Home » Trade Marks » Restaurants, Bars, Hospitality Businesses and Trademarks – Top Tips

Restaurants, Bars, Hospitality Businesses and Trademarks – Top Tips

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menuIPcopy is pleased to welcome guest contributor Stacey C. Friends, Partner at Boston firm Ruberto Israel Weiner, who provides useful tips on trade mark protection for restaurant names and hospitality businesses in general, based on her extensive experience in advising individual restaurants as well as small, medium and large restaurant chains in the USA.  The article is reproduced with the kind permission of the author. Keltie’s Manuela Macchi has added comments drawing a parallel with the UK and EU.

Retail, food and hospitality businesses often have more problematic trademark issues than other types of businesses due to their territorial nature. While software, consumer goods and many other businesses immediately function in interstate or international commerce, many restaurants, hotels, or retail stores start out doing business in one geographic location. Sometimes the business plan includes a strategy to expand or franchise, or perhaps the location of the business (e.g. a hotel in downtown Boston) naturally lends itself to national and international travelers and publicity.

Whatever the initial plans or situation, in order to avoid problems with the trademark down the road and also to create the most value in the trademark and the business, the mark should be chosen as if one were going to expand or be well-known nationwide.  Unfortunately many companies choose a name, start the business, and then years later decide to expand or try to officially protect their mark by registering it, only to find out that their mark is in use somewhere else – sometimes by senior users, sometimes by innocent junior users, sometimes by copycats. 

This is especially tricky in the U.S. which bases its trademark rights on actual use in commerce, not necessarily registration.  Following are some tips to follow when choosing and using a new mark, or how to make the best out of a mark you are already using and do not want to change.

[MM: In the EU and in the UK the general rule is that whoever files for registration of a mark first has priority over later marks. However, in the UK significant use of a mark can also generate trade mark rights that cannot be overriden by, and in fact can form the bsis for a challenge to, a later registration. These rights can also have mere local scope and this may be particularly relevant for individual restaurants or small chains. The EU situation is more complex as there are some Countries that recognise trade mark rights based on use and some that do not or that do only if the mark has achieved a status of notoriety. Therefore, checking the legal position in each EU Member State before embarking on a EU-wide franchise operation for a hospiality business is very important.]

  1. Clear Your Mark.  Ideally, before using a mark, one should choose a few names, perform a search on them all, and then choose one based on distinctiveness and availability.   Searching can be done in-house or through your trademark attorney.  A professional search report can also be ordered from a service provider specializing in this area.  If you are already using a mark and are wedded to it, you should still go through the search process to determine what your options are with regard to expanding or registering your mark.  Be aware that it can be considered bad faith to start using or expand your use of a mark that you know or should have known is in use by another, particularly if the other business started using the mark first.
  2. Think Globally (or at least nationally or regionally!).  When searching, do not discount a reference to an establishment with a similar name that happens to be far away.  You may think you will never open up a restaurant in San Francisco or Houston or expand your retail chain to Asia, but you never know. [MM: when thinking nationally in a EU Member State, remember that Community Trade Mark (‘CTM’) Registrations cover the whole of the EU and the registered trade mark of restaurant with premises in London and Paris only, could be an obstacle to the use of a mark in Italy or Germany if the registration is a CTM even if you have no intention of trading in the UK or France.]
  3. Strategize Regarding Other Users.  What if the search report shows someone else is using the mark?  If you have not yet committed to the mark, then you may want to use one of your other choices.  If, however, the senior use is one restaurant or shop in Minnesota and you do not realistically think you will ever want to do business in Minnesota, then you may decide to go ahead.  If you are already using your mark, you should next try to find out if the other uses are senior or junior to yours.  You may be able to figure this out with some general internet research, or you may need to hire a trademark investigator.  Once you have this information, you can then decide how much of a risk these other users present based on their date of first use, the extent of their use, the location of their use, and other factors.  [MM: in a similar situation in the UK, it will be relevant to find out whether the earlier mark has been used to a sufficient extent to have built up enforceable trade mark rights. From a EU perspective, it will be necessary to establish the level of recognition of trade mark rights based on use in the EU Member State of interest.]
  4. Register Early.  As stated above, trademark rights in the U.S. are gained through actual use of the mark (the first user, or “senior” user, wins), and so a registration with the USPTO is not absolutely necessary.  However, if you do register, you will have gained several key benefits.  First, you will automatically have nationwide rights.  Therefore, provided you are the first user of the mark, you will not have to worry about clearing the mark in other states or regions.  Your mark will also appear in the USPTO database, which is used by every trademark lawyer in the world to help clients clear their marks and is therefore an excellent “notice” system to keep others away.   If you found other similar marks in your search, it will be tricky to register but not impossible depending on the circumstances.  [MM: for the EU, our tip would be “be the first to register!”]
  5. Keep Your Eyes and Ears Open.  Once you have chosen a mark, you will have to enforce it, whether you register the mark or not.  Enroll in a trademark watch service or have someone in your organization periodically check the USPTO and internet for any possible infringers.  Depending on the situation, you may need to do further research, send possible infringers a letter or take other action.  Enforcement often creates a quandary for single restaurant owners and other smaller businesses who want to have exclusive rights and protect their mark but do not have the budget for enforcement.  This is why we often see a fair amount of coexistence of the same or similar restaurant names in different territories.
  6. Coexist.  Depending on the location of the other user, the type of use and other factors, you may be able to coexist without causing consumer confusion.  In many countries, including the U.S., coexistence agreements and consents can be used under certain circumstances to enable registration of a similar mark as well.

[MM: A final comment: it is not uncommon for the names of famous restaurants or hotels in a particular location to be adopted by third party establishments in another Country. However, being in a different territory does not guarantee that the “original” establishment will have no course of action against the third party. Famous trade marks are protected in most jurisdictions without a requirement for use or registration of the name as a trade mark in that jurisdiction and a course of action might also be offered in certain circumstances under “bad faith” provisions.]

Stacey C. Friends 7 November 2013

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