Food for thought: intellectual property rights in the hospitality industry
With a number of household chains in financial difficulty in recent months, the restaurant industry has seen a surge in the opening of independent eateries, event catering, specialist drinks producers and street food pop-ups.
During the initial phases of setting up a hospitality business intellectual property rights are developed which could add huge value to your business. Fundamental to a successful hospitality business is branding. It aids recognition, boosts sales and offers the possibility of expanding financial benefit.
But building an effective brand takes effort – most often financial.
We look at how IP rights are created and which are essential investments for new businesses cutting their teeth in the hospitality industry.
A trade mark is a word, phrase, sign or logo that distinguishes goods and services of one business from another. If you register your trade mark, you are the sole owner and have the right to stop others from using any mark that is the same or confusingly similar.
Not everything in your brand is necessarily registrable as a trade mark. For example, if you are operating a themed restaurant it may not be possible to register the theme as a whole as a trade mark, but you may still want to prevent others from replicating the same theme for their restaurant. In this case you would have the right to prevent use of a mark that could be seen by customers as associated to your business by bringing a claim for passing off.
Why waste costs registering a trade mark if you can bring a claim for passing off?
It is much more difficult to enforce unregistered trade marks. You have to show you own the mark or branding in question, it has built up a reputation and your business has suffered loss by the other company’s use of it. In practice this is often difficult and costly to establish.
Registering trade marks early on offers young businesses significant benefits. The brand is protected throughout the UK. It is quicker and less costly to enforce. And you can licence or sell a trade mark just like any other business asset, creating value for your business.
If you intend to set up a franchising network, a registered trade mark is essential.
What to register as a trade mark
Restaurant names, a catchy slogan or a logo could all be registered as trade marks – the more distinctive the better. As the Nando’s/Fernando’s saga proves, avoiding names that are reminiscent of larger chains is prudent. At the other end of the spectrum, naming your restaurant after a chef or founder, whilst it may seem unique, would also not be recommended because a person’s name is not considered distinctive.
You could also protect:
- a popular unique dish or cocktail name;
- particular features of the décor such as a specially designed mural; or
- an individually created menu.
If your branding uses a logo as well as a name both should be separately registered. You should use the registered name or logo consistently, whether it is online, on your menu or on your waitstaff uniform.
With the rise in social media, the value of ‘instagrammable’ plating, trending hashtags and online advertising campaigns has increased exponentially.
Anything which shows intellectual creation, originality and a minimum level of effort to produce is capable of being protected by copyright.
What falls under the protection of copyright?
The work must fall within one of the categories in section 1(1) of the Copyright, Designs and Patents Act 1988, which, broadly, include:
- literary, dramatic, musical and artistic work, including illustrations, graphics, sculptures, collages and photography;
- software, web content and databases; or
- film, television recordings and broadcasts.
The copyright owner
The author is the first owner of copyright. If, for example, you have commissioned graffiti artwork for your wall, the copyright rests with the artist not the restaurant, despite you having paid for it. You should always ensure you are the exclusive owner of the copyright in any works, branding or campaigns created for you by any person or agency. This should always be an explicit term.
The exception to this is where the work is created by an employee in the course of their employment, in which case the employer owns the resulting creative work. Where possible, this should be made clear in any employment terms.
Crucial to the success of many street food vans, pop-up bars and microbreweries is the competitive advantage afforded by signature recipes, formulae, techniques and processes. These should be protected as trade secrets.
This means they are not published and therefore unregistered. Only the minimum necessary number of people should know the recipe or process from start to finish and their employment contract terms should included confidentiality, non-disclosure and non-competition clauses.
You will need to consider who owns the trade secret: the business or the individual chef who created it? There is no predetermined legal ownership so all contracts should clearly state who has ownership.
Setting up a solid foundation of IP rights now is worth the investment. Not only do you add longer-term value to your business but you avoid crying over spilt milk later down the line.
Please do give us a call to see how we can help your business on 020 7438 1060.