Having the franchise open in Mattoon would have brought competition to the Burger King restaurant. To safeguard against the competition that would be introduced by the national franchise to the Burger King restaurant, Gene and Hoots trademarked the name.
The court case between Gene and Hoots and the national franchise Burger King gave a landmark ruling in the United States trademark law jurisprudence and specifically with regards to the Lanham Act. To this date, the court’s decision on the case has remained a significant interpretation of the Act also referred to as the Trademark Act of 1946. It is the federal statute that controls trademarks, service marks and unfair competition. The ruling recognized that the federal trademark registration has precedence over the state law and therefore the national franchise has rights to the name anywhere in the US except within the 20-mile radius in Mattoon. Gene and Hoots too have no rights to use the name “Burger King” anywhere in the US outside the 20-mile radius centered at their Burger King restaurant in Mattoon.
According to Bozic & Cvelbar, knowledge is one of the three the primary sources of a firm’s competitive advantage in the hospitality industry. The main issue of intellectual property discussed by Bozic and Cvelbar is the numerous studies that have been carried on ownership types, classifications and owner’s corporate strategies. The concept highlighted that directly concerns intellectual property is the intellectual capital which involves, human, organizational and customer. Intangible resources and capabilities for an organization include intellectual property rights, ownership model and ownership structure. Trademarking a name keeps organizations safe from possible unfair competition that may come with other organizations using the same name. Further, the article “Resources And Capabilities Driving Performance in the Hotel Industry” shows the positive correlation that exists between the tangible and the intangible resources, capabilities and the performance of a firm.
Intellectual capital is one of the independent variables that affects both sales growth and profit growth of an organization. Both organizational and customer capital have a positive impact on the performance of a business venture. Human capital has a bearing on the performance indirectly and more importantly through the organizational and customer capital. Therefore, copywriting and patenting of intellectual property is important if an organization is to remain within their safe profit margins.