Let’s face it, being in the restaurant biz takes a certain kind of personality with a certain kind of vision. Given all the risks and hurdles, having just one street address is not what they’re in this for. Hence startup restaurants that have a single location often seek federal trademark protection with an eye towards being a chain or a franchise. However, the very real and very serious obstacle to registration, the requirement that the applicant show that the restaurant is engaged in interstate commerce, is one that is often cited against pursuing registration. Well as with all things in the law, there is no straight black and white line that bars such registration. And in fact, a restaurant with a single location may a seek a federal trademark registration, but only under certain circumstances.
Federal trademark registration is a clear asset to the startup restaurant venture. It demonstrates individuality and a unique concept. Often, those are the very touchstones necessary to attract third party investors. This creates a chicken and egg scenario, as the restaurant venture may have to expand to multiple locations in order to sustain a trademark application, but requires the capital to do so. However, the reality is that most restaurant ventures barely have the capital for the initial location and will require a perfect storm of good fortune to expand. As a result, early protection of the restaurant's name and logo can greatly enhance the chances of survival and expansion.
Usually, a restaurant will file for a service mark that includes the restaurant's name or logo, or a combination of the two. As with all trademark applications, the restaurant must adequately demonstrate to the Patent and Trademark Office that it is doing business across state lines (in “interstate commerce.”) For the restaurant chain with locations in more than one state, this is an easy task. In the case of our single location restaurant, it has to make a greater more nuanced effort to show that it makes an impact on interstate commerce.
Two major cases support the position that a single restaurant location can form the basis for a federal trademark application. These are: Lobo Enterprises Inc. v. The Tunnel Inc., 3 USPQ2d 1446 (CA 2 1987), and Larry Harmon Pictures Corp. v. The Williams Restaurant Corp., 18 USPQ2d 1292, (CAFC 1991).
The cases, when viewed together, provide practical criteria that a single location restaurant can use to demonstrate it is a player in interstate commerce. In Lobo, two single location restaurants located in New York were embroiled in a dispute over an unregistered mark. The federal court found that it had jurisdiction based upon interstate commerce, due to the fact that one of the restaurants had extensively advertised in travel guides and magazines with interstate circulation. In the Williams case, the court rejected a strict bright line formula that required the restaurant be located on an interstate highway, served greater than 50% of its meals served to interstate travelers, or routinely places regular advertisements in some kind of interstate media.
Examining these two cases provides something of a manual for the single location restaurant owner to demonstrate its impact on interstate commerce. The first step is to build an objective record that demonstrates the single location restaurant is known outside the state. Articles from publications with a national or out of state circulation that focus on the restaurant are good candidates for this.
As with all trademarks, the touchstone of federal registration is “use.” Hence it is not enough to rely on third party write-ups of the restaurant. Actual advertisements in publications that circulate out of state are recommended, especially those that recommend out of state dining and entertainment. Hence, it is recommended that the restaurant owner engage in a targeted advertising campaign to out of state customers.
Location, location, location is the heart of the registration game as much as it is increasing the number of covers in a shift. The more the single location restaurant owner can demonstrate the operation sits at some kind of travel and/or transportation nexus, the better positioned he/she is for registration. So for example, being located near an interstate highway, or in the case of a dense urban locale, being located near subways and other transport hubs, is useful to demonstrate accessibility and attractiveness to out of state patrons. To the extent the restaurant’s model permits the identification of out of state travelers (e.g., a visitor’s desk if it you are running a bed and breakfast/restaurant, or the reservation desk, to the extent it requests the origin of the party), the owner should use that to collect data. Finally, proactively maintaining records that demonstrate sales to out of state parties, before and during the registration process is critical. Credit card data (to the extent it does not violate any privacy obligations is a good).
