Title: World Wide Prosthetic Supply, Inc. v. Robert J. Mikulsky
Citation: 2002 WI 26
Docket Number: 2000AP001751
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: March 19, 2002

2002 WI 26 
 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
00-1751 
 
 
COMPLETE TITLE: 
 
 
World Wide Prosthetic Supply, Inc.,  
 
Plaintiff-Appellant, 
 
v. 
Robert J. Mikulsky and Karen Mikulsky, d/b/a 
Enterprise Machine and Voyager, Inc.,  
 
Defendants-Respondents-Petitioners. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2001 WI App 133 
Reported at:  246 Wis. 2d 461, 631 N.W.2d 253 
(Published) 
 
 
OPINION FILED: 
March 19, 2002   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
January 15, 2002   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Brown   
 
JUDGE: 
Sue E. Bischel 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For 
the 
defendants-respondents-petitioners 
there 
were 
briefs by Winston A. Ostrow, Donald L. Romundson and Godfrey & 
Kahn, S.C., Green Bay, and oral argument by Donald L. Romundson. 
 
For the plaintiff-appellant there was a brief by Terry J. 
Gerbers and Gerbers Law Offices, Green Bay, and oral argument by 
Terry J. Gerbers. 
 
 
2002 WI 26 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  00-1751  
(L.C. No. 
99 CV 616) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
World Wide Prosthetic Supply, Inc.,  
 
          Plaintiff-Appellant, 
 
     v. 
 
Robert J. Mikulsky and Karen Mikulsky,  
d/b/a Enterprise Machine and Voyager,  
Inc.,  
 
          Defendants-Respondents- 
          Petitioners. 
 
FILED 
 
MAR 19, 2002 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
ANN WALSH BRADLEY, J.   The petitioners, Robert J. 
Mikulsky and Karen Mikulsky, doing business as Enterprise 
Machine and Voyager, Inc., seek review of a published court of 
appeals decision that reversed a circuit court order declaring a 
mistrial and remanded for a new trial.1  They argue that the 
court of appeals erred in concluding that World Wide Prosthetic 
                                                 
1 See World Wide Prosthetic Supply, Inc. v. Mikulsky, 2001 
WI App 133, 246 Wis. 2d 461, 631 N.W.2d 253 (reversing a 
judgment of the Circuit Court for Brown County, Sue E. Bischel, 
Judge). 
No. 
00-1751   
 
2 
 
Supply, Inc. could recover as damages its lost profits allegedly 
resulting from Voyager's manufacture and distribution of a 
defective product incorporating World Wide's trade secret. 
¶2 
In essence, the petitioners assert that the court of 
appeals 
misinterpreted 
Wis. Stat. § 134.90(4)(a)(1999-2000),2 
which provides for damages in a claim for misappropriation of a 
trade secret.  Because we determine that the phrase "actual 
loss" in § 134.90(4)(a) is correctly interpreted to include the 
damages World Wide seeks, and that evidence of such losses is 
admissible, we affirm the court of appeals. 
I 
¶3 
World Wide, a company that designs and distributes 
endoskeletal prosthetic components, entered into a manufacturing 
arrangement 
with 
the 
Mikulskys, 
doing 
business 
first 
as 
Enterprise Machine and later as Voyager.  Pursuant to the 
agreement, Voyager produced components for World Wide that World 
Wide delivered to a number of distributors. 
¶4 
When World Wide's customers began complaining that 
some of the components produced by Voyager were cracked and 
broken, the parties' relationship deteriorated.  World Wide 
suspected that the problems were due to manufacturing defects.  
After attempting to reconcile the problems with Voyager, World 
Wide 
stopped 
marketing 
the 
defective 
product 
and 
made 
arrangements to have a different company manufacture its 
                                                 
2 All subsequent references to the Wisconsin Statutes are to 
the 1999-2000 version unless otherwise indicated. 
No. 
00-1751   
 
3 
 
components.  Upon the ending of the business relationship 
between Voyager and World Wide, Voyager continued to manufacture 
and also to distribute prosthetic components, without making 
changes to their appearance or design. 
¶5 
World Wide sued Voyager, the Mikulskys, and Enterprise 
Machine 
(hereinafter 
"Voyager"), 
alleging 
that 
Voyager 
misappropriated a trade secret.3  According to World Wide, 
Voyager's continued production of the prosthetic components 
constituted a misappropriation of a trade secret that caused 
World Wide to lose profits.4  World Wide claimed that it was 
entitled to trade secret damages because its lost profits were 
due to the fact that Voyager's components were defective and 
that these defective components, which looked like Voyager's 
components, caused buyers to lose confidence in World Wide's 
products. 
¶6 
The case proceeded to trial, and World Wide sought to 
introduce evidence to show that it lost profits because Voyager 
continued to manufacture and distribute defective components 
using World Wide's trade secret.  Voyager objected to the 
introduction of the evidence, asserting that it was not relevant 
                                                 
3 World Wide also made claims for breach of contract, breach 
of implied duty of good faith, and tortious interference with 
contract.  The circuit court dismissed the breach of contract 
claim on Voyager's motion for summary judgment.  These other 
claims are not relevant for purposes of our review. 
4 Specifically, World Wide's amended complaint alleged that 
it suffered damages, including loss of past and future sales and 
harm to its good will. 
No. 
00-1751   
 
4 
 
in a trade secret claim.  Although the circuit court initially 
allowed some testimony that the components were defective, the 
court ultimately agreed with Voyager.  The court determined that 
the evidence was not relevant, and thus not admissible to 
establish damages in a trade secret claim.  The court concluded 
that it had erroneously admitted the evidence.  Voyager moved 
for a mistrial, and the court granted the motion. 
¶7 
World Wide petitioned the court of appeals for leave 
to appeal, which the court granted.  The court determined that 
under § 134.90(4), World Wide could recover damages that were 
the natural and proximate result of Voyager's wrongful conduct, 
including losses World Wide suffered because Voyager distributed 
a defective product incorporating World Wide's trade secret.  
Therefore, the court of appeals concluded, the evidence that 
Voyager marketed defective products incorporating World Wide's 
trade secret was admissible as evidence of damages under 
§ 134.90(4), and the circuit court erred in determining that 
World Wide could not introduce the evidence.  The court of 
appeals reversed the circuit court and remanded for a new trial. 
II 
¶8 
The question before us is whether the court of appeals 
correctly interpreted § 134.90(4) to conclude that evidence that 
Voyager marketed defective products incorporating World Wide's 
trade secrets was admissible.  In order to address whether such 
evidence is relevant, and thus admissible, we must determine 
whether the phrase "actual loss" under § 134.90(4)(a) may 
include World Wide's lost profits allegedly resulting from 
No. 
00-1751   
 
5 
 
Voyager's manufacture and distribution of a defective product 
incorporating World Wide's trade secret.  The interpretation and 
application of a statute to a given set of facts is a question 
of law for our independent review.  Minuteman, Inc. v. L.D. 
Alexander, 147 Wis. 2d 842, 853, 434 N.W.2d 773 (1989). 
¶9 
In answering this question we look to case law from 
both this state and other jurisdictions.  Prior to this case, we 
have not had an opportunity to interpret § 134.90(4).  However, 
since § 134.90 is Wisconsin's version of the Uniform Trade 
Secrets Act, we can look to decisions of other jurisdictions 
interpreting 
the 
Uniform 
Act 
for 
guidance. 
 
See 
Wis. Stat. § 134.90(7). 
 
Additionally, 
in 
addressing 
this 
question, we consider secondary authority, as well as the nature 
of trade secret claims under § 134.90. 
III 
¶10 Passed by the legislature in 1986, § 134.90 adopts the 
Uniform Trade Secrets Act.  Minuteman, 147 Wis. 2d at 851.  
Section 134.90 defines a trade secret and outlines the remedies 
available to those injured by trade secret misappropriation.  
Id.  In Minuteman, this court set out a three-prong framework 
for the analysis of trade secret actions under § 134.90: 
When examining an alleged violation of sec. 
134.90, Stats., three questions arise.  First, whether 
the material complained about is a trade secret under 
sec. 
134.90(1)(c), 
Stats. 
 
Second, 
whether 
a 
misappropriation has occurred in violation of sec. 
134.90(2).  And finally, if both of the above 
requirements 
are 
met, 
what 
type 
of 
relief 
is 
appropriate under sec. 134.90(3) or (4). 
No. 
00-1751   
 
6 
 
Id. at 853-54. 
¶11 For the limited purpose of our review in this case, 
Voyager concedes the first prong, that the material complained 
about is a trade secret.  In its brief and at oral argument, 
Voyager initially asserted that no misappropriation occurred.  
However, Voyager eventually conceded at oral argument that for 
purposes of this court's review that it used, and thus 
misappropriated, World Wide's trade secret.5 
¶12 Therefore, the central question presented by this case 
falls within the third prong of the Minuteman framework, the 
type of relief available under § 134.90.  Section 134.90(4), the 
portion of the trade secret statute addressing damages, states 
in part: 
(a)  . . . .  A court may award damages in 
addition to, or in lieu of, injunctive relief under 
sub. (3).  Damages may include both the actual loss 
caused by the violation and unjust enrichment caused 
by the violation that is not taken into account in 
computing actual loss.  Damages may be measured 
exclusively by the imposition of liability for a 
reasonable royalty for a violation of sub. (2) if the 
complainant cannot by any other method of measurement 
prove 
an 
amount 
of 
damages 
which 
exceeds 
the 
reasonable royalty. 
                                                 
5 Thus, the question of whether World Wide can establish 
that Voyager misappropriated a trade secret is not before us.  
That will be a question for the fact finder at trial, and 
Voyager disputes whether it in fact misappropriated a trade 
secret.  The present record is somewhat unclear as to the 
precise nature of the trade secret that World Wide alleges 
Voyager has misappropriated, although it seems to involve a 
particular type of material used in the prosthetic components. 
No. 
00-1751   
 
7 
 
(b) If a violation of sub. (2) is wilful and 
malicious, the court may award punitive damages in an 
amount not exceeding twice any award under par. (a).   
(Emphasis added.) 
¶13 Under the statute, total damages may be calculated by 
a number of measures, including, in appropriate cases, punitive 
damages.  Our focus, however, is on the phrase "actual loss" in 
the statute.  The statute states that damages may include "the 
actual loss caused by the violation . . . ."  The question 
becomes whether "actual loss" encompasses lost profits allegedly 
resulting 
from 
Voyager's 
manufacture 
and 
distribution 
of 
defective products incorporating World Wide's trade secret. 
¶14 As the court of appeals in this case recognized, the 
Seventh Circuit Court of Appeals anticipated the question before 
us in Micro Data Base Sys., Inc. v. Dharma Sys., Inc., 148 F.3d 
649 (7th Cir. 1998).  In Micro Data, several entities were 
involved in a four-way deal that led to a dispute between two 
software companies, Dharma and Micro Data Base Systems (MDBS).  
Id. at 651.  Dharma, the defendant in the lawsuit arising from 
the 
dispute, 
counterclaimed 
and 
asserted 
a 
trade 
secret 
violation against MDBS.  Id. at 652. 
¶15 In addressing Dharma's trade secret claim, the Micro 
Data court focused on the question of whether Dharma had 
suffered injury.  148 F.3d at 657.  Dharma put in evidence that 
in the course of the dispute that led to the trade secret claim, 
MDBS soured Dharma's relationship with another entity, who 
otherwise would have purchased at least 1,000 copies of Dharma's 
software program.  Id. 
No. 
00-1751   
 
8 
 
¶16 The court concluded that Dharma was entitled to seek 
damages for its lost business.  Micro Data, 148 F.3d at 658.  
Characterizing the misappropriation of a trade secret as a tort, 
the court in Micro Data reasoned that Dharma's lost business 
constituted reasonably foreseeable consequential damages.  Id.  
The court gave an illustration to demonstrate further: 
It's as if MDBS, having stolen a program from 
Dharma, inserted a bug in it as a result of which the 
program didn't work, and buyers blamed Dharma and 
refused to do any further business with it.  That 
would be a consequence of misappropriation, and Dharma 
would be entitled to the foreseeable damages flowing 
from that consequence. 
Id. 
¶17 This illustration parallels the facts before us.  
Here, the program would be World Wide's trade secret and the 
program with the bug would be the defective product manufactured 
and distributed by Voyager that incorporated World Wide's trade 
secret.  World Wide's lost profits would be the reasonably 
foreseeable damages that flow from Voyager's marketing of its 
own defective product. 
¶18 Although the court in Micro Data was interpreting New 
Hampshire law, New Hampshire has adopted the Uniform Act, 
including its section on damages, which is materially the same 
as § 134.90(4).  See N.H. Rev. Stat. Ann. § 350-B:3 (2001).  
Courts are to construe the Uniform Act's provisions to make 
uniform the law among the states, see § 134.90(7); N.H. Rev. 
Stat. Ann. § 350-B:8, and thus, Micro Data is highly persuasive. 
No. 
00-1751   
 
9 
 
¶19 Voyager asserts that Micro Data is an exceptional case 
and that no other authority allows for trade secret damages like 
those World Wide seeks.  Yet, Voyager is unable to cite to any 
case expressly holding that such damages are not available under 
the Uniform Act.  Instead, Voyager relies upon Forest Labs., 
Inc. v. Pillsbury Co., 452 F.2d 621 (7th Cir. 1971), and Sokol 
Crystal Prods., Inc. v. DSC Communications Corp., 15 F.3d 1427 
(7th Cir. 1994), arguing that these cases illustrate that the 
damages World Wide seeks are not the proper measure of damages 
in a trade secret action under § 134.90.  Neither Forest nor 
Sokol supports Voyager's position. 
¶20 The Seventh Circuit Court of Appeals in Forest 
interpreted Wisconsin law and applied the "reasonable royalty" 
method of computing damages, which is defined as "what the 
parties would have agreed upon, if both were reasonably trying 
to reach an agreement."  452 F.2d at 627.  The court's decision 
in Forest, issued well before the adoption of § 134.90, simply 
illustrates one of the measures of damages now permissible under 
the statute.  It does not speak to the proper interpretation of 
"actual loss" under § 134.90(4)(a), the portion of the statute 
we apply in this case. 
¶21 In Sokol, the Seventh Circuit allowed a plaintiff to 
recover 
under 
§ 134.90 
for 
lost 
profits 
caused 
by 
the 
misappropriation of the plaintiff's trade secret.  15 F.3d at 
1433.  Nevertheless, Voyager interprets Sokol to support its 
position because the lost profits in Sokol were calculated by 
comparing actual sales to projected sales. 
No. 
00-1751   
 
10 
 
¶22 Contrary to Voyager's interpretation of the case, we 
read Sokol to support an interpretation of "actual loss" to 
include lost profits resulting from Voyager's manufacture and 
distribution of defective products incorporating World Wide's 
trade secret.  The court in Sokol referred approvingly to the 
jury instruction given in the case, which stated that the jury 
could award lost profits so long as it determined that "the 
wrongful act of the defendant caused the loss."  15 F.3d at 
1433. 
¶23 The conclusion that damages such as those sought by 
World Wide are recoverable for a trade secret violation is 
supported by secondary authority discussing trade secrets.  The 
Restatement (Third) of Unfair Competition section addressing 
monetary relief for the misappropriation of trade secrets 
contains the following commentary:  "A plaintiff may also 
recover any other proven pecuniary loss attributable to the 
appropriation. . . .  The plaintiff is also entitled to recover 
losses associated with sales of its own goods at reduced prices 
resulting from the wrongful competition of the defendant."  
Restatement (Third) of Unfair Competition, § 45 cmt. e (1995).  
Similarly, 
Professor 
Dobbs 
explains 
that 
"[c]onsequential 
damages to the plaintiff from loss of the trade secret are 
recoverable if adequately proven."  Dan B. Dobbs, 2 Law of 
Remedies § 10.5(3), 692 (2d ed. 1993). 
¶24 Although much of the case law cited in these secondary 
sources predates the Uniform Trade Secrets Act, nothing in the 
commentary to the Uniform Act suggests that its drafters 
No. 
00-1751   
 
11 
 
intended to limit the scope of damages that were available under 
the common law of trade secrets.  If anything, the contrary is 
true.  The Prefatory Note to the Uniform Act states that the Act 
"codifies the basic principles of common law trade secret 
protection."  14 U.L.A. 434 (Master ed. 1990). 
¶25 The 
nature 
of 
an 
action 
for 
a 
trade 
secret 
misappropriation also supports an interpretation of "actual 
loss" to include the damages World Wide seeks.  A trade secret 
misappropriation often is characterized as sounding in tort.  
See Micro Data, 148 F.3d at 658; Minuteman, 147 Wis. 2d at 851; 
see also RTE Corp. v. Coatings, Inc., 84 Wis. 2d 105, 115, 267 
N.W.2d 226 (1978).  The availability of punitive damages under 
§ 134.90(4)(b) suggests that the misappropriation of a trade 
secret under § 134.90 is properly conceived of as a tort-type 
action.  See Wangen v. Ford Motor Co., 97 Wis. 2d 260, 278, 294 
N.W.2d 437 (1980) ("courts have accepted punitive damages as 
part of Wisconsin tort law").  Ordinarily, tort damages are 
limited only by the concept of "proximate cause" or certain 
public policy considerations.  See, e.g., State Farm Mut. Auto. 
Ins. Co. v. Ford Motor Co., 225 Wis. 2d 305, 316, 592 N.W.2d 201 
(1999); Brockmeyer v. Dun & Bradstreet, 113 Wis. 2d 561, 575, 
335 N.W.2d 834 (1983). 
¶26 In light of Micro Data and the other authority cited, 
and given that § 134.90 embodies a tort-type action, we 
determine that "actual loss" as used in § 134.90(4)(a) may 
include lost profits resulting from Voyager's manufacture and 
distribution of a defective product incorporating World Wide's 
No. 
00-1751   
 
12 
 
trade secret.  Thus, the court of appeals correctly concluded 
that 
evidence 
that 
Voyager 
marketed 
defective 
products 
incorporating World Wide's trade secret was relevant and 
admissible to show World Wide's damages under § 134.90(4). 
¶27 Our interpretation of § 134.90(4)(a) does not result 
in unlimited consequential damages as Voyager asserts.  In order 
to recover for actual loss under the statute, a plaintiff must 
prove that its loss was caused by the defendant's violation.  
Section 134.90(4)(a). 
¶28 Thus, Voyager cannot be liable for any decline in 
World Wide's 
business 
attributable 
to 
Voyager's 
defective 
production of World Wide components during the period of their 
business relationship.  Before the dissolution of the business 
relationship, Voyager was not in violation of § 134.90, and 
therefore, any loss suffered by World Wide attributable to 
Voyager's conduct during that period could not have been caused 
by a violation of § 134.90.  In order to recover damages for 
lost profits, World Wide will have to prove that Voyager's 
manufacture and marketing of prosthetic components after the 
dissolution of their business relationship caused World Wide's 
losses. 
¶29 Having determined that "actual loss" as used in 
§ 134.90(4)(a) may include lost profits resulting from Voyager's 
manufacture 
and 
distribution 
of 
a 
defective 
product 
incorporating World Wide's trade secret, we turn to Voyager's 
other assertions that the court of appeals erred in its 
interpretation of § 134.90.  First, Voyager argues that the 
No. 
00-1751   
 
13 
 
court of appeals deprived the circuit court of its discretion by 
declaring World Wide's evidence admissible despite the circuit 
court's conclusion that any relevance the evidence had was 
outweighed by its prejudicial effect.  Second, Voyager argues 
that the construction given to § 134.90 by the court of appeals 
infringes upon preempted fields of federal intellectual property 
law.  We address each argument in turn.    
¶30 The admissibility of evidence is ordinarily a decision 
left to the discretion of the circuit court.  State v. Jackson, 
216 Wis. 2d 646, 655, 575 N.W.2d 475 (1998).  Even when evidence 
is 
otherwise 
admissible, 
the 
circuit 
court 
retains 
the 
discretion to exclude the evidence if the prejudicial nature of 
the 
evidence 
outweighs 
its 
probative 
value.  
Wis. Stat. § 904.03; Lease America Corp. v. Insurance Co. of N. 
America, 88 Wis. 2d 395, 399-400, 276 N.W.2d 767 (1979).  
However, the circuit court erroneously exercises its discretion 
if it applies an erroneous view of the law.  Sullivan v. 
Waukesha County, 218 Wis. 2d 458, 470, 578 N.W.2d 596 (1998). 
¶31 Here, it is readily apparent from the record that in 
balancing the probative value of the evidence against its 
prejudicial nature, the court assumed that the evidence lacked 
probative value.  When the circuit court declared a mistrial 
after determining that it had improperly admitted the evidence, 
the court explained, "it is clear to me now that all of this 
testimony is irrelevant."  In addition, the court stated as 
follows:  "And assuming that it has any probative value.  And 
right now, I think it has virtually none or none——whatever 
No. 
00-1751   
 
14 
 
probative value it might have, it seems to me is really 
substantially outweighed by the danger of unfair prejudice." 
¶32 Because 
the 
court 
incorrectly 
assumed 
that 
the 
evidence was not relevant, it could not have properly exercised 
its discretion when it balanced the probative value of the 
evidence against any danger of prejudice.  Therefore, we agree 
with the court of appeals that the circuit court erred in 
preventing World Wide from introducing the evidence.  Voyager is 
incorrect in asserting that the court of appeals' interpretation 
of § 134.90 improperly deprived the circuit court of its 
discretion. 
¶33 Next, 
we 
turn 
to 
Voyager's 
assertion 
that 
a 
construction of § 134.90 to allow for the damages World Wide 
seeks 
infringes 
upon 
the 
federally 
preempted 
field 
of 
intellectual property law.  According to Voyager, a construction 
of § 134.90 to permit the damages World Wide seeks conflicts 
with federal intellectual property law requiring that when an 
article is unprotected by patent or copyright, state law may not 
forbid others to copy that article.  In support of its argument, 
Voyager cites three United States Supreme Court cases, Bonito 
Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989), 
Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234 (1964), 
and Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964).  
Voyager's analysis of preemption and intellectual property law 
is, however, incomplete. 
¶34 Compco, Sears, and Bonito Boats each address whether 
states may regulate material in the public domain in the face of 
No. 
00-1751   
 
15 
 
federal intellectual property law.  For example, in Compco, the 
Court determined that when an article is unprotected by a patent 
or a copyright, to forbid copying would interfere with the 
federal policy "allowing free access to copy whatever the 
federal patent and copyright laws leave in the public domain."  
376 U.S. at 237 (emphasis added).  Similarly, in Bonito Boats, 
the Court concluded that "[a] state law that substantially 
interferes with the enjoyment of an unpatented utilitarian or 
design conception which 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."  489 U.S. at 156-57 (emphasis added). 
¶35 A trade secret, by definition, is not in the public 
domain.  Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 484 
(1974).  Rather, a trade secret is something that derives its 
value "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."  
Wis. Stat. § 134.90(1)(c). 
¶36 Voyager fails to cite Kewanee, in which the Supreme 
Court 
specifically 
addressed 
whether 
state 
trade 
secret 
protection is preempted by operation of the federal patent law.  
416 U.S. at 472.  The Court concluded that, as a general matter, 
it is not.  Id. at 492.  As the Prefatory Note to the Uniform 
Trade Secrets Act explains, under Kewanee, "neither the Patent 
Clause of the United States Constitution nor the federal patent 
No. 
00-1751   
 
16 
 
laws preempt state trade secret protection for patentable or 
unpatentable information."  14 U.L.A. at 434.6 
¶37 We acknowledge that, at least before Kewanee and 
Bonito Boats, some of the language in Compco and Sears could be 
construed to substantially curtail state trade secret law.  
However, Bonito Boats underscores that the Court does not 
endorse Voyager's interpretation of Compco and Sears.  In Bonito 
Boats, the Court explained: 
Read at their highest level of generality, the two 
decisions [Compco and Sears] 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. . . . .  [T]he 
broadest reading of Sears would prohibit the States 
from regulating the deceptive simulation of trade 
dress 
or 
the 
tortious 
appropriation 
of 
private 
information. 
That the extrapolation of such a broad preemptive 
principle from Sears is inappropriate is clear from 
the balance struck in Sears itself.  . . . . 
489 U.S. at 154 (emphasis added).  The Court explained further: 
What 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 
                                                 
6 Commentators have observed that before Kewanee Oil Co. v. 
Bicron Corp., 416 U.S. 470 (1974), the relationship between 
federal intellectual property law and state trade secrets law 
was highly uncertain.  See, e.g., Mark I. Koffsky, Patent 
Preemption of Computer Software Contracts Restricting Reverse 
Engineering: The Last Stand?, 95 Colum. L. Rev. 1160, 1171 
(1995); David A. Rice, Public Goods, Private Contract and Public 
Policy: Federal Preemption of Software License Prohibitions 
Against Reverse Engineering, 53 U. Pitt. L. Rev. 543, 574-75 
(1992). 
No. 
00-1751   
 
17 
 
Kewanee[], we held that state protection of trade 
secrets did not operate to frustrate the achievement 
of the congressional objectives served by the patent 
laws. 
Id. at 155. 
¶38 Voyager's other argument relating to preemption seems 
to be that World Wide cannot recover the damages it seeks under 
§ 134.90 because similar damages may be available in an action 
for commercial disparagement or confusion of source under the 
Lanham Act, the federal trademark statute.  See 15 U.S.C.A. 
§ 1125 (2001).  According to Voyager, a construction of § 134.90 
to encompass damages that might also be available under the 
Lanham Act allows plaintiffs to "avoid the limitations and 
restrictions" of the Lanham Act and to "short circuit the 
requirements of the Lanham Act." 
¶39 Even assuming that World Wide could have maintained an 
action under the Lanham Act, it does not follow that the damages 
it seeks under § 134.90 are preempted by the Lanham Act.  
Voyager cites no case law, other than Compco and Bonito Boats, 
in support of its assertion that the Lanham Act has this sort of 
preemptive effect on state trade secrets law.  In contrast, our 
search of the case law reveals that federal courts regularly 
permit litigants to maintain concurrent causes of action under 
trade secret law and the Lanham Act.  See, e.g., Taquino v. 
Teledyne Monarch Rubber, 893 F.2d 1488, 1490 (5th Cir. 1990); 
Unix System Labs., Inc. v. Berkeley Software Design, Inc., 832 
F. Supp. 790, 796-97 (D.N.J. 1993); CNA Fin. Corp. v. Local 743, 
515 F. Supp. 942, 944 (N.D. Ill. 1981).  Thus, we decline to 
No. 
00-1751   
 
18 
 
adopt Voyager's broad and unprecedented interpretation of the 
preemption doctrine. 
IV 
¶40 In 
sum, 
we 
determine 
that 
"actual 
loss" 
in 
§ 134.90(4)(a) includes lost profits allegedly resulting from 
Voyager's manufacture and distribution of defective products 
incorporating World Wide's trade secret.  We further determine 
that the court of appeals correctly interpreted § 134.90(4) to 
conclude that evidence that Voyager marketed defective products 
incorporating 
World 
Wide's 
trade 
secret 
was 
admissible.  
Accordingly, we affirm the court of appeals. 
By the Court.—The decision of the court of appeals is 
affirmed. 
 
 
No. 
00-1751   
 
 
 
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