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Tuesday, July 24, 2012

Contract Dispute over Easyriders Trademarks

Triumph_T_110_650_cc_1954On June 22, 2012, Paisano Publications (“Paisano”), publisher of Easyriders Magazine, filed a complaint against KSLB&D, owners of the popular Sturgis, South Dakota bar and restaurant, Easyriders Saloon (the “Saloon”) in the Superior Court of Los Angeles.  The Complaint alleges breach of a licensing and vendor agreement.  Paisano alleges that KSLB&D was granted the right to operate the Saloon under the name “Easyriders Saloon” via a License Agreement under which Paisano was entitled to royalties from sales of food, beverages, and merchandiseat the Saloon.  

In addition to the License Agreement, the parties also had a Vendor Agreement wherein KSLB&D engaged Paisano to act as its “exclusive agent of the sale of vendor space” adjacent to the Saloon surrounding the annual motorcyclist rally held in Sturgis (the "Sturgis Event").  The Vendor Agreement permitted either party to terminate upon ten days notice.

Paisano alleges that KSLB&D sent Paisano a Notice of Termination claiming that Paisano had materially breached the Vendor Agreement in failing to sell sufficient vendor space in advance of the approaching 2012 Sturgis Event and that KSLB&D had begun selling the remaining available vendor space on its own.  Although the Saloon has now rebranded itself “The Saloon & Steakhouse,” Paisano contends that KSLB&D continued to sell merchandise featuring the Easyriders mark without approval. 

Paisano contends that it did not breach the agreement and accuses KSLB&D of attempting to avoid royalty and commission obligations under the Vendor and License Agreements prior to the 2012 Sturgis Event.  Paisano further accuses KSLB&D of breaching the implied covenant of good faith and fair dealing in connection with both the License and the Vendor Agreement.

Paisano seeks damages in excess of $2,000,000, along with attorney fees and costs of the suit, It also seeks declaratory and Injunctive relief barring KSLB&D from covering and otherwise obscuring the signs in and around the Saloon, and from identifying or advertising itself as “The Saloon & Steakhouse.”  

 [Christina Phillips & JT]

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