Property, intangible

a blog about ownership of intellectual property rights and its licensing

The City Owns “Tavern on the Green”

You just can’t trust your readership.  When the City of New York first claimed that it owned the name of the landmark New York City restaurant “Tavern on the Green,” I posted a poll asking readers’ opinion.  The result from the many, many voters (15) was resoundingly in favor of the restaurant.

We were wrong, according to the District Court for the Southern District of New York.  The court decided the ownership dispute in favor of the City, so the only true “Tavern on the Green” will stay in Central Park.

The court tells us that in 1934 the City hired an architect to turn an 1870’s sheepfold into a restaurant, hired a concessionaire, and opened the restaurant in October of that year.  Over the years a series of concessionaires ran the facility and the City paid for a substantial part of the renovations during that time.  The defendant Tavern on the Green, L.P. (referred to in the decision as Debtor, since the decision is related to a bankruptcy proceeding) had been operating the restaurant since 1973.  The relationship was governed by two agreements, from 1973 (amended in 1976) and 1985.  Both were styled as “licenses,” although neither addressed trademark ownership directly other than to allow the restaurant owner to change the name with the City’s permission. (The new operator was also owner of the famous Maxwell’s Plum, a name that at the time might have overshadowed Tavern on the Green in fame.)

The City’s greatest hurdle was that the restaurateur owned an incontestable registration for “Tavern on the Green,” giving it exclusive rights to the trademark.  This meant that, under Lanham Act § 15, 15 U.S.C. § 1065 (2006), the City had to demonstrate that it was a prior user of the mark.  Turns out it was fairly easily done:

The evidence shows that the City established the restaurant well over thirty-five years prior to the Debtors’ use and registration. The City chose the name and each concessionaire and made significant investments to ensure the success of the restaurant –- such that “Tavern on the Green” was closely associated in the public mind with a building owned by the City and located in New York’s Central Park.

But the use not only has to start first, it has to be continuous.  The parties disputed whether a two year period of closure for renovations (when the defendant took over) meant there wasn’t continuous use.  The court, rightly, held that this was not a sufficient break.  What no one touched, though, was how the City could have had continuous use during the defendant’s occupation of the premises.  To find that the City had continuous use presupposes that the defendant was a mere licensee whose use inured to the benefit of the City, the very fact disputed.  It’s the right outcome, but a foundation for it (tolling, perhaps) would be nice.

What about consumer perception, though?  My informal poll, although not at all representative, demonstrates that consumer perception might be different.  The court merely assumes consumer perception: “‘Tavern on the Green’ has become a famous name associated in the public mind with a restaurant in a City building located in New York’s Central Park.”  But is it?  Where’s the evidence of the public perception?  There was none; instead, the court reached its conclusion based solely on the history and the agreements between the parties.

Mind you, I don’t disagree with the outcome.  It should be exceedingly difficult to appropriate another’s trademark for one’s own. It was the City’s trademark before this particular operator started running the restaurant, and vaguely worded licensing and the unilateral act of registration shouldn’t be enough to defeat the City’s ownership.  It is an interesting question, though – this owner had run the restaurant for over 30 years, so few would remember any earlier iteration of the services offered there.  What are appropriate circumstances when consumer perception should be more material?

The court also cancelled the registration for fraud, likewise an easy call:

That the 1973 Agreement is not explicitly labeled a trademark license agreement does not alter the fact that LeRoy acknowledged the City’s right to the trade name “Tavern on the Green” in the Agreement and knew that his venture was merely one in a succession of operators of the restaurant. Accordingly, the undisputed facts establish that LeRoy deliberately attempted to mislead the PTO about his status as the licensee of “Tavern on the Green,” and the Debtors’ restaurant services mark must be canceled.

New York practitioners take note, you just can’t fight city hall: “The traditional view in New York [is] that the goodwill and rights to the name of a public building run with the building.” See Shubert v. Columbia Pictures Corp., 189 Misc. 734, 739, 72 N.Y.S.2d 851 (N.Y. Sup. Ct. 1947) (“[T]he good will of a public building, such as a theatre or hotel, runs with the building, and that good will passes with the lease of the building to the lessee and cannot be severed therefrom even by its first adopter and user.”) (citations omitted), aff’d, 274 A.D. 751 (1st Dep’t 1948); Norden Rest. Corp. v. Sons of the Revol. in the State of N.Y., 51 N.Y.2d 518, 522-23, 434 N.Y.S.2d 967, 415 N.E.2d 956 (1980), cert. denied, 454 U.S. 825 (1981).

City of New York v. Tavern on the Green, L.P., 09 Civ. 9254 (MGC) (S.D.N.Y. March 10, 2010). article here.

Creative Commons License
Text is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License. Photo credit jrambow.

Share Button