Besieged by the Bellagio
If you're opening a business, think twice about what you name it.
By SCOTT BARANCIK, Times Staff Writer
Published January 8, 2008
Bellagio, an opulent Las Vegas resort named after a humble Italian village, has become something of a global legal menace. Its growing enemies list includes a Fort Lauderdale condo project called Bellaggio at Coral Ridge, a Georgia chocolatier named Bellejais, and Bellagio restaurants located in Moscow, Great Britain and Tampa's Westchase area - all of which have been warned to change their name.
Fort Lauderdale developer Luis D'Agostino, who gave in to pressure last year and spent $25,000 to rename his condo project Porto Venezia, says it's not fair. No one could confuse his 10-unit spread with Bellagio's 4,000-room colossus, he claims. Nor is it legal to trademark a geographic location. "That's like claiming the name 'New York City,'" he argues.
Experts disagree. Under the right circumstances, they say, a well-prepared trademark holder can enforce its mark overseas, crush logos that resemble its own and even lay claim to a city's name. Combine that resolve with deep pockets - Bellagio's parent company, MGM Mirage, had revenue of $7.2-billion in 2006 - and you have yourself one ferocious policing machine.
"We've invested billions of dollars to build this brand," MGM spokeswoman Yvette Monet says. "You can understand why we are obligated to pursue even minor cases of trademark infringement."
Some cases hardly seem incidental. Shortly before Bellagio opened its gilded doors in 1998, a company obtained a Canadian trademark for the word "Bellagio," reserved the Web domain www.bellagio.com and used it to sell high-priced counterfeit apparel emblazoned with Bellagio's own logo, including $125 golf shirts and $6,000 limited-edition leather jackets. Several years ago, a West Palm Beach restaurant called Il Bellagio built a miniature version of the Vegas resort's well-known dancing fountains.
The copycat needn't be a competitor for the infringement to sting. Imagine the outcry at Walt Disney Co. if Orlando resident John Q. Disney were to open a local establishment called Disney Dry Cleaners, or worse yet, the Disney Adult Book Store.
Many of Bellagio's targets - there are dozens each year - profess innocence. Some claim a personal connection to the Italian village called Bellagio, often translated as "beautiful lake." Others, like the owner of Cafe Bellagio in Thousand Oaks, Calif., say they dutifully obtained a trademark from their home state, if not a federal one.
Like D'Agostino, Bellejais co-owner Neal Howard is confident he could have clobbered Bellagio in court if he and his business partner had the money. "Bellejais" is an invented name. The chocolate shop's offending logo - a cursive "B" similar to Bellagio's - was nothing more than a Microsoft Word font. Says Howard: "What our attorneys told us was, 'You can win this. You just can't survive the fight.'"
In fact, Howard's majority partner filed for bankruptcy shortly after Bellagio mailed a warning letter last year. Howard had to close the shop - which he admits was already suffering financially - and now their lender is coming after him. He faces the possibility of bankruptcy as well as the loss of his family's home. "That's what Bellagio has done for me," he says.
Marking its territory
Trademark protections are broader than many small-business owners might imagine.
Small differences in spelling, punctuation or design, for example, are no guarantee against legal action. Though geographic locations like Tampa or New York City generally cannot be trademarked, exceptions can be made if time and marketing have rendered the location and the business synonymous, says Stefan V. Smith, a partner at Holland & Knight in Tampa and former head of the firm's intellectual-property group.
Holders of "Famous" trademarks like Coke or Disney are entitled to even broader enforcement rights, Stein says. While the makers of Unknown Cola only can go after infringing carbonated beverages, for example, Coca-Cola can sue the manufacturers of Coke underwear, pencil sets or mouthwash. That power comes with an obligation, however. If Coke fails to police infringers, its "famous" status may be disputed in court.
Overseas violations usually are not subject to U.S. trademark law. But they can be policed if the trademark owner has been marketing his business in the violator's home market, or if the foreign company does business in the United States via the Internet.
Enforcement
Keeping abreast of trademark violations is no small task. Monet, the MGM Mirage spokeswoman, says sources include lawyers, Google, suppliers and guests. Holland & Knight's Stein says many large companies use a "watch" service like Thomson CompuMark, which tracks trademark registrations in the United States and abroad.
When a potential violation is identified, Bellagio sends a cease-and-desist letter. If that fails to spark a name change, the resort may sue.
To D'Agostino, the Fort Lauderdale developer, the moniker simply wasn't worth fighting for. "We sold only four (of 10) units preconstruction," he says. "If the name Bellagio was so great, I should've sold them all."
Scott Barancik can be reached at barancik@sptimes.com">href="mailto:barancik@sptimes.com" mce_href="mailto:barancik@sptimes.com">barancik@sptimes.com or (727) 893-8751.
The offenders
Most of the companies warned by Bellagio to change their name eventually do so, but not all fare well. Here is what happened to a few:
- Bellagio Restaurant & Pizza, in Tampa's Westchase area: After getting a cease-and-desist letter in 2003, the owner changed its name to Bellisimo Ristorante.
- Bellaggio at Coral Ridge, a Fort Lauderdale condo development: After being sued last year, the developer changed its name to Porto Venizia at a cost of $25,000.
- Bellagio, a women's clothing store in Edina, Minn.: Changed its name to Arafina.
- Bellejais, a chocolatemaker in Woodstock, Ga.: The company was already struggling financially when Bellagio sent a cease-and-desist warning last year, but that was the last straw. Bellejais' majority owner filed for personal bankruptcy and walked away from a business loan. Its minority partner is on the hook for the loan now and faces the possibility of bankruptcy and the loss of his home.