Rachel Rodgers Law Office Intellectual Property Strategy & Legal Counsel for Digital Entrepreneurs

Will the Real Sriracha Please Stand Up? (And go get me a glass of water. My mouth is on fire.)

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Unless you’ve been living under a sack of bland potatoes during the last two weeks, you’ve probably heard about the Sriracha trademark situation. If you haven’t heard, (Welcome back to the sunshine. PS. You smell like bland potatoes): Sriracha never trademarked “Sriracha.”

Read on and we’ll give you the low down on this spicy situation, and then tell you why you should care.

The fiery facts

Huy Fong Foods, the company that makes Sriracha as we know it, has not registered the trademark for the name “Sriracha.” It’s difficult to characterize how this happened—was it a failure to register, a decision not to register, or just a glaring mistake?  Although David Tran, founder and operator of Huy Fong Foods characterizes the absence of the Sriracha trademarkas “free advertising,” one has to wonder whether not registering the trademark is, in fact, an oversight now being spun as a strategic decision.

Huy Fong Foods did secure a trademark in the rooster logo that appears on their Sriracha bottle back in 1990, but PTO required a disclaimer on the word “sriracha,”  so even though Huy Fong’s logo is protected, the PTO would not allow them exclusive use of that word.

Why all of this Sriracha imposture should be hard for all of us to swallow

Trademark law serves two functions. One is to protect the consumer and the other protects the trademark holder, ie, the business who sells the trademarked product.

  1. Businesses work hard to build their brands. Trademarks protect them.

When a company registers its trademark, it is then able to prevent others from using the mark, or one that would be “confusingly” similar, in commerce. In this way, the company is able to protect the investment it has made in that mark, and therefore in its reputation, by preventing others from using the mark.

In the hot sauce context, this means that not just any old fiery, red sauce can call itself Texas Pete, or Tabasco and expect not to get burned (see what we did there?). By registering their trademarks, Texas Pete and Tabasco essentially own those words (at least in some commercial sense) and can therefore preclude all others from using them.

In Sriracha’s case, without trademark protection for “Sriracha” any old fiery red sauce can call itself Sriracha and go on about its (incredibly profitable) business. By not registering its trademark, Sriracha has given up its right to exclusive use of the word, and now many other big companies stand to profit from the reputation and brand value that Sriracha built. Taco Bell, Pizza Hut and Tabasco are already taking advantage of the sriracha name, and Huy Fong Foods doesn’t stand  to profit from their use of the word. In fact, it would be reasonable to predict that Huy Fong Foods’ Sriracha business will suffer as a result—a fear that Mr. Tran has acknowledged himself.

  1. Trademarks protect a consumer’s right to choose. Or, a (flying) goose is not a rooster.

Recall the second function of trademark law is to protect you as a consumer. A trademark assures you of the source of the goods or service before you buy. When you see a trademark, you can trust that this product has been made by the same company as all other products bearing the same mark.

Even we, dear reader, have been duped by not-really-sriracha sriracha ourselves. Long story short: we bought a bottle of what we thought was our beloved Huy Fong Foods Sriracha, only to later discover that it was, in fact, not Huy Fong Foods Sriracha.  The only major difference on the label was that where the rooster appears on Huy Fong Foods’ Sriracha bottle, on the imposter there is a goose (a flying one at that) appearing under the words “Sriracha Hot Chili Sauce.”

Now, you may be thinking: “Do they not know the difference between a rooster and a goose?”

Most of the time we do. However, when we are standing before shelves full of red sauce in a bottles that look exactly like the bottles that usually contain that sweet, spicy Sriracha that we love (even down to the green cap), and it is a Monday evening, and we are tired, and all we want to do is go home and slather that spicy nectar of the god’s on our leftover burrito from yesterday, we might, in that specific scenario, confuse a goose for a rooster.

Of course we weren’t irreparably harmed, and in fact the goose stuff was not too bad. And, of course, we don’t blame Flying Goose Brand for taking advantage of their opportunity to capitalize on the unprotected Sriracha brand.

But as a consuming culture, we depend on logos and brand names to identify the products we prefer.

When you see a product that has the Nike swoosh on it, you know something about that product already: you know that it has the level of quality, the features, the price point, and the manufacturing practices that you associate with Nike the company, and that helps you make a decision about whether you want to by this product, or one with the Target logo instead.

If you don’t share our flair for the spicy sauce, just apply this scenario to any brands that you support for specific reasons, whether it be their superior quality, or that they engage in fair trade, or they don’t test on animals, or the CEO shares your enthusiasm of feline reenactments of Lord of the Rings. Now imagine yourself in a Monday evening haze, standing before a shelf of products trying to figure out which brand is which. And, it’s tough to figure it out because they all look pretty much the same—same wording, same coloring, same shape, same overall graphics except for subtle differences. Was it the one with the rooster or the goose on the front? Rooster or goose? Rooster or goose? Rooster or….goose!

The reason Huy Fong Foods did not register a Trademark for Sriracha may forever remain a mystery. And, if it was for truly altruistic reasons, then good on Mr. Tran. But future brand leaders may want to explore other mechanisms in existence within intellectual property law (cough: licensing) that allow companies to “share the wealth” of their protected names or logos in a way that isn’t at the expense of the consumer’s ability to identify the true source of her hot sauce.

As a business owner, you invest a lot in your brand. Money and time spent on designing a logo, marketing your brand, communicating your quality and business philosophy to customers. And if you are like most business owners, you are emotionally invested in your brand, it means something to you, just as you hope it means something to your customer.

If you aren’t protecting your trademark, that time, money, and emotional connection are all at risk. Another company can come along and use your name or logo for their product, a product that may be inferior, and threaten the integrity of your good name, or a product that may be similar, and steal customers (who knows, maybe we will start to prefer the Flying Goose Sriracha.) Just thinking about that gives us indigestion.

Last Chance to Save on Trademark Registration

Like all good things, our trademark promotion must end … tonight at 11:59pm EST to be exact. So this is your very last chance to save $1,000 on trademark registration plus there’s a fancy payment plan. Read all about it right over here. To covering your ass and profiting from your assets!


 

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