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Federal Preemption in Patent Law

Inventors of new technologies often obtain legal rights over their ideas through the acquisition of patents from the US Patent and Trademark Office. Patent laws are created based on Article 1, Section 8, clause 8 of the US Constitution, which states that Congress has the power “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.” Thus, patent rights are protected through federal law, which reach any jurisdiction in the United States.

One particular issue that arises with federal patent laws is the limitation of state based patent rights due to federal preemption. If there is any inconsistent overlapping between federal and state law in general, Article IV, clause 2 of the US Constitution establishes federal law as the supreme law of the land and thereby as the prevailing law that preempts the state law. This clause is widely known as the Supremacy clause. There are three situations in which a state law can be preempted by a federal patent law: explicit preemption, field preemption, and conflict preemption. Congress institutes explicit preemption via a federal statute that clearly states that federal law governs over a state law for a given issue. Field preemption occurs when a scheme of federal regulation is so pervasive to the point where there is no room left for state law to apply. Lastly, federal law preempts state law through conflict preemption when compliance with both federal and state law is physically impossible or when the state law impedes the goals of the federal law. These types of preemption of state law can significantly limit the rights of patentees, since it is often the case that these state laws broaden the rights that the patentees would have otherwise.

An example of such preemption is Bonito Boats v. Thunder Craft Boats. In Bonito Boats, the state of Florida had passed a statute that forbid a company from utilizing a direct molding process that duplicated unpatented boat hull designs. Bonito Boats had developed an unpatentable hull design, and under the Florida statute, proceeded to file suit against Thunder Craft boats for duplicating their hull design. The US Supreme Court held that federal patent law preempted Florida state law under conflict preemption and that Bonito Boats did not have exclusive rights to the hull design. One of the goals of federal patent law is to strike a balance between the encouragement for innovation and the free competition of unpatented ideas. By giving undue protection to unpatented hull designs, the Florida state law hindered the free use of technology that should be open to the public. Therefore, the Florida statute directly conflicted with one of patent law’s main goals, and was held to be invalid.

Despite cases like Bonito Boats v. Thunder Craft Boats, there can be state laws that overlap federal laws and still be upheld such as in Cover v. Sea Gull Lighting. The plaintiff in Cover filed suit against Sea Gull for direct infringement and Hydramatic for contributory infringement. Although Sea Gull and Hydramatic settled with Cover, Hydramatic filed a counter claim against Sea Gull for indemnification. Hydramatic manufactured the products in question for Sea Gull and wanted Sea Gull to cover any damages that would arise from making the products for them. Sea Gull argues that there should be preemption of federal patent law over state contract law since if there’s no underlying liability under patent law, state contract law shouldn’t impose such a liability. The Court ruled that there’s no such conflict preemption, since patent law and state commercial law cover different areas of law, and the state commercial law doesn’t impede the goals of federal patent law.