• Another Restaurant Name Dispute

    by  • December 28, 2010 • trademark

    Specimen

    One of the most common scenarios where trademark ownership disputes arise is between the owner of the building and the operator of the business in the building.  There was the newsworthy “Tavern on the Green” case, where the City of New York successfully retained ownership of the name for the landmark building in Central Park, and the continuing internecine dispute over “Joyce Theater.”  The common thread in these disputes is that there are documents defining the relationship, but they do not elaborate on trademark ownership.  The court has to do some tea leaf reading to figure out what the intent of the parties was with respect to the trademark ownership.

    In Nothing Heavy, Inc. v. Levinson, though, the court has a little more than just tea leaves.  The defendant’s predecessor had originally opened a diner under the name “Empire Diner” and operated it for about 30 years.  In 1976, plaintiff Nothing Heavy then leased the property and made substantial improvements to the restaurant.  In 2002 it filed a trademark application to register “Empire Diner,” but the lessor caught on.  The lessor then negotiated a deal where Nothing Heavy would abandon the application in exchange for the lessor’s consent to an outdoor sidewalk cafe license:

    (Note that I’m not sure much was obtained on the trademark front; the application was about to be finally refused under § 2(d) for likelihood of confusion with EMPIRE, KOSHER EMPIRE RESTAURANT, EMPIRE KOSHER CHICKEN RESTAURANT and EMPIRE BREWING COMPANY.)

    But that wasn’t the end of it.  In 2007, Nothing Heavy began negotiating with third parties to expand the use of THE EMPIRE DINER trademark and trade dress.  A potential licensee, Michael Feucht, filed a Madrid application for THE EMPIRE DINER and extended it to the United States.  Nothing Heavy then asserted to the lessor that it owned the trademark, the lessor opposed the Feucht trademark application, and asserted its own ownership claim to the restaurant name.  Ultimately Nothing Heavy lost the lease to the restaurant, vacated the building, and sued for a declaratory judgment that it owns the name of the restaurant.

    There’s not much meat at the moment for this case.  The decision is on a motion to dismiss by the lessor, claiming that the 2003 amendment precludes the trademark ownership claim altogether.  The court, I think rightly, rejects the theory:

    Reading the contract language in the light most favorable to Plaintiff, the agreement unambiguously requires Plaintiff to forgo trademark registration-nothing else. Plaintiff’s covenant means that Plaintiff relinquished its right to become a registrant, which confers certain benefits to trademark owners, but is not the only avenue for acquiring trademark rights. See 15 U.S.C. § 1127 (“trademark”). Based solely on the contract language, the covenant cannot be reasonably construed to bear on any common law trademark rights claimed to have been already acquired by Plaintiff. Nor can it be construed as an admission that Plaintiff lacks trademark rights. The 2003 Amendment is thus not dispositive. There are simply insufficient facts at the moment to conclude that Defendants are, as a matter of law, the owners of THE EMPIRE DINER trademark.

    The pleadings and decision reference an opinion of counsel obtained by Nothing Heavy that it is the owner of the trademark, but I couldn’t find a copy through the docket.  That’s an opinion I’d be interested in reading.  Wonder what it did with this: “The traditional view in New York [is] that the goodwill and rights to the name of a public building run with the building.” City of New York v. Tavern on the Green, L.P., 09 Civ. 9254 (MGC) (S.D.N.Y. March 10, 2010) (citing cases).

    Nothing Heavy Inc. v. Levinson, No. 10-cv-03466 (GBD) (S.D.N.Y. Dec. 6, 2010).

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