Intellectual Property Question Moves to the Courts

[slkinsey]

We've had a number of threads here on restaurants, recipes, cuisine and intellectual property rights. Here is a representative example.

Now, it appears that someone is going to test intellectual property law as it relates to restaurants and cuisine. Pete Wells in the New York Times tells us that Rebecca Charles or Pearl Oyster Bar is going to sue Ed McFarland for copying her restaurant in creating his "knock-off" restaurant, Ed's Lobster Bar.

The suit, which seeks unspecified financial damages from Mr. McFarland and the restaurant itself, charges that Ed’s Lobster Bar copies “each and every element” of Pearl Oyster Bar, including the white marble bar, the gray paint on the wainscoting, the chairs and bar stools with their wheat-straw backs, the packets of oyster crackers placed at each table setting and the dressing on the Caesar salad.

Mr. McFarland would not comment on the complaint, saying that he had not seen it yet. But he said that Ed’s Lobster Bar, which opened in March, was no imitator.

“I would say it’s a similar restaurant,” he said, “I would not say it’s a copy.”

Lawyers for Ms. Charles, 53, said that what Ed’s Lobster Bar had done amounted to theft of her intellectual property — the kind of claim more often seen in publishing and entertainment, or among giant restaurant chains protecting their brand.

In recent years, a handful of chefs and restaurateurs have invoked intellectual property concepts, including trademarks, patents and trade dress — the distinctive look and feel of a business — to defend their restaurants, their techniques and even their recipes, but most have stopped short of a courtroom.

If this suit moves forward, it will be very interesting to see how the courts view this kind of intellectual property.

[Nathan]

well...I am a lawyer..but I don't practice in IP. I did take a couple classes in it.

the following does not constitute legal advice or establish any sort of attorney/client relationship.

assuming, arguendo, that Ed did "copy" Rebecca...the extent of such imitation will be the question. (combined with the degree of originality expressed in the original restaurant.)

Balthazar may be imitated all over the city...but it itself is intended to be a reasonable facsimile of a generic "Parisian bistro"...

on the other hand, if I opened a "Nathan's" that imitated the entirety of a McDonald's franchise right down to the menu and color scheme....I'd be worried.

other considerations: the possibility of confusion in the mind of consumers...might people reasonably think that Ed's is a franchise of Pearl?

so, I'm not certain that this opens up a new area....I would think that the same considerations apply as they do in other commercial areas where "look and feel" are considered.

as for what the courts will rule...I don't have the foggiest clue (I haven't eaten at either restaurant or read their filings)....but I'd put down a reasonable amount of money that they won't rule at all. It will end the same way as 99.5% of commercial litigations....an out of court settlement.

Edited June 27, 2007 by Nathan (log)

[slkinsey]

A few answers to Nathan's points:

- Pearl Oyster Bar is, to a certain extent, an "upscale NYC take" on New England beachside cookery. She's making lobster rolls and fried clams.

- Anyone who would confuse Ed's Lobster Bar with Pearl Oyster Bar would also confuse, say, Wolfgang's with Smith & Wollensky.

- As the article points out, there are already several other Pearl Oyster Bar knockoffs (e.g., Mary's Fish Camp).

[phaelon56]

I'm not sure what percentage of a restaurant's menu and/or decor has to be a copy to constitute actual infringement but a situation like this actually occurred here in Syracuse some years ago.

The infringers - local group who had once owned a number of TJ's Big Boy franchises locally and then moved on to other more upscale ventures, decided to hop on board with the casual moderately priced steak house trend of the early 1990's. They allegedly visited some Bugaboo Creek Steakhouse locations and then opened a local independent operation called Yukon River Grill. Everything from specific decor, overall interior architectural style, menu and service style were all exact copies.

Bugaboo Creek corporate got wind of it... came to visit... and (supposedly) threatened legal action. The local guys backed down quickly and made enough changes so that legal action was avoided. I don't know if they would have won in court or not but it was undoubtedly cheaper to just accommodate rather than face huge legal bills.

The long term problem was simply that their food wasn't all that good. Outback opened a block away from them in a more accessible location about 6 or 7 years later and Yukon's business gradually fell off for the next several years until they closed. One would think that producing better food than Outback at a similar price point wouldn't be a huge challenge but i think they'd already made their money and didn't care. The same owners had operated a seafood restaurant in the Yukon location for a number of years prior and did very well until seafood prices went through the roof (before the days of farmed seafood).

Now they operate three "sports bar restaurants" featuring almost exclusively fried and microwaved foods from Sysco's lowest end line. And they are hugely successful - their places are packed regularly.

edited to add:

chairs and bar stools with their wheat-straw backs, the packets of oyster crackers placed at each table setting and the dressing on the Caesar salad.

Wow - I've never seen stuff like that in any other restaurant (NOT!). I doubt that such a lawsuit stands a chance but it's all about who can afford more, bigger or better lawyers. And int he end it will be the location, food quality and notoriously fickle taste of the dining public that determines who really wins.

[Nathan]

A few answers to Nathan's points:

- Pearl Oyster Bar is, to a certain extent, an "upscale NYC take" on New England beachside cookery.  She's making lobster rolls and fried clams.

- Anyone who would confuse Ed's Lobster Bar with Pearl Oyster Bar would also confuse, say, Wolfgang's with Smith & Wollensky.

- As the article points out, there are already several other Pearl Oyster Bar knockoffs (e.g., Mary's Fish Camp).

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I imagine that Ed's attorney will be making exactly these points then.

(a reasonable speculation is that this lawsuit is the result of negotiations breaking down. you'll see them resume...a court will usually push something of this nature toward compromise)

[FabulousFoodBabe]

Maybe I'm missing something, but who is paying these attorneys? How can a Pearl Oyster Bar have enough disposable cash to pay for such a suit, and how much could you expect to get if you win against an Ed's?

Edited June 27, 2007 by FabulousFoodBabe (log)

[Nathan]

Maybe I'm missing something, but who is paying these attorneys?  How can a Pearl Oyster Bar have enough disposable cash to pay for such a suit, and how much could you expect to get if you win against an Ed's?

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suits like these are usually primarily about forcing the defendant to change his/her business practices...and secondarily about damages (lost profits and the like).

as for the legal fees...well, having a Complaint drafted may not be cheap but it's usually simply part of the cost of negotiations...if this dragged on through the entire litigation it could get every expensive for both parties...another reason why virtually all commercial legal matters settle.

put it this way: I wouldn't be flabbergasted to see the suit quietly dropped in a few months while a couple changes are made at Ed's.

[cdh]

This sort of thing is not unprecedented under trademark law. The famous Taco Cabana/Two Pesos case said that a distinctive trade dress is protectable... but that was a chain situation rather than a pair of one-off restaurants, so it could be distinguishable...

Will be interesting to see how they work it out.

[slkinsey]

Right. Something like immitating the distinctive viral logo and design of a big chain is one thing. That's easy to understand. You can't be like Cleo McDowell and say: "Look... me and the McDonald's people got this little misunderstanding. See, they're McDonald's... I'm McDowell's. They got the Golden Arches, mine is the Golden Arcs. They got the Big Mac, I got the Big Mick. We both got two all-beef patties, special sauce, lettuce, cheese, pickles and onions, but their buns have sesame seeds. My buns have no seeds."

This case seems a little less clear-cut to me. Like Nathan, I doubt it will go to trial. But it would be cool if it did. And I do think it's likely a matter of time before someone attempts to sue someone else for "copying" or "stealing" a recipe (which could include distinctive plating, etc.).

[Nathan]

This sort of thing is not unprecedented under trademark law.  The famous Taco Cabana/Two Pesos case said that a distinctive trade dress is protectable... but that was a chain situation rather than a pair of one-off restaurants, so it could be distinguishable... 

Will be interesting to see how they work it out.

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doubtful. they're in the same city.

[cdh]

Well, generally under trademark law, rights accrue in production and distribution (to end consumers) of goods and services. Trademarks are, fundamentally and historically, about preventing market confusion as to the source of goods and services.

In a franchise case, like Two Pesos, there is the overarching entity, the franchisor, who is the source of the comestible goods and services offered at each outlet. In a sense each outlet is a service offered by the franchisor. So when Two Pesos dressed up the interior of some of its franchises to look just like the interior of a Taco Cabana, it was creating potential consumer confusion as to who the ultimate franchisor was, and could do damage to the reputation of the wrong entity if executed badly.

In the NYC case, there is little likelihood of market confusion based on the trade dress of the two fish shacks. They have distinct names and locations, moreover, and more importantly, there is only one of each of them. It is a whole different scenario than in a case of look-alike chains upon which the precedent being invoked is based..

Edited June 27, 2007 by cdh (log)

[cdh]

It should also be noted that this flap has nothing at all to do with the controversial (and IMHO bad) idea of chefs having a copyright interest in the dishes that they create and serve.

[markabauman]

I can't comment on the legal questions involved in this case, but what about the moral/ethical issues of copy-catting one's restaurant design/menu/dishes? Is it a sincere form of flattery or stealing? I've been in restaurants where I've recognized some dishes, then learned the new chef used to be a sous chef at the restaurant where I first had such dishes. Haven't had the opportunity to ask the original chef/owner how they felt about their dishes/recipes being appropriated as such. Could set some precedents. Certainly Pearl doesn't need the PR.

[Kent D]

Well, I hate to even bring this example up, in a forum dedicated to fine cuisine, but the gentleman who brought this country both Casa Bonita as well as the Taco Bueno fast-food chain sold his interest in both years ago, and has now opened in Tulsa, Oklahoma, in the location of a closed Casa Bonita, a restaurant called Casa Viva that not only uses then same style of extravagant faux-Mexican-village decor, but features the same "all-you-can-eat" plastic Mexican food dinner, the same "raise the flag to get the waitress" flags, and sopapillas. Maybe it's just not worth the effort to sue him, or perhaps he has permission to rip off his own original concept, but I would think that the citizens of Tulsa who ate at Casa Bonita for 35 years would be familiar and comfortable with the Casa Viva replacement restaurant.

[Darcie B]

Well, I hate to even bring this example up, in a forum dedicated to fine cuisine, but the gentleman who brought this country both Casa Bonita as well as the Taco Bueno fast-food chain sold his interest in both years ago, and has now opened in Tulsa, Oklahoma, in the location of a closed Casa Bonita, a restaurant called Casa Viva that not only uses then same style of extravagant faux-Mexican-village decor, but features the same "all-you-can-eat" plastic Mexican food dinner, the same "raise the flag to get the waitress" flags, and sopapillas. Maybe it's just not worth the effort to sue him, or perhaps he has permission to rip off his own original concept, but I would think that the citizens of Tulsa who ate at Casa Bonita for 35 years would be familiar and comfortable with the Casa Viva replacement restaurant.

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Perhaps it is because there are so many different Mexican restaurants and chains that have the faux-Mexican-village decor, "plastic" Mexican food, etc., that it could be claimed the Casa Bonita/Taco Bueno wasn't original itself therefore no harm in copying it. I mean, what you described is what EVERY Mexican restaurant here has, with the exception of the flags to get the waitress.

Boy that didn't come out well but I hope you understand what I'm saying.

[Kent D]

Perhaps it is because there are so many different Mexican restaurants and chains that have the faux-Mexican-village decor, "plastic" Mexican food, etc., that it could be claimed the Casa Bonita/Taco Bueno wasn't original itself therefore no harm in copying it. I mean, what you described is what EVERY Mexican restaurant here has, with the exception of the flags to get the waitress.

Boy that didn't come out well but I hope you understand what I'm saying.

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Then surely as a culinary culture we have fallen farther than I thought...

I guess, for me, if I walk into a restaurant and say "hey, this looks like Joes Diner down the street", and the menu has the same entrees, and they let you throw your peanut shells on the floor the same way as Joe's, I'm still going to judge both of them on service and quality and perhaps even price, NOT on decor and theme, the same way I'd judge two dissimilar restaurants. MOST customer's aren't going to be that confused over similar concepts.

[Fat Guy]

Has anybody seen the actual complaint? I'd be interested to see the legal theory behind it.

[Dave Weinstein]

Has anybody seen the actual complaint? I'd be interested to see the legal theory behind it.

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I haven't seen the complaint, but the one claim that looked interesting to me (speaking as someone who isn't a lawyer) was the claim for breach of trade secrets.