978-0078029295 Case NY_Lobster_Rolls Part 1

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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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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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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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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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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.