The Case of the Dueling Dumplings: A Trade Secret Dispute
When most people think of trade secrets, they think high-tech – like the design of a new computer chip.
But food and drinks can also be the subject of trade secret protection. Perhaps the most famous trade secret is the formula for Coca-Cola, which has been kept confidential for more than 100 years.
As reported by the Boston Globe, two local restaurants are now engaged in a trade secret dispute involving dumplings.
What’s a Trade Secret?
Trade secret disputes are generally governed by state law. Forty states and the District of Columbia have enacted some version of the Uniform Trade Secrets Act ("UTSA").
The UTSA defines a trade secret as:
- information, including a formula, pattern, compilation, program, device, method, technique, or process,
- that derives independent economic value, actual or potential, from not being generally known to or readily ascertainable through appropriate means by other persons who might obtain economic value from its disclosure or use; and
- is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
A “formula” includes a recipe, so in theory a recipe can be protected as a trade secret. However, the other prongs of the test must also apply.
For example, a recent trade secret claim involving pretzel sandwiches failed because the so-called “secrets” (the design elements of the sandwich) were clearly visible to anyone eating one. In other words, the alleged “secrets” weren’t secret.
As reported by the Globe, since 2014 Nadia Liu Spellman has run a well-reviewed restaurant in Weston, MA, called Dumpling Daughter. The menu features dumplings and other dishes from Japan and China.
Spellman’s mother, Sally Ling, and her father, Edward Nan Liu, were also well-known restaurateurs who ran “Sally Ling’s” on the Boston waterfront and in Newton Center.
Only three people knew about Dumpling Daughter’s recipes: herself, her mother, and her kitchen manager.
Jie Lin and Ying Yao Xiong allegedly worked at Dumpling Daughter during the first six months of this year. Xiong was Spellman’s assistant; she often volunteered in the kitchen and came in on her days off to observe the workings of the kitchen. Lin worked as a dumpling chef.
In July, Lin and Xiong incorporated a business called Dumpling Girl and opened their own restaurant in Weston – about an hour’s drive from Dumpling Daughter.
Dumpling Daughter filed suit against Dumpling Girl in federal court in Massachusetts. The complaint may be seen here.
Spellman claims that Dumpling Girl is a “virtual clone” of Dumpling Daughter, with dishes and a menu which are “virtually identical… down to the color scheme and punctuation.”
The complaint also alleges that Dumpling Girl uses “proprietary, trade secret recipes misappropriated from Dumpling Daughter.”
According to the complaint, the defendants ignored two cease-and-desist letters from Dumpling Daughter’s attorneys.
Spellman is claiming damages in an amount to be determined at trial.