Editorial: Learning the hard way

Tuesday, Dec. 19, 2006 | 7:07 a.m.

Las Vegas Convention and Visitors Authority officials say they have learned an expensive lesson after shelling out more than $780,000 to reclaim the rights to a popular marketing slogan that the authority's chief executive sold for $1.

The "What happens here, stays here," slogan is the hallmark of one of the nation's most recognized and successful marketing campaigns. The "What happens here" campaign drew attention from late-night talk-show hosts and was used on knockoffs everywhere. And it was in pursuing one of those marketing knockoffs that an LVCVA official made a backroom deal that has cost the taxpayer-supported tourism agency nearly a million dollars.

In 2004 the authority sued a California woman for trademark infringement because she was selling clothing that sported the slogan, "What happens in Vegas, stays in Vegas." Hoping to bolster the lawsuit, authority Chief Executive Rossi Ralenkotter struck a secret deal in which he sold the rights to the slogan for $1 to R&R Partners, the advertising firm that had coined the phrase for the authority.

A series of stories and columns by the Las Vegas Sun revealed that Ralenkotter had worked out the deal with R&R President Billy Vassiliadis with neither the knowledge nor permission of the LVCVA's 13-member board. Sun reporter Jeff German on Friday reported that the authority has paid more than $760,000 to a San Francisco law firm and about $26,000 to two Nevada law firms in legal fees.

A U.S. District Court judge ruled in favor of the authority's lawsuit against the California woman in 2005. And the judge also said that the authority had improperly sold the "What happens here" rights to R&R. An authority spokesman told the Sun's German that the agency has learned an important lesson about protecting its trademarks.

We certainly hope so.