Academic journal article Marquette Intellectual Property Law Review

Kewanee Revisited: Returning to First Principles of Intellectual Property Law to Determine the Issue of Federal Preemption

Academic journal article Marquette Intellectual Property Law Review

Kewanee Revisited: Returning to First Principles of Intellectual Property Law to Determine the Issue of Federal Preemption

Article excerpt

INTRODUCTION

I. THE HISTORICAL AND LEGAL CONTEXT OF KEWANEE
     A. The Sears/Compco Doctrine
     B. Applying the Sears/Compco Doctrine to Trade Secret Cases
II. KEWANEE DE-CONSTRUCTED
     A. Argument One: The Limited Scope of Trade Secret Law
     B. Argument Two: Constitutional Preemption
     C. Argument Three: Conflict Preemption
     D. Argument Four: The Partial Preemption Theory
     E. The Missing Analyses: Field Preemption and Free Competition
III. THE CHANGED ASSUMPTIONS OF KEWANEE
     A. Changes to Patent Law since 1974.
     B. Changes to Copyright Law since 1974
     C. Changes to Trade Secret Law since 1974
IV. KEWANEE REFRESHED
     A. Problem One: The Court's Preemption Analysis is Incomplete
        1. Express Preemption
        2. Field Preemption
     B. Problem Two: The Court's Conflict Preemption Analysis
        is Incomplete and Based upon Unsupported Factual
        Assumptions
     C. Problem Three: The Court's Failure to Articulate a Clear,
        Unifying Test for Intellectual Property Preemption
     D. Problem Four: The Court's Reluctance to Engage in an
        "As Applied" Analysis
V. GUARDING AGAINST THE ANTI-COMPETITIVE EFFECTS OF STATE LAWS
CONCLUSION

INTRODUCTION

In 1973, members of the American Bar Association (ABA), Section on Patent, Trademark and Copyright (hereinafter the PTC Section) faced a dilemma. For more than six years, they had written, scrutinized, debated, and re-worked a draft uniform law to govern trade secrets. (1) In August 1972, their efforts finally bore fruit when a draft law was read before the National Conference of Commissioners on Uniform State Laws (hereinafter NCCUSL). (2) At the time, and despite the U.S. Supreme Court's decisions in the Sears, Roebuck & Co. v. Stiffel Co. and Compco Corp. v. Day-Brite Lighting, Inc. (hereinafter Sears/Compco) cases, (3) it was thought that states could regulate in the area of trade secrets without interfering with federal patent policies. (4) With the decision of the Sixth Circuit Court of Appeals in Kewanee Oil Co. v. Bicron Corp., (5) however, this conclusion was called into question, and further consideration of a uniform trade secrets act was suspended pending clarification from the U.S. Supreme Court or an act of Congress. (6)

The PTC Section did not have to wait long for the clarification it needed. In its 1974 decision in Kewanee, a divided Supreme Court ruled that Ohio's trade secret law was not preempted by patent law. (7) Rejecting the fact-specific analysis that had been applied by the Sixth Circuit and calls for application of so-called "partial preemption," the Court concluded that trade secret protection did not "constitute too great an encroachment on the federal patent system to be tolerated." (8) Based upon this conclusion, the PTC Section resumed its efforts to enact a uniform law in early 1975, ultimately culminating in NCCUSL's approval of the Uniform Trade Secret Act (hereinafter the UTSA) in August 1979, and the subsequent adoption of the UTSA by forty-five states. (9)

While the decision of the Supreme Court in Kewanee is frequently cited for the proposition that state trade secret laws are not preempted by federal law, this broad proposition belies five aspects of the decision. First, Kewanee is based upon the Supreme Court's understanding of the trade secret law of the State of Ohio. (10) Although the Ohio common law governing trade secrets was found not to be preempted by federal patent policies, Kewanee is not a direct endorsement of the trade secret laws of all states. (11) Second, Kewanee was decided before the enactment of the UTSA, and the Court has not subsequently determined whether the UTSA is preempted by federal law. Third, Kewanee was decided based upon the Court's understanding of U.S. patent law in 1974 and does not reflect the significant changes in patent law that have occurred since that time. Fourth, due to changes that occurred in U. …

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