The hospitality industry supports, boosts, and drives economic activities and growth in a big way. Building a brand name in hospitality takes time and immense effort as it is a highly competitive environment. A brand name allows a business to associate and continuously use this name in association with the products and/or services the business offers. A business in the hospitality industry, in particular, may establish a positive experience associated with its brand, allowing that brand name to be recognized as the place to go to obtain a positive service or a product in demand.
Branding is not only related to products and services but has also extended to specific destinations. Cities, regions, and even countries may rely on the Intellectual Property (IP) system to create a unique identity. Recent efforts to brand places, also known as ‘destination branding,’ are an example of efforts by cities or regions to create a distinctive appeal that will resonate amongst visitors, and they have done so by relying on a trademark, whether under a registered logo or tagline. ‘I love NY,’ ‘Malaysia Truly Asia,’ ‘Kerala – God’s Own County,’ are some examples of Registered Trademarks in the hospitality industry that are specific to destinations.
Surviving in the highly competitive industry requires businesses to utilize and safeguard their IP assets such as trademarks, logos, trade secrets, copyrightable content, and even geographical indications with the help of proper statutory mechanisms for protection and enforcement.
Trademarks have become central to the modern marketing of goods and services, and the hospitality sector is no exception. Hotel and restaurant chains have their presence in several countries, hoping to operate or franchise continuously, and hence, expand their business. In a world where more and more people find themselves traveling for business or pleasure to unfamiliar areas, having a known trademark from a traveler’s home country can be a valuable selling point. In the hospitality context, such factors also can play a role through trade dress – for example, in the uniforms of hotel staff or the layout of a restaurant. A trademark is a word, phrase, sign, or logo that distinguishes goods and services of one business from another. If you register your trademark, you are the sole owner and have the right to stop others from using any mark that is the same or confusingly similar.
Restaurant/hotel names, a catchy slogan, or a logo could all be registered as trademarks – the more distinctive, the better. Avoiding names that are similar to already established larger brands is prudent. Similarly, naming your restaurant or hotel after a chef or founder, while it may seem unique, is also not always recommended because a person’s name is not considered distinctive.
Furthermore, the following can also be protected:
- A popular unique dish or cocktail name;
- The particular features of the décor such as a specially designed mural; or
- An individually created menu
If the business uses a logo as well as a name, then both should be separately registered. The name or logo should be used consistently, whether it is online, in print, or even on employee uniforms.
With the rise in social media usage, the value of food plating, trending hashtags, and online advertising campaigns has increased exponentially. Anything that shows intellectual creation, originality, and a minimum level of effort is capable of being protected by copyright. The business should always ensure it is the exclusive owner of the copyright in any works, branding, or campaigns created for it by any person or agency. The same should always be an explicit term in a contract. Menus, marketing materials, and business website names fall under Copyright Law, which protects original works of authorship, including literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software, and architecture.
Crucial to the success of many street food vans, bars, and microbreweries is the competitive advantage due to signature recipes, formulae, techniques, and processes. These should be protected as trade secrets. It 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 include confidentiality, non-disclosure, and non-competition clauses.
The business has to consider who owns the trade secret: the business or the individual chef/employee who created it? There is no predetermined legal ownership, so all contracts should clearly state who has the ownership.
When an inventor creates something new, he or she may apply for a patent on the invention. If, for instance, a restaurateur invents a new piece of kitchen equipment, he or she can obtain a patent on the same. A patent owner has the right to exclude any other person from making, using, or selling the invention covered by the patent anywhere in the countries where the patent is applied.
Geographical Indications (GIs)
Geographical indications (GIs) are signs that point to a specific geographical origin and possess qualities or a reputation that are due to that origin. These signs strengthen tourism in a specific geographic area, either under the region’s umbrella brand or independently.
A destination is also known for its various products that originate and are particular to a country or region and possess a certain reputation and quality under such geographical origin. A sign or a mark on these products specifying their origin is known as a Geographical Indication (GI). Geographical Indications and appellations, apart from facilitating business, attract tourists. Some instances of famous GIs are Bordeaux wine, Switzerland Gruyere cheese, Darjeeling tea, etc.
Licensing of IPRs
The owner of a trademark, copyright, or patent may, apart from using these rights to create name recognition or protect the competitive advantage from imitators, use these rights to create additional revenue streams by giving interested third parties the right to use these rights against a fee. This practice is known as the licensing of IPRs and is at the core of a substantial and growing practice in the hospitality sector.
Franchising is when an owner of a business gives another the right to run the same business model by applying the trademark and other relevant IP assets that are integral to that business. Usually, businesses that are franchised have a business model that lends itself to being replicated and has built a strong name recognition allowing the franchisees to have a head start while going into business for themselves.
Franchising is one of the fastest-growing practices and is of great relevance to the hospitality industry. Hotels, restaurants, and other services such as transport, cleaning, management are often franchised businesses. Many names in the hotel industry, such as Hilton, are franchised businesses.
Merchandising, which is also a specialized form of IP licensing, is when the owner of an IPR, generally a trademark, industrial design, or copyright, gives another the right to apply that mark, industrial design or copyright, usually on ordinary consumer goods, to enhance the appeal of those goods. Merchandising provides an avenue to the owner of the right to obtain additional revenue from his right. It gives the licensee the possibility of enhancing the value, and thus, the likelihood of the sale and higher price of his goods to gain more revenue and profits.
Best Practices for the Hospitality Industry
In today’s highly competitive market, coming up with a distinctive concept for a restaurant, hotel, or bar has never been more challenging. Safeguarding this concept should therefore be a priority for any good business. It is best achieved through understanding the IPRs, which apply to different aspects of a brand. Awareness of these rights will not only help protect the business from competitors but will also help to maximize the entity’s overall value and goodwill. Here are the best practices for protecting one’s IP in the hospitality industry:
Whether one is coming up with the basic idea for his or her business or creating a new restaurant menu, it is imperative to be as original and unique as possible. Creating a distinctive brand will not only help with general marketing but will also facilitate IP Protection and enable businesses to find the infringers easily. While coming up with new ideas, it is vital to consider how the new idea will fit into the market and conduct thorough research on competitors. For instance, if someone is beginning and thinking of a restaurant/hotel name, it should be ensured that there are no existing brands with the same or similar name that a customer might confuse it with. Case law has shown that when two businesses operate in distinct fields, IP Infringement is less likely. However, the best approach will always be to adopt a truly unique name.
- Recognizing the IPRs
Understanding whether you require a trademark, copyright patent, or trade secret protection depends on the needs of the business, and each of them protects distinct aspects of a brand. Similarly, it is imperative to be aware that certain IPRs exist automatically regardless of registration. For example, copyright ownership arises from the creation of any original artistic, musical, dramatic, or literary work. In the hospitality industry, copyright commonly attaches to logos and signage and may even extend to protect menus. Recipes may be protected as trade secrets. It should be defined early on who will own any trade secrets in recipes (i.e., the business or the chef), and agreements should be entered into accordingly.
- Registration of the IP
Some IPRs need to be registered to obtain maximum protection, trademarks being a key example. The registration of a trademark gives the proprietor an exclusive right to prevent the third parties from using the mark concerning the goods and services covered by the registration in the jurisdiction where the registration took place. In the hospitality industry, trademarks can exist in a variety of forms. A restaurant’s name and logo are typical examples; however, trademarks can also exist in a sufficiently unique dish name, for instance, Big Mac, Whopper, or even in the overall appearance of a restaurant, known as its ‘get up.’ Layouts of a restaurant can also be protected as trademarks or designs.
- Understanding the Contracts Needed
It is imperative to take legal advice from the start to ensure that the brand’s IPRs are protected contractually. In the case of copyright, the author or creator of the work is usually the first owner of any copyright in it. However, the position is different when the work is created by an employee in the course of employment, in which case, the employer will be the first owner of the copyright. Works can also be jointly owned if more than one party has contributed to the development of the brand. Therefore, a business needs to assess from the starting what IPRs might be involved and who will help in the creation of that IP so that proper documentation with ownership in the business’ name can be done. In the case of trade secrets, specific confidentiality clauses need to be included in contracts of employment. The use of non-disclosure agreements can also be useful.
- Being Ready to Enforce your IP
IP Infringement in the hospitality industry can take place in several ways, including Trademark Infringement, passing off, Copyright Infringement, Patent Infringement, etc. Proper monitoring with the help of IP experts will enable the brand to establish whether or not its rights have been infringed and the nature and extent of the infringement. Furthermore, it is vital to conduct proper risk management and decide on the apt level of resources to commit to counter IP infringement, if needed. In many cases, a cease and desist letter in itself is sufficient to stop the infringing activity. Litigation should always be a last resort but may be necessary to protect one’s unique brand in the hospitality industry, which is probably the most prone to copycats.