Copycats and Recipe Thieves- How to Protect Your Small Business Legally
I remember the first time someone stole my intellectual property.
It was my third year with a retail shop (almost tenth in business) and suddenly I was having jellies and small treats returned to my store- and I didn’t make them. A business had sprung up locally with a logo and a name so similar that my die hard regulars even thought they were mine. I was incensed, upset and felt deeply violated.
I wish I’d had someone like Ashley Burk in my corner when it happened.
Ashley is a lawyer and the founder of Burk Law PC, a Canadian intellectual property law firm. She and I have been working together for a few years now, with her coming to speak at my workshops and assisting clients with protecting their brands and creations. Thank you for joining us on the blog Ashley. Can you tell us a little bit about what you do?
AB- My firm works with clients to protect their most valuable asset - their brand. Your brand (which includes the images, logos, product and service names, company name, social media handles, and domain names that you use) is protectable against copying by others… if you have the right advice and take the right steps.
I’ve represented a wide range of clients, including those in the food industry.
I’m in a position to advise on the broader, practical impact of legal decisions on both established businesses as well as startups, and can provide advice in trademark and copyright clearance, protection and enforcement, intellectual property licensing, and domain name matters.
ML- In Canada we can’t copyright a recipe, so what are some steps a business owner can take to protect their recipes and formulas?
AB- Copyright can’t protect an idea - but it can protect how the idea is expressed. That means that you can’t copyright the specific combination of ingredients that makes your recipe unique, but you can protect the way something looks - like the decorations on a cake or a unique plating arrangement.
In practice, it’s a lot easier to protect your recipes by controlling the flow of information. Restricting your employee’s access to recipes if possible, and building non-disclosure agreements into employee agreements, is the best way to keep your recipe unique.
ML- That’s a great lead into my next question- how can a business protect itself via staff policies?
AB- While it’s helpful to have staff policies in writing, a signed agreement with each individual employee that details these policies is even better.
Beyond protecting recipes through non-disclosure agreements, employee agreements should restrict your employees from sharing any confidential aspects of your business - workflow, suppliers, anything that you want to keep secret as between you and your employees.
ML- Absolutely, I’ve drafted a few of these for business owners myself. (I love drafting forms and policies *shameless plug alert* it’s part of my service offerings.) We usually include stuff like future plans, insider secrets, recipe and product developments, business relations and more. Important note: always take documents like this to your lawyer once received from your consultant or writer for review and approval. They may see things you don’t!
Since we’re talking about employees, if a Chef or employee creates a dish/product for a business and then resigns, who owns the rights to that recipe / formula? I get asked about this one all the time
AB- Unless there’s a signed agreement that details who owns the rights to continue using, sharing, etc. a recipe or formula, it’s fair game for anybody who has the recipe or formula. An employee agreement can redefine this dynamic and govern whether it is the owner or chef who can share and continue to use the recipe or formula.
ML- So what steps should be taken if a business owner believes that their product is being compromised / stolen by another business or person?
AB- There’s no one-size-fits-all solution to intellectual property infringement, but your rights are often not taken seriously by the infringer before they’re faced with the consequences of their actions, so a good first step is for you (or me) to explain the consequences of continuing their actions.
Being sued for infringement is a time-consuming and terribly expensive endeavour, and can lead to awards of damages (or the return of all of the profits made by the infringing activities), awards of lawyers’ fees, and court orders to stop doing the infringing activity. Being known in your industry as a “thief” is also never a good thing - the court of public opinion matters too.
ML- Thank you for this. I had a similar experience when I had the shop- there was a person in town who started making similar items with an almost identical name and logo. It got to the point that folks were returning her products to my shop. It was such an awful feeling. I’m proactive, so I called her myself to politely ask her to stop and remind her that building her own personal brand and success was more admirable than piggybacking off of mine. She didn’t take me seriously at all. I ended up having my lawyer at the time send her a Cease and Desist letter outlining the legal consequences if she didn’t stop. She stopped.
That being said, I think it’s important to note that should she have continued after the C+D letter, I would have been on the hook for suing her myself, and that if I failed to take action on it within a certain amount of time, it could have ruined any case I would have had against her in the future. My lawyer was careful to explain that to me at the time.
I get asked about intellectual property and cakes a lot too - if you create a custom cake and then see the design being used on another businesses website, what steps should you take?
AB- The look of a custom cake is protected by copyright, assuming that the design is unique and not a copy or close similar to an earlier cake. The owner of the copyright is the artist who designed and created the cake, unless the artist is employed and the cake was created in the course of that employment (in which case the copyright owner is the company).
The owner of the copyright should first reach out to the business that is using the design and politely but firmly request that they stop using and offering the design for sale (on the website, in promotional material, and in reality). 9 times out of 10, this is enough to make the problem stop.
If the other business won’t stop, consider reaching out to an intellectual property lawyer (like me). A letter from a lawyer explaining that the continued infringement of the design is not acceptable, and that damages will be sought in the absence of their immediate cooperation, will usually result in quick action.
ML- Fantastic, I actually had this happen at the shop. I had an employee who personally designed all of our cakes and she was devastated when she saw an exact replica of one of her most unique cakes (she had a dream about it first that inspired the design- it was *that* original) on a local bakeries web gallery. I emailed the shop asking them to remove it and mentioning firmly but politely I found it to be in poor taste. They replied that it was commonplace within the industry and we should get over it, but ultimately it was removed. It was a really violating feeling for my employee and myself as the business owner.
I’ve also had clients find their images on social media feeds that aren’t theirs- what should you do to protect your images and logos on social media and what are the steps if you see them being used on another business channel?
AB- As with cakes, photographs are also subject to copyright and can be owned and sold. The copyright in photographs is owned by the photographer unless an assignment in writing has been signed, and the same steps as for cakes can be taken if someone is using the image without the copyright owner’s permission - i.e. first reach out to ask that the infringement stop, and if it doesn’t, call me.
Logos and brand names are protectable via a different IP beast - trademarks. You have rights in your trademarks just by virtue of using them, but it’s always better if you register your trademarks because this makes it easier to stop third parties from using something too similar.
ML- Good call- a quick preventative step is to download a free design app like Canva folks, and watermark the heck out of that stuff to ensure thieves and catfishes can’t get to it easily.
So what should you do if someone creates an account for your business that isn't legit?
AB- The best offence is a good defence. When you’re creating a new brand (be it your business name, or a new product or service name), take 5 minutes to check that all domain names are available (.com, .ca, and anything else relevant to your business) and all social media accounts are available (even the ones that you don’t think you’ll use) - and register these before you commit to the name.
ML- This is so important. There’s an entire subculture of people registering brand new business names on Instagram and social media then turning around and charging business owners for them. Here is a perfect example. Just read that bio. Ugh.
AB- If someone does create an illegitimate social media account (or a “sucks” account eg. @BurkLawIsTheWorst), you’ll need to check the policies of the platform - Twitter, Insta, FB, etc. have wildly different rules for what can be done about this. I can help with the details.
ML- So how can you protect yourself when hiring a social media manager or staff member to manage accounts? I’ve written about the importance of policy before, but what else?
AB- Policy is super important when hiring someone to manage accounts, but as always, an agreement in writing is more important. This agreement should set out, at least, that the account is owned by the company (and not the manager/staff member) and will be returned immediately upon request. Having a legal right to the return of the account in any situation is paramount.
It’s also super important that the brand be managed in a consistent way - brand guidelines should be provided to the manager which detail how and when the trademarks are to be used (size, font, colour, marking of ™ or ®, etc.). Consistency in the brand is key to maintaining the value of it from a trademark law perspective.
ML- Any other tips or tricks for us today?
AB- Before investing too heavily in any brand (business name, product name, service name), check in with an IP lawyer to make sure that you’re able to use it. So often we see disappointed brand owners having to change a logo or brand name in which they’ve built up recognition because someone was using something similar first. Recognize that just because you’re using a logo or brand name doesn’t mean you’re allowed to do it, and doesn’t mean you won’t be forced to stop.
And, make sure that the brand that you do choose is distinctive - this means that it doesn’t describe the goods and services that you’re offering. It’s hard to be recognized by a name if everyone else is using the same name - it’s also hard to stop others from coming too close to you. Think about APPLE, AMAZON and LEXUS - none of these words describe computers, online retail services, or cars - but everyone knows the brands.
ML- Ashley, thank you so much for this wealth of knowledge. It’s going to help so many small business owners in protecting their property.
Readers, I strongly encourage you to reach out to Ashley no matter what your stage of business- she is super wonderful and very easy to talk to. Shoot her an email at ashley@burk.law or a call at (613) 218-6313.