More specifically, HRCI claims that the Defendants’ actions at the Hard Rock Hotel/Casino have caused HRCI’s marks to “become associated with objectionable and offensive conduct that is at odds with the brand imagery of the HARD ROCK trademarks” and “failed to use their best efforts to protect the goodwill associated with” HRCI’s trademarks.
The complaint spends several pages going through the history of the Hard Rock Café and the creation of the worldwide successful HARD ROCK brand by original founders Peter Morton and Isaac Tigrett.
Then, in 1990, The Rank Group, Plc (“Rank”), HRCI’s predecessor-in-interest, acquired all of Tigrett’s interests in the business then operated under the HARD ROCK Marks at that time. In June 1996, Rank entered into a transaction with Morton whereby Morton sold to Rank his interests in the business then conducted under the HARD ROCK Marks, with the exception of ownership of the Hard Rock Hotel & Casino in Las Vegas and the option to develop other properties using the HARD ROCK HOTEL and HARD ROCK CASINO marks in certain geographic areas.
According to the complaint, Rank acquired all right, title and interest to all HARD ROCK marks registered and used around the world and Morton received a license from Rank (through a Rank IP licensing special purpose entity, Rank Licensing, Inc.) to use the HARD ROCK HOTEL and HARD ROCK CASINO marks on a limited basis and subject to a number of conditions. Rank Licensing later assigned all right, title and interest in the HARD ROCK Marks to HRCI. (Note: The few assignment records reviewed regarding the some HARD ROCK registrations did not show this precise chain of title – see, e.g., here and here).
The complaint next asserts that in February 2007, as part of a buyout of Peter Morton’s interests in the Hard Rock Hotel/Casino business, Morton assigned the rights granted to and obligations imposed on him by the 1996 License Agreement to one of the Defendants, HRHH IP, LLC. And since that time, HRHH IP, LLC and Hard Rock Hotel Holdings, LLC have been licensees of HRCI under the 1996 License Agreement (and apparently represented to third party sublicensees that they are licensees under such agreement).
After detailing various sections of the License Agreement regarding use of the marks and protecting the goodwill, the complaint then gets into the juicy details which give rise to the dispute.
Rehab portrays the Las Vegas HARD ROCK HOTEL & CASINO, a property operated under trademarks owned and licensed by HRCI, as a destination that revels in drunken debauchery, acts of vandalism, sexual harassment, violence, criminality and a host of other behavior that most members of the general consuming public of the United States who regularly frequent or are potential patrons of HRCI’s HARD ROCK CAFE restaurants and other properties operated under the HARD ROCK Marks would find unseemly and objectionable.
The complaint also maintains that the Rehab show portrays the staff of the Las Vegas Hard Rock Hotel & Casino as “unprofessional, incompetent, and/or physically and emotionally abusive to hotel guests and other staff.” [ed. – have you seen how rowdy and obnoxious some guests get while living it up in “Vegas”?] Of course, HRCI claims that it “prides itself on offering guests at its HARD ROCK CAFE restaurants and other properties operated under the HARD ROCK Marks dining and entertainment experiences that are pleasurable, fun and consistent with the democratic free spirit of rock music.” [Comment: I think the people engaging in the debauchery at the Rehab pool party were certainly having an entertainment experience that was pleasurable, fun and consistent with the democratic free spirit of rock music – and those watching the show from their homes would surely switch places if they could.]
HRCI then references some highly publicized arrests that occurred in September 2009 at the Rehab pool party where eight patrons were arrested for engaging in acts of solicitation of prostitution and drug distribution (Las Vegas Sun article here) – alleging that Defendants “allowed” the Rehab pool parties to become associated with criminal activity.
The complaint then quotes various communications from members of the public expressly various negatives comments about the Hard Rock Hotel/Casino after viewing the Rehab television show, including communications by members of the public who believe HRCI is responsible for the conduct depicted in the show.
HRCI received assurances from Defendants that the “negative associations” created by the show would be addressed, HRCI alleges that the third season of Rehab “depict the same offensive and depraved conduct portrayed in the first two seasons.” [ed. – does this type of language make anybody else want to check out this show now?]
HRCI maintains that this is harming the reputation and goodwill of the HARD ROCK Marks in violation of the 1996 License Agreement (which requires Defendants to use best efforts to maintain the goodwill of the HARD ROCK Marks). HRCI further maintains that by allowing the Rehab TV show to be aired – and causing the HARD ROCK Marks to become associated with “unsavory, offensive conduct that the majority of the American consuming public finds to be objectionable” [ed.—And yet, the ratings have been high enough to bring it back for a third season so people are watching!] – are intentionally damaging such goodwill.
HRCI also argues that Defendants breached a provision of the 1996 License Agreement by using the mark “HARD ROCK HOTEL” in the title of the Rehab show without HRCI authorization.
HRCI next argues that Defendants have begun branding certain facilities at the Las Vegas property using the acronym HRH (e.g., HRH Tower, HRH Beach Club, HRH Beach Club Bar & Grill) and even branding the property itself as the HRH HARD ROCK HOTEL & CASINO – with the HRH acronym being more prominent than the HARD ROCK HOTEL & CASINO trademark – in an attempt to create a sub-brand of the Hard Rock Marks over which Defendants can claim possesses independent goodwill and capable of being used independently of HRCI (HRCI does have one trademark registration for HRH for clothing items). HRCI maintains that such actions violate the 1996 License Agreement because Defendants are using a mark which is likely to cause confusion with and dilute the distinctive quality of the HARD ROCK Marks.
HRCI’s next focus is on Defendant’s sublicensing of the HARD ROCK HOTEL and HARD ROCK CASINO trademarks to the Cherokee Nation Enterprises, which operates a Hard Rock Hotel & Casino in Tulsa, Oklahoma, and to Pueblo of Isleta Indian tribe which operates a Hard Rock Hotel & Casino in Albuquerque, New Mexico.
Without getting much into specifics, HRCI alleges that the way the HARD ROCK Marks are being used at the Tulsa property are “inconsistent with the brand image HRCI has cultivated over many years” – citing on that “the range of services, character of the establishment and the experience offered to customers is incompatible with consumer expectations for goods and services branded with the HARD ROCK Marks.” [Comment: Are they not offering debaucherous pool parties?]. HRCI cites to some signage that is supposedly not the type of use allowed under the 1996 License Agreement and also mentions the use of the HARD ROCK HOTEL & CASINO mark in the restaurant name “Toby Keith’s I Love This Bar & Grill” where the HARD ROCK mark is subordinate (again, in violation of the provisions in 1996 License Agreement requiring the HARD ROCK Marks to be depicted more prominently, requiring HRCI consent, and requiring HRCI to have copies of all sublicense agreements made between Defendants and third party sublicensees).
HRCI maintains that Defendants have failed in their obligations to ensure that, for its sublicensees, the HARD ROCK Marks are used in a manner that is consistent with the reputation and goodwill of the HARD ROCK Marks. Similar allegations are made regarding Defendants sublicensing at the Albuquerque property.
HRCI’s final focus is the registration by the Defendants of numerous Internet domain names containing variations of the HARD ROCK Marks, including cherokeehardrockhotel.com, hrhpokeronline.com and hardrockroyalty.com, in violation of provisions of the 1996 License Agreement preventing the registration of domain names containing any HARD ROCK Marks.
HRCI’s causes of actions are for breach of contract, declaratory judgment regarding the enforceability of the 1996 License Agreement in light of Defendants’ intentional breaches, federal and state trademark dilution, registered and common law trademark infringement, and federal and common law unfair competition.