Protecting Your Company’s “Unfair Advantage”

When pitching a startup, it’s common to be asked what your unfair advantage is. Whether it’s that you have the best person in the field working with you, or some proprietary software, or patented hardware, it’s what gives you an advantage over an existing company, or a later entrant.

There are ways to protect basically any unfair advantage through copyright, patent, trademark, non-disclosure agreements or non-competes.

In the case of a restaurant, your unfair advantage is often your recipes, and failure to protect those can result in an employee walking off with your unfair advantage.

The complaint states that the employee who allegedly stole recipes “knew” that they were confidential, but there are very few facts that allege the owner of the trade secrets took any meaningful steps to actually protect those secrets. The recipes were not kept in a secure location (a chef’s phone), the employees were not clearly informed that the recipes were trade secrets, and no steps were taken to limit access to the entire recipe to few people.

Even these relatively simple steps could have stymied an employee from copying the recipe, while a well-drafted employee agreement could have prevented it, or provided the restaurant with immediate remedies for breach of the contract.

Is your unfair advantage protected?