Protect your restaurant’s intellectual property

What if I told you that the most valuable piece of your restaurant wasn’t the dollars and cents that flow inward from customer transactions? You certainly take the appropriate precautionary measures to safeguard the money inside your restaurant, but why leave “the safe open” when it comes to arguably your most valuable asset? Of course, we’re talking about your restaurant’s intellectual property!

What is intellectual property? Webster’s defines intellectual property as an idea, invention, or process, that derives from the work of the mind or intellect. In other words, it’s the property that you create as your own that takes shape through various forms such as trademarks, copyrights, trade dress and trade secrets.

In a restaurant setting, this translates to the unique names of both your restaurant and its menu items, the unique design of your website and the menu itself, the unique “look and feel” to both the inside and outside of your restaurant, as well as your unique recipes.

Not everything listed above is automatically intellectual property. As an example, the name of your restaurant, or even its menu items, can become a federally registered trademark by submitting an application through the U.S. Patent and Trademark Office (USPTO). The value in obtaining a trademark for the name of your restaurant is that if you succeed in registering the name, then future restaurants are prevented from using that same name for a restaurant elsewhere in the United States.

Let’s take McDonald’s as an example. In 1961, McDonald’s applied for the trademark McDonald’s within the specific class for “restaurant services.” By 1963, they received the trademark for “McDonald’s. Not only did that end up being a good business decision for McDonald’s as they continued to grow and that asset appreciated in value, but it also served to protect their brand by preventing others from using that same name.

You don’t need to be McDonald’s to register your restaurant’s name, or perhaps an item from its menu. Take local favorite Flannigan’s as another example. Not only does Flannigan’s have a trademark on their restaurant name, but they also went ahead and registered the menu item “Joe’s Rockin’ Rib Rolls” for their delicious egg roll/baby back rib concoction. The value there is to solidify that there’s truly only one place in the United States with “Joe’s Rockin’ Rib Rolls” on the menu, and that’s at Flannigan’s!

Whether it makes sense to register the name of your restaurant, or an item from your menu, depends on various factors, including your budget. Arguably however, perhaps the name of your restaurant, or the name of a menu item are not the most valuable pieces of your restaurant’s intellectual property to protect.

Think about it, guests flock to your restaurant for your great and unique food. There’s only one place to get Joe’s world-famous key lime pie and that’s at Joe’s Stone Crab. But what if their secret recipe for key lime pie was no longer secret? What I am describing here is the importance of safeguarding and maintaining your restaurant’s trade secrets.

Coca Cola’s formula for Coke is considered a trade secret. If Coca Cola didn’t keep their recipe a secret, then anyone could produce it. Legend has it that Coca Cola keeps their recipe for Coke separated and locked up in various safes.

So what can you do to protect your restaurant’s intellectual property? Here are a few quick tips:

▪ Run a quick “TESS” search on the USPTO website to see if someone already has the name registered.

▪ Trademarks can be complicated, so definitely consult with an attorney on whether applying for one makes sense for you.

▪ Keep your recipes secret! Knowing it’s impractical to keep recipes secret from your own employees, think about having them sign nondisclosure agreements.

▪ Always be cognizant of the potential value that your restaurant possesses from an intellectual property perspective, as it can have a significant commercial impact on its long-term success.

Corporate and transactional attorney Andrew Cromer is a partner with AXS Law Group in Wynwood. He was formerly Associate General Counsel for Shake Shack in NYC. He may be reached at: andrew@axslawgroup.com.