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Beware of Using Your Restaurant Name in Multiple Locations Without Federal or State Service Mark Protection or a Written Agreement with All Subsequent Users of the Name




by:
Nicole J. Harrell
Robert E. Smartschan
Stephen E. Story
Kaufman & Canoles A Professional Corporation - Norfolk Office

 
July 30, 2014

Previously published on Summer 2014

Beware of using your restaurant name in multiple locations without federal or state service mark protection or a written agreement with all subsequent users of the restaurant name. It is not uncommon for a successful restaurateur to expand using the same name as the initial flagship restaurant. Done properly, the use of the same name can build brand identification and strengthen the original owner’s rights in the name. Done incorrectly, however, the subsequent usage of the identical or very similar name can raise substantial legal issues.

Registering your restaurant name as a federal or state service mark, before the mark is used by any other owner, is an essential step towards full protection of the original owner’s superior service mark rights. A written agreement with each subsequent user, acknowledging the superior rights of the original owner, while not as protective as a federal or state service mark registration, is another way to protect the original service mark user. Ideally the original owner should take both of these steps to maximize his rights in the restaurant name and avoid allowing someone else to obtain competing rights in the name.

Unfortunately, we regularly see restaurants that do not take either step to protect the original owner’s rights in the use of the restaurant name. In the last year alone, we have seen four situations, within Hampton Roads, where successful restaurant chains with multiple locations have allowed family members, friends, and others to use the original name of a successful restaurant, when the name was protected neither by a federal or state service mark registration, nor by any written agreement with the subsequent owners documenting the original owner’s superior rights in the name. Under these circumstances, in the event of any disagreement over the use of the name with the subsequent users, or if there is ever an attempt to enforce or register service mark rights in the restaurant name, the failure to correctly handle the situation from the outset can cause significant problems to the original owner of the name.

Either a federal or state service mark registration, or written agreements with all subsequent users, or both, are simple, and relatively inexpensive, legal matters. Do not allow the name of your successful restaurant to be held hostage by failure to properly preserve your rights, as the original owner, to exclusively use that restaurant name.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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Author
 
Nicole J. Harrell
Robert E. Smartschan
Stephen E. Story
Practice Area
 
Business Law
 
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