Yellowfin Yachts, Inc. v. Barker Boatworks, LLC , 898 F.3d 1279 ( 2018 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 17-11176
________________________
D.C. Docket No. 8:15-cv-00990-SDM-TGW
YELLOWFIN YACHTS, INC.,
Plaintiff–Appellant,
versus
BARKER BOATWORKS, LLC,
KEVIN BARKER,
Defendants–Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(August 7, 2018)
Before TJOFLAT, ROSENBAUM and BRANCH, Circuit Judges.
TJOFLAT, Circuit Judge:
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I.
Yellowfin Yachts, Inc. is a manufacturer of high-end fishing boats. Since
2000, Yellowfin has produced predominantly “center-consoled, open-fisherman
styled boats” ranging between twenty-one and forty-two feet. According to
Yellowfin, these boats all have the same “swept” sheer line, meaning a gently
sloped “s”-shaped line that runs upward from the point at which a boat’s hull
intersects with the deck to the boat’s lofted bow. 1 This swept sheer line, described
by Yellowfin as “unique,” is the subject of its trade dress claims. 2
(Twenty-four-foot Yellowfin boat.)
1
Yellowfin also produces a seventeen-foot “flats boat.” Its flats boat lacks the sheer line
at issue.
2
The sheer line for which Yellowfin is claiming trade dress protection here does not
include the dramatically sloped portion appearing at the stern of the twenty-six-foot Yellowfin
pictured below.
2
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(Twenty-six-foot Yellowfin boat.)
Yellowfin hired Kevin Barker in 2006 as a vice president of sales. Although
Yellowfin presented Barker with a proposed employment agreement which
included confidentiality clauses, Barker never executed the agreement. Barker left
Yellowfin in 2014—not encumbered by a noncompetition or nonsolicitation
contract—and founded a competitor, Barker Boatworks, LLC. On his last day at
Yellowfin, Barker downloaded hundreds of files from Yellowfin’s main server.
These files contained “detailed purchasing history and specifications for all of
Yellowfin’s customers,” as well as “drawings” and “style images” for Yellowfin
boats and “related manufacturing information.”3
After leaving Yellowfin, Barker retained marine architect Michael Peters to
design a twenty-six-foot bay boat based on Barker’s specifications. These
3
Barker claims that he did so to ensure that he was properly compensated through
commissions.
3
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specifications, according to Yellowfin, were derived directly from Yellowfin’s
own bay boats, and the Barker boat’s sheer line nearly replicated that of Yellowfin.
Barker Boatworks opened for business in July 2014 and has since competed with
Yellowfin in the same “niche” center-console fishing-boat market.
(Barker Boatworks “Calibogue Bay” boat.)
In April 2015, Yellowfin filed a complaint against Barker Boatworks and
Kevin Barker4 in the United States District Court for the Middle District of Florida.
With leave of court, Yellowfin filed its First Amended Complaint, the operative
complaint here, in September. In this complaint, Yellowfin pleads claims for trade
dress infringement and false designation of origin under Section 43(a) of the
Lanham Act, 15 U.S.C. § 1125(a), common-law unfair competition, common-law
trade dress infringement, and violation of Florida’s Trade Secret Act.5
4
For ease of reading, we generally do not distinguish between the two defendants and we
refer to them interchangeably.
5
Yellowfin also claims that the defendants violated Florida’s Trade Secret Act pursuant
to a conspiracy.
4
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After unsuccessfully moving to dismiss Yellowfin’s complaint, Barker
Boatworks moved for summary judgment on all of Yellowfin’s claims. The
District Court granted the motion in full. First, the Court provided three reasons
why Yellowfin’s Lanham Act trade dress claim failed: Yellowfin did not
adequately describe any distinctive feature of its sheer line, its sheer line is
functional and thus not protectable as trade dress, and no reasonable jury could
conclude that a potential buyer would likely confuse a Barker boat for a Yellowfin.
The Court then held that, because a reasonable jury could not conclude that a
potential buyer would likely confuse the two boats, Yellowfin’s claims of Section
43(a) false designation of origin, common-law trade dress infringement, and
common-law unfair competition also fail. Finally, the Court found that Yellowfin
failed to identify a protectable, misappropriated trade secret, and, regardless, that
Yellowfin did not make “reasonable efforts” to protect all of its alleged trade
secrets. The Court therefore rejected Yellowfin’s trade secret claim. Yellowfin
appeals these rulings.
We note that Yellowfin’s trade secret claim could conceivably have been pleaded as a
conversion claim, as Barker essentially stole a bundle of Yellowfin’s information and data—
whether this information was a “trade secret” or not—on his way out. “Conversion is an ‘act of
dominion wrongfully asserted over another’s property inconsistent with his ownership therein.’”
United Techs. Corp. v. Mazer, 556 F.3d 1260, 1270 (11th Cir. 2009) (quoting Thomas v. Hertz
Corp., 890 So. 2d 448, 449 (Fla. Dist. Ct. App. 2004)). Under Florida law, a conversion action
can be brought related to the copying of a non-rival good, such as a confidential customer list.
See Warshall v. Price, 629 So. 2d 903, 905 (Fla. Dist. Ct. App. 1993) (recognizing a conversion
claim where the defendant copied and took, but did not delete or otherwise deprive the plaintiff
of, plaintiff’s confidential patient list).
5
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We review a district court’s grant of summary judgment de novo and
construe the evidence and draw all reasonable inferences therefrom in the light
most favorable to Yellowfin. Ziegler v. Martin Cty. Sch. Dist., 831 F.3d 1309,
1318 (11th Cir. 2016). We first address the District Court’s trade dress rulings.
II.
Section 43(a) of the Lanham Act provides a cause of action for trade dress
infringement. Kason Indus., Inc. v. Component Hardware Grp., Inc., 120 F.3d
1199, 1203 (11th Cir. 1997). Trade dress is defined as “the total image of a
product,” which “may include features such as size, shape, color or color
combinations, texture, graphics, or even particular sales techniques.” John H.
Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 980 (11th Cir. 1983). A typical
trade dress action involves a good’s packaging or labeling, but the design of a
product, or a feature of a product, may also constitute protectable trade dress. See
id. The plaintiff must prove three elements to prevail on a trade dress claim: “1) its
trade dress is inherently distinctive or has acquired secondary meaning, 2) its trade
dress is primarily non-functional, and 3) the defendant’s trade dress is confusingly
similar.” AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1535 (11th Cir. 1986). We
6
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narrow our focus to the third requirement, likelihood of confusion, as we conclude
that factor is dispositive in favor of Barker Boatworks.6
Trademark law’s familiar “likelihood of confusion” test is used to assess
trade dress claims. See John H. Harland Co., 711 F.2d at 981. We consider (1)
the strength of plaintiff’s trade dress, (2) the similarity of the products’ designs, (3)
the similarity of the products themselves, (4) the similarity of the parties’ trade
channels and customers, (5) the similarity of advertising media used by the parties,
(6) the defendant’s intent, and (7) the existence and extent of actual confusion in
the consuming public. Fla. Int’l Univ. Bd. of Trustees v. Fla. Nat’l Univ., Inc., 830
F.3d 1242, 1255 (11th Cir. 2016); AmBrit, 812 F.2d at 1538. We recognize that
aspects of one factor will overlap with aspects of the others. Therefore, we do not
decide which party is favored by each factor, tally up the score, and hold in favor
of the party with the most points. We apply the factors holistically. That said, the
existence and extent of actual confusion and the strength of the plaintiff’s trade
dress are, respectively, the most and second most important factors. Fla. Int’l, 830
F.3d at 1256, 1264. Those factors have the strongest influence on the question the
test was created to assess: the likelihood of consumer confusion.
6
“[A]s all three elements are necessary for a finding of trade dress infringement, any one
could be characterized as threshold.” Dippin’ Dots, Inc. v. Frosty Bites Distribution, LLC, 369
F.3d 1197, 1202 (11th Cir. 2004) (alteration in original) (quoting Epic Metals Corp. v. Souliere,
99 F.3d 1034, 1039 (11th Cir. 1996)). Because we conclude that the District Court properly held
that no reasonable jury could find that Barker Boatworks’ trade dress would likely confuse the
purchasing public, we do not address the other two requirements.
7
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Although likelihood of confusion is a question of fact, it may be decided as a
matter of law. Tana v. Dantanna’s, 611 F.3d 767, 775 & n.7 (11th Cir. 2010).
“The role of the [district] court in reviewing a motion for summary judgment is to
determine the ultimate question of whether, in light of the evidence as a whole,
there is sufficient proof of a likelihood of confusion to warrant a trial of the issue.”
Id. at 775 n.7. Because we review the district court’s decision de novo, using the
same legal standards it employed, our role is effectively the same. See Ziegler, 831
F.3d at 1318.
Yellowfin’s primary argument is not that consumers are likely to
accidentally purchase a Barker boat instead of a Yellowfin due to Barker’s
allegedly similar sheer line. Rather, its theory of confusion centers on confusion in
the postsale context: consumers might see a Barker boat sporting a Yellowfin-like
sheer line and mistakenly believe that boat to be a Yellowfin. See Custom Mfg. &
Eng’g, Inc. v. Midway Servs., Inc., 508 F.3d 641, 650 (11th Cir. 2007) (recognizing
“likelihood of confusion in the post-sale context” as a viable basis for an action);
Montgomery v. Noga, 168 F.3d 1282, 1301 n.32 (11th Cir. 1999) (“[P]resale
confusion of actual purchasers is not the only type of confusion actionable under
the Lanham Act.”). We apply the factors with that theory in mind and ultimately
hold that, as a matter of law, no reasonable jury could find a likelihood of
confusion between the Barker and Yellowfin boats.
8
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A. Strength of Yellowfin’s Trade Dress
The District Court reasoned that because sweeping sheer lines are
“ubiquitous” in the center-console fishing-boat market, “Yellowfin’s purportedly
‘distinctive’ feature deserves little protection.” Indeed, Wylie Nagel, Yellowfin’s
founder, conceded that several other boats have a sweeping sheer line. Thus, the
District Court concluded, Yellowfin’s sheer line is weak trade dress.
Yellowfin pushes back on this reasoning, contending that even though
sweeping sheer lines are common among fishing boats, its sweeping sheer line
stands out from those of other boats—it is unique and, to consumers, synonymous
with Yellowfin’s high-quality boats. Yellowfin provides the following excerpts
from boating magazines to support this point:
• “Yellowfin Yachts has earned a reputation for producing some of
the most jaw-dropping center-console fishing machines on the
market,” with “good looks and sleek design” that “are easily
recognizable, even from far distances.”
• “Ever wonder if you took the logos off many boats today whether
you’d still be able to tell them apart? You’ll never have difficulty
discerning a Yellowfin. From the proud bow to the sweeping
sheer, a Yellowfin is unmistakable.”
• “Looking at this 29-footer’s profile, you can’t possibly mistake it
for anything but a Yellowfin with its distinctive proud bow and
dramatically sloping sheer line.”
These excerpts, however, hardly bolster Yellowfin’s argument. The first
simply describes Yellowfin boats as “sleek” and “easily recognizable.” Although
Yellowfin’s sheer line might contribute to the “sleekness” and, to an extent, the
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recognizability of its boats, the excerpt leaves this to inference. And it takes quite
an inferential leap to connect this excerpt, which makes no reference to the sheer
line, to Yellowfin’s claim that its sheer line—one among many in the market—is
so unique as to be synonymous with its product. The second excerpt is more
probative. It homes in on the sweeping sheer line’s ability to signify a Yellowfin
boat. But it also attributes recognizability to the “proud bow” of Yellowfin boats,
which is not part of the claimed trade dress, and seemingly to other unnamed
features as well, stating, “From the proud bow to the sweeping sheer, a Yellowfin
is unmistakable.” (Emphasis added). Finally, the third excerpt mentions only the
“proud bow and dramatically sloping sheer line” of a twenty-nine-foot Yellowfin
boat. As with the “proud bow,” the “dramatically sloping” portion of Yellowfin’s
sheer line is not part of its trade dress claim. 7 Thus, the third excerpt says nothing
about the trade dress at issue in this case. Overall, even construed in the light most
favorable to Yellowfin, these excerpts provide little support for Yellowfin’s claim
that its sweeping sheer line is particularly strong trade dress.
Aside from these excerpts, Yellowfin presents as evidence Nagler’s
declaration, in which he stated that he sought to create boats “that would have a
unique and enduring style,” that Yellowfin thus heavily markets its boats showing
7
Supra note 2.
10
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off the sheer line, and that Yellowfin customers “comment on, and identify” the
Yellowfin sheer line.
A self-serving declaration “may create an issue of material fact and preclude
summary judgment even if . . . uncorroborated.” United States v. Stein, 881 F.3d
853, 854 (11th Cir. 2018) (en banc). But that is not to say that such a declaration
will necessarily preclude summary judgment. Id. at 859. Nagler’s statements do
not focus on the signifying effect—i.e., the strength—of the Yellowfin sheer line.
Rather, he merely relays that he intended to create boats with a unique and
enduring style, that Yellowfin heavily advertises its boats and sometimes the
advertisements refer to the sheer line directly, and that customers mention the sheer
line.8 These statements fail to support the proposition that Yellowfin’s sheer line
causes consumers to associate the sheer line with its source, bringing to their minds
the high-quality boats manufactured by Yellowfin.
In short, Yellowfin presents little evidence meaningfully supporting the
strength of its trade dress. The effect of this shortcoming is amplified by the fact
that many other boats in the relevant market have a sweeping sheer line. Cf. Fla.
Int’l, 830 F.3d at 1257–58 (noting that “the strength of [Florida International
8
This last point is hearsay. Yellowfin offers Nagler’s out-of-court statement relaying
what consumers have said for the truth it asserts—that customers comment on and identify
Yellowfin’s sheer line. See Fed. R. Evid. 801(c). “The general rule is that inadmissible hearsay
cannot be considered on a motion for summary judgment.” Macuba v. Deboer, 193 F.3d 1316,
1322 (11th Cir. 1999) (internal quotation marks and footnote omitted).
11
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University’s] word mark and [FIU] acronym” was naturally mitigated by
“operat[ing] in a crowded field” of similar names and acronyms used by other
Florida universities); Sun Banks of Fla., Inc. v. Sun Fed. Sav. & Loan Ass’n, 651
F.2d 311, 315–16 (5th Cir. 1981) (explaining that extensive third-party use of a
particular word in plaintiff’s trademark counsels against likely confusion). Even
relatively weak trade dress, though, may be entitled to a narrow range of
protections. See Fla. Int’l, 830 F.3d at 1260. We thus continue our inquiry.
B. Similarity of the Products’ Designs
The second likelihood of confusion factor focuses on the overall impression
of the two products at issue. AmBrit, 812 F.2d at 1540. The District Court stated
that Yellowfin and Barker Boatworks “sell a product generally similar in
appearance,” but noted that “several prominent differences permit a potential buyer
to distinguish a Barker from a Yellowfin.” First, both Yellowfin and Barker
Boatworks prominently display their respective logos, which “look nothing alike,”
on their boats. Further, a Barker’s hull differs from that of a Yellowfin, and Barker
“omits the rolled transom typical of most Yellowfin models.” 9 Finally, citing
Nagler’s deposition, the District Court added plainly that “the layout of each boat
9
The “transom” is the backmost section of a boat that connects the port and starboard
sections of the hull—where a boat’s name is typically displayed. A “rolled” transom is as
opposed to a “straight” transom. The twenty-six-foot Yellowfin pictured above has a rolled
transom, while the twenty-four-foot Yellowfin and the Barker boat pictured do not.
12
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is different.” These differences, the Court stated, “will preclude a potential buyer[]
[from] mistaking a Barker for a Yellowfin.”
Yellowfin argues that the District Court erred by failing “to address the
actual Yellowfin trade dress—its unique sheer line.” Had the District Court done
so, Yellowfin continues, it would have found that the two sheer lines at issue are
similar. Yellowfin concludes that the similarity between the sheer lines, combined
with the Court’s statement that both boats are “generally similar in appearance,”
tips this second likelihood of confusion factor in its favor.
Although Yellowfin’s argument is weakened by the differences between its
boats and those of Barker Boatworks—especially the different, prominently
displayed logos—the mere presence of a distinguishing logo or other feature does
not in all cases alleviate a likelihood of confusion. See Levi Strauss & Co. v. Blue
Bell, Inc., 632 F.2d 817, 822 (9th Cir. 1980) (“[N]othing of record indicates that
the mere presence of [the defendant’s] word mark avoids a likelihood of
confusion.”). But see L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117,
1134 (Fed. Cir. 1993) (stating that the “conspicuous and permanent” labeling on
the parties’ respective products avoided postsale consumer confusion). We more
thoroughly engage with this principle infra, when discussing the “actual
confusion” factor. For now, it suffices to say that the product design factor favors
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Yellowfin, but this factor’s value is almost completely washed out by our actual
confusion analysis below.
C. Similarity of the Products
Both parties manufacture high-end, center-console fishing boats of a similar
size. This factor favors Yellowfin.
D. The Similarity of the Parties’ Trade Channels and Customers
Neither Yellowfin nor Barker Boatworks sells boats through a retail outlet;
both sell directly to customers. This necessarily means that the parties operate in
different trade channels, as a customer must contact either Yellowfin or Barker
Boatworks directly to purchase a boat. The dissimilarity of trade channels,
however, is mostly irrelevant given that Yellowfin’s primary theory of likelihood
of confusion applies to potential consumers postsale.
The two manufacturers compete in the same niche market and thus have
similar customers. But having similar customers does not necessarily favor
Yellowfin. These are customers in the market for a high-end, expensive fishing
boat. As such, they are likely more discerning—and so less easily confused—than
customers purchasing everyday products. See Fla. Int’l, 830 F.3d at 1256 (noting
that “sophisticated consumers” of “complex goods” are less easily confused than
“casual purchasers of small items”). We expand upon the effect that consumers’
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sophistication has on Yellowfin’s theory in our discussion of actual confusion
below.
E. The Similarity of Advertising Media Used by the Parties
As to this factor, the District Court stated the following:
Barker and Yellowfin concededly advertise in several of the same
forums, including the magazines SaltWater Sportsman and Sport
Fishing. Also, both companies attend the same boat shows, for
example, Miami, Palm Beach, and Fort Lauderdale. The similarity of
advertising forums might contribute to confusion, although the
absence from the record of Barker advertisements prevents comparing
the parties’ advertisements. See AmBrit, 812 F.2d at 1542 (explaining
that the “similarity of advertising” evaluates whether the parties
advertise in similar forums and whether the advertisements appear
similar).
(Record citations omitted). In its brief, Yellowfin emphasizes the first part of this
statement; Barker Boatworks’ brief emphasizes the latter part. This factor favors
Yellowfin for purposes of summary judgment, as we may reasonably infer that
similar advertising contributes, however little, to consumer confusion. See AmBrit,
812 F.2d at 1542 (“If the plaintiff and defendant both use the same advertising
media, a finding of likelihood of confusion is more probable.”).
F. Barker’s Intent
The District Court found that “the record contains no evidence that Barker
copied Yellowfin’s design in an attempt to confuse a potential buyer.” Yellowfin
disagrees, contending that the Court did not construe the record, as it must on
summary judgment, in a way that takes “the plaintiff’s best case.” See Stephens v.
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DeGiovanni, 852 F.3d 1298, 1313–14 (11th Cir. 2017). Yellowfin adds that a
defendant’s intent is generally a credibility question that cannot be decided on
summary judgment.
More specifically, Yellowfin argues that because Barker had “significant
business dealings” with Yellowfin and took customer information with him upon
leaving Yellowfin, “an inference of intent readily arises.” See AmBrit, 812 F.2d at
1543 n.61. Further, Yellowfin adds that to successfully compete in the same
“niche market” as Yellowfin, Barker Boatworks copied Yellowfin’s sheer line,
aware that the sheer line had garnered extensive favorable press.10 Finally,
Yellowfin points out that an employee of Michael Peters, the marine architect
Barker Boatworks employed to design its bay boat, met with Barker in June 2014
and left with design notes containing a notation to look at “24 Yellowfin.” The
employee’s notes also contained several sketches of plans for the Barker boat, one
of which was titled “Yellowfin 24.” All of this, Yellowfin contends, is enough to
create a material factual issue as to intent.
In response, Barker Boatworks points out that notes from the June 2014
meeting also show that Barker “did not care for the Yellowfin hull and sheer line
appearance,” evidenced by his comment that Yellowfins look “[too] much
offshore” and have “too much fla[ir].” Barker Boatworks adds that several
10
Yellowfin cites back to the magazine excerpts quoted supra. As discussed, these
excerpts do little to prove the strength of Yellowfin’s sheer line as trade dress.
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competing bay boats other than Yellowfin were also mentioned at the meeting.
Yellowfin, Barker Boatworks contends, seeks to improperly infer intent from mere
references to Yellowfin and from prior business dealings. Moreover, the District
Court made no credibility finding because there was no dispute in the record about
the meaning of any relevant testimony or the meeting notes.
There is a difference between intentional copying and intentional copying
with intent to cause confusion. See Brooks Shoe Mfg. Co. v. Suave Shoe Corp.,
716 F.2d 854, 859 n.13 (11th Cir. 1983). This distinction is an important one. If a
defendant intentionally copies an aspect of the plaintiff’s product, but not with
intent to confuse consumers, then the defendant’s intent has little bearing on the
ultimate question: whether the allegedly infringing product is likely to confuse
consumers. See J. Thomas McCarthy, McCarthy on Trademarks and Unfair
Competition § 23:110 (5th ed. 2017) (“[T]he only kind of intent that is relevant to
the issue of likelihood of confusion is the intent to confuse.”). “Strictly, intent, or
lack thereof, does not affect the eyes of the viewer.” Chrysler Corp. v. Silva, 118
F.3d 56, 59 n.3 (1st Cir. 1997). But when a defendant copies a design intending to
cause confusion, a tenable inference may be drawn that this will cause confusion in
fact; the defendant’s very action indicates that it expects consumer confusion.
Fleischmann Distilling Corp. v. Maier Brewing Co., 314 F.2d 149, 158 (9th Cir.
1963); McCarthy, supra, at § 23:110. In this latter instance, we may presume that
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the defendant “adopt[ed] a mark or design with the intent of deriving benefit from
another person’s mark” and deny the defendant’s summary judgment motion.
Brooks, 716 F.2d at 860 n.13 (internal quotation marks omitted).
In sum, proof of intentional copying alone is not conclusive on the
likelihood of confusion issue. Id. The plaintiff must put forth some evidence
showing that the defendant’s copying was done with intent to confuse consumers.
Viewing the evidence in Yellowfin’s favor allows us, at most, to infer that
Barker Boatworks intended to copy some aspects of Yellowfin’s boats in order to
construct a worthy competitor in a niche market. That is Yellowfin’s “best case.”
See Stephens, 852 F.3d at 1313–14. But evidence that “a junior user copies a
competitor’s product design because it sells better and consumers seem to like it
. . . is not evidence of an intent to confuse.” McCarthy, supra, at § 8:19. The
District Court properly concluded that Yellowfin put forth no evidence showing
Barker’s intent to copy Yellowfin’s sheer line in order to deceive consumers as to
the source of Barker Boatworks’ boats—i.e., to cause consumer confusion.
G. Actual Confusion
Finally, the District Court found that Yellowfin failed to present any
evidence of actual confusion. The Court stated that Yellowfin did not “identify a
customer who mistakenly bought a Barker instead of a Yellowfin.” Further, the
Court noted, the high price tags attached to center-console fishing boats likely
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encourage consumers to exercise a high degree of care when purchasing a boat.
Therefore, a similar sheer line will not reasonably cause a customer to mistakenly
purchase a Barker instead of a Yellowfin. The Court then briefly addressed
postsale confusion, stating that postsale confusion “requires a showing that the
junior product is inferior in craftsmanship to the senior product.” The Court noted
that Yellowfin produced only an “unsubstantiated boast” by Nagler in his
deposition testimony that Yellowfins are “far” superior in quality to Barkers. 11 On
the other hand, several former Yellowfin customers—who had first-hand
experience of Yellowfin’s craftsmanship and were likely to investigate that of
Barker Boatworks before investing in another boat—bought a Barker. Thus,
because Yellowfin did not present evidence sufficient to show Barker boats were
of a lesser quality, the Court halted its analysis of postsale confusion.
Yellowfin’s appellate brief initially presents a point-of-sale-type theory of
confusion, arguing that Nagler, in his deposition, identified four potential
customers whose business he lost to Barker and further maintained that “there’s
probably another handful.” But, as the District Court pointed out, Nagler did not
attribute these lost sales to confusion, much less confusion derived from the
11
Elsewhere in his deposition, Nagler stated that he had never ridden in a Barker boat but
that he “assume[d]” Barker boats were “pretty close” to Yellowfins in quality.
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similarity of the sheer lines specifically. 12 Rather, it was general similarity in the
boats’ designs that led to the loss of sales.
Perhaps recognizing the weaknesses of a point-of-sale theory of confusion,
Yellowfin ultimately contends that, primarily, “[t]his is a post-sale confusion
case.” That is, “the point at which the likelihood of confusion would be most
likely to occur is after the sale of a Barker boat, when the relevant audience is the
‘purchasing public.’” Yellowfin argues that the District Court erred by imposing a
requirement that Yellowfin prove Barker boats to be of inferior quality. Because
this is not a threshold requirement to proving postsale confusion, Yellowfin
continues, the Court never addressed its postsale-confusion theory. If it had,
Yellowfin concludes, it could not have granted summary judgment because there is
a triable issue of fact about whether Barker’s sheer line is likely to confuse
potential purchasers in the postsale context.
Boiled down, Yellowfin’s theory is this: its unique sheer line is instantly
recognizable to potential purchasers. Upon seeing a Barker with a similar sheer
line, potential purchasers become confused—they mistakenly believe that the boat
they see is a Yellowfin or is associated with Yellowfin. This, in turn, has damaged
12
In his deposition, Nagler summarily stated that Barker’s copying of Yellowfin’s sheer
line specifically caused the lost customers. But, immediately after making this statement, Nagler
also attributed the lost customers to Barker giving customers a lower price than Yellowfin could
offer and to “the relationship that [a former Yellowfin customer] had with [Kevin Barker].”
Either way, he did not testify that confusion caused the lost sales.
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the goodwill associated with Yellowfin’s brand and has diverted consumers from
Yellowfin, causing lost profits.
“Actual consumer confusion is the best evidence of likelihood of confusion.”
AmBrit, 812 F.2d at 1543. We review this factor holistically; there is no precise
number of instances of actual confusion sufficient to establish the factor. Id.
Although it takes “very little evidence to establish the existence of the actual
confusion factor,” id. at 1544, the evidence adduced must be more than “nominal,”
Tana, 611 F.3d at 779. 13 Further, “[l]ikelihood of confusion is synonymous with
‘probable’ confusion—it is not sufficient if confusion is merely ‘possible.’”
McCarthy, supra, at § 23:3 (citing Shatel Corp. v. Mao Ta Lumber & Yacht Corp.,
697 F.2d 1352, 1355 n.2 (11th Cir. 1983)). That a junior user’s trade dress merely
calls to mind that of the senior user, moreover, is not an infringement. Id. at
§ 23:5.
Yellowfin is correct that this Court’s precedent does not require a threshold
showing that the defendant’s product is inferior in quality. And we do not impose
such a requirement today. 14 That notwithstanding, the record is devoid of evidence
13
The Tana Court found “nominal” an affidavit by a patron of plaintiff’s restaurant
stating he patronized defendant’s restaurant because similarity in the restaurants’ names led him
to believe they were affiliated, and defendant’s admission that customers had twice inquired
about an affiliation between the restaurants. 611 F.3d at 779. It accordingly affirmed the district
court’s grant of summary judgment in favor of defendant. Id. at 783.
14
The District Court’s error on this point does not necessitate a remand to further address
Yellowfin’s postsale-confusion theory. See Dippin’ Dots, 369 F.3d at 1207–08 (stating that a
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indicating a probability of postsale confusion among potential purchasers.15
Yellowfin effectively argues that the District Court should have inferred from the
“district court’s failure to consider all the factors relevant to the issue of whether two marks are
confusingly similar does not necessarily constitute reversible error” (internal quotation marks
omitted)).
We note that the quality of a defendant’s product is relevant to the harm suffered by the
plaintiff. The “classic situation” of postsale confusion occurs when “an observer sees the
defendant’s inferior product and because of similar . . . trade dress, mistakenly thinks it is a
product of plaintiff, damaging plaintiff’s reputation and image.” McCarthy, supra, at § 23:7; see
United States v. Torkington, 812 F.2d 1347, 1353 (11th Cir. 1987) (stating, with regard to
counterfeit goods, that a “trademark holder’s ability to use its mark to symbolize its reputation is
harmed when potential purchasers of its goods see unauthentic goods and identify these goods
with the trademark holder”). This damage to reputation and image is naturally mitigated when
an observer mistakenly associates a product of similar quality with the plaintiff. Thus, although
Yellowfin’s lack of proof of the Barker boats’ inferiority is not dispositive of the actual
confusion factor on summary judgment, it raises the question of what, if any, negative effect
postsale confusion could have on Yellowfin’s reputation and image. We need not answer that
question here.
15
Yellowfin proffered a survey to support its position on likelihood of confusion. The
District Court, however, excluded the survey due to several methodological flaws. That ruling is
not an issue on appeal.
Nagler’s own testimony, moreover, does not support Yellowfin’s postsale-confusion
theory. Consider the following exchange at his deposition:
Q. Okay. Have there been any – anybody that’s come to you with confusion
between Barker and Yellowfin?
A. Several people have come to me with discussions about how [Barker]
copied our styling and our sheer line of the boat and, you know, felt it was wrong.
True, you know, did they come in confused between the two brands?
Well, they know who Yellowfin is. They don’t know who Barker is, but they
know when they see that [Barker] boat on the water, it looks like a Yellowfin.
Q. And who was that?
A. Customers call us all the time, people on the Internet. There’s plenty of
documentation all over the Internet. Go to any of the forums.
Nagler then identified specific customers who expressed to him that Barker copied Yellowfin’s
style or stated that they could not tell the two boats apart. When asked if any customer was
“confused,” Nagler responded, “I would think copying and confusion [are] the same.” Nagler
then stated, “If you took the sticker off the back of [a Barker], you would probably be confused.”
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strength of its trade dress alone—which, as discussed, is suspect—actual confusion
in the postsale context. But, without any evidence corroborating its postsale
confusion theory outlined above, Yellowfin cannot defeat summary judgment. See
Libman Co. v. Vining Indus., Inc., 69 F.3d 1360, 1363 (7th Cir. 1995) (“A finding
of likely confusion can no more be based on pure conjecture or a fetching narrative
alone than any other finding on an issue on which the proponent bears the burden
of proof.”).
Indeed, the market in which Yellowfin competes and the potential
purchasers therein make its theory of postsale confusion unlikely. Yellowfin
repeatedly mentions that it and Barker Boatworks compete in the same “niche”
market of center-console fishing boats. We may infer that potential purchasers of
products in this market are relatively sophisticated. See Groeneveld Transp.
Efficiency, Inc. v. Lubecore Int’l, Inc., 730 F.3d 494, 510–11 (6th Cir. 2013)
After this, Nagler clarified that Yellowfin’s claim was limited to the copying of its sheer line and
agreed that several features of the Barker boat differed from Yellowfin’s boats.
To the extent it is offered for the truth it asserts, Nagler’s testimony relaying the
statements of the “[s]everal people” who expressed to him that Barker copied Yellowfin is
inadmissible hearsay. See Fed. R. Evid. 801(c). Regardless, nothing in this exchange indicates
that people were confused by Barker’s sheer line. Nagler testified in effect that people believe
Barker copied Yellowfin’s boat styling, that confusion would be caused if the logo were
removed from a Barker, and that the boats have many dissimilar features. Copying is not the
same as confusion, as Nagler suggests. And Yellowfin presents no evidence showing that
potential purchasers have observed Barker boats stripped of their logo. At best, Nagler’s
testimony could be construed to support the proposition that seeing a Barker might call the
Yellowfin brand to a consumer’s mind. This, however, is not tantamount to confusion.
McCarthy, supra, at § 23:5.
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(noting the relationship between a product’s complexity and price and the
sophistication of its consumers). In fact, Yellowfin’s theory of postsale confusion
depends upon sophisticated consumers. Yellowfin recognizes that that “every bay
boat has a sloping sheer line as a key element of its design.” (Emphasis removed).
But in designing a sloping sheer line, Yellowfin posits, a designer employs
“creativity with highly nuanced refinements” so that his sheer line will differ from
the others—“that is precisely what Mr. Nagler did in designing the Yellowfin sheer
line.” A lay consumer unfamiliar with bay boats would be unlikely to notice the
“highly nuanced refinements” of Yellowfin’s sheer line and match the sheer line
with the brand. Only a discerning, sophisticated consumer would be able to do so.
Yellowfin’s theory thus holds water only in a scenario involving a sophisticated
potential purchaser.
However, without any corroborating evidence, it is unreasonable to infer that
this discerning potential purchaser—familiar enough with the crowded bay-boat
market to distinguish Yellowfin’s sloping sheer line from the numerous others—
would see a Barker and become confused despite the Barker’s prominent and
distinct logo, differing hull, and other dissimilar features. See id. at 509–11
(stating that the “starkly different” logos on two expensive products and the “the
high degree of care presumably exercised by the [products’] sophisticated
consumers” compels the conclusion that the plaintiff, as a matter of law, failed to
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raise a triable issue as to likelihood of confusion). Perhaps the Barker sheer line
would “call[] to mind” that of a Yellowfin, but that is not an infringement. See
McCarthy, supra, at § 23:5. Yellowfin has failed to establish that the Barker sheer
line has actually confused potential purchasers in the postsale context.
* * *
Weighing the likelihood of confusion factors holistically, we conclude that
the District Court did not err in holding that Yellowfin could not, as a matter of
law, prove a likelihood of confusion between Barker Boatworks’ trade dress and its
own. We therefore also hold that the District Court properly rejected the rest of
Yellowfin’s claims related to trade dress and consumer confusion. We turn now to
Yellowfin’s remaining trade secret claim.
III.
The Florida Uniform Trade Secrets Act (“FUTSA”) provides a cause of
action for the misappropriation of trade secrets. Fla. Stat. §§ 688.001–009. “To
prevail on a FUTSA claim, a plaintiff must demonstrate that (1) it possessed a
‘trade secret’ and (2) the secret was misappropriated.” Advantor Sys. Corp. v. DRS
Tech. Servs., Inc., 678 F. App’x 839, 853 (11th Cir. 2017) (citing Fla. Stat.
§ 688.002; Am. Red Cross v. Palm Beach Blood Bank, Inc., 143 F.3d 1407, 1410
(11th Cir. 1998)). Under FUTSA, a “trade secret” is
information, including a formula, pattern, compilation, program,
device, method, technique, or process that:
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(a) Derives independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by
proper means by, other persons who can obtain economic value
from its disclosure or use; and
(b) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
Fla. Stat. § 688.002(4). “Misappropriation,” generally, is defined as the acquisition
of a secret “by someone who knows or has reason to know that the secret was
improperly obtained or who used improper means to obtain it.” Advantor, 678 F.
App’x at 853; see Fla. Stat. § 688.002(2).
Yellowfin claims two sets of information, both allegedly misappropriated by
Barker, as trade secrets: “Source Information” and “Customer Information.” We
start with the former.
A.
Yellowfin describes its Source Information in the following manner:
In the course of building Yellowfin’s boats, the company requires and
incorporates into its boats materials and components from various
sources. Yellowfin considers its sources, the contracts it has with
those sources and the terms and conditions of those contracts as trade
secrets.[16]
16
In opposition to Barker Boatworks’ summary judgment motion, Yellowfin also argued
that its Source Information included drawings and other customer and supplier information not
identified in its complaint. The District Court properly declined to address this argument in its
decision granting Barker Boatworks summary judgment, citing Gilmour v. Gates, McDonald &
Co., 382 F.3d 1312, 1315 (11th Cir. 2004), for the proposition that a plaintiff cannot amend its
complaint through argument in a brief opposing summary judgment. Thus we also consider the
Source Information only to include the contents quoted above.
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This information, Yellowfin contends, is “valuable to its business and provide[s] a
competitive edge to the company.”
The District Court rejected Yellowfin’s Source Information trade secret
claim, providing a number of reasons supporting its conclusion that no reasonable
jury could find the Source Information to constitute a trade secret. First, the Court
held that the identities of Yellowfin’s suppliers are typically well known—indeed,
“the photos in the record show that many [of the suppliers] prominently brand their
products.” The Court also noted that Nagler conceded in his deposition that a
supplier’s identity is not a trade secret. Thus, the Court determined, the identities
of Yellowfin’s suppliers did not qualify as a trade secret.
Next, the Court concluded that the prices Yellowfin negotiated with its
suppliers were also not trade secrets. The Court gave three reasons. First, the
negotiated prices were based on the volume of Yellowfin’s boat production. That
is, Yellowfin produced enough boats to secure lower prices than a smaller boat
company could. Nagler confirmed as much, stating, “[A] company . . . the size of
[Barker’s] wouldn’t be able to make” the “deals that I make with my vendors.”
The Court therefore held that “[i]nformation about a volume discount lacks
independent economic value to a producer too small to secure the discount.”
Second, the Court pointed out that Yellowfin stated that its discounts were based in
part on the relationships it cultivated with its vendors over the course of a number
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of years. Information about these relationship-based discounts, the Court stated,
lacks independent economic value to a newly established manufacturer. Finally,
the Court held that Yellowfin’s claim also failed because Barker learned
Yellowfin’s production costs in the ordinary course of working at Yellowfin.
Thus, even if Barker could secure a supplier discount similar to Yellowfin’s, an
injunction could not practicably restrain Barker from using the knowledge he
gained while employed at Yellowfin.17
In its appellate briefing, Yellowfin challenges none of these conclusions.
Nor does it identify any issues of material fact underlying the District Court’s
determinations. Rather, Yellowfin only mentions summarily that its Source
Information qualifies as a trade secret and that the District Court erred by
conducting a fact-bound inquiry, better left for a jury, when determining
otherwise.18 Although we recognize that whether something is a trade secret is a
question typically “resolved by a fact finder after full presentation of evidence
from each side,” Lear Siegler, Inc. v. Ark-Ell Springs, Inc., 569 F.2d 286, 288–89
17
See Am. Red Cross, 143 F.3d at 1410 (stating that an employer cannot preclude a
former employee “from utilizing contacts and expertise gained during his former employment”
(internal quotation marks omitted)); see also Renpak, Inc. v. Oppenheimer, 104 So. 2d 642, 645
(Fla. Dist. Ct. App. 1958) (“Skill and knowledge are assets gained by an employee which are
transferable to his future use in business . . . . It is impossible to leave them behind so long as
they exist within the mind of the employee.”).
18
Yellowfin also summarily states that an implicit confidential relationship between it
and Barker precluded Barker from using any confidential information, including the Source
Information, for purposes other than benefitting Yellowfin. We address and reject this point
infra.
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(5th Cir. 1978), Yellowfin fails to provide any reason why, in this case, the District
Court erred in concluding that no reasonable jury could find that the Source
Information constituted a trade secret. And, after reviewing the record, we fail to
find any evidence suggesting that the District Court erred.
B.
Yellowfin does, however, extensively contend that the District Court erred
in determining that no jury could reasonably find that its Customer Information
constituted a trade secret. Yellowfin’s Customer Information is comprised of
information that it has collected and stored about each of its customers, including
“personal identifying information such as the person’s name, address, contact
information, and other information related to the customer’s purchase.”
The District Court provided two independent reasons for rejecting
Yellowfin’s Customer Information trade secret claim. It first noted that Florida
Statutes § 328.48(2) requires vessel owners to register their vessels with the state,
and the Public Records Act requires the state to openly provide registration
information, including registrants’ names and addresses. “With a registrant’s name
and address,” the Court stated, “a person can use the Internet or the White Pages to
find the registrant’s contact information.” Because the Customer Information’s
core contents are publicly available, the Court found that the information could not
be a trade secret.
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The District Court then held that even if the Customer Information was not
publicly available, Yellowfin could not prove FUTSA’s second trade secret
requirement: that the information was “the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.” Fla. Stat. § 688.002(4).
Although Yellowfin protected its Customer Information by limiting employee
access to it and maintaining it on a password-protected computer system,
Yellowfin nonetheless “encouraged Barker to store [the] information on a personal
laptop and phone.”19 Yellowfin’s security measures were thus useless once it
unrestrictedly relinquished the Customer Information to Barker. The Court also
stressed that Yellowfin never asked Barker to delete the information from his
personal devices after he left the company. Based on these facts, the Court
concluded that no reasonable jury could find that Yellowfin engaged in reasonable
efforts to secure the Customer Information.
Yellowfin contends that the District Court erred on both points. First, the
Customer Information includes more than what one may derive from Florida’s
public vessel-registration records. In addition to names and addresses, the
Customer Information contains detailed purchasing history, including the
specifications customers requested when ordering their boats. Further, Yellowfin
argues that uniquely compiling or distilling information, even if some of which is
19
According to Nagler’s declaration, the cellphone used by Barker was paid for by
Yellowfin.
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publicly available, adds value to the information and may render it a trade secret.
See Capital Asset Research Corp. v. Finnegan, 160 F.3d 683, 686 (11th Cir. 1998).
As to its reasonable efforts to maintain the Customer Information’s secrecy,
Yellowfin states that the information is held within its computer system which
requires a username and password to access, is accessible by fewer than five
percent of the company’s employees, and is not accessible by or shared with third
parties. Yellowfin also maintains that there was an “implicit understanding”
between Yellowfin and Barker that its Customer Information was confidential and
not to be disclosed outside Yellowfin or used for any purpose other than to benefit
the company.
Exercising our liberty to affirm on any basis in the record, United States v.
Hall, 714 F.3d 1270, 1271 (11th Cir. 2013), we affirm the District Court’s
rejection of Yellowfin’s Customer Information trade secret claim because
Yellowfin failed to reasonably protect the information. Yellowfin limiting
employee access to the information and password-protecting the computer network
on which the information resided were positive steps in securing the alleged trade
secret. See, e.g., VAS Aero Servs., LLC v. Arroyo, 860 F. Supp. 2d 1349, 1359
(S.D. Fla. 2012) (noting these measures as influential in reasonably securing trade
secrets). But Yellowfin compromised the efficacy of these measures by
encouraging Barker to keep the Customer Information on his cellphone and
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personal laptop. Cf. Diamond Power Int’l, Inc. v. Davidson, 540 F. Supp. 2d 1322,
1333–35 (N.D. Ga. 2007) (finding significant plaintiff’s failure to prevent its
employees from transferring a file allegedly constituting a trade secret to their
personal computers). 20 Indeed, Barker refused to sign an employment agreement
which stated that he would, among other things, keep all Yellowfin trade secrets in
confidence. Further, Yellowfin neither marked the Customer Information as
confidential nor instructed Barker to secure the information on his personal
devices. And when Barker left Yellowfin, the company did not request that Barker
return or delete any of the information.
Thus, at bottom, Yellowfin’s efforts to secure the Customer Information rest
upon a purported “implicit understanding” between Yellowfin and Barker that the
information was to be kept confidential. Although “Florida law recognizes implied
confidential relationships sufficient to trigger trade secret liability,” this Court is
“wary of any trade secret claim predicated on the existence of” such a relationship.
Bateman v. Mnemonics, Inc., 79 F.3d 1532, 1550 (11th Cir. 1996). Yellowfin cites
part of Nagler’s Declaration as evidence of this relationship:
Yellowfin employees, including Kevin Barker, understand, or should
understand, that the company’s Customer Information is confidential
and proprietary to Yellowfin, because I personally have verbalized
this policy and restriction to Yellowfin employees. On several
20
Diamond Power related to the Georgia Trade Secret Act which, like FUTSA, requires
“efforts that are reasonable under the circumstances to maintain [a trade secret’s] secrecy.”
O.C.G.A. § 10-1-761(4)(B).
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occasions, Yellowfin was approached by outside companies desiring
to gain access to [this information] . . . . Each time this happened, I
expressly rejected such offers and told my employees, including
Kevin Barker, that such information would never be sold or shared
with outside companies.”
Other than Nagler’s general verbal statements warning employees not to share its
Customer Information with third parties, Yellowfin references no evidence
corroborating the implicit confidential relationship between it and Barker.
In sum, with mere verbal statements that the Customer Information should
not be given to outsiders, Yellowfin relinquished the information to Barker, who
refused to sign a confidentiality agreement, with no instruction to him as to how to
secure the information on his cellphone or personal laptop. In doing so, Yellowfin
effectively abandoned all oversight in the security of the Customer Information.
Accordingly, the District Court did not err in determining that no reasonable jury
could find that Yellowfin employed reasonable efforts to secure the information.21
IV.
In light of the foregoing, we affirm the District Court’s grant of summary
judgment in favor of Barker Boatworks.
AFFIRMED.
21
Because Yellowfin cannot identify an allegedly misappropriated trade secret meeting
both definitional parts of Florida Statutes § 688.002(4), its FUTSA-predicated conspiracy claim
also fails. See supra note 5.
33