Recipe ownership

[chocchic]

I've been running my own confectionery business for several years now, and I am working out a partnership with a company who has the means to take my products to retail. My company will be dissolved and I will take all my recipes and produce confections under my business partner's existing company. My question is whether my recipes still belong to me, and for future recipes that are developed (by me), who owns those? What's the common industry practice?

[Badiane]

The best thing I can tell you is GET A LAWYER. Doesn't matter how good a partner you have or how well things are going. Get it in writing. Protect yourself.

[tmriga]

Sounds more like a buy-out than a partnership. Proceed with caution. If anything smells fishy, it's probably bad.

I agree about the attorney. I have a colleague who went into a partnership with an already established business. She was star-struck, thinking she would have autonomy. Instead, she ended up being handed her hat within six months. Because she did not seek legal advice, as we all begged her to do, she ended up losing her recipes, half the equipment she brought into the partnership, and in bankruptcy.

Good luck. I hope all works out well for you.

Theresa

[chocchic]

Thanks for the suggestions! I will definitely be having my lawyer look over all the contracts for me. Is it also common practice to have all my current and future recipes owned by me?

[Edward J]

Oh geez, stop and think a minute.

A recipie can't really be owned, you can change one ingredient, or change the proportions of several, and presto! It's a new recipie.

Think evil now. Pretend you are a company that distributes products, your only thought, your only goal, is volume. Can a smaller producer provide you with this? Or do you use a smaller producer to "get your feet wet", then take a product that is proven marketable to a larger mnfctr and subsequently to more retail outlets?

I've spent a liftime in this business, and I'm still in love with cooking and confectionary.

However.

However the money is in sales, not in production, never has, never will be. Remember this, and use it to your advantage.

[jackal10]

Depends what the contract says. The normal advise (I am not a lawyer) for the US is that the ingredients, being a list, cannot be copyrighted, but the method and exact amounts can. You may be able (but expensive) to get a "business methods" patent as well. You may also have moral rights to be identified as author/inventor.

However you can have a contract that explicitly identifies and lists your existing recipes, and has some mechanism for identifying future recipes you claim. Whether you can enforce it or afford to sue in court is a whole other matter.

The previous posters are right. Get a real lawyer, preferably one that specialises in this sort of thing.

[gfweb]

Work out an agreement on terms to dissolve the partnership (if need be) before you go all-in. A business pre-nup.

[chocchic]

Thanks for everyone's replies and suggestions. I will have a lawyer look over the contract/terms of the business partnership and make sure that I'm protected. I hadn't thought of all the different scenarios with this partnership. I guess it's not uncommon for business relationships to go sour! Especially since recipes can be so easily reproduced, and amount of money to be made.

[heidih]

Without your recipes what are you bringing to the table? I do not understand.

[JeanneCake]

Without your recipes what are you bringing to the table? I do not understand.

The products/recipes are known to be good sellers; the company doing the buying doesn't have to do market research or recipe development; that's what they're buying. The company is buying the whole thing (business) to get the product...

[Tri2Cook]

Without your recipes what are you bringing to the table? I do not understand.

I think the concern is what will happen to the recipes if a short time down the road "we no longer require your services".

[gap]

I think the concern is what will happen to the recipes if a short time down the road "we no longer require your services".

And that's the real crux of it.

Depending on the size of partner and relationship, one method of prtotecting yourself is to make sure there is a guaranteed payout (for example, 1 years salary) if you are let go at their discretion within a certain timeframe (ie., within the first 2 years of business). As previous posters have mentioned, you're going to have a hard time keeping your recipes once the partner knows them, they're easy to change and actual copyright is dubious for a list of ingredients and amounts. The important thing is to make sure you're compensated in some way for your recipes if you are forced to leave.

[gfweb]

Why not just sell them the business for what it is worth? You get paid and have no risk.

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[Edward J]

gfweb has an excellent point. Sell it off, wash your hands, and move on.

Even if you went the contract route and things went sour, it's a question of who has more time, money, and patience to go through the court system to win. Avoid this scenerio at all costs.

[heidih]

Backing up a little - if a well thought out partnership agreement is drafted I think one can address the issue up front. Saying "sell' brings up the issue of valuation which is quite slippery - taking us to the issue of the recipes and their value. Do you really want to sell your recipes to them and walk away? As to what is created and crafted within the partnership I think the general concensus is that it belongs to the partnership so their value would be part of what you have to be bought out if you split up. Of course that again gets you into the hell of valuation. As noted if they are way bigger than you, you have to really arm yourself.

[paulraphael]

Sounds to me like recipes are the least of your worry. As far as I know they are not protected as intellectual property. The precise wording of a recipe can by copyrighted, but that's worth nothing.

You can sell the whole thing and still use your recipes.

All the other things people are mentioning are more important.