Tuesday, November 16, 2010

Hard Rock Hotel Fires Back Against Hard Rock Café Trademark Lawsuit. . .and Reveals the True Story Behind the Dispute

I previously blogged (link here) about the trademark infringement lawsuit filed by Hard Rock Café against the Hard Rock Hotel.

Last Friday, the Hard Rock Hotel fired back with its own counterclaims against Hard Rock Care for breach of contract and tortious interference with business relations arising from Hard Rock Café’s alleged interference with Hard Rock Hotel’s sublicensing activities. A copy of the Hard Rock Hotel’s Answer and Counterclaims can be downloaded here (HT: Steve Green). The Las Vegas Sun has an article on the court filing here.

When the lawsuit was filed back in September, it had all of the tell-tale signs of “something else is going on here.” It seemed pretty obvious (at least to me) that the Hard Rock Café was using some slight “breaches” to try to gain some kind of business advantage. Now, with the Hard Rock Hotel’s Answer, it becomes a little clearer what this dispute is really about – and no surprise, it’s about money.

The true nature of this dispute is revealed in the Hard Rock Hotel’s Preliminary Statement which states the following:

The Hard Rock Defendants have done nothing wrong and, in fact, are victims of systematic legal and business harassment by the Café, which today’s countersuit seeks to remedy. The Hard Rock Defendants enjoy an exclusive, perpetual and royalty-free right to use the “Hard Rock” family of marks for hotel-casinos and casinos west of the Mississippi and in certain international locations. These rights are clearly spelled out in a 1996 license agreement, which the Café is unhappy with but legally bound by. Under that license, the Hard Rock Defendants operate the popular Hard Rock Hotel and Casino Las Vegas; have developed Hard Rock Hotel-Casinos in Tulsa and Albuquerque, through tribal sublicensees; and are actively pursuing other hotel-casino and casino development opportunities in the territories where they enjoy exclusive rights. Per the license agreement, none of the revenue from these ventures goes to the Café or ever will.

The Café has brought the present lawsuit – a meritless grab bag of claims for breach of license, trademark infringement, trademark dilution and unfair competition – in an attempt to terminate or rewrite the 1996 license agreement. The Café complains about a range of alleged trademark abuses that in many cases it has long known about, tolerated or even approved. Most notably, the Café claims to be shocked and disturbed by the popular reality television show “Rehab: Party at the Hard Rock Hotel,” filmed at the Hard Rock Hotel and Casino Las Vegas – despite the fact that this show and the lively behavior it portrays have already been on the air for two years; depicts an event similar to the “Detox” party held at one of the Café’s properties; and has brought enormous positive publicity to the Hard Rock brand. Likewise, the Café purports to be upset about the Tulsa and Albuquerque ventures despite having offered public praise about both ventures. The meritless and untimely nature of the Café’s allegations confirms that this lawsuit is nothing more than an attempt to escape the disadvantageous 1996 license agreement.

Frustrated at being contractually excluded from a lucrative business in a large territory, the Café, in addition to filing the Complaint, has also resorted to improper business tactics. The Café has actively pursued its own projects in the Hard Rock Defendants’ exclusive territories in direct violation of the letter and spirit of the license agreement. The Cafe has interfered with the Hard Rock Defendants’ development projects, including by making untrue and overreaching public statements to deter potential partners from doing business with the Hard Rock Defendants. This misconduct by the Café violates the license agreement and the law, and it must stop.

Of course, Hard Rock Café would say that this is just the Hard Rock Hotel's spin on the dispute. But looking at the situation impartially, what makes more sense? That the Hard Rock Café feels that the Hard Rock Hotel and the “Rehab” show is harming the “rock and roll image” of the Hard Rock trademark so badly that it filed this action – or that Hard Rock Café is looking for a way to rescind the Hard Rock Hotel's license (and sublicense) agreement so that it can have the entire bundle of trademark rights to itself?

Friday, November 5, 2010

The latest Facebook trademark dispute - Lamebook

Facebook’s aggressive trademark enforcement efforts against any third party use of trademarks using “–book” (or “face-“) have been well documented in the media (most recently, Teachbook) (articles here, here, and here among many). A review of the Trademark Trial and Appeal Board filings by Facebook also documents the number of trademark applications involving the word “book” or “face” that Facebook has opposed.

Yesterday, the website Lamebook, which prides itself on finding and reposting amusing pictures and status updates (along with “other gems”) found on social networking websites like Facebook and Twitter, decided to be proactive and filed a declaratory judgment action in the face of a cease and desist letter from Facebook seeking a declaration of non-infringement and non-dilution. See Lamebook, LLC v. Facebook, Inc., Case No. 10-cv-00833 (W.D. Tex. November 4, 2010). Techcrunch reports on the lawsuit (and provides a copy of the complaint).

Lamebook’s position is that its use of the mark Lamebook is protectable parody. So naturally, Facebook’s position will be that its mark is famous (not an unreasonable position) and that this mark causes a likelihood of dilution (ask Louis Vuitton about the viability of this position). Of course, as described in this prior blog post regarding a different parody mark, the online nature of the services offered by both Facebook and Lamebook may make the case more suitable for a traditional likelihood of confusion analysis.