COMMENT

Crying Fowl Over Churchs Chicken

Sandwich Trademark: How Employees
Lose Ownership Rights To Their Ideas

SOMTO C. OJUKWU*

ABSTRACT

Ownership of trademarks between an employer and an employee is

difficult for courts to determine due to the complex system of common and
federal laws. Ordinarily, ownership is determined based on first use in
commerce, but such a determination is complicated when an employee
creates a trademark and allows the employer to use that mark in
commerce. In Lorenzana v. South American Restaurants Corp., the court held
an employee was not entitled to ownership of a trademark he created when
he allowed his employer to use it. Because employees cannot use the mark
in commerce, courts allow the parties to settle their disputes through
contractual agreements. Absent such an agreement, the employee is
entitled to ownership of his mark created outside the scope of his
employment. However, in Lorenzana, the court never looked into the
parties employment agreement, it did not look into whether the mark was
created outside the scope of employment, and it did not look into whether
the mark was a concrete, fully developed idea which would have entitled
the employee to ownership rights. Lorenzana failed to follow the
appropriate analysis for ownership of a trademark between an employer
and an employee.

* Candidate for Juris Doctor, New England Law | Boston (2017). BA, Graduated with Honors,
Business Management, University of California, Merced, 2010.
New England Law Review Scribes Award Winner, 20152016.

115
116 New England Law Review Vol. 51|1

INTRODUCTION

T
rademarks are governed by a complex system of common law and
federal laws which dictate when a word or symbol can be
trademarked, as well as who is the proper owner.1 Ownership is
further complicated when discussed in the context of employers and
employees.2 Ownership of trademarks has been a constant battle within the
court system.3 The determination of who owns a mark usually comes down
to who first used the mark in commerce.4 But problems arise when
employees create trademarks for employers to affix to their goods and sell
in the market, which was the issue in Lorenzana v. South American
Restaurants Corp.5 The First Circuit Court of Appeals had to decide whether
an employee was still entitled to ownership of his intellectual property
when he suggested it be used by his employer.6 The difficulty of defining
ownership of employee-created trademarks results from the fact that
employees do not actually use the mark in commerce, which leads most
courts to ignore that issue and allow the parties to divide the rights
amongst themselves through contract law.7 However, courts need clear,
uniform, and distinct laws to clarify ownership rights of trademarks
between employers and employees.8 Lorenzana did not look at whether the
employee created the mark within the scope of his employment or whether
his employment contract transferred ownership rights to the employer; nor
did it evaluate the manner in which the idea was presented before it

1 See Brad Reid, The Difficult Necessity of Unified Intellectual Property Law, HUFFINGTON POST

(May 20, 2013, 5:37 PM), http://www.huffingtonpost.com/brad-reid/intellectual-property-

law_b_3293939.html [https://perma.cc/YFE8-G23R].
2 See generally WILLIAM H. FRANKEL ET AL., CORPORATE COMPLIANCE SERIES: INTELLECTUAL

PROPERTY 3:4 (2015) (explaining ownership rights of employers within specific situations).
3 E.g., Volkswagenwerk Aktiengesellschaft v. Wheeler, 814 F.2d 812, 815 (1st Cir. 1987)

(discussing Volkswagens dispute over the subsequent use of the mark beetle by an
automotive repair shop); Geoffrey, Inc. v. Toys R Us (Nosotros Somos Los Juguetes), Inc., 756
F. Supp. 661, 665 (D.P.R. 1991) (discussing plaintiffs dispute over ownership of Toys R Us
trademark against subsequent user who claimed priority use).
4 See Lanham Act, 15 U.S.C. 1051 (2006); see, e.g., Dialogo, LLC v. Bauza, 467 F. Supp. 2d

115, 126 (D. Mass. 2006) (holding that defendants use of title El Dilogo held priority over
plaintiffs subsequent use).
5 Lorenzana v. S. Am. Rests. Corp., 799 F.3d 31, 33 (1st Cir. 2015).
6 See id.
7 See United States v. Dubilier Condenser Corp., 289 U.S. 178, 18889 (1933) (holding that,

in most cases, the inventor must expressly grant ownership rights to his employer in order for
the employer to own the invention).
8 See Reid, supra note 1.
2017 Crying Fowl 117

determined that the employee was not entitled to ownership of the

trademark.9
This Comment argues that an employee who creates a design outside
the scope of his employment and voluntarily gives a concrete trademark-
eligible idea to his employer should be entitled to the ownership rights and
benefits that accompany such an idea regardless of whether he used the
idea in commerce separate from his job duties. It will argue that the
employee should not have lost his rights to his trademark because the
mark was not created within the scope of his employment, and that
employees should receive the benefits and additional compensation to
which creators and owners of trademarks are entitled if the trademark is
given in a manner that establishes such rights. Additionally, this Comment
argues that although Lorenzana followed the correct analysis for a
copyright, it failed to address the trademark question, and looks into
methods of attaching ownership to employees trademark-eligible ideas.
Part I outlines the customary practices involved in trademark ownership
disputes between employees and their employers. Part II will review the
courts opinion and its decision regarding trademark infringement. Part III
establishes that absent a provision within the employment contract, an
employee is entitled to ownership of his ideas developed outside the scope
of his employment. Part IV argues that the Lorenzana ruling, that an
employee cannot own an idea offered to an employer, is wrong and does
not consider the property rights of the creator when such an idea is offered
in a satisfactory manner.

I. Background

A. What is a Trademark?

A trademark is a design, word, or symbol that is used by an individual

to identify and distinguish ones goods in the marketplace.10 Under the
Lanham Act, a trademark can be either registered or unregistered, but each
is afforded protection.11 The purpose of a trademark is to give consumers
confidence that products with the same mark come from the same source.12

9
See Lorenzana, 799 F.3d at 33, 35.
10
Lanham Act, 15 U.S.C. 1127 (2012); see also Qualitex Co. v. Jacobson Products Co., Inc.,
514 U.S. 159, 166 (1995) (determining that a color can be used as a trademark when it has
acquired secondary meaning); Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 194
(1985) (discussing the requirement that a trademark cannot consist of a generic term);
Kazmaier v. Wooten, 761 F.2d 46, 49 (1st Cir. 1985) (holding that a descriptive phrase can be
protected as a trade name).
11 Warner Bros. v. Gay Toys, Inc., 658 F.2d 76, 78 (2d Cir. 1981) (holding that the Lanham

Act applies to both registered federal marks and unregistered common law marks).
12 110 AM. JUR. 3D Proof of Facts 1 2 (2009).
118 New England Law Review Vol. 51|1

A trademark comes into being as soon as it is affixed to the goods and the
goods are sold.13 Therefore, in most cases, it is not the actual registration
of the mark that creates the trademark, but the use of the mark that creates
it.14
Infringement occurs after an established trademark is taken by a
second user, without permission, to identify and distinguish his own
goods.15 Such use confuses the general public because they will no longer
have confidence that two products with the same mark come from the
same source.16 Use in commerce is easy to define when goods are sold by
separate entities: the first to use the mark is the first to fix the mark to the
good and sell, display for sale, or otherwise publicly distribute it in the
market.17 Since use in commerce is usually the deciding factor for
ownership of a trademark, most courts struggle with how to assign such
rights when the employee permits the employer to be the one to use the
trademark, and instead choose to allow employment contract provisions to
settle such disputes.18 But of course, the same types of issues can occur
when no such provision is included within the employment contract, and
even when outsiders suggest ideas in the hopes of receiving employment.19
Trademark ownership rights are decided based on who used the mark first
in commerce.20 Ownership rights can be difficult to determine when
discussed in the context of employment, especially when the law has not
laid out clear definitions for ownership.21 Courts have used different
methods to evaluate ownership of a mark including: (1) whether contract
provisions allow for employers to acquire rights;22 (2) whether the mark

13 Blisscraft of Hollywood v. United Plastics Co., 294 F.2d 694, 700 (2d Cir. 1961).
14 See 15 U.S.C. 1127 (2012).
15 Baker v. Simmons Co., 307 F.2d 458, 461 (1st Cir. 1962) (explaining that infringement

requires proof of the likelihood of confusion to consumers if the trademark is used on goods
from two different sources).
16 See id.
17 Blue Bell, Inc. v. Farah Mfg. Co., Inc., 508 F.2d 1260, 1264 (5th Cir. 1975) (holding that the

user who affixed his trademark to the good and sold to the public had superior rights over the
other user who affixed the mark to the good but only sold the good within its companys own
subdivisions before selling to the general public).
18 23 AM. JUR. 2D Proof of Facts 203 3 (1980).
19 Leibovitz v. Columbia Broad. Sys., Inc., No. 79-799-Z, 1981 WL 1399, at *1 (D. Mass. Jan.

29, 1981) (finding that an idea entered public domain because a potential employee disclosed
an idea but failed to protect it through a contractual agreement).
20 15 U.S.C. 1127 (2012).
21 See Pamela S. Chestek, Who Owns the Mark? A Single Framework for Resolving Trademark
Ownership Disputes, 96 TRADEMARK REP. 681, 681 (2006).
22 See Greene v. Ablon, No. CIV.A. 09-10937-DJC, 2012 WL 6597779, at *2 (D. Mass. Dec. 17,

2012).
2017 Crying Fowl 119

was created outside the scope of employment;23 (3) and the manner in
which such ideas are presented.24

B. Ownership of Employee Creations

Most disputes concerning ownership of intellectual property between

an employee and an employer are resolved through examining the
employment contract.25 When an employee develops an idea or creation, it
is commonly regarded as the property of the employer.26 However, there
are many situations in which an employee can retain his rights to his idea
or creation.27 Such disputes over ownership can be resolved expressly
through an employment agreement, or upon determination of whether the
idea was created within the scope of employment.28 For an employee to
retain rights in an idea or creation, it must be expressed in a legally
protected manner.29 Courts agree that an idea in its abstract form will not
be afforded protection because people should be able to freely use ideas as
they are formulated.30 Instead, an idea must be sufficiently developed into
something concrete and fully formed which can be used without further
development.31 In addition, the idea must be novel or original in order to
establish property rights and be afforded protection.32

23 Mattel, Inc. v. MGA Entmt, Inc., 616 F.3d 904, 912 (9th Cir. 2010) (allowing an employee
who did not create a mark within the scope of his employment to keep his rights to the mark).
24 Hamilton Natl Bank v. Belt, 210 F.2d 706, 708 (D.C. Cir. 1953) (holding that an idea must

be suggested in a concrete form in order to become a property right which is subject to

ownership).
25 See Parker A. Howell, Whose Invention Is It Anyway? Employee Invention-Assignment

Agreements and Their Limits, 8 WASH. J.L. TECH. & ARTS 79, 8788 (2012) (explaining how courts
examine employment contracts to determine ownership of employee-inventions).
26Id. at 85.
27See Donna Domagala, Employee Suggestion Plans: Building A Better Mousetrap or the
Misappropriation of Ideas?, 31 SUFFOLK U. L. REV. 391, 414 (1997) (discussing employment
suggestion plans, misappropriation of ideas, and unjust enrichment as methods of retaining
ownership rights).
28 United States v. Dubilier Condenser Corp., 289 U.S. 178, 189 (1933); see 2 J. THOMAS
MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION 16:36 (4th ed. 2016)
[hereinafter MCCARTHY].
29 See J. Irizarry y Puente v. Pres. and Fellows of Harvard Coll., 248 F.2d 799, 802 (1st Cir.

1957) (holding that an idea would receive no protection unless disclosed under circumstances
that would imply such a relationship between the employer and employee); see also Joyce v.
Gen. Motors Corp., 551 N.E.2d 172, 175 (Ohio 1990).
30 Richter v. Westab, Inc., 529 F.2d 896, 902 (6th Cir. 1976).
31 Belt v. Hamilton Natl Bank, 108 F. Supp. 689, 691 (D.D.C. 1952), aff'd, 210 F.2d 706 (D.C.

Cir. 1953).
32 Sarver v. Detroit Edison Co., 571 N.W.2d 759, 762 (Mich. Ct. App. 1997).
120 New England Law Review Vol. 51|1

1. Ownership of Employee Creations Through the

Employment Agreement

Contract law is commonly used to distinguish ownership of

intellectual property between an employee and employer.33 The right of the
employer to appropriate an employees idea is based on the employment
agreement.34 The main concern is whether the parties have entered into an
agreement (express, implied, or otherwise) that awards the employer
ownership of the employees creations, or whether their conduct could
reasonably cause the employee to believe he owned the rights to his
creations.35 Employees can also be hired for the specific purpose of
developing ideas for the employer, making the employer the true owner.36
The first step is to determine whether a controlling agreement exists
between the parties, then the court must interpret whether the creation falls
within the terms of the agreement.37
In Bell v. Streetwise Records, Ltd., the First Circuit Court of Appeals used
the employment contract to determine that the record company owned the
rights to the name New Edition instead of the musical group to which it
referred.38 Each member of the group signed an employment contract with
the record company which stated, in pertinent part, Artist hereby grants
to Company the sole and exclusive right to use . . . Artists name (including
any professional names now or hereafter adopted by Artist). . . . Artist
performs in a musical group named The New Edition and confirms that the

33 Hapgood v. Hewitt, 119 U.S. 226, 231 (1886) (holding that the performance of the

employee under his contract transferred his intellectual property rights to his employer);
Jamesbury Corp. v. Worcester Valve Co., 443 F.2d 205, 214 (1st Cir. 1971) (holding that
employee did not have a fiduciary duty to turn over intellectual property; it must be attained
through contract); Bowers v. Woodman, 59 F.2d 797, 800 (D. Mass. 1932) (discussing that
assignment contracts must be definitely and distinctly established in order to properly
transfer ownership of intellectual property).
3419 WILLISTON ON CONTRACTS 54:20 (4th ed. 2016) [hereinafter WILLISTON].
351 ALAN S. GUTTERMAN, CORPORATE COUNSELS GUIDE TO TECHNOLOGY MANAGEMENT &
TRANSACTIONS 9:3 (2016) [hereinafter CORP. COUNS. GUIDE].
36 Howell, supra note 25, at 86.
37 See Freedom Wireless, Inc. v. Boston Commc'ns Grp., Inc., 220 F. Supp. 2d 16, 18 (D.
Mass. 2002) (discussing first the validity of the employment contract before determining
whether the creation fell within its terms); Grocela v. Gen. Hosp. Corp., No. CIV.A. 11-991-
BLS1, 2012 WL 3205616, at *34 (Mass. Super. Ct. July 18, 2012) (examining employment
contract to determine employer did not own intellectual property of employees created
outside its scope).
38 Bell v. Streetwise Records, Ltd., 761 F.2d 67, 74 (1st Cir. 1985). The group created the

name New Edition for the purpose of doing live performances in and around the Boston
area, but had not recorded any albums and so had not yet entered the phonorecord market. Id.
at 69.
2017 Crying Fowl 121

name is wholly owned by Boston International Records Inc., and that Artist
has no right or interest in and to the name.39 The company expressly
contracted for ownership of the employees creationtheir group name
and thus were granted the exclusive right to use the name.40 The court first
analyzed the employment agreement before holding that the employees
could not use the name outside of their employment with the record
company.41 Therefore, an examination of the employment contract is the
first course of action for courts in determining ownership of employee
creations.42 In the absence of such an agreement expressly covering
ownership of intellectual property, ownership will be controlled by
common law.43 Under common law, an employees creation is owned by
the employer if the employer took the creation and further developed it
into a marketable result.44

II. Lorenzana v. S. Am. Rests. Corp.

A. Factual Background of the Case

Noberto Coln Lorenzana (Lorenzana) was an employee of Churchs

Fried Chicken in Puerto Rico, a franchise owned by South American
Restaurants Corporation (SARCO).45 While working in his first position as
a store manager, Lorenzana created the recipe for a new chicken sandwich
(consisting of chicken, lettuce, tomato, cheese, and mayonnaise) and
suggested to the president and vice president of SARCO that the sandwich
be added to the menu.46 He called the sandwich the Pechu Sandwich.47
Through a series of transfers from Churchs Chicken franchisors, SARCO
acquired the registration of the trade name Pechu Sandwich with the
Department of State for the Commonwealth of Puerto Rico and filed an
application to register it with the United States Patent and Trademark
Office (USPTO).48 Believing that he had been denied the benefits of
ownership in a mark he had created, Lorenzana filed suit against SARCO

39 Id. at 70.
40 Id. at 73.
41 Id. at 75 (adding that the employees would still receive the benefits of the contract

because the employees were publicly recognized in connection to the name).

42 See WILLISTON, supra note 34.
43 CORP. COUNS. GUIDE, supra note 35.
44 See, e.g., Riehm v. Hambleton, 53 F. Supp. 328, 330 (D. Mass. 1943) (clarifying that

employer was improving upon creation by employee, so ownership of creation properly

belonged to employer). See generally CORP. COUNS. GUIDE, supra note 35.
45 Lorenzana v. S. Am. Rests. Corp., 799 F.3d 31, 33 (1st Cir. 2015).
46 Id.
47 Id.
48 Id.
122 New England Law Review Vol. 51|1

for violations of the Lanham Act.49 The lower court granted SARCOs
motion to dismiss; it was affirmed on appeal.50

B. Holding and Reasoning

The court ruled that SARCO had not committed trademark

infringement because Lorenzana did not own rights to the name Pechu
Sandwich.51 The court held that Lorenzana did not acquire rights to a
trademark in Pechu Sandwich because he never used the mark in
commerce outside of his employment with SARCO.52 Because the defining
factor of ownership of a mark comes from use of a trademark, Lorenzana
could not succeed because, as an employee, he could never sell the Pechu
Sandwich outside of Churchs Fried Chicken.53 The court maintained that
rights to a trademark are acquired by the first to use the mark in commerce
in connection with a product.54 Thus the court reasoned he had not used
the mark, and therefore had not obtained rights in the name.55 The court
observed that the discovery or invention of a trademark is not sufficient to
acquire rights; therefore, in suggesting its use to SARCO, Lorenzana did
not obtain a property right in the mark.56 Lorenzano did not sell his idea,
nor did he ever register its trademark.57 As such, the court found that he
had no claim to ownership and affirmed the dismissal of his infringement
claim.58

49 Id.
50 Id.
51 Colon-Lorenzana v. S. Am. Rests. Corp., No. CIV. 12-1794 MEL, 2014 WL 1794459, at *3

(D.P.R. May 6, 2014), affd sub nom. Lorenzana v. S. Am. Rests. Corp., 799 F.3d 31 (1st Cir.
2015).
52 Id.
53 Id.
54 Id.
55 Id.

56 Id.

57 Colon-Lorenzana v. S. Am. Rests. Corp., No. CIV. 12-1794 MEL, 2014 WL 1794459, at *3

(D.P.R. May 6, 2014), affd sub nom. Lorenzana v. S. Am. Rests. Corp., 799 F.3d 31 (1st Cir.
2015).
58 Id.
2017 Crying Fowl 123

ANALYSIS

III. Absent a Provision in the Employment Agreement, an Employee is

Entitled to Ownership of His Own Ideas Developed Outside the
Scope of His Employment

The Lorenzana court completely ignored the notion that an employer is

only entitled to ownership of ideas contracted for, or created by its
employees within the scope of their employment agreement.59 Lorenzana
was not hired for the specific purpose of developing ideas for the
corporation, neither was he employed in a position in which developing
new ideas or suggestions were part of his job description.60 The court never
examined his employment contract to determine whether there was a
provision controlling ownership of intellectual property.61 As a store
manager, Lorenzana was not required to develop new ideas or recipes for
sandwiches, and no provision of his employment agreement was
introduced to state that any such ideas created by an employee would be
owned by SARCO.62 If an employee designs a mark within the scope of his
employment and the employer uses it, then the employer is considered the
owner of the mark.63 The parties provided no evidence of the terms of the
employment agreement, yet the court still found that SARCO was the true
owner of the idea for the Pechu Sandwich.64 Without looking into the
terms of the employment agreement, the court cannot rule that Lorenzana
created the mark within the scope of his employment, nor can it analyze
whether the agreement specifically addressed this issue.65
The Lorenzana court cites to Arvelo v. American International Insurance
Company to focus its argument on the priority of use in commerce as the
most important factor in determining trademark ownership.66 Arvelo
established that use of the mark in commerce was necessary to
demonstrate ownership, and it disposed of the notion that the creation of

59 See Greene v. Ablon, No. CIV.A. 09-10937-DJC, 2012 WL 6597779, at *2 (D. Mass. Dec. 17,

2012) (holding that the employer was entitled to ownership of the trademark, Collaborative
Problem Solving, created by the employee because the employment agreement included
provisions which transferred ownership of intellectual property to the employer).
60 See Lorenzana, 799 F.3d at 33.
61 See id. at 3335.
62 See id. at 33.
63 MCCARTHY, supra note 28.

64 See Lorenzana, 799 F.3d at 36 (affirming the lower courts decision to assign ownership to

SARCO).
65 See generally MCCARTHY, supra note 28.

66 Colon-Lorenzana v. S. Am. Rests. Corp., No. CIV. 12-1794 MEL, 2014 WL 1794459, at *3

(D.P.R.) May 6, 2014), affd sub nom. Lorenzana, 799 F.3d at 31.
124 New England Law Review Vol. 51|1

the mark was sufficient to establish property rights.67 It is well known that
an employee owes a common law fiduciary duty to his employer to not
compete while employed in his present position, therefore, it would have
been impossible for Lorenzana to use the mark in commerce while he was
still working for SARCO.68 However, it should be noted that the Arvelo
court decided the case by first looking to the employment agreement
between the parties to acknowledge the fact that the plaintiff had signed an
agreement which specifically stated that he had been hired to create a new
marketing plan for an insurance policy, and to generate ideas for the name
of the policy.69 Therefore, there was a provision directly in the employment
agreement which acknowledged that any ideas created would be within
the scope of his employment and subject to ownership by the employer.70
This is an express contract that transfers ownership, which is widely
recognized by courts as a method for acquiring property rights to
employees ideas.71 Similarly, the plaintiff in Greene v. Ablon agreed to an
express contract which stated that all intellectual property created by the
employee would be the property of the employer.72 Lorenzana should have
followed the analysis taken from Arvelo and Greene, and should have first
looked at the employment contract to determine whether a provision
existed that would transfer ownership rights to the employer.73
Lorenzana can be distinguished from Greene because no such express
contract provision had been agreed upon.74 Absent such an agreement, the

67Arvelo v. Am. Intl. Ins. Co., 875 F. Supp. 95, 101 (D.P.R. 1995), affd, 66 F.3d 306 (1st Cir.
1995); see also Volkswagenwerk Aktiengesellschaft v. Wheeler, 814 F.2d 812, 81516 (1st Cir.
1987) (finding that the the one who first uses the marks in connection with a peculiar line of
business has a right to the trademark).
68 TalentBurst, Inc. v. Collabera, Inc., 567 F. Supp. 2d 261, 267 (D. Mass. 2008) (holding that

an employees duty to not compete is enforceable as an employment covenant); RESTATEMENT

(THIRD) OF AGENCY 8.04 (2006); see also David L. Johnson & Junaid A. Odubeko, When Does
Preparation to Compete Become Unlawful Conduct?, A.B.A. (Feb. 19, 2013),
http://apps.americanbar.org/litigation/committees/businesstorts/articles/winter2013-0213-
when-does-preparation-compete-become-unlawful-conduct.html [https://perma.cc/T9GC-
KNFV].
69Arvelo, 875 F. Supp. at 97.
70See id.
71 David M. McGovern, What is Your Pitch?: Idea Protection is Nothing but Curveballs, 15 LOY.

L.A. ENT. L.J. 475, 491 (1995).

72 Greene v. Ablon, No. CIV.A. 09-10937-DJC, 2012 WL 6597779, at *2 (D. Mass. Dec. 17,

2012).
73 See generally id.; Arvelo, 875 F. Supp. at 97 (inferring that the court first had to look at the

employment contract).
74See generally Lorenzana v. S. Am. Rests. Corp., 799 F.3d 31 (1st Cir. 2015) (resolving this
case merely on the factor of use in commerce and thus did not look into the employment
contract).
2017 Crying Fowl 125

employee is entitled to ownership in his own intellectual property.75 The

court must establish that no provisions within the employment agreement
transfer ownership of any intellectual property to the employer before
ruling that the employer is the owner of such property.76 Close examination
of the employment relationship is required to determine whether the
Pechu Sandwich was developed within the scope of employment.77
In the Ninth Circuit case Mattel, Inc. v. MGA Entertainment, Inc., the
employment agreement provided that the employee agree to
communicate to the Company as promptly and fully as practicable all
inventions . . . conceived or reduced to practice by [him] . . . at any time
during [his] employment by the Company.78 Despite this clear agreement,
the court still had to determine whether the employer owned the
employees ideas.79 The court ultimately remanded the case because it was
up to the jury to determine whether the employee created the idea within
the scope of his employment agreement since it was developed on the
employees own time.80 Similarly, the Lorenzana court should have first
determined whether Lorenzana created the idea within the scope of his
employment agreement.81 Mattel is especially enlightening on trademarks
because the employee created the names Jade and Bratz, similar to
Lorenzanas Pechu Sandwich.82 Just as the employee in Mattel was able

75 Tina A. Syring & Felicia J. Boyd, Employer and Employee Ownership of Intellectual Property:

Not as Easy as You Think, THOMSON REUTERS (Dec. 2014),

http://legalsolutions.thomsonreuters.com/law-products/news-views/corporate-
counsel/employer-and-employee-ownership-of-intellectual-property-not-as-easy-as-you-think
[https://perma.cc/2GSE-T264].
76 Shlomit Yanisky Ravid, Rethinking Innovation and Productivity Within the Workplace Amidst

Economic Uncertainty, 24 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 143, 15253 (2013) (stating
that contractual transfer of rights are enforceable against default rules of ownership).
77 Molinelli-Freytes v. Univ. of P.R., 792 F. Supp. 2d 150, 159 (D.P.R. 2010) (defining the

scope of employment as work which is of the type he is employed to perform, occurs within
the time and space of the employment, and is motivated by a purpose to serve the employer).
78 Mattel, Inc. v. MGA Entmt, Inc., 616 F.3d 904, 909 (9th Cir. 2010). As this case is from the

Ninth Circuit Court of Appeals it is merely persuasive, but the evident trend is to protect
ownership of intellectual property through express agreements within the employment
agreement. See id.
79 See id. at 917 (differentiating between ideas created within the scope of his employment

agreement, and those created outside the scope of his employment agreement).
80 Id. at 912 (MGA argue[d] that at any time during my employment cover[ed] only

works created within the scope of [the employees] employment, not those created on his own
time and outside of his duties at Mattel. . . . MGA thus argues that [the employee] created the
Bratz designs and came up with the names Bratz and Jade outside the scope of his
employment, and that he therefore owns the work.).
81 See generally id. at 917.
82 Id. at 912.
126 New England Law Review Vol. 51|1

to keep ownership rights to his trademark in the names, Lorenzana should

be able to keep ownership rights to Pechu Sandwich.83
Another method used to determine ownership rights of an idea is
whether the mark was disclosed in a manner which would imply a
contractual or fiduciary relationship between the parties.84 In J. Irizarry, the
plaintiff sent letters disclosing his idea to 1,500 different businesses and
banking institutions.85 Such unconditional public disclosure relieves the
owner of a property right to his idea; a fiduciary relationship cannot be
established if the idea is widely spread to multiple potential users of the
idea.86 Here, Lorenzana directly told the president and vice president of
SARCO; he did not widely spread the idea to all his coworkers or others in
the industry.87 It was confidentially disclosed to those who Lorenzana
expected would use it, and ultimately reward him for his good idea.88
Therefore, the idea was disclosed in a manner that would imply a fiduciary
relationship.89

IV. An Employee Should be Entitled to Property Rights in His Ideas

Under Common Law if the Ideas are Offered in a Satisfactory
Manner

In order for an idea to be considered a property right, it must be

offered in a manner that is definitive, concrete, and fully realized.90 The
court found that Lorenzana had not acquired a property right in his idea
for Pechu Sandwich, which SARCO registered as a trade name.91
However, this was not a circumstance where an employee offered a
generalized, vague idea which required the employer to put in substantial

83 Lorenzana v. S. Am. Rests. Corp., 799 F.3d 31, 33 (1st Cir. 2015) (highlighting that the

employee created the name of a product which was used by the employer).
84 J. Irizarry y Puente v. Pres. and Fellows of Harvard Coll., 248 F.2d 799, 802 (1st Cir. 1957)

(holding that an idea would receive no protection unless disclosed under circumstances that
would imply such a relationship between the employer and employee).
85 Id. at 802; see also Keane v. Fox TV Stations, Inc., 129 Fed. Appx. 874, 876 (5th Cir. 2005)

(barring plaintiffs recovery when he sent letters detailing his idea to multiple production
companies).
86 J. Irizarry, 248 F.2d at 802 (ruling plaintiff had no basis for a claim because he had not

disclosed his idea in any manner as to imply a contractual or fiduciary relationship).

87 Lorenzana, 799 F.3d at 33.
88 See id.
89 See id.

90 Belt v. Hamilton Natl Bank, 108 F. Supp. 689, 691 (D.D.C. 1952), affd, 210 F.2d 706 (D.C.

Cir. 1953).
91 Colon-Lorenzana v. S. Am. Rests. Corp., No. CIV. 12-1794 MEL, 2014 WL 1794459, at *3

(D.P.R. May 6, 2014), affd sub nom. Lorenzana, 799 F.3d at 31.
2017 Crying Fowl 127

work before it was capable of being used to sell products.92 The law gives a
clear property right in an idea that is more than a mere abstraction. . . . It
must be . . . a concrete detailed form. It must, of course, be novel.93 Similar
to the plaintiff in How J. Ryan & Associates, who provided his employer
with the concrete phrase The Beer of the Century, Lorenzana provided
his employer with the concrete and novel name Pechu Sandwich, which
was trademark eligible, and therefore the law grants a property interest in
the employee.94 The law does not want to give property rights to abstract
ideas which should be free for all to use and develop; instead the law
protects those ideas which have been fully developed and reduced to a
concrete, detailed form which can be put to use without further
development.95 Lorenzanas idea required no further development; he
suggested Pechu Sandwich and the company used it as the official name
of the sandwich.96 SARCO may have further developed the recipe
Lorenzana suggested, but the court correctly disposed of this issue by
holding that recipes are not protectable by trademark or copyright.97 Once
a property right in the idea has been created, it is up to the employer to
secure ownership through contract or special relationship, but ownership
does not automatically transfer to the employer upon creation.98 SARCO,
unknown to Lorenzana, registered the trademark in Pechu Sandwich
without first securing ownership of the name through contract or special

92 Belt, 108 F. Supp. at 691 (explaining that an abstract idea may not be the subject of a

property right, until it takes on a concrete form); see, e.g., How J. Ryan & Assoc. v. Century
Brewing Assn, 55 P.2d 1053, 1054 (Wash. 1936) (ruling for the plaintiff where plaintiff
presented the phrase, The Beer of the Century as an advertising slogan to the employer and
employer refused to compensate).
93 Belt, 108 F. Supp. at 691.
94 How J. Ryan & Assoc., 55 P.2d at 1054.
95 See, e.g., Sarver v. Detroit Edison Co., 571 N.W.2d 759, 762 (Mich. Ct. App. 1997) (holding

that when an employee submits an idea to a suggestion program, it does not give rise to a
property interest that could be subject to a conversion cause of action); see also Richter v.
Westab, Inc., 529 F.2d 896, 900 (6th Cir. 1976) (clarifying that an idea which lacks concreteness
cannot be protected through property rights); Marcus Advert., Inc. v. M. M. Fisher Assocs.,
Inc., 444 F.2d 1061, 1063 (7th Cir. 1971) (explaining that the plaintiffs idea was not new, novel
or unique, and therefore not protected); Stanley v. Columbia Broad. Sys., 221 P.2d 73, 75 (Cal.
1950); Smith v. Recrion Corp., 541 P.2d 663, 665 (Nev. 1975); Joyce v. Gen. Motors Corp., 551
N.E.2d 172, 175 (Ohio 1990) (holding that the employees suggestion was not expressed in a
legally protected manner).
96 Lorenzana, 799 F.3d at 33.
97 Id. (discussing the series of taste tests conducted on the sandwich recipe before SARCO
settled on one to be added to the menu); Publns Int'l, Ltd. v. Meredith Corp., 88 F.3d 473, 480
(7th Cir. 1996) (holding that a recipe is a list of ingredients which are facts, not creative
expressions, and as such cannot be subject to copyright protection); 37 C.F.R 202.1 (2015).
98 McGovern, supra note 71, at 485.
128 New England Law Review Vol. 51|1

relationship; it wrongly assumed ownership automatically transferred to

the employer upon creation.99 Similarly, the court wrongly assumed
ownership automatically transferred upon creation.100 It is clear that
SARCO found the name to be valuable since it took the necessary steps to
acquire a trademark in Pechu Sandwich, but it should not be enriched by
appropriating the ideas of its employees without proper compensation or
agreement.101
Correctly classifying Lorenzanas idea as a property interest is essential
to the argument concerning ownership.102 If the court had found that he
had a property interest in Pechu Sandwich, then the court could have
properly held that Lorenzana was entitled to its benefits.103 The employer
cannot expect that all intellectual property created by its employees will,
without fail, become the employers property.104 The employer must
contract for these rights; the trend in most states is to require an express
contract for these property rights because the value of ideas is increasingly
desired.105 Without provisions in the employment agreement, the employer
is unjustly enriched by the misappropriation of the employees ideas.106 The
employer must establish ownership rights to the idea before it can acquire
the benefits from such ownership.107 The court did not inquire into how the
idea was generated or presented, nor did it look into the employment
contract; instead the court automatically approved SARCOs ownership
without any analysis.108 The automatic loss of an employees intellectual
property should be remedied when the employer has not taken proper
measures to obtain such property.109 Employers are aware that the ideas
and other intellectual property of its employees can be highly valuable and

99 See Lorenzana, 799 F.3d at 33; McGovern, supra note 71, at 485.
100 See generally Lorenzana, 799 F.3d at 35 (holding that neither the name Pechu Sandwich
nor the recipe are eligible for copyright protection).
101 See id.; see also Domagala, supra note 27, at 395 (discussing unjust enrichment as a theory
of recovery for misappropriation of employees ideas).
102 See Dale D. Smith, A Musing AffairWho Owns Your Thoughts?, 44 LOY. L. REV. 155, 160

(1998).
103 See id.
104 Orly Lobel, My Ideas, My Bosss Property, N.Y. TIMES (Apr. 13, 2014),

http://www.nytimes.com/2014/04/14/opinion/my-ideas-my-bosss-property.html?_r=1
[https://perma.cc/G73M-F8N6].
105 Id.
106 See generally Domagala, supra note 27.
107 See generally Lanham Act, 15 U.S.C. 11111129 (2006) (detailing exclusive rights

accompanying ownership and registration of a trademark).

108 See generally Lorenzana v. S. Am. Rests. Corp., 799 F.3d 31, 33 (1st Cir. 2015).

109 See generally Lobel, supra note 104 (discussing the expanding claims employers are

making over their employees ideas).

2017 Crying Fowl 129

should take the necessary steps to procure them through contractual

agreements, instead of misappropriating ideas without compensation.110 It
follows then, that the court should have first looked to the employment
contract before awarding the employer ownership of all the intellectual
property created by the employee.111
Ownership of ideas is more difficult for courts to evaluate because so
much of it depends on establishing a property right which hinges on the
manner in which the idea is presented to the employer.112 The law must
bend and conform to meet the changing needs of society, and this is one of
its fundamental characteristicsit can grow and adjust to adapt.113
Compensation for ideas is growing as a viable method for companies to
build and develop new products, marketing strategies, and campaigns.114
Consequently, a more uniform standard of protection should be afforded
to ideas.115 This is especially the case when courts tend to favor employers
and afford employees much less protection.116 The court cannot ignore the
proper analysis for determining ownership of a trademark between an
employer and an employee as it did in Lorenzana; the direction of the law is
to evaluate ownership of intellectual property through employment
agreements, and Lorenzana failed to follow that course.117

110 Anne Fisher, Does Your Employer Own the Entire Contents of Your Head?, FORTUNE (Dec. 6,

2013, 2:21 PM), http://fortune.com/2013/12/06/does-your-employer-own-the-entire-contents-

of-your-head/ [https://perma.cc/G73M-F8N6].
111 Robert P. Merges, The Law and Economics of Employee Inventions, 13 HARV. J.L. & TECH. 1,

8 (1999) (explaining that courts routinely uphold contractual provisions that transfer
ownership to employers).
112 Sarver v. Detroit Edison Co., 571 N.W.2d 759, 764 (Mich. Ct. App. 1997) (White, J.,

concurring in part and dissenting in part).

113 See Belt v. Hamilton Natl Bank, 108 F. Supp. 689, 690 (D.D.C. 1952), affd, 210 F.2d 706

(D.C. Cir. 1953); State of Washington v. W.C. Dawson & Co., 264 U.S. 219, 236 (1924) (Brandeis
J., dissenting) ([A] rule, cannot end with its first enunciation. The rule as announced must be
deemed tentative. For the many and varying facts to which it will be applied cannot be
foreseen. Modification implies growth. It is the life of the law.).
114 See Reid, supra note 1.
115 See id.
116 See id.

117 See generally Intellectual Property Law and Employees, BLOOMBERG BUSINESS, (Nov. 16, 2010,

4:36 PM) http://www.bloomberg.com/news/articles/2010-11-16/intellectual-property-law-and-

employees [https://perma.cc/332D-CPH2] (discussing the benefits of employment agreements
that assign the ownership of intellectual property rights).
130 New England Law Review Vol. 51|1

CONCLUSION

The decision in Lorenzana disregards developments in the law of

ownership of ideas; it fails to consider whether the employer contracted for
ownership rights, whether the mark was created outside the scope of the
employment, and the manner in which the idea was presented. Lorenzana
created the mark outside the scope of his employment and voluntarily
gave a concrete, novel, and trademark-eligible idea to his employer. As
such, he acquired a property interest in the mark and should be afforded
its benefits, or compensation in its use. This case should not be decided
based on whether Lorenzana first used the mark in commerce because as
an employee he had a fiduciary duty not to compete with his employer
during his employment, and would have been prevented from using the
trademark. Therefore, Lorenzana owned his idea, and did not transfer
ownership of the idea to SARCO when he suggested it use the name
Pechu Sandwich on its menu. The court should have ruled in favor of
Lorenzana and found that he did in fact own Pechu Sandwich.
Lorenzana deserves the proper compensation that accompanies ownership
of his trademark.