Australia: But I want to keep making it! Who owns a signature dish when the chef responsible moves on?

Restaurants should ensure their employment contracts are clear about the ownership of recipes created in their kitchens.

A public dispute between an award-winning restaurant in Brisbane and its former head chef highlights an interesting issue as to who owns the rights to, and is therefore allowed to market, a signature dish when the relevant chef and restaurant part ways.

Followers of the gourmet food scene in Brisbane will most likely be familiar with the restaurant "Public", located in North Quay within the CBD. An extremely popular dish on the restaurant's menu is the "KFD (Kentucky Fried Duck)", which was reportedly created by chef Damon Amos when he worked at the restaurant in 2012.

Mr Amos left the restaurant in or about July 2015, and has opened a new restaurant in Woolloongabba on the outskirts of the CBD, called "Detour". Mr Amos wants to feature "KFD" on his new menu, but has publicly expressed his desire for Public to stop including the dish on its menu, which continues to be a highly sought-after dish for diners at Public. In fact, a number of the dishes reportedly served at Detour will be familiar to those who have dined at Public, with ants, fossilised carrots and lychees featuring prominently.

The question also came up recently in a decision decided by the District Court of Florida in Vraiment Hospitality LLC v Binkowski, in which the plaintiff alleged that, after a joint venture between the parties had failed, the defendant had started a further venture which served a "salted caramel brownie" recipe that the plaintiff had contributed to the joint venture.

The question became: can a chef demand that a former employer stop including certain dishes on its menu and, if so, when?

Does intellectual property law in Australia provide protection over recipes?

The issue is one that involves both a consideration of who owns any intellectual property rights that arise from the recipe, and whether those rights have been varied by the terms of the relationship between the restaurant and the chef. Looking first at the relevant areas of intellectual property as they relate to recipes:

  • the written form of the recipe can attract the protection of copyright, for example, if the recipe is recorded in a cookbook or something similar. This will, of course, only protect the author in so far as someone attempts to copy the exact form of the recipe. It will not protect the actual substance of the recipe, just the way it is expressed.
  • section 50(1)(b) of the Patents Act 1990 (Cth) states that an application for a patent may be refused where it the relevant invention is:
    • a substance that is capable of being used as food, and is a mere mixture of known ingredients; or
    • a process producing a substance that is capable of being used as food by mere admixture.
      This largely prevents the obtaining of patent protection for a recipe, unless it is particularly unusual or novel.
  • while it may theoretically be possible to obtain protection under the Designs Act 2003 (Cth) for the way in which the dish is presented, this would only protect the way in which the recipe is plated. It would not stop others from making a dish that tasted the same but looked slightly different.
  • it may be possible to obtain protection over a recipe as a "trade secret". KFC's Kentucky-Fried Chicken is one of the most famous examples of such protection being effective. Until very recently, McDonald's "Big Mac Special Sauce" was another. Obtaining protection in this regard however, requires that the recipe remain confidential and will remain effective only until a similar recipe is produced, or the original recipe is reverse-engineered.

The above discussion demonstrates that, unless a chef keeps his or her recipes for the most part secret, it is unlikely that they will be able to effectively protect them. Assuming, however, that trade secret protection can be obtained, the more pressing issue is which party obtains the benefit of that protection: the restaurant or the chef?

The answer will depend, to a large degree, upon:

  • the terms of the chef's engagement by the restaurant;
  • the time and manner in which the chef discovered upon, or created, the recipe and the supplier of the equipment and ingredients used.

What are the terms of the chef's engagement?

It is relatively commonplace in employment agreements for there to be intellectual property and confidential information clauses or similar included - that is, terms that make it clear that:

  • any intellectual property (which would include recipes that can satisfy the requirements of a trade secret) created by the employee in the course of the employee's employment is owned by the employer; and
  • information obtained during the course of the person's employment is, and remains even after the employment relationship is at an end, the confidential information of the employer and is not to be used outside of the course of the employee's employment.

It is also not uncommon for employers to include a waiver of moral rights clause or similar in relation to any works in which intellectual property rights might subsist. Additionally, section 35(6) of the Copyright Act 1968 (Cth) makes it clear that, as a general rule, an employer will own the copyright in works created by an employee in the course of their employment.

In circumstances where such clauses have been included when defining the relationship, it would become a relatively straightforward exercise for an employer to prevent someone in the position of Mr Amos using dishes devised during his time at a relevant restaurant from serving them at other restaurants after their relationship ends.

The position can be complicated slightly, however, where the chef alleges that the devised the dish in their own time, or outside of the course of their employment, or where the terms of the employee's contract are silent as to ownership of such intellectual property.

The default position is that the inventor of the relevant intellectual property is the owner of it, however where the person is employed in a role where invention of such items falls within the scope of their duties, the invention can be said to be owned by their employer. One expects that it could be a difficult exercise for an employee in the position of a former head chef of a restaurant to rebut the assertion that he or she was expected to devise new recipes and dishes to be served on the menu; indeed, that is often a key part of their role and could arguably be defined as a "duty to invent". Where the task of writing the relevant menu and implementing new dishes into it was specifically outlined in the chef's role, this duty to invent could be seen as an express duty within their employment. If it were not, you would expect the argument that such a duty should be implied.

In those circumstances, recipes and dishes which are produced whilst employed would be properly the property of the restaurant.

What about recipes that the chef brings to the restaurant?

A different result may arise in circumstances where a chef brings a particular technique, recipe or dish to a restaurant and includes it on the venue's restaurant unaltered and without need for further refinement through any equipment or ingredients supplied by the restaurant beyond those used prior.

In that circumstance, the chef is likely to argue that any rights that attach to that recipe (such as those arising out of categorisation as a trade secret) remain those of the chef.

However, a restaurant may seek to attack a chef's assertion that the recipe should receive such protection; for example:

  • if the chef shared the key components, or "secrets" of the recipe freely with other employees of the restaurant, customers and the like, it is unlikely that the chef could satisfy the confidentiality requirement of trade secrets. However, if he or she confidentially disclosed the recipe only to those who needed to know in order to assist to make it, and required that they not share the information, the result may differ.
  • similarly, the absence of any effort by the relevant chef to obtain a licensing arrangement with the restaurant upon placing the recipe on the restaurant's menu might be used as an inference that the chef did not actually protect the secrecy of the recipe and thus it should not be seen as a trade secret. This would not be conclusive however, if a chef shared the recipe with those within the restaurant freely without any effort to ensure that the restaurant knew that the chef wished to retain the information. It would be difficult in those circumstances for a chef to argue that it should be considered a "trade secret".
  • where the recipe in question can be reverse-engineered relatively easily, or is generic, Courts are unlikely to find that they will constitute trade secrets. In the highlighted decision of Vraiment Hospitality LLC, the Court held that the recipe was broadly available save for one alleged "secret ingredient" which, upon tasting the brownie, was not hard to decipher. As such, it was determined not to be a trade secret.

How should restaurants deal with this issue?

The difficulty highlighted above in establishing that something is a "trade secret" means that, to a large extent, restauranteurs are likely to expect that it will be a difficult exercise for a chef to prevent them from serving a dish that the chef implemented on their menu during their time as an employee. However, to ensure that there is no confusion:

  • restaurants should ensure that examples of the types of clauses discussed above are included in their contracts of employment for chefs expected to have any significant input into what is served in the restaurant.
  • if a chef is brought to a restaurant with the intention to serve a dish known to be in their repertoire, the rights of the restaurant to continue to use it after the chef departs should be discussed and any agreement documented at the outset.

In extreme cases (but certainly where recipes for particular dishes are known to be signatures of a particular restaurant), it may be prudent to have employees who are given details of the recipe sign separate non-disclosure agreements relevant to that disclosure, so as to ensure that any protection gained by its characterisation is not lost, and the restaurant's position is protected.

While this may seem dramatic, the scenario considered in this article as between Public and Mr Amos demonstrates that such steps may assist in avoiding any public reputational damage that could be suffered by either party.

RELATED KNOWLEDGE

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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