Implied partnerships? A risk business owners must watch for

| Apr 14, 2021 | Firm News

Innovation is a constant in the business world. It is essential for competition and success. And the events of this past year pushed businesses to strategize and innovate to continue serving consumers and earning a profit.

In some cases, the innovation and growth of one entity or industry can put others at risk if they do not adhere to business laws.

One such case came to light near the end of 2020, but it is still critical to understand the details involved – especially in terms of this current landscape all businesses face.

Grubhub case shows risks business owners face nowadays

Back in October, several restaurants across the nation filed a lawsuit against the food delivery company Grubhub. They claimed that the app listed nearly 150,000 restaurants participating in Grubhub’s delivery that had not given their permission to be listed in the app or affiliated with the company.

According to CBS News, the restaurants claimed in the lawsuit that Grubhub:

  • Violated federal laws by falsely advertising their partnership with these restaurants, in turn misleading consumers
  • Infringed on their trademarks in using the restaurants’ names, logos and menus

The restaurant owners state they did not agree to enter a partnership arrangement with Grubhub. And yet, they claim that by listing these restaurants, Grubhub unfairly profited.

New frontiers require new strategies

Business owners must be diligent when they face innovations and frontiers like this. This case highlights a significant challenge many businesses are facing in the current environment. It is not just restaurants dealing with these legal issues either, though they are more susceptible to it with the rise of third-party delivery apps like Grubhub.

This is why California business owners must ensure they:

  • Monitor the online presence of their business
  • Protect their trademark rights
  • Review their rights under state and federal laws

The current environment of the business world is one that owners of companies large and small did not see coming. That is why it is all the more important for business owners to be on their guard now and with every step forward.