Wynn Resorts Files Declaratory Judgment Action Over XS

On July 13, 209, Wynn Resorts Holdings, LLC (“Wynn Resorts”), the sole member of Wynn Las Vegas, LLC, which owns and operates the Wynn Las Vegas casino hotel and resort, filed a declaratory judgment action against NYLO Hotels, LLC (“NYLO”), in the U.S. District Court for the District of Nevada. See Wynn Resorts Holdings, LLC v. NYLO Hotels, LLC, Case No. 09-cv-01258 (D. Nev. July 13, 2009). A copy of the complaint can be downloaded here.

For those outside Las Vegas, the Encore Las Vegas is the latest hotel project by well-known hotel/casino developer Steve Wynn. As part of Encore, Wynn decided to develop a restaurant/bar/nightclub named XS. And as any good businessman does, Wynn filed for trademark protection for the mark XS (one application for night club services and one for restaurant and bar services – both filed February 4, 2008).

Wynn’s applications hit an initial stumbling block when its applications were rejected on the basis of likelihood of confusion over the registered (and incontestable) mark XS owned by XS Entertainment, Inc. ( for “entertainment in the nature of indoor and outdoor amusement complexes” and “restaurant services, namely, restaurant and bar services.”). The same office action noted that there was one other pending intent-to-use trademark application for XS filed by NYLO with an earlier effective filing date.

Wynn was able to overcome the likelihood of confusion rejection by simply acquiring the registered mark from XS Entertainment, Inc. (with all of its correspondence goodwill of course) Of course, if XS Entertainment knew that it was Wynn seeking the mark, XS Entertainment might jack up the price – and so Wynn had The Treadstone Group acquire the mark on July 18, 2008 on Wynn’s behalf and The Treadstone Group subsequently assigned the mark to Wynn on July 31, 2008 (click here for the PTO’s Assignment Records). Wynn subsequently renewed the registered mark on November 28, 2008 (with specimens showing the mark used in connection with the XS nightclub). [Comment: One wonders how much goodwill there was for Wynn to acquire along with the actual trademark registration?]

Of course, Wynn’s acquisition only allowed it to overcome half of the trademark battle. With Wynn owning the registered mark that was owned by XS Entertainment, Inc., the PTO still suspended prosecution of Wynn’s two pending applications pending the outcome of NYLO’s earlier filed intent-to-use application.

On April 22, 2009, NYLO sent a cease and desist letter to Wynn demanding that Wynn stop using the XS mark (and dropping the hint that it would be willing to discuss licensing opportunities). Wynn’s counsel responded to NYLO noting Wynn’s ownership of a trademark registration for XS as well as Wynn’s actual use in commerce of the XS mark (compared to NYLO’s pending intent-to-use).

NYLO’s counsel wrote back to Wynn on May 28, 2009, reiterating its demands that Wynn cease and desist and claiming that Wynn’s trademark registration for XS was invalid on the basis that a) when the registration was renewed, it was not being used for “indoor and outdoor amusement complexes” b) the original application was impermissibly broadened to include “bar services” and c) that the mark had been abandoned by XS Entertainment. NYLO argues that Wynn’s only rights are its common law rights acquired through its actual use of the XS mark in January 2009 – long after the constructive use date of NYLO’s application [ed.—and after Wynn had actual notice of NYLO’s pending intent-to-use application].

Based on this “reasonable apprehension” that Wynn is violating NYLO’s trademark rights and that NYLO will pursue injunctive relief against Wynn – when and if NYLO’s pending trademark application is ever registered – Wynn filed for a declaratory judgment that its use of XS is lawful and does not violate NYLO’s rights.

Of course, the big question here is how could NYLO have gotten its own XS trademark application approved by the PTO in light of the existing XS registration where there was a clear overlap of services in the area of “restaurant services.”

Looking at NYLO’s lengthy list of services, does Wynn have a possible argument that NYLO lacked a bona fide intent to use the mark in connection with all of the services described? After all, NYLO is still on its third extension of time to file a statement of use. Does NYLO have the business plan materials to show a bona fide intent back to when it first filed the application? We shall see.

Steve Green with the Las Vegas Sun, an avid trademark lawsuit watcher, has his own article on the lawsuit (link here).

Geisha LLC Denied Summary Judgment Over New York Man’s JAPONAIS Trademark Registration

There was another court decision in the long running battle between the founders of the restaurant Japonais and a New York man who was first to file a trademark registration application for the JAPONAIS mark with the U.S. Patent and Trademark Office (“USPTO”). See Geisha LLC. v. Tuccillo, 2009 U.S. Dist. LEXIS 20300, Case No. 05-cv-05529 (N.D. Ill. March 13, 2009). The decision was a setback for the Japonais restaurant founders and underscores the importance of businesses taking the steps to seek trademark registrations early for their intended their trademarks and service marks in order to protect their subsequent ability to expand the use of such marks nationwide.

Geisha LLC (“Geisha”) is the founder of the European/Japanese fusion restaurant “Japonais.” The company was formed in December 2001 and sometime thereafter selected “Japonais” (English for “Japanese”) as the name for its planned restaurant. In early 2003, Geisha created the JAPONAIS design mark pictured above. Unfortunately, Geisha did not seek to apply for registration of its name or logo sometime before it opened its first restaurant in downtown Chicago on September 23, 2003. While the Japonais restaurant received some nationwide press from Bon Appetit magazine, Conde Nast Traveler, and Time magazine, Geisha’s JAPONAIS design mark only appeared in advertisements in the Chicago market

On June 25, 2004 – nine months after the restaurant opened (and two weeks after an article about the restaurant appeared in Time magazine) – a man named Roy Tuccillo, owner of Anchor Frozen Foods, a New York-based frozen seafood supply company, filed an intent-to-use application with the USPTO for the mark JAPONAIS (coincidentally with the same style as the logo created by Geisha having an inverted V in place of the A) in connection with restaurant and lounge services. Tuccillo testified in deposition that he had used his JAPONAIS mark as far back as 2000 when he put it on a store front window where he sold his frozen seafood (Tuccillo offered an undated photo of a unidentified store front window as evidence).

Geisha did not discover Tuccillo’s intent-to-use application until September 2005 – long after the period for Geisha to file an opposition to registration had expired. The PTO issued a Notice of Allowance on August 23, 2005. Geisha’s counsel notified Tucillo’s attorney about Geisha’s rights to the JAPONAIS mark to which Tucillo apparently replied that he intended to use the name in connection with a future restaurant and lounge. Geisha then filed the instant action against Tucillo on September 26, 2005, claiming, among its ten causes of action, false designation of origin under 15 U.S.C. § 1125(a). While the case was proceeding, Geisha opened two additional Japonais restaurants – one in New York City and the other in Las Vegas – using its JAPONAIS design mark.

Geisha’s complaint had also sought declaratory relief that Geisha possessed superior rights in the mark and that Tuccillo’s intended use of the mark would constitute infringement – relief that was preliminarily denied because Tuccillo had not yet used the mark and was not immediately threatening to do so.

On May 2, 2008, however, Tuccillo filed a Statement of Use declaring that he was using the mark in commerce in connection with restaurant and lounge services. Tuccillo’s specimen of use was a menu showing the JAPONAIS mark as well as a photo of the mark etched onto a window. Geisha subsequently moved for summary judgment on its false designation of origin claim arguing that Tuccillo’s conduct in registering and using the mark constituted false designation of origin.

The court denied Geisha’s motion for summary judgment based on genuine disputed issues of material fact, particularly on the issue of whether the geographic reputation of Geisha’s restaurant and the JAPONAIS mark had penetrated the New York area such that Geisha could claim prior common law trademark rights.

The court first analyzed Geisha’s rights in the JAPONAIS mark at the time Tuccillo filed his application. Because Geisha did not apply to register the mark with the USPTO, Geisha was not entitled to the presumption of constructive notice nationwide, and thus must show evidence that its rights extended beyond the Chicago area. While the general rule is that a junior user who is unaware of the senior user’s use may adopt a mark in a geographically distinct area provided that the mark has not been registered, one exception to this rule is where the senior user’s reputation extends beyond the immediate geographic area where the mark is employed.

In analyzing Geisha’s reputation, the court noted that by June 2004, most of Japonais’s publicity had been in the Chicago media and in trade publications and the particular stylized JAPONAIS mark appeared in only three advertisements in Chicago-based publications before Tuccillo filed his application. In the end, the court found that it could not conclude, as a matter of law, based on the evidence in the record that the JAPONAIS mark had obtained such widespread notoriety by June 2004 that Geisha possessed common law rights in the mark in New York at the time Tuccillo filed his application.

The court further noted that Geisha’s expansion to New York and Las Vegas does not create enforceable trademark rights in New York that Tuccillo violated by opening his restaurant because Tuccillo had filed an intent-to-use application giving him an effective date of first use of June 2004 with respect to the JAPONAIS mark despite not actually using it until May 2008 – the wonderful benefit of the intent-to-use trademark laws. Indeed, any party that begins using the mark after an intent-to-use application is filed will be treated as a junior user with respect to such intent-to-use trademark applicant.

The court then eloquently explained an important distinction (often misunderstood) between constructive use and constructive notice (citations omitted):

Constructive notice, obtained when a mark is actually registered on the principal registry, prevents further use of the mark by others. Even senior users may be restricted to the areas they operated in at the time of registration. Constructive use, by contrast, prevents a third party from acquiring any rights in the trademark as of the date the intent-to-use application was filed. Under this doctrine, Tuccillo will have a constructive use date of June 25, 2004, the date he filed the ITU application. Constructive use is subject to two important limitations that are relevant here: first, constructive use is contingent upon actual registration of the mark, and second, constructive use does not bar use of the mark by senior users.

At the time of the court’s decision, Tuccillo’s mark had not yet registered, which left the question of Tuccillo’s constructive use priority in question. Well, there is no longer any doubt because Tuccillo’s mark was registered yesterday, March 17, 2008 (U.S. Registration No. 3,591,621). [Geisha has promised to initiate a cancellation proceeding with the Trademark Trial and Appeal Board -- meanwhile, Geisha's own trademark registration applications (here and here) are suspended].

Nonetheless, there was sufficient uncertainty that the court was able to conclude that Geisha was not entitled to judgment as a matter of law on its false designation of origin claim. The court held that Tuccillo could not have violated Geisha’s rights in the mark in New York unless Geisha possessed common law rights in New York prior to the constructive use date of June 25, 2004 – and that the extent of Geisha’s common law rights is a contested issue of material fact that precludes summary judgment.

The court further noted that while Geisha’s expanding use of the Japonais mark in New York would ordinarily not be precluded because it occurred before Tuccillo’s date of registration (i.e., the date of constructive notice), in this case, Geisha had actual notice of Tuccillo’s pending application prior to its expansion. As the court stated, “If constructive notice that Tuccillo possesses rights in the mark bars Geisha from expanding its use of the mark, surely Geisha is under similar constraints where it has actual notice of Tuccillo’s application.” (italics in original). The court added that “It would be inequitable to hold Tuccillo in violation of Geisha’s trademark rights in these circumstances. Geisha did not operate in New York prior to Tuccillo’s filing the ITU application, in which Tuccillo swore he had a bona fide intention to use the mark in the restaurant and lounge industry and that he had no knowledge of any other use of that mark in the industry.”

In the end, the court was unable to conclude, as a matter of law, that Tuccillo had no rights to the JAPONAIS mark or that Tuccillo infringed Geisha’s trademark rights when he opened his restaurant, and therefore, denied Geisha’s motion for summary judgment.