Intellectual PropertyDo you cook? I.P. in the Kitchen

In Nigeria, dining out has become a very popular form of leisure and entertainment, generating an estimated N250 billion(two hundred and fifty billion Naira) in 2011.

However, dining out represents only one aspect of the modern food economy; cooking and dining are regularly featured in newspapers, TV programmes and magazines, while celebrity chefs tout their own brands in other countries, in Nigeria celebrities’ are casted as chefs touting popular brands on television.

Eating has been transformed from routine activity into big business. Increasing competition for the attention and money of restaurant patrons and fast food lovers has prompted chefs of grande cuisine and owners of fast foods to differentiate their menus by creating unique dishes with innovative names that remain largely unprotected.

The time and labour that chefs invest into this form of innovation represents a substantial investment, and very few have turned to the law to protect their original dishes from competing chefs.

Yet, in Nigeria copyright law fails to protect chefs’ recipes from copycats.  Historically, the law has viewed recipes as uncopyrightable subject matter because of their “functional” and “utilitarian” nature.

More interestingly restaurant owners and fast food owners have not been very eager to protect the intellectual property inherent in their recipes and their shops as a whole.

Reasons for protecting Intellectual property in your Restaurant

In Nigeria many restaurant operators often neglect their intellectual property and its legal power and potential to develop their unique images, fend off competition and maximise profits by commercializing their intellectual property and extending their brand identity.

Key intellectual property in Restaurants and practical steps to protect them

There are a plethora of intellectual property assets that are worthy of legal protection namely Copyright, Patent, Industrial Design and Trademark and restaurants can and should use them to strengthen the value of their brands by the possibility of licensing, franchising and merchandising amongst other options.

Distinctive Names

The first ingredient in any great restaurant is a good name. It should be registered as a trademark. A trademark is usually a word, your name; but it can also be a logo, an email address(folawusu@yahoo.com, a tag line “Just do it”. Whether registered or not, a name is a valuable asset that can be protected under the tort of passing off. In choosing a name, it is wise to consider a name that is distinctive. In Nigeria single location, owner-operated restaurants often bear the name of their founder or chef. But to name a restaurant SEUN’S, for example, is to create something that would be virtually impossible to protect, it is advisable to come up with a creative name.

A strong trademark is virtually mandatory for restaurants and other members of the fast food industry. A local restaurant should, like any prudent business man at a minimum, conduct a comprehensive name/trademark search in order to avoid choosing a name similar to any known competitor or similar business. Geographical indicators can be used to name restaurants as can be seen in “AMALA SHITTA”, “OBALENDE SUYA” “SONOLA AMALA”

Menus

Instead of using generic descriptions like “ofada rice” or “Agege Bread”, restaurateurs or fast food owners can choose signature names for their dishes. These special names can then be protected as trademarks and can be used to build value for the owner through licensing, franchising and merchandising etc. In addition, a menu that is an original creation, combining photographs, illustrations, images, and descriptions of the wonderful and unique Nigerian dishes, is protectable under copyright law In Nigeria.

Recipes

Often recipes are protectable trade secrets. A “trade secret” is defined as any product, operating formula, pattern, device or other compilation of information which is used in a business, which gets its economic value from being kept secret, and gives the business a competitive advantage. They can be protected in the following ways; Identify your company’s trade secrets, Develop and codify a trade secret protection policy for your company, limit disclosures of trade secrets and other confidential information only on a “need to know” basis to chefs and managers, require appropriate parties to sign written confidentiality or non-disclosure agreements, require appropriate parties to sign non-competition and non-solicitation agreements and require appropriate parties to assign rights to the business with respect to inventions and work-product arising in the course of their relationship with the business.

However there are at least two schools of thought as regards trade secrets. The first school of thought states that ideas are ten Naira a dozen; so they want to share their innovations and don’t want to try to keep things for themselves, they just execute better and get to the market place quicker, or the second school of thought which believes that you should treat your stuff as proprietary, and use available legal means to protect it: e.g., nondisclosure agreement; employment agreements; and generally limit access to information.

The right approach will depend on a lot of factors, but having an approach that is well-considered and that you can clearly express and codify will help with maximizing returns on your trade secrets.

Use of Take away products as a Brand Extension

Nigerian restaurants can begin to package and sell signature products outside their business premises such as take away packs, ingredients, bottled water, t-shirts, face caps, cooking aprons, gloves and dish ware.

The restaurant’s furnishing and layout

In this writers opinion, restaurant décor and layout as with all ideas and concepts can be protected under industrial designs provided they are distinctive. Blue tablecloths and blue wash hand basins for an Ibadan-themed Amala restaurant will probably not be protected. Nigerian restaurants can go ahead to post signs stating that no photography is permitted on their premises, however in a social media-driven world, this may be illusory and very difficult to enforce.

Websites and Social Media: Connecting with Customers

There is a need to ensure that company websites (internal and external) do not contain information which you want to be able to classify as a trade secret or confidential or proprietary. Websites need to be reviewed regularly to ensure such information is not placed at risk.  Restaurant owners must address what information employees can discuss or post on blogs, and prohibit the disclosure of confidential information and trade secrets.  It might be prudent to monitor blogging activity frequently, and take steps to prohibit or stop trade secret disclosures.

Consequences of Failing to Register Trademark/other Intellectual property

The absence of trademark registration may limit your expansion into new territories. Trademarks are tied to a geographical location; without a registration, your rights may be limited and you can get boxed in if a third-party registers the same name you use.

In addition it also means you have no obvious asset. You may have trademark rights based on prior use (at common law), but banks and other financial institutions are more likely to reckon with trademark registration as a tangible evidence of an intangible asset.

If you want to franchise your business model, not having a trademark registration is a significant risk and your franchisee may just go ahead and register your trademark in their own name and then go ahead to rail road you out of the market.

Building Brand Value with Intellectual Property Registration and Enforcement Strategies

In June 2007, Rebecca Charles, chef-owner of Pearl Oyster Bar (“Pearl”) in New York City’s Greenwich Village, sued her former sous chef, Ed McFarland, now chef and part owner of Ed’s Lobster Bar in New York’s SoHo neighborhood. In her complaint, Charles alleged that McFarland had pirated Pearl’s menu, recipes, dish presentations, décor, “look and feel,” all of which Charles believed amounted to a flagrant misappropriation of both her and Pearl’s intellectual property. The detail that reportedly irritated Charles most was a dish on McFarland’s menu called “Ed’s Caesar.”

According to Charles, McFarland had copied her own Caesar salad recipe, made with English muffin croutons and a coddled egg dressing, which Charles maintained was a signature dish at Pearl.

The culinary and restaurant industries billed Charles’s suit, which settled out of court on undisclosed terms in April 2008,as among the first of its kind. Chefs and restaurateurs had invoked intellectual property concepts to defend particular aspects of their restaurants, but most had stopped short of filing suits, and few had attempted to argue intellectual property theft in such totality. While Charles maintained that her case was about protecting her restaurant as a whole and not about laying claim to a type of food, her lawsuit sparked fierce debate in the culinary world, particularly with regard to intellectual property rights and cuisine itself.

Intellectual Property Registration is tangible evidence of an intangible asset. It is proof that the goodwill exists. Anytime you make an intangible asset, like goodwill and trademark rights, concrete it helps people understand the value.

Registering your intellectual property is not going to automatically prevent others from encroaching on your territory. Intellectual Property owners are obligated to protect their own right using governmental apparatus and applicable laws, well that is part of the reason you pay taxes.

Part of any good Intellectual Property protection strategy should include some budget to properly commercialize their IP in other to maximise profit and a willingness to fight any IP infringers.

            Conclusion

Simply owning intellectual property rights does not generate money.
To produce income the owners of these rights must exploit them financially through various types of commercial agreements including but not limited to licensing arrangements and/or
assignments of rights.
In a sense, all of these commercial agreements are an attempt to turn intellectual property into intellectual capital that will then increase your cash flow

Megathos Law Practice copyright © 2012