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David E. Desplaces, College of Charleston
Roxane M. Delaurell, College of Charleston
Laquita C. Blockson, College of
Charleston________________________________
Case Synopsis
alleging that he infringed on her restaurant identity. Furthermore, Rebecca claimed that Ed
had a fiduciary obligation to keep the secrets of the business confidential and refrain from
this flagrant copycat?
Learning Objectives
Students should be able to:
1. Differentiate between the types of Intellectual Property (IP)
incident
3. Identify business processes/measures that can help protect a business’s trade
secrets and trade dress
Target Audience
This case was designed for undergraduate students enrolled in introduction/principles of
entrepreneurship, hotel management, general business, or small business management
courses. This critical incident is designed to engage the students on the topic of Intellectual
Property, including trade secrets and trade dress issues as they apply to a restaurant setting.
Research Methodology
This critical incident was written using public domain information about the legal case
including news media coverage of the law suit. The authors were able to access the original
law suit (Pearl
Oyster Bar vs. Ed McFarland and Ed’s Lobster Bar. 07-cv-06036, 2007) and track its
progress
______________________________________________________________________________
Competing for New York’s Best Lobster Roll:
Failed Trade Protection
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TCJ06-02-01TN
For use in conjunction with Strategic Management 13E, Pearce & Robinson. Expiry date 2015.
The CASE Journal IM-Competing for New York’s Best Lobster Roll
Volume 6, Issue 2 (Spring 2010) 2
through public records (mostly electronic news coverage). The critical incident has been
tested in both principles of entrepreneurship and small business management courses.
Discussion questions:
a. What type of intellectual property interests may Rebecca have in her
restaurant? How are they held and how can they be protected? Give
specific examples under each type. For example a recipe: can it be
b. What are the employment issues that may apply to this critical incident
and the protecting of trade secrets?
c. What should be included in a legal checklist to protect the IP rights of a
restaurant owner/entrepreneur?
Pedagogy
Although this exercise can easily be altered to fit various approaches to teaching, we
recommend the following approach:
Preparation
Facilitate student learning by assigning chapters/readings on the topic prior to class
discussion. Since the case has been settled out of court, students can quickly identify the
recent settlement in the case without offering any reasoning or lessons learned.
Handout Preparation
We recommend that you create handouts of both Appendices A and B to distribute to the
students along with the critical incident. Pictures of the restaurants and the Google map
protected from reproduction, however we provided instructions on how to access them on the
internet.
In Class Team Preparation
1. Review various types of Intellectual Property (distribute Exhibit I)
3. Share handouts or show slides of Appendices A & B to the class.
4. Tell students that they must try to answer the discussion questions (and draw conclusion)
b. What are the employment issues that may apply to this critical incident
and the protecting of trade secrets?
restaurant owner/entrepreneur?
5. Instruct students to form groups charged with clarifying the legal premise of the case as it
Variations/Options
1. Assigned groups can take a position or role play for Rebecca or Ed.
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Volume 6, Issue 2 (Spring 2010) 3
2. Groups are instructed to draft a memo (possible take home assignment) that must include:
employment relationship between Rebecca and Ed)
b. answers to the discussion questions
this incident.
3. Groups could also be asked to offer recommendations to the owner of another restaurant
preparing a position for class discussion.
4. Possible follow-up question include discussing industry specific code of
conduct/standards (See proposed follow up question).
General Debriefing
Students have reported that:
of both Rebecca and Ed.
Discussion/Study Questions
1. What types of intellectual property interest may Rebecca have with her restaurant? How
are they held and how can they be protected? Give specific examples under each type that
authored work
Any industry (even restaurants) should work to protect their intellectual property so as
to avoid a situation similar to the one described in the critical incident. Intellectual
property is a product of human intellect that is intangible but valuable in the
marketplace. It can be protected in several different ways including trademarks,
the different forms of intellectual property. Let us review how each type of IP as they
apply to the critical incident:
A. Patent - method of cooking such as special oil for cooking the fries, a
process of controlling inventory, a special stove used in the restaurant.
There is no information in the case indicating that a special method or
process has been used to cook any of the dishes prepared by Rebecca.
Rebecca could have a claim her Caesar salad or other dishes are
are identical to hers and show proof of publication, such as a cookbook. The
recipe in the publication must match the name used on her current menu for
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Volume 6, Issue 2 (Spring 2010) 4
Mere listings of ingredients as in recipes, formulas, compounds, or
…… when a recipe or formula is accompanied by substantial literary
102) extends only to “original works of authorship” that are fixed in a
tangible form (a copy). “Original” means merely that the author
produced the work by his own intellectual effort, as distinguished from
methods.
C. Trademark - any word, name of house dishes, slogans that differentiate
Pearl from the competition, symbol, or device used to identify the source or
origin of products or services and to distinguish those products or services
named dishes to Pearl.
D. Trade dress - lighting fixtures, tables and colors = an entire look. This is the
only dimension of Intellectual Property that appears to be copied or imitated
considering the proximity of the restaurants, the theme of the restaurants,
and the previous employment relationship between the two restaurant
restaurant can also qualify as a trademark for her restaurant and unique to
her only, because it was her original design and it solely represents how she
wants her restaurant to be displayed to the public. Her lawsuit did specify
that she had picked up her design ideas from other restaurants across the
some striking resemblances:
TCJ06-02-01TN
For use in conjunction with Strategic Management 13E, Pearce & Robinson. Expiry date 2015.
The CASE Journal IM-Competing for New York’s Best Lobster Roll
Volume 6, Issue 2 (Spring 2010) 5
Green on white tones.
Chrome light fixtures.
In the landmark case Two Pesos, Inc. v. Taco Cabana, Inc., (1992), Two Pesos
was found guilty of infringing the identity of Taco Cabana and ordered to pay
damages as well as modify certain aspects of their restaurants in order to
presented in the incident (or lawsuit) indicating that a recipe was copied by
Ed. Such claim would be difficult to prove in a restaurant setting.
2. What are the employment issues that may apply to this critical incident and the protecting
of trade secrets?
her intellectual property by opening Ed’s Lobster Bar, which she says, copies “each and
every element” from the décor to the menu of Pearl Oyster Bar. This illustrates an important
without prior consent, and also states that Pearl Oyster Bar reserves the right to legally
enforce the agreement. Rebecca could have also protected herself by making all kitchen staff
agreements. Summary information on New York law related to trade secrets can be found at:
http://www.citmedialaw.org/legal-guide/new-york/trade-secrets-law-new-york
3. What should be included in a legal checklist to protect the IP rights of a restaurant
owner/entrepreneur?
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The CASE Journal IM-Competing for New York’s Best Lobster Roll
Volume 6, Issue 2 (Spring 2010) 6
.
9Formulate and clearly set out your creative contribution to the enterprise e.g. name,
theme, logos, symbols etc……..
9Categorize each idea within the IP framework:
B. Trademark, trade dress
C. Patent
D. Trade secrets
(This may require consultation with an IP attorney. First perusal may be done by going to
9Determine if you can protect each one of these creative contributions. In other words
confidentiality agreement to protect the owner’s intellectual property. Restaurant owners
should then require all employees to sign the agreement before allowing them to begin
work.
9If restaurant owners feel their rights have been violated, they should seek legal action
Follow Up Question
Did Ed act appropriately?
While this critical incident involves a legal case, it is not uncommon for some students to
raise questions about whether Ed’s actions toward Rebecca were appropriate. The
ethical/social norms of trust, honesty, integrity, and fair dealings are necessary when
however, Ed’s actions may have been also viewed as inappropriate according to many.
According to IACP Code of Professional Ethics (Exhibit II), all members of the profession
should “maintain the highest standards of accuracy and honesty in … dealings with
colleagues and clients” and “respect the intellectual property rights of others and not
this does not mean that he acted illegally (intellectual property infringement).
Epilogue
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Volume 6, Issue 2 (Spring 2010) 7
Rebecca’s lawsuit was settled out of court after a delay imposed by the court. Ed agreed to
change his décor as well as some of his menu items although he proclaimed that he did not
mean to infringe on Rebecca’s intellectual property. In effect Rebecca was able to enforce her
rights to a certain extent even though she did not take all the appropriate preparatory steps.
TCJ06-02-01TN
For use in conjunction with Strategic Management 13E, Pearce & Robinson. Expiry date 2015.
