Trademark Concerns for Restaurants

As restaurants turn increasingly to social media to lure in patrons, their legal exposure increases. On March 19, 2019, Kyle-Beth Hilfer will present at the New York County Lawyers Association’s CLE entitled “NYC Restaurant Law: Are You Ready for Business?” She will discuss best practices for protecting the restaurant’s intellectual property and promoting the brand lawfully. Below is a preview of her discussion on the most pressing concerns relating to restaurant trademarks. (To read about legal issues with restaurant marketing content and restaurant loyalty programs, click here and here.)

Does Your Restaurant Trademark Infringe on Someone Else’s?

Restaurants may find themselves in receipt of a cease and desist letter from a pre-existing trademark owner if they have not properly cleared their trademarks. A Google search is insufficient for this purpose. Similarly, looking for direct hits at the United States Patent & Trademark Office does not fully clear the trademark. A proper search will not just focus on identical marks. Instead, it will also allow an evaluation of any marks where  a likelihood of confusion may exist.

In one California case, Noodles Raw Catering LLC v. Saison Group LLC. (N.D.Cal. 3:15-cv-00316), a restaurant named Chubby Noodle sued another named Fat Noodle, asserting that the defendant purposefully adopted a confusingly similar logo and name in an effort to misappropriate and infringe the plaintiff’s prior rights and well-publicized goodwill. The plaintiff claimed that Fat Noodle’s actions constituted common law trademark infringement, false designation of origin, cybersquatting, and unfair competition. They sought a permanent injunction, treble damages and attorney’s fees. To avoid this kind of legal tangle, hospitality businesses should adopt strong, valid trademarks that have been properly vetted.  Restaurateurs who rely on outside agencies to create their trademarks may not realize that these agencies have not properly vetted their recommendations.

The USPTO may also consider whether your proposed restaurant trademark creates a likelihood of confusion with already registered food marks. This inquiry is highly fact-dependent. In addition, as restaurants expand from bricks and mortar services to also sell their packaged products or logo items through other trade channels, the likelihood of confusion may increase. Similarly, with the explosion of celebrity chefs marketing their services through the sale a variety of goods, a restaurant owner may face increasing obstacles to use and/or registration of a trademark solely for restaurant services.

Is Your Restaurant Trademark Too Descriptive or Misclassified?

In addition, restaurateurs all too often select names for their businesses that are generic or descriptive. They may call themselves a burger or Thai restaurant, for example. As a result, they often end up with a business name that is not protectable as a legal trademark. In so doing, they deny themselves of a valuable business asset. They also fail to distinguish themselves in the marketplace. The USPTO commonly denies registration of restaurant services’ trademarks because they are “merely descriptive.” A second reason for denial is that restaurateurs often confuse service marks and trademarks. Trademark counsel can help you determine if your menu items’ names also identify services.

Does Your Restaurant Trademark Contain Advertising Claims?

Your restaurant’s trademarks may constitute advertising claims. On February 6, 2019, a California District Court ruled that Smashburger’s “Triple Double” burger name was “literally false” and constituted false advertising. Smashburger had defended the “double the beef” product description, saying the product had double the layers rather than weight. In reality, the burger consisted of two burgers, each half the weight of the Classic Smashburger. This case is a cautionary tale about menu item names and other restaurant trademarks. It is important to clear all restaurant trademarks as potential advertising claims. If there are any express or implied advertising claims, the restaurant should make sure it has the necessary legal substantiation. (As of the date of this writing, there is also a class action lawsuit pending as a result of alleged consumer deception resulting from the product name.)

Restaurant Trademark Practice Tips:

• Develop a vetting process for all new trademarks, including slogans, hashtags that represent your business, and product names. Legal counsel can help you determine the level of search and protection needed for each trademark.
• Some hospitality businesses also package and sell signature products such as microbrews, preserves, condiments, t-shirts, cooking aprons, dishware, ashtrays, bedding, etc. Operators engaging in this kind of brand extension should seek trademark protection in an expanded class of goods, particularly if their customers are not purely local.
• Consider if your restaurant has a distinctive look. It may be worthy of trademark protection or trade dress protection. Plan proactively and collaboratively with your legal counsel and design team.
• Remember to clear your menu item names and other trademarks to ensure they do not contain unsubstantiated advertising claims. Such trademarks could leave you open for legal challenge from a competitor or a regulator.

To read about 9 common legal problems associated with restaurant marketing, click here.