In today’s highly competitive market, coming up with a distinctive concept for a restaurant has never been more challenging. Protecting this concept should therefore be a priority for any discerning restaurateur. This is best achieved through understanding the intellectual property (IP) rights which attach to different aspects of your restaurant’s brand. Awareness of these rights will not only help safeguard your brand from competitors but will also help to maximise your restaurant’s value in general. Here are our top tips for protecting your restaurant’s IP:
1. Be distinctive
Whether you are coming up with the root idea for your business, or simply creating a new menu, try to be as original as you can. Creating a distinctive offer will not only help with general marketing but will also facilitate IP protection and enable you to spot copycat competitors a mile away. When you are brainstorming for new ideas make sure you consider how your new offer will fit into the market and conduct thorough research on competitors. For example, if you are starting out and thinking up your restaurant’s name make sure that there are no existing restaurants with the same or a sufficiently similar name that a customers might confuse it with. Case law has shown that when two businesses operate in sufficiently distinct fields IP infringement is less likely. However, the safest approach will always be to adopt a truly unique name.
2. Know the unregistered IP rights
It is important to be aware that certain intellectual property rights exist automatically regardless of registration. For example, copyright ownership arises on the creation of any original artistic, musical, dramatic or literary work. In the restaurant business, copyright commonly attaches to restaurant logos and signage, and may even stretch to protect menus. Recipes may be protected as trade secrets (information that provides an economic or competitive advantage to its owner by reasons of its secrecy). You should consider early on who will own any trade secrets in recipes (i.e. the business or the chef).
3. Register your trademark
Some IP rights need to be registered to obtain maximum protection, trademarks being a key example. A trademark is a sign or symbol used by a trader to distinguish its products or services from those of other traders. The more distinctive the mark, the easier it is for it to obtain trade mark protection. The registration of a trade mark gives the proprietor an exclusive right to prevent third parties from using the mark in relation to the goods and services covered by the registration, in the jurisdiction in which registration took place. In the hospitality industry, trademarks can exist in a variety of forms. A restaurant’s name and logo are typical examples, but trademarks can also exist in a sufficiently unique dish name (e.g. the Big Mac) or even in the overall appearance of a restaurant (known as its ‘get up’).
4. Understand the contracts you need
It is important to take legal advice from the outset to ensure that your restaurant’s IP rights are safeguarded contractually. A good example is in respect of copyright, where the author or creator of the work is usually the first owner of any copyright in it. However, the position is different where the work is created by an employee in the course of employment, in which case the employer will be the first owner of the copyright. Works can also be jointly owned if more than one party has contributed to the development of the brand. As such, you need to assess from the outset what IP rights might be engaged, and who will take a hand in their creation, in order to put in place the correct documentation to ensure the ownership of the brand remains with you. When you engage third parties (e.g. a designer to create your restaurant’s logo) make sure, for example, that the contract contains an assignment of copyright.
Another example is in respect of trade secrets. Since the owner of a trade secret must take all reasonable steps to maintain its secrecy, you may wish to include specific confidentiality provisions in your chefs’ contracts of employment. Furthermore, any external recipients of the recipe should be notified of its status as a trade secret. The use of non-disclosure agreements can also be beneficial.
5. Be prepared to take action
Infringement of a restaurant’s IP could manifest itself in many forms, including trademark infringement, the common law tort of ‘passing off’, and breach of copyright. If you spot a copycat competitor who appears to be infringing your IP rights (whether accidentally or on purpose) the first step is to seek legal advice. This will enable you to establish whether your rights have been infringed, and the nature and extent of the infringement. Legal advice will enable you to conduct proper risk management and decide on the appropriate level of resources to commit to fight the IP infringement, if such a fight is needed. In many cases a pre-action letter may be sufficient to resolve the offending behaviour (though be aware of the potential consequences of sending such a letter, especially in relation to trade mark disputes). Litigation should always be a last resort, but may be necessary (ultimately) to protect your restaurant’s brand.
Deborah Rider is a partner at Goodman Derrick LLP