​​​​Reverse Engineering Without Regret: Strategy Takeaways from the Bobcat – Caterpillar Skid-Steer Clash

By Cecily Anne O’Regan

Doosan Bobcat North America filed federal and international lawsuits against Caterpillar alleging Caterpillar improperly reverse engineered loader components. These lawsuits are a timely reminder that “reverse engineering” is not per se unlawful in the United States, but the legality turns on the rights at issue. Reverse engineering is recognized as an important and proper means of competition where the efforts start from lawfully acquired, publicly available products and does not violate an independent duty of confidentiality or an exclusive right like a valid patent. However, reverse engineering is not without limits, and any of patent, trade secret, copyright, contract, or unfair competition doctrines are potentially implicated if best practices are not followed.

The Bobcat – Caterpillar backdrop

Bobcat’s Eastern District of Texas and International Trade Commission (ITC) complaints allege that Caterpillar systematically disassembled Bobcat skid-steer loaders, compact track loaders, excavators, dozers, and related components, and then implemented Bobcat’s patented hydraulic and control technologies in Caterpillar’s competing machines. The patents at issue include US 7,831,364, US 8,047,760, US 8,364,356, and US 10,934,684. Bobcat’s pleadings frame Caterpillar’s conduct not as bare reverse engineering, which is permissible, but as patent infringement tied to specific Bobcat patents covering hydraulic power prioritization, tracking adjustment, and control features, among others.

Reverse engineering and patents

The core question is not whether an accused infringer reverse engineered, but whether the resulting product or process falls within the asserted claims of issued patents. A lawful acquisition and teardown of a patented product is fully consistent with the Patent Act as long as the reverse engineer does not make, use, sell, offer to sell, or import a product or process that practices the patent claims. See, e.g., 35 U.S.C. § 271 (acts of infringement). Federal Circuit authority also recognizes that studying and testing a publicly sold patented article is permissible, while commercial exploitation that reads on the claims is not. By contrast, the Federal Circuit has repeatedly rejected arguments that a trade secret or other state-law right can be used to bar reverse engineering of publicly available technology that patent law leaves in the public domain, underscoring patent preemption at the interface with state protection.

From a patent perspective, allowable conduct includes:

Buying a competitor’s product on the open market, disassembling the product, measuring and documenting the product’s geometry and performance, and using those learnings to design a competing product around the competitor’s patents, as long as the resulting product does not fall within the claim scope of the patent claims; and using reverse engineering internally to evaluate potential infringement risks, to inform license negotiations, or to prepare invalidity/non‑infringement positions.

Conduct that is not allowable is using reverse engineering to produce products or parts that embody each limitation of a valid claim. Bobcat contends that is exactly what Caterpillar has done by “identifying and mimicking” Bobcat’s patented features in Caterpillar’s accused dozers, excavators, loaders, and components. Determining whether Bobcat is correct in its assessment of Caterpillar’s conduct will require evidence that establishes copying and willfulness, not to whether reverse engineering itself is per se illegal.

Reverse engineering and trade secrets

Under the Defend Trade Secrets Act (DTSA), 18 U.S.C. 1836, and the state based versions of the Uniform Trade Secret Act (UTSA) drafted by the Uniform Law Commission, reverse engineering of a lawfully obtained product is expressly recognized as a “proper means” of acquiring information, unless prohibited by contract or other improper conduct. The Federal Circuit has emphasized, applying Fifth Circuit trade secret principles, that the public is free to discover and exploit trade secrets through reverse engineering once the embodiment is accessible, and that a trade secret becomes “accessible” when it could have been reverse engineered, not only when someone in fact does so. MS-OSRAM USA Inc. v. Renesas Electronics America, Inc., 133 F.4th 1337 (Fed. Cir. 2025).

Allowable conduct in the trade-secret context therefore includes:

Purchasing a competitor’s component, without any confidentiality restriction, and reverse engineering it to understand its design and operation.

Using information gleaned from such teardown to develop a competing product, provided the information is not subject to a duty of confidentiality and is obtained solely by proper means.

Not allowable is reverse engineering that breaches an independent duty—such as using confidential prototypes, samples, or documentation obtained under an NDA to reverse engineer or providing those prototypes to a third party for teardown in violation of the duty of confidentiality. In MS-OSRAM USA, the Federal Circuit affirmed liability where the defendant’s access to design information derived from a confidential business relationship rather than from lawfully acquired market products, treating the use of that information in competing products as misappropriation notwithstanding arguments that the same information could, in theory, have been reverse engineered from market products.

Contract, copyright, and chip‑specific regimes

As noted above in MS-OSRAM USA, contractual restrictions frequently determine whether reverse engineering is allowed. In fact, shrink‑wrap or click‑wrap licenses, NDAs, and supply agreements often prohibit decompilation or teardown, and both Federal Circuit and regional circuit decisions have enforced such provisions where they are consistent with federal policy. In the copyright sphere, the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 512, and fair‑use jurisprudence recognize limited privileges to reverse engineer software and digital systems to achieve interoperability, while treating circumvention of technological protection measures that goes beyond those narrow purposes as unlawful. Congress has separately carved out a regulated reverse‑engineering safe harbor for semiconductor mask works in the Semiconductor Chip Protection Act (SCPA), 17 U.S.C. §§ 901-914, which protects the physical layout of a semiconductor chip’s integrated circuit. Competitors can reverse-engineer and emulate a chip but cannot slavishly copy the chip. The SCPA attempts to balance protection for original layouts with innovation, and was added to the Copyright Act to protect the significant investment of what once was a highly labor intensive process to create useful articles.  

Practical Takeaways

For in‑house engineering and business teams, practical compliance means: (1) confine reverse engineering to lawfully purchased products, and (2) document the independence of design work resulting from what is learned. Consider separating the team that performs the reverse engineering analysis from the team that develops a new product or feature from the documented learning. But always check the resulting product against the relevant intellectual property as a final step. Scrupulously honor NDAs and license terms, and treat any move from “learning” from a competitor’s product to “replicating” as a moment to involve intellectual property counsel.
 

Cecily Anne O’Regan, a partner at Fishman Stewart, is based in Silicon Valley and Boston and has over thirty years of experience working with entrepreneurs and start-up companies developing patent portfolios that provide a sustainable competitive advantage. During her career she has worked on everything from surfboards to semiconductors. In addition to working as a patent attorney she also mentors young practitioners and entrepreneurs and has both taught in and guest lectured on IP related topics for several business schools. She currently hosts a small group IP Bootcamp webinar to help entrepreneurs meaningfully identify and protect their intellectual property. IP Bootcamp sign up is here. Her full bio is here.