What Exactly is “Intellectual Property”?
by Pamela Chestek • June 3, 2009 • trade dress, trademark
The concept of “intellectual property” is often used as a generic category, particularly in contracts. So what does it mean for an amusement park?
The “Hard Rock Park” was an amusement park in Myrtle Beach, South Carolina. This isn’t going where you think; it’s not about the HARD ROCK marks. The park had been designed by HRP Creative Services Co., LLC (“HRP”) and the Hard Rock marks were appropriately licensed from Hard Rock Café International. The park was a bust, though, so it closed and the operating company, HRP Myrtle, filed for bankruptcy.
HRP claimed ownership of the “Creative Content” in the park, as described in the “Creative Content Registry” (“CCR”) exhibit to the Creative Services Agreement between HRP and HRP Myrtle. The CCR listed as its creative content, in part, the “concept of park program (mix of attractions and amenities) designed to allow all demographics and ages of a family unit to enjoy attractions in the same Zone”; the “concept of landscaping to provide a significant portion of shade cover”; “theme park elements (meaning the design and layout of the Park, the mix and all other aspects of the Attractions)”; a “buffeteria-style restaurant/food facility featuring indoor and outdoor seating, a live performance stage, island theming and island/rock memorabilia”; a “British Zone area”; a “Caribbean Island themed crafts/shopping area”; a “retail gift shop themed to look like an old retrofitted military Quonset hut”; a “full service sit-down restaurant themed in a late 60’s, early 70’s antiwar, naturally ‘bitchin’ love-in decor”; and a “Heckle House,” which is an industry term for inanimate object or puppet that comically berates people in the crowd for fun entertainment purposes, in this case in the form of a “fiberglass cow that talks to the audience (via a live-voice performer off ‘stage’ on a speaker in the Cow’s mouth.”
Defendant FPI-MB Entertainment, LLC (“FPI”) bought the park out of bankruptcy. The Asset Purchase Agreement excluded the Hard Rock assets and the “HRP Creative Services Co. LLC license.” When FPI contacted HRP about the license, HRP demanded a royalty. FPI instead elected to file a motion in bankrutpcy court for an order that it owned the intellectual property in the park, which was denied without a determination of rights. FPI then undertook a rebranding, removing all the Hard Rock branding and HRP’s registered trademarks from the park and changing a number of aspects of the park to make it more family friendly, like covering a painting of a large marijuana leaf with a sunburst.
HRP filed the lawsuit on April 24, 2009. On May 14 it asked for an expedited hearing for a preliminary injunction to be held before Memorial Day, when the park was scheduled to open. The court held the hearing on May 20 and issued its memorandum on May 22.
In this case the “intellectual property” was two things: registered trademarks and trade dress. The infringement of registered marks was readily disposed of, since FPI had removed them all. This query in the freeform search at the PTO web site will show you the marks: (“hrp creative”)[ON] and (`AD > “20090424” or live[LD]).
And not so fast that there were any “trade dress” rights either. “Creative content” and “intellectual property” are not the same: “HRP asserts that it retains ownership in the Creative Content, as detailed in the CCR . . . . According to HRP, it ‘has shown validity and ownership of its intellectual property’ and the only other issue is likelihood of confusion. This conclusory argument ignores two of the three factors HRP must establish to succeed on its trade dress claim,” i.e., functionality and distinctiveness.
On distinctiveness, the court made the following observation:
Denial of a preliminary injunction was easy:
|HRP has failed to demonstrate that it will suffer harm. By contrast, FPI’s harm from a preliminary injunction would be catastrophic and probably fatal to the new park. Given the low to non-existent likelihood of public confusion, especially weighed against the indefinite layoffs of more than one thousand people in this difficult economy, the public interest heavily weights in favor of FPI. Given its vaporous to preposterous claims, HRP has not shown any serious likelihood of success on the merits.|
Visit the new Freestyle Music Park.
P.S. The entire opinion has (rightfully) a high snark quotient. One example – HRP had listed in the CCR a theme for a gift shop that included “flowered ‘Hawaiian’ wear like shirts, shorts and bandanas (ala [sic] Tommy Bahama . . . .” This drew a footnote from the court: “There are 72 trademarks in the federal trademark database containing the words ‘Tommy Bahama.’ Yet HRP–staunch defender of intellectual property that it claims to be–gives no attribution in the CCR, which HRP claims it owns.” Likewise, HRP’s reference in the CCR to a “House of Blues feel” provoked the court to comment that “Again, the federal trademark database includes 86 entries for ‘House of Blues,’ but HRP does not provide any attribution in the CCR.”
© 2009 Pamela Chestek