Company Alleges Waffles Featured on Oprah's Annual "Favorite Things" List Were Made From Stolen Recipe
A Massachusetts waffle manufacturer, The Burgundian, recently filed a lawsuit alleging that a potential co-venturer, Eastern Standard Provisions, submitted its Liege waffles for inclusion on Oprah Winfrey's annual "Favorite Things" list without giving credit to Burgundian. Then, after Burgundian refused to sell its secret waffle recipe, Eastern Standard employed a "bait and switch" by selling Liege waffles from a different company while touting Oprah's endorsement of the Liege waffles made by Burgundian and enjoying the spoils of landing a spot on the coveted list.
Burgundian's owner, Shane Matlock, lacked any formal baking training and therefore developed his secret Liege waffle recipe through years of trial and error. Sensing the limits of "self-teaching," Mr. Matlock arranged to train with a master Liege waffle maker in Belgium. Mr. Matlock alleges that he was approached by Eastern Standard in 2021 to explore expanding its existing pretzel line with Liege waffles, and the two companies began exploring co-branding opportunities.
Burgundian shared its secret waffle recipe after Eastern Standard signed a nondisclosure agreement. Eastern Standard's pretzels had previously been selected as one of Oprah's "Favorite Things" and the two companies decided to pitch the waffles for Oprah's 2021 list. Mr. Matlock personally prepared the waffles using his confidential recipe, which were later delivered to Oprah by Eastern Standard.
Sensing that the waffles would be selected by Oprah for her 2021 list, Eastern Standard allegedly set out in bad faith to secure the rights to Burgundian's waffle recipe by presenting a term sheet which, rather than proposing a co-branding relationship, contemplated a "recipe buy" whereby Burgundian would sell its recipe to Eastern Standard and receive a royalty for each waffle sold.
After Oprah selected Burgundian's waffles to be included in her 2021 list, Burgundian and Eastern Standard's negotiations broke down. Burgundian alleges that Eastern Standard abruptly terminated the parties' relationship and threatened litigation against Burgundian. Eastern Standard claimed that it had decided to move forward using a waffle recipe developed by its "co-packer," which was different than Burgundian's recipe. Burgundian alleges that the Liege waffles Eastern Standard is currently selling are not the same waffles that Mr. Matlock made and submitted to Oprah, although Eastern Standard continues to advertise its selection on the "Favorite Things" list.
After Burgundian brought suit in Massachusetts state court, Eastern Standard hit back with counterclaims against Burgundian and Mr. Matlock, alleging that they breached the parties' NDA by publicly disclosing confidential information in the complaint. Eastern Standard also told a very different story about the parties' relationship: it alleged that Eastern Standard negotiated in good faith to pursue a co-branding deal with Burgundian, but when Burgundian could not secure the necessary capital to secure such a deal, Eastern Standard was forced to move forward with a different manufacturer, using a different waffle recipe. Eastern Standard paints Mr. Matlock as an opportunist who, after learning that Oprah had selected the waffles for her list, tried to renegotiate the terms of the parties' relationship. Eastern Standard claims that it has never sold a single waffle using the Burgundian confidential recipe, and that it has no plans to do so.
This case illustrates the importance of protecting confidential information and trade secrets with well-drafted nondisclosure agreements that clearly delineate the parties' respective obligations with respect to confidential information. While those agreements will not necessarily ensure that a company's trade secrets will be not be misused, a company may be left with little recourse if the information it discloses is later used by a competitor. This case also presents a cautionary tale about the potential dangers of disclosing confidential information in public court filings. In its attempt at aggressive litigation, Burgundian may have breached its own NDA and exposed itself to potential liability. The better course would have been to either file pleadings under seal, or to describe the confidential information more generally in a way that would not breach the agreement.
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