Name of student
Trade secret protection
The lemonade business suffers from the treat of imitation by competitors. Imitation is a contributing factor to decrease of customers as the business will loses its competitive advantage. To protect the lemonade recipe the owner should obtain trade secret protection. Trade protection entails that the recipe is not revealed and is used in the business operations to obtain a competitive advantage. Through the trade secret the owner preserves intellectual property rights and other advantages absent in patent protection (DuBoff, 2004)
In order for the lemonade business owner to obtain the trade secret protection physical security is essential. Physical security includes restricting access of unauthorized person to the area where the recipe is used. This minimizes the leakage of information to people who may pass them to competitors or use them for personal gain. Documents that have the recipe should be labeled appropriately to indicate documents that should not be viewed. The documents should have an authorized employee who is responsible for protecting them (O’Donnell, 2008)
To protect the recipe, fragmentation is important to ensure that the secret is not entirely known to one person only. By fragmenting no employee will have sufficient information about the recipe hence cannot sell it out to competitors. Signing a confidentiality agreement with the employees is a beneficial idea. The agreement entails that the employees are not allow to disclose the recipe to anyone. Vague labelling of the recipe components and ingredients is a strategy that helps in protecting the recipe. Giving the ingredients false names confuses parties that may engage in passing information and those imitating.
Trademark is commonly referred to as a distinctive design that is used to identify or represent a certain product or company. The lemonade business owner is likely to get a trademark protection for the “fresh squeezed lemonade”. This is because the phrase identifies the source of lemonade and distinguishes the lemonade from those that are processed. The “fresh squeezed lemonade” will get trademark protection for it usage in commercial activities.
The mark used in lemonade bottles that will be sold in grocery stores. The phrase will be protected if it facilitates easy identification of the manufacture. In the case the manufacturer is the lemonade business which is easy to identify when the lemonade is being sold. This puts more emphasis in that the trademark is associated with the product. Fixing the trademark on the bottles improves chances of getting the protection (DuBoff 2004)
“Lemonade stand” is not an applicable trademark because it is so generic hence cannot afford protection. The phrase is also descriptive about the location by indicating that the lemonade is found in a stand. But the “lemonade stand” trademark can get protection if the business owner can prove of the phrase secondary meaning.
Insurance against lawsuits
Insurance covers offers protection and compensation in case a business suffers from a financial loss. Insurance may also protect a business from being taken to court over disputes associated to the business. The best insurance for the lemonade business is the value policy or liability insurance. Product liability insurance protects the business from lawsuits such as lemonade effects on customer’s health. The insurance will protect the business because the accuser does not have evidence that product was designed with an intention to harm the consumer. Also, there is no prove that there was negligence in production of the lemonade. Product liability insurance has an inclusion of defense costs which entails that the company does not incur extra cost to pay the lawyers (DuBoff 2004)
DuBoff, L. D. (2004). The Law (in Plain English) for Small Business. Sphinx Legal.
O’Donnell, R. W., O’Malley, J. J., Huis, R. J., & Halt Jr, G. B. (2008). Trade Secret Protection. In Intellectual Property in the Food Technology Industry (pp. 23-28). Springer New York.
Schechter, F. I. (1927). The rational basis of trademark protection. Harvard law review, 40(6), 813-833.