Friday, September 25, 2009

Potential Buyer of “Crazy Horse Too” Strip Club Wants “Crazy Horse 3” To Change Its Name

How many times has a client wanted to buy a strip club that was seized by the federal government as part of a racketeering and tax evasion investigation into the club’s owner -- Rick Rizzolo, who had reputed ties to organized crime families -- but was worried that the “reputation and goodwill” (those in Las Vegas will understand why I put those words in quotes) of the club would be diluted by another strip club that opened up in the meantime by a third party using a similar mark to identify its strip club? (I know, another one of those cases).

The trademark angle is just one part of the story reported by the Las Vegas Sun today (link here) about the likely sale of the infamous Las Vegas strip cub “Crazy Horse Too.” The saga behind the Crazy Horse Too is a long and colorful one – for a collection of articles about Rick Rizzolo, including the saga of the Crazy Horse Too, visit Steve Miller’s “The Rick Rizzolo Connection.”

But as this blog is not so much interested in mobsters and strippers and focused squarely on all things trademark, I found it interesting that, according to the article, the agreement entered into by the U.S. Marshals and the yet to be named buyer hinges on the owner of another Las Vegas strip club giving up the name “Crazy Horse 3” (which was known as The Penthouse Club up until very recently when new owners took over – and apparently decided to trade off the “reputation” of the “Crazy Horse”) so that the buyer of the “Crazy Horse Too” can be assured of keeping intact the exclusive right to use the name Crazy Horse in connection with strip club services (not to mention all of the fantastic goodwill that goes along with that name in this town).

Pete Rinato, the attorney representing the prospective buyer, stated that a lawsuit was being prepared to be filed against the owners of the Crazy Horse 3 demanding that they give up the name.

Of course, that’s not the only trademark battle that Crazy Horse Too is fighting. A South Carolina man named Carl Reid applied for and received a trademark registration for the mark CRAZY HORSE for “Entertainment services, namely, exotic dance performances” in 2006. This registration served to block Crazy Horse Too’s own application in 2007 for registration of the mark CRAZY HORSE TOO GENTLEMAN'S CLUB for “Night clubs; Entertainment in the nature of dance performances.”

On July 9, 2009, Crazy Horse Too filed two cancellation proceedings against Reid (including a second one for the mark PURE GOLD'S CRAZY HORSE) with the Trademark Trial and Appeal Board. See Crazy Horse Too A Gentleman's Club v. Reid, Cancellation Nos. 92051211 and 92051225. Reid failed to answer and so the TTAB entered a default on September 8, 2009. Crazy Horse Too will likely get a default judgment and the two registered marks cancelled unless Reid steps forward soon.

But there is another “crazy horse” on the horizon. In fact, what I find most “crazy” about the competing use of this particular mark is how Sodipa (SAS) has never taken any action against any of them. Sodipa is the French company which owns the international registration for the mark CRAZY HORSE which is most famously associated with the showgirl revue Le Crazy Horse de Paris (which has an Americanized version showing nightly at the MGM Grand – although the show was originally named Le Femme when it first opened at the MGM Grand many years back). [Don’t you think that Crazy Horse Too was also trying to trade off a little bit of the “Crazy Horse” reputation and goodwill created by Sodipa – at least until Crazy Horse Too was able to create its own reputation (which it certainly has)].

Unfortunately for Sodipa, the company did not apply for a Request for Extension of Protection under the Madrid Protocol for its CRAZY HORSE international registration until very recently (March 20, 2008), and the request is currently suspended pending the outcome of several pending applications for the mark CRAZY HORSE with earlier effective filing dates, including the application filed by Crazy Horse Too on September 14, 2007.

Of course, I know what you’re all wondering – where does the “Crazy Horse 1” strip club fit into all of this? I do recall that there was at one time a very small strip club on the East side of the strip that was named “Crazy Horse” around the time that the “Crazy Horse Too” opened (and thus the basis for the play on the word “too”). Don’t know if it even exists anymore – difficult to find using a search engine with most of the hits being for “Crazy Horse Too” or the MGM production “Crazy Horse Paris.” Perhaps I should go out tonight and conduct some “research” in order to better write about these important trademark issues

[Update: Soonafter I published this post, the Las Vegas Review Journal posted an article (link here) on the lawsuit filed in Clark County District Court today by CC Holdings (managed indirectly by Christopher Condotti of Chicago) against Russell Road Food and Beverage, the company doing business as Crazy Horse 3.]

Tuesday, September 15, 2009

Fish & Richardson Files Foreclosure Action to Let the World Know “Who’s Your Daddy”

Fish & Richardson, the powerhouse intellectual property law firm, filed an action in federal district court against Who's Your Daddy, Inc. (“WYD”) in order to foreclose on security interests the firm obtained on several trademark registrations owned by WYD for the mark WHO’S YOUR DADDY (including their apparent signature product, energy drinks, as well as for such products as cosmetics, jewelry, sunglasses and CDs, and “adult sexual aids”) See Fish & Richardson, P.C. v. Who's Your Daddy, Inc., Case No. 09-cv-01993 (S.D. Cal. September 10, 2009). A copy of the complaint with exhibits can be downloaded here.

In February 2005, WYD engaged F&R’s legal services (most likely in connection with a trademark infringement lawsuit filed by Who's Ya Daddy, Inc., the owner of the identical mark for clothing, against WYD in 2005 -- Who's Ya Daddy, Inc. v. Who's Your Daddy, Inc., Case No. 05-cv-00670 (S.D. Cal.).

Unfortunately (but not surprisingly given that in litigation, the only parties that win are the lawyers), WYD fell behind in paying its monthly legal services invoices. In September 2006, the parties entered into a Settlement Agreement whereby F&R received a first priority security interest against WYD’s trademarks which was recorded by F&R through a UCC Financing Statement filed with the California Secretary of State on September 27, 2006.

Nonetheless, WYD was still not able to make the payments required under the terms of the Settlement Agreement. F&R sued for breach of contract in California Superior court. After the action was filed, F&R recorded its Security Agreement against WYD’s thirteen trademarks with the United States Patent and Trademark Office (“PTO”).

F&R eventually was granted summary judgment in its state court breach of contract action and the court awarded F&R $348,651.18 [ed. – litigation is expensive]. F&R now seeks to foreclose on WYD’s trademarks against which F&R recorded its security agreement by obtaining a court order directing the PTO to certify that F&R is the owner of WYD’s trademark registrations.

With the economy hurting the revenue streams of so many law firms, perhaps F&R is looking to expand into the energy drink market by claiming ownership of WYD’s trademark registrations (and purpotedly the associated goodwill that goes along with those marks). I can’t wait to try a Who's Your Daddy energy drink where Fish & Richardson is responsible for maintaining the quality control of the goods. Of course, an outright sale of the marks to an existing energy drink maker is the more likely outcome if F&R successfully obtains ownership of the registrations, but it’s an interesting image – law firm licensing its marks and overseeing the quality control of the goods. This could also just be F&R's efforts to force WYD to pay off the judgment under threat of losing its trademark registrations.

Even more interesting is that even if F&R obtains the trademark registrations, are they really obtaining the underlying goodwill associated with the marks if F&R cannot also obtain and sell WYD’s particular energy drink recipes? If F&R resells the marks to another energy drink maker who then slaps those names on their own energy drink beverages, isn’t this misleading to consumers who are likely to believe the source of the goods and services is the same source that they have always known and associated with Who's Your Daddy brand energy drinks?

Friday, September 4, 2009

Blogging Hiatus

As regular readers have probably noticed, I have not been posting as frequently or as substantively lately. Pre-trial work on top of all of the usual ongoing client matters that arise on a daily basis has been the major cause of the slowdown.

And with a trial beginning the day after labor day that is scheduled to last several weeks as well as various other upcoming court filing deadlines, the slowdown is certainly going to continue throughout most of the month of September.

I hope to have a few posts during the middle of the month and resume more regular postings by the end of the month. For now, I’m calling it a blogging hiatus.

Happy Labor Day to all! (and a day of labor it certainly will be for me).

Tuesday, September 1, 2009

Federal Circuit Clarifies Trademark Fraud

In what will certainly be the most talked about court decision of 2009 for trademark practitioners, the Federal Circuit reversed the Trademark Trial and Appeal Board’s decision in Bose Corp. v. Hexawave, Inc., 88 USPQ2d 1332 (T.T.A.B. 2007), which found that Bose had committed fraud when it filed a renewal for goods that it no longer sold under the mark WAVE. See In re Bose Corporation, Appeal No. 2008-1448 (Fed. Cir., Aug. 31, 2009).

The Court found that the Board had erroneously lowered the fraud standard to a simple negligence standard. The Federal Circuit went on to make its holding on fraud quite clear:

Thus, we hold that a trademark is obtained fraudulently under the Lanham Act only if the applicant or registrant knowingly makes a false, material representation with the intent to deceive the PTO.

The TTABlog® discusses the decision here (and make sure to check out the numerous comments), Finnegan provides a detailed summary of the decision here, while Registration Ruminations opines about the decision here.