Columnist Jeff German: Slogan sale may have skirted law

Tuesday, June 28, 2005 | 11:02 a.m.

R& R Partners wasted little time last November looking to cash in on its newfound trademark rights to the popular slogan "what happens here, stays here."

The high-powered advertising agency obtained the rights to the phrase it created for $1 in a Nov. 9 written agreement between Las Vegas Convention and Visitors Authority President Rossi Ralenkotter and R & R Partners CEO Billy Vassiliadis.

The ink was barely dry on the secret eight-page agreement Nov. 9 when R & R lawyers express-mailed a package to the U.S. Patent and Trademark Office with an application for a trademark to market "souvenirs and clothing" under the "what happens here, stays here" name.

Records show the application was received and filed by the patent and trademark office the next day in Washington.

On the application, which is still being reviewed by the federal agency, R & R General Counsel Morgan Baumgartner said her company "has a bonafide intention to use the mark in commerce on or in connection with the above identified goods/services."

That would be the souvenirs and clothing.

And that would also seem to cast doubt on the explanation that Ralenkotter and Vassiliadis have given as to why the advertising agency acquired the rights to the slogan. Both executives continue to insist that the deal was designed to allow R & R to pursue legal action against others in the business world who might try to steal the slogan.

Vassiliadis also contends that his company had no interest in profiting from the mark.

If that's true, and Baumgartner filed the application solely to give R & R more standing in court to stop those infringing on the mark, then she and her company could be in a lot of trouble with the federal government.

Baumgartner, who could not be reached for comment, acknowledged on the application that any "willful false statements" she made about R & R's intentions to use the slogan on souvenirs and clothing could be "punishable by fine or imprisonment, or both," under federal law.

So who's telling the truth here? Vassiliadis, who says his company wasn't looking to profit? Or Baumgartner, who told the feds under penalty of perjury that the company was looking to profit?

"If you file an intent to use application, you better have a bonafide intent to use the mark in the way that you designate it," said Mary LaFrance, a UNLV Boyd Law School professor who teaches trademark law. "Making a false statement on a federal filing is a very serious thing."

LaFrance said the federal trademark system is there to ensure that people who say they're going to use a mark actually use it.

"The entire system is set up to prevent people from warehousing trademarks," she said. "If you're not going to use it, somebody else should be free to use it."

Sacramento lawyer Daniel Ballard, who's on the other side of R & R in an infringement lawsuit, said R & R has to make good on its promise to market "what happens here, stays here" souvenirs or it will loose any right under federal law to the trademark.

"This is just more evidence that the LVCVA gave away a valuable mark," he said.