Protecting A Restaurant’s Intellectual Property (and More)

Protecting a restaurant’s intellectual property is about more than its trademarks and copyrights.The restaurant industry is in a state of transformation as it accesses technology and maintains connections with customers in exciting new ways. As a result, multidisciplinary threats to a restaurant brand’s reputation loom large.

Here are seven trends in the restaurant industry that should affect how a restaurateur thinks about brand protection.  (To read about trademark concerns for restaurants, click here. To read about legal issues with restaurant marketing content and restaurant loyalty programs, click here and here.)

Food is on the move. Delivery options, subscription models, and food trucks abound.

• Some cities, like Boston, have established formal guidance for creating food trucks. Consider regulatory impediments to being on the go.
• A restaurant’s trademark registration portfolio may need updating.  It may need registrations in new service areas.
• It is likely that the restaurateur will collaborate with vendors to move food out of the traditional kitchen. Consider the legal implications for the brand of such collaborations.

Technology is improving service. Beyond iPads for ordering, restaurants are embracing table tracking devices, facial recognition kiosks, and text message ordering services.

• A restaurant’s budget should include legal review of all vendor agreements.
• Data privacy issues and legal compliance should be high on the legal “to do” list.
• Trademark licenses should be in place to protect the brand.
• Individual and class action lawsuits are rampant claiming discrimination under the Americans with Disabilities Act. Restaurants need to stay in front of this issue. They should engage the latest technology for websites and apps.

“Virtual restaurants” are all the rage. These establishments are delivery-only kitchens with no dining room. They may service multiple brands at once. They often serve as a testing ground for experimental menus or new brand roll-outs.

• Owners should consider how they name these enterprises. It may be tempting to use descriptive names so that customers readily comprehend the brand channel. In the long run, however, those easily understood names may be difficult to protect as trademarks.
• A “virtual restaurant” may be able to expand its trademark portfolio into delivery services.
• If using a third party delivery service, the contract needs careful review for liability and data protection issues.

Retail and brand extensions may account for a significant share of revenues. From hats and t-shirts to tabletop items to branded food, restaurants are finding ways for customers to take their brand into the streets.

• So often, restaurants add in retail goods without clearing their trademarks for that kind of usage. Trademark vetting should precede such roll-outs.
• Similarly, new trademark registrations should accompany brand extensions to preserve the brand’s value.
• If the retail goods are part of a license agreement with a third party, that contract should be reviewed. The focus should be not only ameliorating short-term risk but creating long-term viability.

Instagram and influencers are key to restaurant success. There are few restaurants who are not active on social media today.

• Restaurants frequently align with influencers without a contract. In so doing, they leave themselves without a legal safety net.
• The restaurant should have social media guidelines in place for its influencer relationships to ensure compliance with the FTC Guidelines on Endorsements & Testimonials.
• It is tempting to re-gram a customer’s Instagram photos onto the restaurant’s feed. Before doing so, the social media team needs to understand the intellectual property and right of privacy/publicity risks associated with user-generated content.
• Restaurants often run Instagram photo contests. They need to take steps to avoid running illegal lotteries.

Menus are offering options tailored to customer values. Sustainable, organic, natural, and locally sourced are popular descriptors in todays’ environment.

• Restaurant marketers need to be aware of the FTC’s “Green Guides” and ensure their claims meet regulatory standards.
• Beware health claims about certain types of products (e.g. those infused with CBD; kambuccha; matcha).
• Watch out for specialized regulatory issues. Federal, state, and local laws may impact a restaurant’s ability to identify certain foods on its menu (e.g. seafood names, brand name alcohol, mushrooms, etc.).
• Craft beer presents its own set of intellectual property challenges. Who owns the trademark? The brewery or the restaurant commissioning the beer. Who owns the recipe? All ownership issues need to be worked out contractually.

Restaurants love to support charity. They may donate unused food to a food bank or donate a percentage of sales to a particular charity. Cause marketing is a popular technique for promoting sales.

• When a restaurant donates a percentage of sales to a charitable cause, it may become a co-venturer with the charity and have certain legal obligations under a wide variety of charitable solicitation laws.
• A restaurant’s charitable contribution campaign needs legal vetting.
• In some states, the restaurant may have to register and bond the promotion.
• New York’s Attorney General has put out guidelines that serve as best practices for advertising and marketing the promotion.

For more information about protecting a restaurant’s intellectual property and brand, contact Kyle-Beth Hilfer.