Five Types Of Intellectual Property That You Should Know For Your F&B Business

Intellectual Property (“IP”) is essentially the creations of the mind which you can own. It is a property that is intangible in nature. Many a time, business owners lack the awareness of protecting and leveraging on their intangible property for their business. Unlike tangible property (e.g. office space, house or car) where you can see and touch; you may not be able to see and touch an intangible property. Hence, many business owners fail to appreciate and see the importance and value of IP.

IP is a form of property (as the name suggests) whereby you can own certain ideas, designs, branding, creative works and other intellectual creations. IP is just like a property where it can be transferred / assigned, sold for a sum of money in return, licensed and even be a subject of a security interest (e.g. charge).

Types of IP relevant to F&B

A) Trademark

A trademark can consist of any word, letter, name, signature, numeral, brand, shape of goods or their packaging, sound, scent and etc. It is a sign used to distinguish your products or services from other traders.

For F&B business owners, you can protect your brand name, product name, logo, tagline, packaging and box or bottle design, depending whether you are also selling F&B products, by registering them as trademarks.

You can also grant a license or franchise to any third party to use your trademark / branding (perhaps through opening an outlet for your business) in return for a licensing fee.

B) Copyright

Copyright protects creative works that are original in nature. The types of work entitled to copyright protection are, inter alia, literary works, musical works, artistic works, films and etc.

For F&B business owners, copyright may be able to protect the packaging (artwork) of food products, design of menu, recipe books, mobile apps/software, photographs of foods and beverages and any artistic works in the restaurant.

In order to play music, films or TV shows owned by third parties to the public in your restaurants / shops, you have to first obtain the relevant licenses from copyright licensing bodies such as Music Rights Malaysia Berhad (MRM) and MPLC (Malaysia) Sdn Bhd (MPLC).

C) Trade Secret

Generally, trade secret is confidential information that is beneficial and able to help businesses to attain a competitive advantage. Trade secrets protect important formulas, practices, processes, designs, methods, techniques or patterns of businesses. Safeguarding and keeping the confidential information as trade secrets can be an alternative to obtaining patent registrations.

For F&B business owners, you may keep certain confidential information as trade secrets such as the recipe of making certain foods, sauces or beverages as well as the methods of cooking and so on.

To achieve that, business owners may sign non-disclosure agreements (NDA) with their employees, stakeholders or investors so that such confidential information will not be disclosed to the public and can be kept as business secrets.

D) Industrial Design

Industrial Design protects the appearance of articles which are commercially mass-produced. It protects the unique design of an article.

For F&B business owners, industrial design may be able to protect box or bottle design, GUI of apps, design of furniture or cutlery and so on.

E) Patent

Patent protects inventions that are new / novel. Basically, an invention is ideas which provide solution to a specific problem and it may be a product or process.

For F&B business owners, patent may be able to protect your inventions such as restaurant order system, noodle making machine, or any other machine or device that facilitate the cooking process.

What are the benefits of obtaining IP protection

– To be recognised as the owner of an IP (intangible property)

– To protect your branding, ideas and intellectual creations

– To obtain exclusive rights (monopolistic rights) to use and exploit your IP

– Prevent third parties (copycats) from owning / stealing your IP

– Reduce potential IP infringement activities

– IP will increase the value of your company from the perspective of accounting and company valuation

– IP is an asset and can be commercialised by way of licensing or sold for a sum of money

– It can be the subject of a security interest (e.g. charge) in the same way as other personal or moveable property

– Easier enforcement in case of dispute and less cost in enforcing IP rights

– Act as a valuable marketing / branding tool

– As an investment / insurance for your business