Sriracha Sales are Hot — and with No Trademark, Everyone is Cashing In

Bowl and bottle of sriracha sauce

Sriracha Sales are Hot — and with No Trademark, Everyone is Cashing In

Bon Appétit magazine has called it the “ingredient of the year.”

Sriracha sauce — the fiery red Asian chili sauce developed by Vietnamese refugee David Tran — is one of the hottest food trends today, and everyone is cashing in since Tran never trademarked the name.

Food industry giants like Frito-Lay, Heinz, Subway and Jack in the Box all market products using the name Sriracha. Tran, who makes Sriracha at his Huy Fong Foods plant in Irwindale, CA, says he doesn’t mind. He considers it free advertising, and credits the free use of the name to his company’s jump in sales from $60 million to $80 million in the last two years.

Although Tran has never applied for a trademark for Sriracha, the U.S. Patent and Trademarks Office has denied more than 20 trademark applications for the term, determining that it has now become too generic. So it is probably too late for Tran to protect the name, which he says comes from the name of a city in Thailand.

However, Tran did trademark his rooster logo and distinctive bottle shape, which he believes will continue to represent the real Sriracha sauce for consumers — even though industry sauce giant McIlhenny Co., the makers of Tabasco, will enter the market with their own Sriracha sauce this year.

Establishing clear intellectual property ownership is essential for start-ups, especially those that rely on outsourced development expertise to fully develop their product. Founders need to execute a written assignment of copyright when working with external developers, as well as review employee agreements with former employers to ensure those employers do not have a claim to intellectual property.

Failing to select and protect strong, distinct trademarks for the business and its products is a common error entrepreneurs make. If you inadvertently use a trademark belonging to another company, any profits earned from using that trademark could be awarded to that company for infringement.

Jurado & Farshchian, P.L. assists entrepreneurs and business owners with trademark and intellectual property matters. Please call one of our experienced attorneys at (305) 921-0440, or email us at info@jflawfirm.com today.

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