Tuesday, Aug. 15, 2006 | 7 a.m.
Perhaps saving the Las Vegas Convention and Visitors Authority from one of the more embarrassing deals in its history, a federal judge has officially voided the $1 sale of the tourism agency's most popular marketing slogan.
In a 20-page opinion, dated Wednesday, U.S. District Judge Larry Hicks said the LVCVA two years ago improperly turned over the valuable trademark rights to "What happens here, stays here" to its longtime advertising firm, R&R Partners.
The deal was struck Nov. 9, 2004, without the knowledge of the 13-member LVCVA board, to bolster a trademark infringement lawsuit filed months earlier by R&R Partners on behalf of the LVCVA. The suit was filed in federal court against Dorothy Tovar, a California woman who was marketing a line of risque clothing under the similar trademark, "What happens in Vegas, stays in Vegas."
At the time of the suit, R&R Partners, run by political consultant Billy Vassiliadis, did not own the rights to the award-winning slogan it had created for the LVCVA.
"The only practical effect of the purported assignment was to allow R&R to police the trademark," Hicks wrote. "Therefore, the court finds that the assignment was an invalid assignment as there is no evidence that any business or portion thereof (goodwill) was transferred along with the WHHSH mark."
The LVCVA did not join the lawsuit as a plaintiff until July 2005 - following a series of Sun columns and stories questioning the propriety of its $1 slogan sale, which also gave R&R the rights to profit from the use of "What happens here, stays here."
In his opinion last week, Hicks dismissed R&R Partners as a plaintiff in the Tovar suit, ruling that the LVCVA still was the rightful owner of the slogan, which has become part of the nation's vernacular.
"Because the alleged assignment was invalid, all rights in the WHHSH mark remained with (the) LVCVA," he said.
The judge also granted the LVCVA's motion for summary judgment, voiding Tovar's trademark rights to "What happens in Vegas, stays in Vegas" and prohibiting her from continuing to sell her line of clothing.
Hicks concluded that Tovar's slogan was confusing consumers and infringing on the LVCVA's "What happens here, stays here" campaign.
Sacramento trademark lawyer Daniel Ballard, who represented Tovar in the suit, said his client was disappointed in the decision and is considering an appeal.
"She still believes that her federal trademark registrations give her the presumptive right to use her slogan in commerce," he said.
Although the judge's decision ended up favoring the LVCVA, it came at a high price.
The LVCVA board hired the San Francisco-based law firm of Morrison & Foerster in July 2005 to investigate the $1 slogan deal and represent the tourism agency in the Tovar lawsuit.
Prior to the hiring, lawyers for R&R Partners were representing both R&R and the LVCVA.
The two agencies - one private and one public - have had a close business relationship for more than 25 years.
Last August, Morrison & Foerster submitted a report to the board critical of the slogan deal, recommending the LVCVA take steps to regain control of "What happens here, stays here" and retain possession of future slogans. The board followed the recommendations.
Although it concluded there was no effort on R&R's part to profit from gaining possession of the slogan, the law firm - which has submitted more than $600,000 in legal bills - found that the LVCVA needed to tighten up its business dealings to restore the public's confidence in the agency.