F.3d 454, 462 (5th Cir.1995).
Under Texas law, “[o]ne who appropriates to his own use or benefit the name or likeness of another is subject to liability to the other for invasion of his privacy.” Restatement (Second) of Torts, § 652C (1977); see also Benavidez v. Anheuser Busch, Inc., 873 F.2d 102, 104 (5th Cir.l989)(recognizing § 652C of the Restatement of Torts as descriptive of Texas law); Kimbrough v. Coca-Cola/USA, 521 S.W.2d 719 (Tex.Civ.App. — Eastland 1975, writ ref d n.r.e.) (recognizing cause of action for misappropriation under Texas law). ‘“To prove a cause of action for misappropriation, a plaintiff must show that his or her personal identity has been appropriated by the defendant for some advantage, usually of a commercial nature, to the defendant.’ ” Moore v. Big Picture Co., 828 F.2d 270, 275 (5th Cir.1987) (quoting National Bank of Commerce v. Shaklee Corp., 503 F.Supp. 533, 540 (W.D.Tex. 1980)). Furthermore, plaintiffs in misappropriation of name or likeness actions are not required to show that the defendant *662made money from the commercial use of the name or likeness. See Henley v. Dillard Dep’t Stores, 46 F.Supp.2d 587, 597 (N.D.Tex.1999).
In a misappropriation of name or likeness action, a plaintiff may recover general damages plus any proven special damages. See Shaklee, 503 F.Supp. at 545. “General damages are those which naturally, proximately, and necessarily result from the improper communications.” Moore, 828 F.2d at 277. Collectibles argues that the evidence is too speculative to support the damages verdict. While it is true that recovery is not allowed for damages that are speculative or conjectural, “mathematical precision is not required to establish the extent or amount of one’s damage.” Oyster Creek Financial Corp. v. Richwood Investments II, Inc., 957 S.W.2d 640, 649 (Tex.Ct.App. 1997). Damages must be “ascertainable by reference to some fairly definite standard, established experience, or direct inference from known facts,” but the plaintiff does not have to give an actual dollar value to his injury. Id. In fact, one treatise states: “the award of such damages [general damages in an invasion of privacy case] is within the province of the jury and should not be disturbed unless there is a clear showing of excessiveness or impropriety on the part of the jury.” J. Hadley Edgar, Jr. & James B. Sales, Texas Torts & Remedies § 53.08[l][a] (1999).
In this case, the jury did not clearly err in its damages verdict. The damages awarded fit the Moore criteria: the jury could reasonably have based its estimate of the damages suffered by plaintiffs and even the value of appellees’ names and/or likenesses on inferences from the amounts appellees were paid to perform at blues festivals.
C. The Notarized Contract.
The jury found that Weldon Bonner did not execute a January 1, 1975 Recording Agreement with Roy Ames. Appellant Collectibles argues that the evidence was insufficient to overcome the presumption of authenticity that attaches to a notarized contract under Texas law.10 Appellant Ames asserts that the district court erroneously instructed the jury that the burden of proof was preponderance of the evidence when it should have been clear and convincing proof.
A party must object to a jury charge before the jury begins its deliberations in order to preserve its right to appeal that jury charge, unless the error is so fundamental as to be a miscarriage of justice. See Ford v. United Gas Corp., 254 F.2d 817, 818 (5th Cir.1958); Farrar v. Cain, 756 F.2d 1148, 1150 (5th Cir.1985). Since Ames did not object to the jury charge on the burden of proof and the alleged error is not so fundamental as to be a miscarriage of justice, he has waived any appeal on that basis.
Collectibles, however, has not waived its appeal as to the sufficiency of the evidence supporting the jury verdict that the notarized contract was invalid. It objected, on the same grounds as it argues here, to the trial court’s interrogatory to the jury as to whether Ames and Bonner executed said contract.
Texas law requires “clear and unmistakable proof that either the grantor did not appear before the notary or that the notary practiced some fraud or imposition upon the grantor ... to overcome the validity of a certificate of acknowledgment.” Bell v. Sharif-Munir-Davidson Dev. Corp., 738 S.W.2d 326, 330 (Tex.App. 1987); see also Stout v. Oliveira, 153 S.W.2d 590 (Tex.Civ.App.1941).
*663Bonner’s daughter testified that the signature on the Recording Agreement was not her father’s. Several documents in evidence showed Bonner’s signature and permitted the jury to draw their own conclusions as to the authenticity of the challenged signature. The jury could reasonably have concluded from the evidence that Bonner did not appear before the notary and his signature was forged, thus overcoming the presumption of authenticity that attaches to a notarized contract. Because this inference was reasonable, we affirm the jury’s verdict that the Recording Agreement between Bonner and Ames was invalid.
D. Leonard Brown’s Copyright in “Ain’t Got Much”
Appellants claim that because Leonard Brown’s wife wrote the song “Ain’t Got Much” and he failed to produce a written copyright assignment from her at trial, the district court erred in granting him a copyright in the song.
Appellants never raised this particular objection to Brown’s copyright in “Ain’t Got Much” at trial. To avoid being waived, an argument “must be raised to such a degree that the trial court may rule on it.” In re Fairchild Aircraft Corp., 6 F.3d 1119, 1128 (5th Cir.1993); see also Harris County, Tex. v. CarMax Auto Superstores, Inc., 177 F.3d 306 (5th Cir.1999); FDIC v. Mijalis, 15 F.3d 1314, 1327 (5th Cir.1994). In its April 2, 1997 motion for judgment, Collectibles (but not Ames) challenged Brown’s copyright on the grounds that his misrepresentation to the copyright office of authorship of “Ain’t Got Much” invalidated his copyright application for the entire collection it appeared in. Collectibles did not, however, contend that Brown’s copyright in the song was invalid because he had not produced a written copyright assignment from his wife. In fact, at no time did Collectibles or Ames raise that particular objection at trial. Consequently, the district court never ruled on it. As a result, appellants have waived the right to appeal on this ground.
III. CONCLUSION
The district court was correct in holding that plaintiffs’ misappropriation claims were not preempted, that sufficient evidence supported the damages verdict, and that sufficient evidence supported the jury’s determination that the Recording Agreement between Weldon Bonner and Roy Ames was invalid. In addition, appellants waived their right to argue that, because Leonard Brown did not produce a written assignment from his wife, the district court erred in awarding him a copyright in “Ain’t Got Much.”
AFFIRMED.
22.6 Kewanee Oil Co. v. Bicron Corp. 22.6 Kewanee Oil Co. v. Bicron Corp.
Patents and State Trade Secret Law
KEWANEE OIL CO. v. BICRON CORP. et al.
No. 73-187.
Argued January 9, 1974
Decided May 13, 1974
*471Burger, C. J., delivered the opinion of the Court, in; which Stewart, White, Blackmun, and Rehnquist, JJ., joined. Marshall, J., filed an opinion concurring in the result, posf,..p. 493. Douglas, J., filed a dissenting opinion, in which Brennan, J., joined, post, p. 495. Powell, J., took no part in the decision of the case.
Erwin-N. Griswold argued the cause for petitioner.. With him on the brief were Robert J. Hoerner, Barry L. Springel, Edward P. Troxell, Robert P. 'Mooney, and James A. Lucas. •
William C. McCoy; Jr., argued the cause and filed a brief for respondents.*
delivered the opinion of the Court.
We granted certiorari to resolve a question on which there is a conflict in the courts of appeals: whether state trade Secret protection is pre-empted by operation of the federal patent law.1 In the instant case the Court of Appeals for the Sixth Circuit held that there was preemption.2 . The Courts of Appeals for the Second, Fourth, Fifth, and ..Ninth Circuits have reached the opposite conclusion.3
*473I
Harshaw Chemical Co., an unincorporated division of petitioner, is a leading manufacturer of a type of synthetic crystal which is useful in the detection of ionizing radiation. In 1949 Harshaw commenced research into the growth of this type crystal and was able to produce one less than two inches in diameter. By 1966, as the result of expenditures in excess of $1 million, Harshaw was able to grow a 17-inch crystal, something no one else had done previously. Harshaw hád developed many processes, procedures, and manufacturing techniques in the purification of raw materials and the growth and encapsulation of the crystals which enabled it to accomplish this feat. Some of these processes Harshaw considers to be trade secrets.
The individual respondents ape former employees of Harshaw who formed or later joined respondent Bicron. While at Harshaw the individual respondents executed, as a condition of employment, at least one agreement each, requiring them not to disclose confidential information or trade secrets obtained as employees of Harshaw. Bicron was formed in August 1969 to compete with Harshaw in the production of the crystals; and by April 1970, had grown a 17-inch crystal.
Petitioner brought this diversity action in United States District Court for the Northern District of Ohio seeking injunctive relief and damages for the misappropriation of trade secrets. The District Court, applying Ohio trade secret law, granted a permanent injunction against the disclosure or use by respondents of 20 of the 40 claimed trade secrets until such time as the trade secrets had *474been released to the public, had otherwise generally become available to the public, or had been obtained by respondents from sources having the legal right to convey the information.
The Court of Appeals for the Sixth Circuit held that the findings of fact by the District Court were not clearly erroneous, and that it was evident from the record that the individual respondents appropriated to the benefit of Bicron secret information on processes obtained while they were employees at Harshaw. Further, the Court of Appeals held that the District Court properly applied Ohio law relating to trade secrets. Nevertheless, the Court of Appeals reversed the District Court, finding Ohio’s trade secret law to be in conflict with the patent •laws of the United States. The Court of Appeals reasoned that Ohio could not grant monopoly protection to processes and manufacturing techniques that were appropriate subjects for consideration under 35 U. S. C. § 101 for a federal patent but which had been in commercial use for over one year and so were no longer eligible for patent protection under 35 U. S. C. § 102 (b).
We hold that Ohio’s law of trade secrets is not preempted by the patent laws of the United States, and, accordingly, we reverse.
n
Ohio has adopted the widely relied-upon definition of a trade secret found at Restatement of Torts § 757, comment b (1939). B. F. Goodrich Co. v. Wohlgemuth, 117 Ohio App. 493, 498, 192 N. E. 2d 99, 104 (1963); W. R. Grace & Co. v. Hargadine, 392 F. 2d 9, 14 (CA6 1968). According to the Restatement,
“ [a] trade secret may consist of any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not *475know or use it. ft may be a formula for a chemical compound, a process of manufacturing, treating or preserving materials, a pattern for a- machine or other device, or a list of customers.”
The subject of a trade secret must be secret, and must not be of public knowledge or of a general knowledge in the trade or business. B. F. Goodrich Co. v. Wohlgemuth, supra, at 499, 192 N. E. 2d, at 104; National Tube Co. v. Eastern Tube Co., 3 Ohio C. C. R. (n. s.) 459, 462 (1902), aff’d, 69 Ohio St. 560, 70 N. E. 1127 (1903). This necessary element of secrecy is not lost, however, if the holder of the trade secret reveals the trade secret to another “in confidence, and under an implied obligation not .to use or disclose it.” Cincinnati Bell Foundry Co. v. Dodds, 10 Ohio Dec. Reprint 154, 156, 19 Weekly L. Bull. 84 (Super. Ct. 1887). These others may include those of the holder’s “employees to whom it is necessary to confide it, in order to apply it to the uses for which it is intended.” National Tube Co. v. Eastern Tube Co., supra, at 462. Often the recipient of confidential knowledge of the subject of a trade secret is a licensee of its holder. See Lear, Inc. v. Adkins, 395 U. S. 653 (1969).
The protection accorded the trade secret holder is against the .disclosure or unauthorized use of the trade secret by those to whom' the secret has been confided under the express or implied restriction of nondisclosure or nonuse.4 The law also protects the holder of a trade *476secret against disclosure or use .when the knowledge is gained, not by the owner’s volition, but by some “improper means,” Restatement of Torts § 757 (a),, which may include theft, wiretapping, or even aerial reconnaissance.5 A trade secret law, however, does not offer protection against 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.6
Novelty, in the patent law sense, is not required for a trade secret, W. R. Grace & Co. v. Hargadine, 392 F. 2d, at 14. “Quite clearly discovery is something less than invention.” A. O. Smith Corp. v. Petroleum Iron Works Co., 73 F. 2d 531, 538 (CA6 1934), modified to increase scope of injunction, 74 F. 2d 934 (1935). However, some novelty will be required if merely because that which does not possess novelty is usually known; secrecy, in the context of trade' secrets, thus implies at least minimal novelty.7
The subject matter of a patent is limited to a “process, machine, manufacture, or composition of matter,, or ... . improvement thereof,” 35 U. "S. C. § 101, which fulfills the three conditions of novelty and utility as articulated and defined in 35 U. S. C. §§ 101 and 102, and nonobvi*477ousness, as set out in 35 U. S. C. § 103.8 If an invention xueets the rigorous statutory tests for the issuance of a patent, the patent is granted, for a period of 17 *478years, giving what has been described as the “right of exclusion,” R. Ellis, Patent Assignments and Licenses § 4, p. 7 (2d ed. 1943).9 This protection goes not only to copying the subject matter, which is forbidden under the Copyright Act, 17 U. S, C. § 1 et seq., but also to independent creation.
Ill
The first issue we deal with is whether the States are forbidden to act at all in the area of protection of the kinds of intellectual property which may make up the subject matter of trade secrets.
' Article I, § 8, cl. 8, of the Constitution grants to the Congress the power ■
“[t]o 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 . . . .”
In the 1972 Term, in Goldstein v. California, 412 U. S. 546 (1973), we held that the cl. 8 grant of power to Congress was not exclusive and that, at least in the case of writings, the States were not prohibited from encouraging and protecting the efforts of those within their borders by *479appropriate legislation. The States could, therefore, protect against the unauthorized rerecording for sa,le of performances fixed on records or tapes, even though those performances qualified as “writings” in the constitutional sense and Congress was empowered to legislate regarding such performances and could pre-empt the area if it chose to do so. This determination was premised on the great diversity of interests in .our Nation — the essentially nonuniform character of the. appreciation of intellectual achievements in the various States. Evidence for this came from patents granted by the States in the 18th century. 412 U. S., at 557.
Just as the States may exercise regulatory power over writings so may the States regulate with respect to discoveries. States may hold diverse viewpoints in protecting intellectual property relating to invention as they do in protecting the intellectual property relating to the subject matter of copyright. The only limitation on the States is that in regulating the area of patents and copyrights they do not conflict with the operation of the laws in this area passed by Congress, and it is to that more difficult question, we now turn.
IV
The .-question of whether the trade secret law of Ohio is void under the Supremacy Clause involves a consideration of whether that law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Hines v. Davidowitz, 312 U. S. 52, 67 (1941). See Florida Avocado Growers v. Paul, 373 U. S. 132, 141 (1963). We stated in Sears, Roebuck &. Co. v. Stiffel Co., 376 U. S. 225, 229 (1964), that when state law touches upon'the area of federal statutes enacted pursuant to constitutional authority, “it is-'familiar doctrine’ that the federal policy *480‘may not be set at naught, or its benefits denied’ by the state law. Sola Elec. Co. v. Jefferson Elec. Co., 317 U. S. 173, 176 (1942). This is true, of course, even, if the state law is enacted in the exercise of otherwise undoubted state power.”
The laws which the .Court of Appeals in this case held to be in conflict, with the Ohio law.of.trade secrets were the patent laws passed by the Congress in the unchallenged, exercise'of its clear power under Art. I, §8, cl. 8, of the Constitution. The patent law does not explicitly endorse or forbid the operation of trade secret law. However, as we have noted, if the scheme of protection developed by Ohio respecting trade secrets “clashes with the objectives of the federal patent laws,” Sears, Roebuck & Co. v. Stiffel Co., supra, at 231, then the state law must-fall. To determine whether the Ohio' law “clashes” with the federal law it is helpful to examine the objectives of both the patent and trade secret, laws».
. The stated objective of the Constitution in granting the power to Congress to legislate in the area of intellectual property is. to, “promote the Progress of Science and. useful Arts.”. The patent laws promote this progress by offering a right of 'exclusion for a limited period as an incentive* to inventors to risk the often enormous costs in'-terms of time, research, and development. .The productive effort thereby fostered will have a positive effect on societyithrough the introduction of new products, and processes of manufacture into (the economy, and the emanations by why of increased employment and better lives for our citizens. In return, for the right of ex'clusion — this “reward for inventions,” Universal Oil Co. v. Globe Co., 322 U. S. 471, 484 (1944) — the patent laws impose upon the inventor a requirement of disclosure. To insure adequate and full disclosure so that upon the *481expiration of the 17-year period “the . knowledge of the invention enures to the people, who are thus enabled without restriction to practice it and profit by its use,” United States v. Dubilier Condenser Corp., 289 U. S. 178, 187 (1933), the patent laws require10' that the patent application shall include a full and clear description of the invention and “of the manner and process of making and using it” so that any person skilled in the art may make and use the invention. 35 U. S. C. § 112. When a patent is granted and the information contained in it is circulated to the general public and those especially skilled in the trade, such additions to the general store óf knowledge are of such importance to the public weal that the Federal Government is willing to pay the high price of 17 years of exclusive use for its disclosure, which' disclosure, it is assumed, will stimulate ideas and the eventual development.of further significant advances in the art. The Court has also articulated another policy of the patent law: that which is in the public domain cannot be removed therefrom by action of the States.
“[FJederal law requires that all ideas in general circulation be dedicated to the common good unless they are protected by a valid patent.” Lear, Inc. v. Adkins, 395 U. S., at 668.
See also Goldstein v. California, 412 U. S., at 570-571; Sears, Roebuck & Co. v. Stiffel Co., supra; Compco Corp. v. Day-Brite Lighting, Inc., 376 U. S. 234, 237-238 (1964); International News Service v. Associated Press. 248 U. S. 215, 250 (1918) (Brandéis, J., dissenting).
The maintenance of standards of commercial ethics and the encouragement of invention are the broadly stated policies behind trade secret law. “The necessity of good faith and honest, fair dealing, is the very life *482and spirit of the commercial world.” National Tube Co. v. Eastern Tube Co., 3 Ohio C. C. R. (n. s.), at. 462.11 In A. O. Smith Corp. v. Petroleum Iron Works Co., 73 F. 2d, at 539, the Court emphasized that even though a discovery may not be patentable, that does not
“destroy the value of the discovery to one who makes it, or advantage the competitor who by unfair means, or as the beneficiary of a broken faith, obtains thé desired knowledge without himself paying the price in lábor, money, or machines expended by the discoverer.”
In Wexler v. Greenberg, 399 Pa. 569, 578-579, 160 A. 2d 430, 434-435 (1960), the Pennsylvania Supreme Court noted the importance, of trade secret protection to the subsidization of. research and- development and to increased economic efficiency within large companies through the dispersion of responsibilities for creative developments.12
Having now in mind the objectives of both the patent and trade secret law, we turn to an examination of the interaction of these systems of protection of intellectual property-one established by the Congress' and the other by a State — to determine whether , and under7 what circumstances the latter might constitute “too great an encroachment on the federal patept system to be tolerated.” Sears, Roebuck & Co. v. Stiffel Co., 376 U. S., at 232.
As ,we noted earlier,, trade secret law protects items which would not be proper subjects for consideration for patent protection under 35 U. S. C. §101. As dn the' *483case of the recordings in Goldstein v. California, Congress, with respect to nonpatentable subject matter, “has drawn no balance; rather, it has left the area unattended, and no reason exists why the State should not be free to act.” Goldstein v. California, supra, at 570 (footnote omitted).
Since no patent is available for a discovery, however useful, novel, and nonobvious, unless it falls within one of the express categories of patentable subject matter of 35 U. S. C. § 101, 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, therefore, not result in increased disclosure to the public of discoveries in the area of nonpatentable subject matter. Also, it is hard to see how the public would be benefited by disclosure of customer lists or advertising campaigns; in fact, keeping such items secret encourages businesses to initiate new and individualized plans of operation, and constructive competition results. This, in turn, leads to a greater variety of business methods than would otherwise be the case if privately developed marketing and other data were passed illicitly among firms involved in the same enterprise.
Congress has spoken in the area of those discoveries which fall within one of the categories of patentable subject matter of 35 U. S. C. § 101 and which are, therefore, of a nature that would be subject to consideration for a patent. Processes, machines, manufactures, compositions of matter, and improvements thereof, which meet the tests of utility, novelty, and nonobviousness are entitled to be patented, but those which do not, are not. The question remains whether those items which are proper subjects for consideration for a patent may also have available the alternative, protection accorded by trade secret law.
*484Certainly the patent policy of encouraging invention is not disturbed by the existence of another form of incentive to invention. In this respect the two; systems are not and never would be in conflict. Similarly, the policy that matter once in- the public domain must remain in the- public domain is not incompatible with the existence of trade secret protection. By definition a trade secret has not been placed in the public domain.13
The more difficult objective of the patent law to reconcile with trade secret law is that of disclosure, the quid pro quo of the right to exclude. Universal Oil Co. v. Globe Co., 322 U. S., at 484. We' are helped in this stage of the analysis by Judge Henry Friendly’s opinion in Painton & Co. v. Bourns, Inc., 442 F. 2d 216 (CA2 1971). There the Court of Appeals thought it useful, in determining whether inventors will refrain because of the existence of trade secret law from applying for patents, thereby depriving the public from learning of the invention, to distinguish between three categories of trade secrets: '
“(1) the trade secret believed by its owner to constitute a validly patentable invention; (2) the trade secret known to its owner not to be so patentable; and (3) the trade secret whose valid patentability is considered5 dubious.” . Id., at 224.
Trade .secret protection in each of these categories would run against breaches of confidence — the employee and licensee situations — and theft and other forms of industrial espionage.
As to. the trade secret known not to meet "the standards *485of patentability, very little in the way of disclosure would be accomplished by abolishing trade secret' protection. With trade secrets of nonpatentable subject matter, the patent alternative would not reasonably be available to the inventor. “There can be no public interest in stimulating- developers of such [unpatentable] know-how to flood an overburdened Patent Office with applications [for] what they do npt consider patentable.” Ibid. The- mere filing of applications doomed to be turned down by the Patent Office will bring forth no new public knowledge or enlightenment, since under federal statute and regulation patent applications and abandoned patent applications are held by the Patent Office in confidence and are not open to public inspection. 35 U. S. C. § 122; 37 CFR § 1.14 (b). .
Even as the extension of trade secret protection to patentable subject matter that the owner knows will not meet the standards of patentability will not conflict with the patent policy of disclosure, it will Rave a decidedly beneficial effect on society. Trade secret law will 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 the public is not deprived of the use of valuable, if not quite patentable, invention.14
Even if trade secret protection against the faithless employee were abolished, inventive and exploitive effort in the .area of patentable subject matter that did iiot meet the standards of patentability would continue, although at a reduced level. Alternatively with the effort that remained, however, would come an increase in the amount of self-help that innovative companies *486would employ. Knowledge would be widely dispersed among the employees of those still active in research. Security precautions necessarily would be increased, and salaries and fringe benefits of those few officers or employees who had to know the whole of the secret invention would be fixed in an amount thought sufficient to assure their loyalty.15 Smaller companies would be placed at a distinct economic disadvantage, since the costs of this kind of self-help could be great, and the cost to the public of the use of this invention would be increased. The innovative entrepreneur with limited resources would tend to confine his r ¡Search efforts to himself and those few he felt he could > mst without the ultimate assurance of legal protection against breaches of confidence. As a result, organized scientific and technological research could become fragmented, and society, as a whole, would suffer.
Another problem that would arise if state trade secret protection were precluded is in the area of licensing others to exploit secret processes. The holder óf a trade secret would not likely share his secret with a manufacturer who cannot be placed under binding legal obligation to pay a license fee or to protect the secret. The result would be to hoard rather than disseminate knowledge. Painton & Co. v. Bourns, Inc., 442 F. 2d, at 223. Instead, then,- of licensing others to use his invention and making the most efficient use of existing manufacturing and marketing structures within the industry, the trade secret holder would tend either to limit his utilization of the invention, thereby depriving the public of the maximum benefit of its use, or engage in the time-consuming and economically wasteful enterprise of *487constructing duplicative manufacturing and marketing mechanisms for the exploitation of the invention. The detrimental misallbcation of resources and economic waste that would thus take place if trade secret protection were abolished with respect to employees or licensees cannot be justified by reference to any policy that the federal patent law seeks to advance.
Nothing in the patent law. requires that States refrain from action to prevent industrial espionage. In addition to the increased costs for protection from burglary, wiretapping, bribery, and the other means used to misappropriate trade secrets, there is the inevitable cost to the basic decency of society when one firm steals from another. A most fundamental human right, that of privacy, is threatened when industrial espionage is con-, doned or is made profitable^16 the state interest in denying profit to such illegal ventures is unchallengeable.
The next category of patentable subject matter to deal with is theG invention Whose holder has a legitimate doubt as to its patentability. The risk of eventual patent invalidity by the courts -and the costs associated with that risk may well impel some with a good-faith doubt as to patentability not to take the trouble to seek to obtain and defend patent protection for their discoveries, regardless of the existence of trade secret protection. Trade secret protection would assist those inventors in the more efficient exploitation óf their discoveries and not conflict with the patent l$w. In most cases of genuine doubt as'to patent validity the potential rewards of patent protection are so far superior to those accruing to holders of trade secrets, that the holders of *488such inventions will seek patent protection, ignoring the trade secret route. For those inventors “on the line” as to whether to seek patent protection, the abolition of trade secret protection might encourage some to. apply for a patent who otherwise would not have done so. For some of those so encouraged, no patent will be granted and the result
“will have been an unnecessary postponement in the divulging of the trade secret to persons, willing to pay for it. If [the patent does issue], it may well be invalid, yet many will prefer to pay a modest royalty than to contest it, even though Lear allows them to accept a license and pursue the contest without paying royalties while the.fight goes on. The. result in such a case would be unjustified royalty payments from many who would prefer not to pay them rather than agreed fees from one or a few who are entirely willing to do so.” Painton & Co. v. Bourns, Inc., 442 F. 2d, at 225.
The point is that those who might be encouraged to file for patents by the absence of trade secret law will include inventors possessing the chaff as well as the wheat.' Some of the chaff — the nonpatentablfe discoveries — will be thrown out by the Patent Office, but in the meantime society will have been deprived of use of those discoveries through trade secret-protected licensing. Some of the. chaff may not be thrown out. This Court has noted the difference between the standards used by the Patent Office and the courts to determine patentability. Graham v. John Deere Co., 383 U. S. 1, 18 (1966).17 In Lear, Inc. v. Adkins, 395 U. S. 653 (1969), the Court thought that an invalid patent was so serious a threat to the free use of *489ideas already in the public domain that the Court permitted licensees of the patent holder to challenge, the validity of the patent. Better had the invalid patent, never been issued. More of those patents would likely issue if trade secret law were abolished. Eliminating trade secret law for the doubtfully patentable invention is thus likely to have deleterious effects on society and patent policy which we cannot say are balanced out by the speculative gain which might result from the encouragement of some inventors with doubtfully patentable inventions which -deserve patent protection to come forward and apply for patents. • There is no conflict, then, between trade'secret, law and the patent law policy of disclosure, at least insofar as the first two categories of patentable subject matter are concerned.
The final category of patentable subject matter to deal with is the clearly patentable invention, i. e., that invention which the owner believes to meet the standards of patentability. It is here that the federal interest in disclosure is at its peak;- these inventions, novel, useful and non obvious, are “ ‘the things which, are worth to the public .the embarrassment of an exclusive patent.’ ” Graham v. John Deere Co., supra, at 9 (quoting. Thomas Jefferson). The interest of the public is that the bargain of 17 years of exclusive use in return for disclosure be accepted. If a State, through a system of protection, were to cause a substantial risk that holders of patentable inventions would not seek .patents, but rather would -rely on the state protection, we would be compelled to hold that such a system could not constitutionally cbntinue to exist. In the case of trade secret law no reasonable risk of déterrence from patent application by' those who can reasonably expect' to be granted patents exists.
■ Trade Secret law provides far weaker protection in *490many'.respects than the patent law.18 While trade secret law does not forbid the discovery of the trade secret by fair and honest means, e. g., independent creation or reverse- engineering, patent law operates “against the world,” forbidding any use of the invention -for whatever purpose for a significant length of time. The holder of a trade secret also takes a substantial risk that the secret will be passed on to his competitors, by theft or by breach of a confidential relationship, in a manner not easily susceptible of discovery or proof. Painton & Co. v. Bourns, Inc., 442 F. 2d, at 224. Where patent law acts as a barrier, trade secret law functions relatively as a sieve. ' The possibility that an inventor who believes his invention meets the standards of patentability will sit back, rely on trade secret law, and after one year of use forfeit any right to patent protection, 35 U. S. C. § 102 (b), is rémote indeed.
Nor does society face much risk that scientific Or technological progress will be impeded by the rare inventor with a patentable invention who chooses trade secret protection over patent protection. The ripeness-of-time concept of invention, developed from the study of the -many independent multiple, discoveries in history, predicts. that if a particular individual had not made a particular discovery others would.have, and in probably a relatively short period of time. ' If something is to be discovered at all- very likely it will be discovered by more than one person. Singletons and Multiples in Science (1961), in R. Merton, The Sociology of Science 343 (1973); J. Cole & S. Cole, Social Stratification in Science 12-13, 229-230 (1973); Ogburn & Thomas, Are Inventions Inevitable?, 37 Pol. Sci. Q. 83 (1922).19 Even *491were an inventor to keep his discovery completely to himself, something that neither the patent nor trade secret laws forbid, there is a high probability that it will be soon independently developed. If the invention, though still a trade secret, is put into public use, the competition is alerted to the existence of the inventor’s solution to the problem and may be encouraged to make an extra effort to independently find the solution thus known to be possible. The inventor faces pressures not only from private industry, but from the skilled scientists who work in our universities and our other great publicly supported centers of learning and research.
We conclude that the extension of trade secret protection to clearly patentable inventions does not conflict with the patent policy of disclosure. Perhaps because trade secret law does not produce any positive effects in the. area of clearly patentable inventions, as opposed to the beneficial effects resulting from trade secret protection in the areas of the doubtfully patentable and the clearly unpatentable inventions, it has been suggested that partial pre-emption may be appropriate, and that courts should refuse to apply trade secret protection to inventions which the holder should have patented, and which would have been, thereby, disclosed.20 However, since' there is no real possibility that trade secret law will conflict with the federal policy favoring disclosure of clearly patentable inventions partial pre-emption is inapprbpri*492ate. Partial pre-emption, furthermore, could well create serious problems for state courts in the administration of trade secret law. As a preliminary matter in trade secret actions, state courts would be obliged to distinguish between what a reasonable inventor would and would not <correctly consider to be clearly patentable, with the holder of the trade secret arguing that the invention was not patentable and the misappropriator of. the trade secret árguing its undoubted novelty, utility, and -non-obviousness. Federal courts have a difficult enough time trying to determine whether an invention, narrowed by the patent application procedure21 and fixed in the specifications which describe the invention for which the patent has been granted,, is patentable/22 Although state courts in some circumstances must join federal courts in judging whether an issued patent is valid, Lear, Inc. v. Adkins, supra, it would be undesirable ■ to. impose the almost impossible burden on state courts to determine the patentability — in fact and in the mind of a' reasonable inventor — of a discovery which has not been patented and remains entirely uncircumscribed by expert analysis in the administrative process. . Neither complete nor partial pre-emption of state trade secret,law is justified.
Our conclusion that patent, law does not pre-empt trade secret law is in accord with prior cases of this Court. Universal Oil Co. v. Globe Co., 322 U. S., at 484; United States v. Dubilier Condenser Corp., 289 U. S., at 186—187; Becher v. Contoure Laboratories, 279 U. S. 388, 391 (1929); Du Pont Powder Co. v. Masland, 244 U. S. 100, 102 (1917); Dr. Miles Medical Co. v. Park & Sons Co., 220 U. S. 373, 402-403 (1911); Board of Trade v. Christie *493 Grain & Stock Co., 198 U. S. 236, 250-251 (1905).23 Trade secret law and patent law have co-existed in this country for over one hundred years. Each has its particular, role to play, and the operation of one does not take away from the need for the other. Trade secret law encourages the development and exploitation of those items of lesser or different invention than might be ac- ‘ corded protection under the patent laws, but which items still have an important part to play in the technological •and scientific advancement of the Nation. Trade secret law promotes the sharing of knowledge, and the efficient operation of industry; it permits the individual inventor to reap the rewards of his labor by contracting with a company large'enough to develop and exploit it. Congress, by its silence over these many years, has seen the wisdom of allowing the States to enforce trade secret protection.. Until Congress takes affirmative action to the contrary, States should be free to grant protection to trade secrets.
Since we- hold that Ohio trade secret law is not preempted by the federal patent law, the judgment of the Court of Appeals for the Sixth Circuit is reversed,, and the case is remanded to the Court of Appeals with directions to reinstate the judgment of the District Court.
It 'is- so ordered.
Mr. Justice Powell took no part in-the decision of this case.
concurring in the result.
Unlike the Court, I do not believe that the possibility that an inventor with a patentable invention will rely *494on state trade secret law rather than apply for a patent is “remote indeed.” Ante, at 490. State trade secret law provides substantial protection to the inventor who intends to use or sell the invention himself rather than license it to others,, protection which in its unlimited duration is clearly superior to the 17-year monopoly afforded by the patent laws.' I have no doubt that the existence of trade secret protection provides in some instances a substantial disincentive to entrance into the patent system, and thus deprives society of the benefits of public disclosure of the invention which it is the policy of the patent laws to encourage. This case may well be such an instance.
But my view of sound policy in this area does not dispose of' this case. Rather, the question presented in this case is whether Congress, in enacting the patent laws, intended merely to offer inventors a limited monopoly in exchange for disclosure of their invention, or instead to exert pressure on inventors to enter into this exchange by withdrawing any alternative possibility of legal protection for their inventions. I am persuaded that the former is the case. State trade secret laws and the federal patent laws have co-existed for many, many years. During this time, Congress has repeatedly demonstrated its' full awareness of the existence of the trade secret system, without any indication of disapproval. Indeed, Congress has in a number of instances given explicit federal protection to trade secret information provided to federal agencies. See, e. g., 5 U. S. C. § 552 (b) (4); 18 U. S. C. § 1905; see generally Appendix to Brief for Petitioner. Because of this, I conclude that there is “neither such actual conflict between the two. schemes of regulation that both cannot stand in the same area, nor evidence of a congressional design to preempt the' field.” Florida Avocado Growers v. Paul, *495373 U. S. 132, 141 (1963). I therefore concur in the result reached by. the majority of the Court.
with whom Mr. Justice Bren- ■ nan concurs, dissenting.'
Today’s decision is at war with the philosophy of Sears, Roebuck & Co. v. Stiffel Co., 376 U. S. 225, and Compco. Corp. v. Day-Brite Lighting, Inc., 376 U. S. 234. Those cases involved patents — one of a pole lamp and one of fluorescent lighting fixtures each of which was declared invalid. The lower courts held, however, that though the patents were invalid the sale of identical or confusingly similar products to the products of the patentees violated state unfair competition laws. - We held .that when an article is unprotected by a patent, state law may not forbid others to copy it, because every article not covered by a. valid patent is in the public domain.' Congress in "the patent laws decided that where no patent existed, free competition should prevail; that where a patent is rightfully issued, the right to exclude others should obtain for no longer than 17 years, and that the States may not "under some other law, such as that forbidding unfair competition, give’ protection of a kind that clashes with-the objectives of the-federal patent laws,"1 376 U. S., at 231.
The product involved in this suit, sodium iodide synthetic crystals, was a product that could be patented but was not. Harshaw the inventor apparently contributed greatly to the technology in that field by developing processes, procedures, and’ techniques that produced *496much larger crystals than any competitor. These processes, procedures, and techniques were also patentable; but no patent was sought. Rather Harshaw sought to protect its trade secrets by contracts with its employees. And the District Court found that, as a result of those secrecy precautions, “not sufficient disclosure occurred so as to place the claimed trade secrets in the public domain”; and those findings were sustained by the Court of Appeals.-
The District Court issued a permanent injunction against respondents, ex-employees, restraining them from using the processes used by Harshaw. By a patent which would require full disclosure Harshaw could have obtained ’ a 17-year monopoly against the world. By the District Court’s injunction, which the Court approves and reinstates, Harshaw gets a permanent injunction running into perpetuity against respondents. In Sears, as in the present case, an injunction against the unfair competitor issued. We said: “To allow a State by use of its law of unfair competition to prevent the copying of an article which represents too slight an advance to be patented would be to permit the State to block off from the public something which federal law has said belongs to the public. The result would be that while federal law grants only 14 or 17 years’ protection to genuine inventions, see 35 U. S. C. §§ 154, 173, States could allow perpetual protection to articles too lacking in novelty to merit any patent at all under federal constitutional standards. This would be too great an encroachment on the federal patent system to be tolerated.” 376 U. S., at 231-232.
The conflict with the patent laws is obvious. The decision of Congress to adopt a patent system was based on the idea that there will be much more innovation if discoveries are disclosed and patented than .there will be when everyone works in secret. Society thus fosters a *497free exchange of technological information at the cost of a limited 17-year monopoly.2.
A trade secret,3 unlike a patent, has no property dimension. That was the view of the Court of Appeals, 478 F. 2d 1074,1081; and its decision is supported by what Mr. Justice Holmes said in Du Pont Powder Co. v. Masland, 244 U. S. 100, 102:
“The word property as applied to trade-marks and trade secrets is an unanalyzed expression of certain *498secondary consequences of the primary fact that the. law makes some rudimentary requirements of good faith. Whether the plaintiffs have any valuable secret or not the defendant knows the facts, whatever they are, through a special confidence that he accepted. The property may be denied but the confidence cannot be. Therefore the starting point for the present matter is not property or due process .of law, but that the defendant stood in confidential relations with the plaintiffs, or one of them. These have given place to hostility, and the first thing to be made sure of is that the defendant shall not fraudulently abuse the trust reposed in him. . It is the usual incident of confidential relations. If there is any disadvantage in the fact that he knew the plaintiffs’ secrets he must take .the burden with the good.”4
A suit to redress theft of a trade secret is grounded in tort damages for breach of a contract — a historic remedy, Cataphote Corp. v. Hudson, 422 F. 2d 1290. Damages for breach of a confidential relation are not pre-empted by this patent law, but an injunction *499against use is pre-empted because the patent law states the only monopoly over trade secrets that is enforceable by specific performance; and that monopoly exacts as a price full disclosure. A trade secret can be protected only by being kept secret. Damages for breach of a contract are one thing; an injunction barring disclosure does service for the protection accorded valid patents and is therefore pre-empted.
From the findings of fact of the lower courts, the process involved in this litigation was unique, such a great discovery as to make its patentability a virtual certainty. Yet the Court’s opinion reflects a vigorous activist anti-patent philosophy. My objection is not because it is activist. This is a problem that involves no neutral principle. The Constitution in Art. I, § 8, cl. 8, expresses the activist policy which .Congress has enforced by statutes. It is that constitutional policy which we should enforce, not our individual notions of the public good.
I would affirm the judgment below.
22.7 Munro v. Lucy Activewear, Inc. 22.7 Munro v. Lucy Activewear, Inc.
22 (24)
Bruce MUNRO ; Bruce Munro Studio, Plaintiffs-Appellants
v.
LUCY ACTIVEWEAR, INC.; Lucy Apparel, LLC; VF Outdoor, Inc.; VF Corporation, Defendants-Appellees
No. 16-4483
United States Court of Appeals, Eighth Circuit.
Submitted: May 16, 2018
Filed: August 9, 2018
Counsel who presented argument on behalf of the appellant was Carl F. Schwenker, of Austin, TX. The following attorney(s) appeared on the appellant brief; Steven L. Theesfeld, of Minneapolis, MN.
Counsel who presented argument on behalf of the appellee was Nikola L. Datzov, of Minneapolis, MN. The following attorney(s) appeared on the appellee brief; Lora Mitchell Friedemann, of Minneapolis, MN.
Before SHEPHERD, MELLOY, and GRASZ, Circuit Judges.
Bruce Munro and Bruce Munro Studio (collectively "Munro ") appeal the district court's dismissal of his complaint against Lucy Activewear, Inc., Lucy Apparel, LLC, VF Outdoor, Inc., and VF Corporation (collectively "Lucy ") and the denial of his motion to amend his complaint based on a finding of futility. Munro argues that the district court erred when it found that his tortious interference claim was *588preempted by the Copyright Act1 and that his proposed amended trade dress, trademark, and fraud claims were futile. We disagree with Munro except as to his trademark claim. Thus, we affirm in part and reverse and remand in part.
I. Background
Munro is an artist best known for his works "Field of Light" and "Forest of Light"-"large-scale, immersive, light-based installations, and exhibitions." Proposed Amend. Compl. ¶ 1. Munro alleges that Lucy contacted him and proposed a Lucy advertising and promotional campaign featuring Munro's work. He further claims that, relying on a promise of confidentiality, he shared additional information with Lucy about his prior work, including "attendance figures, achieved online/multimedia traffic, and promotional methods used for the exhibitions." He further disclosed that he was in talks with public officials in Boston, Massachusetts about creating a public exhibition in the city. Following these disclosures, Munro says that Lucy stopped contacting him and that communications with Boston officials ceased soon thereafter as well.
In October 2013, Lucy launched a light exhibition and advertising campaign for Lucy in Boston. The exhibition, titled "Light Forest," was an interactive light installation that responded to the participants' movements. An advertising campaign associated with the exhibit crossed several media platforms, including television, print, internet, and in-store displays.
In 2015, Munro filed a complaint against Lucy in Texas state court alleging that, by presenting the "Light Forest" exhibition and advertising campaign in Boston, Lucy infringed on Munro's trademark and trade dress and usurped a prospective business opportunity. In September 2015, Lucy removed the case to federal court and then filed a motion to dismiss for lack of personal jurisdiction, or, in the alternative, to transfer venue. Lucy also filed a separate Fed. R. Civ. P. Rule 12(b)(6) motion to dismiss for failure to state a claim. In January 2016, the case was transferred to the federal district court in Minnesota. The following month, Lucy renewed its Rule 12(b)(6) motion. Munro responded, but in March 2016, he also moved to amend his complaint. In his proposed amended complaint, Munro alleged: trademark and trade dress infringement, trademark and trade dress dilution, false designation of origin and unfair competition, misappropriation, fraud, tortious interference with prospective business opportunities, and unfair competition. The district court found that Munro's proposed amended complaint was futile and denied his motion to amend. It also granted Lucy's motion to dismiss Munro's complaint for failure to state a claim. The court dismissed without prejudice Munro's fraud claim as well as his trademark claim-to the extent it is based on the similarity of the names of the two exhibitions-but it dismissed all remaining claims with prejudice. Munro appeals.
II. Discussion
We usually review the district court's "denial of leave to amend a complaint under an abuse of discretion standard; however, when the district court bases its denial on the futility of the proposed amendments, we review the underlying legal conclusions de novo." Jackson v. Riebold, 815 F.3d 1114, 1122 (8th Cir. 2016) (internal quotation marks omitted). Federal Rule of Civil Procedure 15(a)(2) states "a party may amend its pleading only with the opposing party's written consent or the court's leave[,] [and] [t]he court should *589freely give leave when justice so requires." However, "[f]utility is a valid basis for denying leave to amend." Jackson, 815 F.3d at 1122. "[W]hen the court denies leave on the basis of futility, it means the district court has reached the legal conclusion that the amended complaint could not withstand a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure." Cornelia I. Crowell GST Tr. v. Possis Med., Inc., 519 F.3d 778, 782 (8th Cir. 2008). When reviewing "a motion to dismiss an action for failure to state a claim under Rule 12(b)(6), [we] tak[e] the factual allegations in the complaint as true and afford[ ] the non-moving party all reasonable inferences from those allegations." Butler v. Bank of Am., N.A., 690 F.3d 959, 961 (8th Cir. 2012). A plaintiff's motion to amend the complaint will be granted if he "show[s] that such an amendment would be able to save an otherwise meritless claim." Jackson, 815 F.3d at 1122.
Munro argues that the district court erred when it denied his motion for leave to amend four of his claims: (1) trade dress infringement; (2) fraud; (3) tortious interference; and (4) trademark infringement. We address each claim in turn.
1. Trade Dress
In Dastar Corp. v. Twentieth Century Fox Film Corp., the Supreme Court held that "[t]he Lanham Act was intended to make 'actionable the deceptive and misleading use of marks,' and 'to protect persons engaged in ... commerce against unfair competition.' " Dastar, 539 U.S. 23, 28, 123 S.Ct. 2041, 156 L.Ed.2d 18 (2003) (quoting 15 U.S.C. § 1127 ). The Court found, however, that the Lanham Act was not designed to protect originality or creativity and it does not create a cause of action for plagiarism. Id. at 36-37, 123 S.Ct. 2041. "Trade dress is the total image of a product, the overall impression created, not the individual features." Aromatique, Inc. v. Gold Seal, Inc., 28 F.3d 863, 868 (8th Cir. 1994) (internal quotation marks omitted). The Lanham Act creates a civil cause of action for trade dress infringement, stating:
Any person who, on or in connection with any goods or services ..., uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin ... which-is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.
15 U.S.C. § 1125(a)(1). To successfully allege a claim under the Lanham Act, a plaintiff must prove that his trade dress is: (1) distinctive; (2) nonfunctional; and (3) likely to "be confused with the accused product." Aromatique, Inc., 28 F.3d at 868. In Wal-Mart Stores, Inc. v. Samara Brothers, Inc., the Supreme Court held that a plaintiff could not succeed in a trade dress claim against another company for producing a "knockoff" of its design without showing that the designs had acquired "secondary meaning" so that they "identify the source of the product rather than the product itself." Samara Brothers, 529 U.S. 205, 208, 211, 214, 120 S.Ct. 1339, 146 L.Ed.2d 182 (2000) (internal quotation marks omitted). "[T]he origin of goods-the source of wares-is the producer of the tangible product sold in the marketplace ... not the producer of the (potentially)
*590copyrightable or patentable designs that the clothes embodied." Dastar, 539 U.S. at 31, 37, 123 S.Ct. 2041.
Here, Munro presents essentially the same claim presented in Dastar and Wal-Mart. Munro asserts that Lucy created a "knockoff" light installation that basically plagiarized his creative designs. Copyright law, not trademark law, protects Munro's creative works. As the district court found, Munro's installation is not a "mark" that the Lanham Act was attempting to protect. Rather, the installation is the product itself. Because the light installation is a product, not a mark, and because copyright, not trademark, protects artistic and creative ideas and concepts, see Dastar, 539 U.S. at 37, 123 S.Ct. 2041, Munro's claim does not properly fall under the Lanham Act. Furthermore, because Munro's proposed amended complaint continues to style his claim as trade dress infringement under the Lanham Act, he has not shown that amending the complaint would save his claim. Thus we find the district court properly dismissed his motion to amend his trade dress claim as futile.
2. Fraud
Next, Munro argues that Lucy perpetrated fraud by making promises to Munro that it never intended to keep. He argues that Lucy stated it would keep the information he provided regarding his light exhibitions and prospective business opportunity with the city of Boston confidential. But, he asserts, Lucy knowingly made those false promises so that it could exploit the information for its own gain, as evidenced by the fact that Lucy did not maintain confidences.
The circumstances of fraud must be pled with particularity. Fed. R. Civ. P. 9(b) ; Parnes v. Gateway 2000, Inc., 122 F.3d 539, 549 (8th Cir. 1997). The circumstances that a plaintiff must allege "include such matters as the time, place and contents of false representations, as well as the identity of the person making the misrepresentation and what was obtained or given up thereby." Id. (internal quotation marks omitted). "[C]onclusory allegations that a defendant's conduct was fraudulent and deceptive are not sufficient to satisfy the rule." Id. (internal quotation marks omitted). If the plaintiff's "allegations of fraud are explicitly ... based only on information and belief, the complaint must set forth the source of the information and the reasons for the belief." Id. at 550 (internal quotation marks omitted). The Minnesota Supreme Court has held:
It is a well-settled rule that a representation or expectation as to future acts is not a sufficient basis to support an action for fraud merely because the represented act or event did not take place. It is true that a misrepresentation of a present intention could amount to fraud. However, it must be made affirmatively to appear that the promisor had no intention to perform at the time the promise was made.
Valspar Refinish, Inc. v. Gaylord's, Inc., 764 N.W.2d 359, 368-69 (Minn. 2009).
In his proposed amended complaint, Munro merely alleged who made the false promise, when the promise was made, and the general content of the promise. This is insufficient to show fraud. See Parnes, 122 F.3d at 549 ; Stumm v. BAC Home Loans Servicing, LP, 914 F.Supp.2d 1009, 1014 (D. Minn. 2012). Munro relies on the phrase "on information and belief" to allege that Lucy intentionally provided false promises. He argues the fact that Lucy broke its promises is proof that Lucy never intended to keep those promises in the first place. We disagree. Munro's complaint does not set forth any supporting facts showing that Lucy intended to defraud *591him when the promises were made. Thus, he has not adequately alleged fraud under Minnesota law, and the district court did not err in dismissing his claim. See Valspar, 764 N.W.2d at 368-69 ; cf. Parnes, 122 F.3d at 549. Additionally, in his proposed amended complaint, Munro still failed to allege sufficient facts to support his fraud claim. Therefore, the proposed amendment is futile, so we find the district court did not err in denying Munro's motion to amend.
3. Tortious Interference
In his third claim for tortious interference under state law, Munro asserts that he had a reasonable probability of staging an exhibition of his "Field of Light" and/or "Forest of Light" works in the city of Boston, but Lucy usurped his prospective business opportunity. Munro claims that using the information he provided Lucy in confidence, Lucy wrongfully and intentionally interfered with his business dealings with the city of Boston by soliciting and presenting Boston city officials an alternative knock-off light exhibition and advertising campaign.
To succeed on a claim for tortious interference with prospective economic advantage, a plaintiff must establish:
1) The existence of a reasonable expectation of economic advantage;
2) Defendant's knowledge of that expectation of economic advantage;
3) That defendant intentionally interfered with plaintiff's reasonable expectation of economic advantage, and the intentional interference is either independently tortious or in violation of a state or federal statute or regulation;
4) That in the absence of the wrongful act of defendant, it is reasonably probable that plaintiff would have realized his economic advantage or benefit; and
5) That plaintiff sustained damages.
Gieseke ex rel. Diversified Water Diversion, Inc. v. IDCA, Inc., 844 N.W.2d 210, 219 (Minn. 2014).
The Copyright Act will preempt a state-law claim if: "(1) the work at issue is within the subject matter of copyright as defined in § 102 and 103 of the Copyright Act, and (2) the state law created right is equivalent to any of the exclusive rights within the general scope of copyright as specified in § 106 [of the Copyright Act]." Ray v. ESPN, Inc., 783 F.3d 1140, 1142 (8th Cir. 2015) (per curiam) (alteration in original) (internal quotation marks omitted). "[P]ictorial, graphic, and sculptural works" are subject matter falling under the umbrella of copyright protection. 17 U.S.C. § 102(a)(5). Munro's light-based artwork and installations are sculptures and, as such, are copyrightable. See id. Munro does not contest that his works fall within the subject matter of copyright. Accordingly, we find that Munro's claim meets the first element of preemption.
We also find the second element of preemption is present. "[E]xclusive rights within the general scope of copyright," Ray, 783 F.3d at 1142, include "reproduc[ing] the copyrighted works in copies or ... prepar[ing] derivative works based upon the copyrighted work," 17 U.S.C. § 106. "A 'derivative work' is a work based upon one or more preexisting works, such as a[n] ... art reproduction ... or any other form in which a work may be recast, transformed, or adapted." Id. § 101. In Ray v. ESPN, Inc., we held that the plaintiff's state-law rights had been "infringed by the mere act of reproduction," so "his state-law rights are equivalent to the exclusive rights within the general scope of copyright." Ray, 783 F.3d at 1144 (internal quotation marks omitted). Similarly, Munro alleges his state-law rights were infringed by Lucy's reproduction of his light-installations.
*592Thus, Munro's "state-law rights are equivalent to the exclusive rights within the general scope of copyright." Id. (internal quotation marks omitted). As a result, Munro's tortious interference claim is preempted by the Copyright Act. Because the claim is preempted, allowing an amendment to the complaint would be futile. See 17 U.S.C. § 301(a) (stating that when "legal or equitable rights ... are equivalent to any of the exclusive rights within the general scope of copyright ... no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State"). Therefore, we find the district court properly denied Munro's motion to amend his tortious interference claim.
4. Trademark Infringement
Finally, Munro argues that Lucy's use of the name "Light Forest" was a confusingly similar and colorable imitation of his "Forest of Light" and "Field of Light" trademarks. He asserts that Lucy's unauthorized use of his marks likely caused the public to erroneously believe that Lucy's exhibition was the same or affiliated with Munro's exhibitions and that Lucy unfairly benefitted and profited from Munro's reputation and the reputation of his trademarks.
A "trademark" can be "any word, name, symbol, or device, or any combination thereof ... [used] to identify and distinguish [a producer's] goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown." 15 U.S.C. § 1127. Federal trademark law is intended to "prevent[ ] competitors from copying a source-identifying mark." Dastar, 539 U.S. at 33, 123 S.Ct. 2041 ; see also 15 U.S.C. § 1125(a). The terms "origin of goods" and the "source" of goods under the Lanham Act refer to the producer of the actual product or good, not the producer of the creative idea for the product or good. Id. at 36, 123 S.Ct. 2041. However, in some situations, the producer of the creative idea for the product and the producer of the actual product are the same. See Shepard v. European Pressphoto Agency, 291 F.Supp.3d 465, 470 (S.D.N.Y. 2017). For example, an artist is considered the producer of the creative ideas of his work, but if the artist also makes and sells his artwork himself, then he is considered the producer of that good or service as well and is "able to assert a Lanham Act claim for false designation of origin." Id.
Here, the district court held that Munro did not properly assert a trademark claim because he failed to provide facts suggesting that the names of his installations-"Field of Light" and "Forest of Light"-served a source-identifying function for a product or service. Instead, the court found, the names merely identified Munro as the artist or source of the creative idea. We disagree. Munro has alleged that he and his studio together create, design, develop, produce, promote, and market these large-scale immersive light installations. Like the artists in Shepard v. European Pressphoto Agency, Munro actually produces and sells these installations, making him the producer of the good. Id.; see also Dastar, 539 U.S. at 36, 123 S.Ct. 2041. Thus, the names "Field of Light" and "Forest of Light" are serving a source-identifying function for the installations, distinguishing them as unique products made by Munro and his studio. See 15 U.S.C. § 1127 ; Dastar, 539 U.S. at 36, 123 S.Ct. 2041. Because Munro produces these installations, he is the "origin of goods" or "source" that the names identify, which entitles him to bring an action under the Lanham Act. See Shepard, 291 F.Supp.3d at 470. Munro pled these facts in his *593amended complaint and his proposed second amended complaint. Because "[we] tak[e] the factual allegations in the complaint as true and afford[ ] the non-moving party all reasonable inferences from those allegations," Butler, 690 F.3d at 961, we find that the district court erred in dismissing Munro's trademark claim regarding the names of the installations.
III. Conclusion
For the foregoing reasons, we affirm the district court's decision to dismiss Munro's trade dress, fraud, and tortious interference claims as well as its denial of Munro's motion to amend these claims because the proposed amendments are futile. However, we find that Munro has sufficiently pled a trademark claim so as to survive a motion to dismiss for failure to state a claim. Accordingly, we reverse the district court's dismissal of Munro's trademark claim. Furthermore, we reverse the denial of Munro's motion to amend his compliant with respect to this claim. Finally, we remand the trademark claim under 15 U.S.C. 1125(a) to the district court for further proceedings consistent with this opinion.