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Russell Road Food and Beverage, LLC v. Spencer

United States District Court, D. Nevada

May 6, 2014

RUSSELL ROAD FOOD AND BEVERAGE, LLC, a Nevada limited liability company, Plaintiff,
v.
FRANK SPENCER, an individual; CRAZY HORSE CONSULTING, INC., an Ohio corporation; and DOES 1-50, inclusive, Defendants.

ORDER

LARRY R. HICKS, District Judge.

Before the Court is Plaintiff Russell Road Food and Beverage, LLC's ("Russell Road") Motion for Summary Judgment. Doc. #45.[1] Defendants Frank Spencer ("Spencer") and Crazy Horse Consulting, Inc. ("CHC") (collectively "Defendants") filed a Response (Doc. #47), to which Russell Road replied (Doc. #49).

I. Factual Background

This is a trademark dispute. Defendants claim to own trademark rights to the CRAZY HORSE mark and assert that Russell Road's use of its CRAZY HORSE III mark infringes on these rights. On the other hand, Russell Road asserts that a co-existence and consent agreement between Russell Road and Defendants entitles it to use the CRAZY HORSE III mark and, thus, Defendants are contractually prohibited from asserting trademark claims against Russell Road for its use of the CRAZY HORSE III mark. Russell Road filed this lawsuit in an effort to obtain declaratory relief of non-infringement of the CRAZY HORSE trademark.

A. History of the Crazy Horse Trademark

Presently, both Spencer and Russell Road operate strip clubs featuring nude female dancing.[2] Spencer's Ohio strip clubs are called "Crazy Horse Cleveland, " "Crazy Horse Men's Club, " and "Platinum Horse Brook Park." Spencer Decl., Doc. #16, ¶ 6. Spencer has continuously operated Ohio strip clubs under the Crazy Horse name since 1978. Id. at ¶ 4. Russell Road's Las Vegas, Nevada strip club is called "Crazy Horse III." Sostilio Decl., Doc. #19-1, ¶ 2. Russell Road first used this name in 2009. Id. In 2006, Carl Reid ("Reid")-yet another owner of a Crazy Horse strip club, this time in South Carolina-applied for and received federal registration of the Crazy Horse trademark for "exotic dance performances." Spencer Decl., Doc. #16, Ex. F. Thereafter, Reid also registered the PURE GOLD'S CRAZY HORSE trademark. Id., Ex. J.

B. Assignment of Trademark Co-Existence Agreement to Russell Road

In 2009, a Nevada company called Crazy Horse Too A Gentleman's Club ("CHTAGC") and Reid became involved in administrative litigation before the United States Patent and Trademark Office's ("USPTO") Trademark Trial and Appeal Board ("TTAB"). CHTAGC resolved their dispute by entering into a Trademark Co-Existence Agreement (hereinafter "Consent Agreement") on September 16, 2009.[3] Tarabichi Decl., Doc. #45-1, Ex. B. The Consent Agreement specifically provides the following:

Mr. Reid consents to [CHTAGC's] use and registration of the CRAZY HORSE TOO GENTLEMEN'S CLUB mark in standard characters, ..., and any mark that includes the phrase CRAZY HORSE provided the mark does not contain the phrase PURE GOLD'S, the terms PURE or GOLD'S, or any phrase or term confusingly similar to PURE GOLD'S. Mr. Reid further agrees not to oppose, petition to cancel, or otherwise interfere with [CHTAGC'S] use and registration of such marks.

Id. Additionally, CHTAGC and Reid agreed that the Consent Agreement would be binding on their successors, assigns, and licensees:

This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective successors, assigns and licensees, and any corporation which owns or controls or is owned or controlled by any party or with which any party has common ownership or control.

Id. On August 16, 2012, CHTAGC assigned all of its rights, title, and interest in and to the Consent Agreement to Russell Road.[4] Tarabichi Decl., Doc. #45-1, Ex. E. Pursuant to the terms of the Assignment of Trademark Co-Existence Agreement (hereinafter "Assignment Agreement"), CHTAGC and Russell Road agreed that "[CHTAGC] shall assign all of [its] rights, title, and interest in and to the [Consent Agreement]...." Id.

C. Assignment of Trademark to CHC

On December 10, 2010, Reid assigned the CRAZY HORSE trademark to Spencer's wholly owned licensing entity CHC. Spencer Decl., Doc. #16, Ex. F. Spencer paid $10, 000 to Reid for the assignment. Tarabichi Decl., Doc. #45-1, Ex. D, No. 57. At the time, Spencer was aware of the Consent Agreement between CHTAGC and Reid. Tarabichi ...


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