MRM EXCLUSIVE: Strategies for Keeping the Secret Formula

Giants such as Coca-Cola and KFC are famous for zealously guarding the secret recipes that set their brands apart, but distinctive recipes could be key ingredients in the success enjoyed by smaller restaurants as well. Recipes can constitute valuable forms of intellectual property that, from a strategic or even legal standpoint, are well worth protecting. After all, most of us have had a friend heartily recommend a place by saying something along the lines of “The shrimp and grits over there are out of this world. You simply must try them.”

To mitigate the risk of your recipes getting out to competitors, you may try to treat those important dishes as trade secrets. Rumor has it that no single employee is ever allowed to know the entire formula for Coca-Cola. Likewise, if a recipe truly is critical to your restaurant maintaining its competitive edge, you might consider keeping it secret even from your own staff. For example, different chefs could handle different parts of the preparation and cooking of the dish. You could also require anyone with direct knowledge of a recipe to sign a legally binding nondisclosure agreement.

Typically, when a dish is truly important to your business, you just know.

Treating your most important recipes in this way also happens to show that you are serious about maintaining their status as trade secret. From a legal standpoint, the ability to show this good-faith effort could be important if litigation, or the threat of it, were to prove necessary.

Another potential strategy involves seeking protection for a recipe under copyright law. We tend to associate copyright protections with music, movies or books. However, recipes, too, are a form of creative expression. Copyright law can grant you exclusive rights to the use and distribution of your recipe, with certain limitations. Bear in mind, however, that there is a potentially big problem here: When you file the application, you have to attach the actual recipe. Since anyone can read copyright applications, you would essentially be publishing the same recipe you are trying to protect.

Nonetheless, sometimes the goal is not to protect the secret ingredients of a sauce or entrée from becoming public. Rather, it is to stop the likes of cookbook authors, bloggers or podcasters from republishing your recipe or otherwise diluting your brand. In these situations, copyright protection might fit your needs perfectly. This is especially true if you are dealing with the problem of a copycat. Let’s say your successful restaurant serves up uniquely named dishes in a truly distinct atmosphere that cannot be found elsewhere. In legal parlance, this is your “trade dress.” By registering your restaurant’s look, feel, entrée names, etc., you can put yourself in a much better position with respect to stopping copycats. You don’t see a lot of fast-food restaurants with red-and-gold color schemes, giant golden arches and red-haired clowns as mascots precisely because McDonald’s registered this trade dress decades ago.

What recipes are potentially deserving of protection? Overwhelming popularity and word of mouth are a good clue, but distinctiveness is a key consideration as well. A functional BLT with no particular special sauce or bun is unlikely to be a good candidate for protection. If, however, your restaurant puts a creative spin on the BLT, then protecting this recipe might be warranted.

Typically, when a dish is truly important to your business, you just know. In these cases, it is important to remember that the law should be regarded as a last resort. There’s a reason the likes of Coca-Cola and KFC put such a premium on secrecy: They understand that the best way to protect your recipe is to make sure your competitors never uncover your “secret sauce.”

LeClairRyan attorneys Edward T. White, Shareholder, and Janet W. Cho, Associate, focus on intellectual property counseling, prosecution and litigation. They are based in the national law firm’s Richmond, Va., office. They can be reached at  edward.white@leclairryan.com and; janet.cho@leclairryan.com.