Week 3 in the Den and there was a food theme that certainly turned up the heat when the dragons fired up to the entrepreneurs. There were certainly some Intellectual Property points to take away from this week as well, and also some interesting points on packaging.
Recipe is a guarded secret and IS protected apparently
Italian Pasta was on the menu when Finn and Alex walked in to the Den asking for £75,000 for only a tiny 2.5% profit in their company Pasta Evangelists. The entrepreneurs were doing well until the question of Intellectual Property Rights were mentioned and suddenly a black cloud descended over the pitch and Deborah Meaden got going.
Interrogation was in full swing as to whether the pair had ensured their product was protected. This brought on the subject of whether the fact that no IP was a ‘recipe for disaster’. One of the entrepreneurs, Alex, claimed that although there was nothing stopping someone copying his products, the recipe itself could not be, and would stay very closely guarded.
We at Lawdit considered this point and after we dusted off our intellectual property manual, we noted that it would be an arguable point that recipes are trade secrets and so would offer protection. The issue would be that this is difficult to control although if it could be managed well, then could help a business to no end. For example KFC have made a huge business out of it. One thing that these entrepreneurs succeeded in doing to protect their business was to register their name as a trade mark. It is so important for businesses to understand that just because their business is registered with Companies House this is not absolute protection for the name. You must file the name as a trade mark as well.
Design must be new and have individual character.
The next entrepreneurs, William and Anna Brightman, brought with them a skin care product using only reusable material. 'One Persons Trash is Another's Treasure' or OPTIAT was the brand and £50,000 was the ask, for only 2% of the business.
The pitch was clean and fresh until Peter Jones piped up with a personal dislike for the shape and even quality of the packaging. Here comes the IP bit. It is important to note that a registered design can mean the appearance is protected providing it is new and has individual character. There is a cost for protecting these though, and in the region of £70.00 for up to 10 designs and affords design rights thereafter.
It was all looking gloomy for the pair because of their design faults until Tej and Touker threw them a lifeline and agreed 15% for all the money.
It just shows how much time needs to go in to the design and protection of a business to ensure a Dragon will give you a second glance.
Until next week......