When A Legacy Provider Sues An Innovator…

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We use Google News alerts around here because it’s a sure-fire way to keep on top of industry changes. Two weeks ago we saw a notification that caught our eye: a legacy hospitality software provider was suing an innovator over “Trademark infringement”.

Accsys Inc, publicly known as Restaurant Magic, is suing Upserve, formerly Swipely, for using the words “Restaurant Magic” in a confusing way. The plaintiff alleges Upserve developed a software tool similar to Restaurant Magic and uses the phrase, “Upserve is Restaurant Magic.” According to the lawsuit, Accsys claims Upserve refused to comply with Accyss’ demands to cease and desist from the wrongful use of the registered trademark, obtained profit at the expense of the plaintiff, and caused confusion among consumers by offering similar services and using the same trademarks as the plaintiff.

untitledAccsys says Upserve’s marketing has caused irreparable injury to Accsys’ reputation and good will, and is thus seeking trial by jury to enjoin the defendant against further infringement, accounting of profits, three times any damages, restitution, costs of action, attorney fees and all relief the court deems just.

Wowsers.

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A few things to note. Restaurant Magic has been since 1989. In that time period they’ve acquired customers representing around 5,000 locations.

Upserve has been around for six years. In that time frame they’ve acquired 8,000 locations. They’ve also consistently improved their product, leveraging the most recent techniques and tools to ensure their product is superior to other hospitality softwares.

Which, frankly, is not hard to do when you look at the competition…

Restaurant Magic has been around for 27 – almost 28 – years. In that time period they haven’t done any of the following things that Upserve customers can take for granted:

  • Conjoin payments data with POS data to develop customer analytics
  • Match menu items to customer frequency to identify high, low, and underperformers
  • Use machine learning
  • Build useful mobile applications
  • Integrate external data sources like Yelp et. al. to manage other business aspects
  • Analyze POS data in novel, useful ways like server performance breakdowns

Restaurant Magic sees a new entrant with a profoundly superior product growing more marketshare in a few years than Restaurant Magic grew over three decades. This pretty much explains why Restaurant Magic is suing Upserve.

That Upserve is using the words “Restaurant Magic” is trivial: such a small percent of the market recognizes Restaurant Magic as a brand, and I don’t pretend to be a lawyer but I’m sure Upserve’s lawyers looked at the suit and thought, “Wow, these guys are desperate.” I am 100% confident that no restaurant searched for “Restaurant Magic”, found Upserve, and said, “Hey I was going to use Restaurant Magic but because Upserve so craftily used the phrase Restaurant Magic I’m going to go with them.” And even if they did, it’s because Upserve has better SEO juice for the words “Restaurant” + “Magic” than the company who bears the phrase as its DBA name.

This is such a waste of a jury’s time. Proving damages by using the words “Restaurant Magic” is going to be really difficult if not impossible.

If Restaurant Magic wants to win more customers it should invest in its product. Don’t go around suing innovators that are beating you by offering better solutions at lower costs. You had nearly 30 years to modernize your software but you didn’t. No variety of patent trolling is going to fix that.

I reached out to Drew Peloubet, CEO of Restaurant Magic, for comments but have yet to hear back.

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