Las Vegas Sun

December 10, 2017

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Jeff German examines the latest in the ‘What happens here, stays here’ slogan saga

Strip oddsmakers would have a tough time setting a line on this ever happening.

The Las Vegas Convention and Visitors Authority may be looking to settle up with the California clothier whose entrepreneurial skills led the tourism agency to give away the rights to its most valuable marketing slogan.

If an agreement is reached, it would bring the LVCVA closer to putting one of its most embarrassing missteps behind it.

Officially, the LVCVA isn't talking.

But through its actions, it is fueling talk that a deal could be in the works to drop a federal lawsuit against Dorothy Tovar, who has been selling a line of risque clothing under a logo similar to the popular "What happens here, stays here" slogan used to market Las Vegas.

R&R Advertising, which created the slogan for the LVCVA, filed the trademark infringement suit in March 2004 to stop Tovar from selling merchandise under the logo "What happens in Vegas, stays in Vegas."

The LVCVA has placed an action item on the agenda of Tuesday's board meeting to discuss the cost of taking the case to trial, as well as a "possible settlement." Previous efforts to settle the case fell by the wayside months ago.

And though both sides are being tight-lipped, I'm told settlement negotiations have indeed once more started up.

The case has been a legal nightmare for R&R and the LVCVA, primarily because of poor legal advice given to both agencies.

The LVCVA, which owned the slogan's rights, should have been the one to file the suit, not its advertising agency.

But that didn't happen, which left R&R in the position of suing Tovar to recover damages for something it didn't even own.

To bolster its legal position, R&R had to obtain the valuable rights to "What happens here, stays here."

R&R got those rights, which included the ability to profit from selling merchandise, for $1 through a secret agreement with LVCVA President Rossi Ralenkotter that wasn't brought before the board for approval.

When the sale of the slogan was exposed in this column, red-faced LVCVA board members hired a high-priced San Francisco firm to figure out a way to regain the slogan and look after its interests in the litigation with Tovar. The LVCVA is now a co-plaintiff in the suit.

The firm, Morrison & Foerster, investigated the botched slogan deal and came up with a series of recommendations (all adopted by the board) to improve the LVCVA's public accountability and make sure the agency never again gives away such lucrative intellectual property.

But Morrison & Foerster, which as of today has been paid a whopping $608,147 for its legal advice, recommended the LVCVA wait to regain the rights to "What happens here, stays here" until the Tovar litigation is resolved.

That day may be on the horizon.

No one wants to bet that the LVCVA will be able to successfully negotiate a settlement with Tovar by Tuesday.

Both sides are scheduled to appear in federal court in Reno that afternoon for arguments on a summary judgment motion filed by R&R Advertising.

But making peace with the shrewd businesswoman certainly is in the LVCVA's best interest.

It would save the LVCVA the expense of paying Morrison & Foerster even more legal fees during a trial.

And it would finally open the door for the agency to get back the popular slogan it never should have given away.

Jeff German's column appears Sunday, Tuesday, Thursday and Friday in the Sun. He can be reached at 259-4067 or at [email protected]