Re-opening an old restaurant

[Tinns2020]

Hi all! Thanks for taking the time to read my question. I'm in the process of opening a restaurant in my city that was previously closed about 2-3 years ago. This was a hot spot and the only reason it closed down was the owner got himself into financial trouble after some bad decisions and filed bankruptcy. They had an assumed name under a Corp in MN. From what I understand assumed names aren't protected legally. I recently started an LLC under the same name used when they were open and plan on trademarking it as well. I plan on running this restaurant somewhat differently then they did. Similar, different menu, but same food for the most part as I know the recipes, although they are pretty simple. It's a hot sandwich shop. Doesn't take a genius to put a sandwich together. I have a different logo, not to infringe intellectual property rights. While I know I may be stepping on some toes as the original owner still lives in town, but I want to be sure I'm not doing anything illegal(my attorney says I'm not)or at least something where they can claim I'm stealing their name or idea and in the end and be forced to change the restaurants name. I'm pretty sure I'm in the clear here but would like your input. Thanks everyone!

 

[Zigner]

Hi all! Thanks for taking the time to read my question. I'm in the process of opening a restaurant in my city that was previously closed about 2-3 years ago. This was a hot spot and the only reason it closed down was the owner got himself into financial trouble after some bad decisions and filed bankruptcy. They had an assumed name under a Corp in MN. From what I understand assumed names aren't protected legally. I recently started an LLC under the same name used when they were open and plan on trademarking it as well. I plan on running this restaurant somewhat differently then they did. Similar, different menu, but same food for the most part as I know the recipes, although they are pretty simple. It's a hot sandwich shop. Doesn't take a genius to put a sandwich together. I have a different logo, not to infringe intellectual property rights. While I know I may be stepping on some toes as the original owner still lives in town, but I want to be sure I'm not doing anything illegal(my attorney says I'm not)or at least something where they can claim I'm stealing their name or idea and in the end and be forced to change the restaurants name. I'm pretty sure I'm in the clear here but would like your input. Thanks everyone!

You asked your attorney and s/he said you're not. What makes you second guess your attorney? If you don't trust your attorney, you may wish to find a new attorney.

We can't second-guess your attorney.

 

[Tinns2020]

You asked your attorney and s/he said you're not. What makes you second guess your attorney? If you don't trust your attorney, you may wish to find a new attorney.

We can't second-guess your attorney.

maybe I should expand. While my attorney said it's not illegal he also said that there is nothing to stop the previous owner from coming after me with a potential lawsuit. Whether he would win or not is another story. Maybe a judge would see it the other way? I'm in the beginning stage here and that's why I'm looking for some other outside advice, but thanks for being insolent about it.

 

[Tax Counsel]

From what I understand assumed names aren't protected legally. I recently started an LLC under the same name used when they were open and plan on trademarking it as well.

Is the lawyer you consulted an intellectual property/trademark attorney? If not, you better go and consult one who is. Trademarks arise from the use of the mark in commerce, not by registration (though registration provides a number of benefits). The owner of that restaurant therefore had a trademark in the restaurant name since it was used for the restaurant that he actually ran for some period of time. Unless that owner has abandoned his trademark, you almost certainly are infringing upon his mark. You may find yourself on the wrong end of a trademark infringement claim in that case. Even if you win, defending that trademark infringement claim could cost you a lot. Note that the trademark might now be held by someone else as result of the bankruptcy.

Why not use a different name that is totally your own and unique so that you don't have to worry about that and you can build your own trademark without risk of negative association that might come from using the old name? After all, the previous owner using that name went bankrupt. There are probably some creditors and suppliers of that place that do have a negative view of the name.

 

[army judge]

Trying to start, grow, and keep operating a restaurant (even a sandwich shop) during a period of time that requires ALL food service to be "take out" doesn't make financial sense.

Small businesses are struggling to survive.

 

[zddoodah]

From what I understand assumed names aren't protected legally.

Where or from whom did you acquire this understanding. While it's a somewhat ambiguous statement, as phrased, it's wrong.

I recently started an LLC under the same name used when they were open and plan on trademarking it as well.

"Trademark" isn't a word that is properly used as a verb. If you use a mark in commerce, you may acquire trademark rights. Once you do that (or beforehand if you have a bona fide intent to use the mark in commerce), you can register the mark with the U.S. Patent and Trademark Office (or the analogous office in your state).

I want to be sure I'm not doing anything illegal(my attorney says I'm not)

If the purpose of your post is for the anonymous strangers who post here to second guess what your attorney told you, that cannot be done intelligently without specific information that you should not post on an online message board. If you don't believe the advice your attorney gave you is reliable, then I suggest you find another with whom to consult.

or at least something where they can claim I'm stealing their name or idea

Anyone can claim anything.

While my attorney said it's not illegal he also said that there is nothing to stop the previous owner from coming after me with a potential lawsuit.

I'm not sure what "coming after me with a potential lawsuit" might mean. Anyone can sue anyone for anything, and there is no way for you to prevent the previous owner of this restaurant from suing you. Why not contact the previous owner, tell him what you're intending to do, and ask if he'll sign some sort of waiver or release?

 

[flyingron]

The OED disagrees with you on trademark being used as a verb. Even legally, it shows up in federal court decisions as a verb. However, you are correct it is distinct from registration.

As for the "assumed" name, I suspect he meant that fictitious names don't gain any rights solely because of their designation as corporate names do in most states. The corporate name or fictitious name may ALSO be a trademark which gives different rights.

 

[zddoodah]

The OED disagrees with you on trademark being used as a verb. Even legally, it shows up in federal court decisions as a verb. However, you are correct it is distinct from registration.

I don't give much of a rip about the OED, and when "trademark" is used as a verb, the speaker or writer almost always is referring to registration. For example:

BOB: I want to trademark my name or logo?

ZDDOODAH: What exactly do you mean by that, Bob?

BOB: I want to fill out an application and send it in to the PTO.

ZDDOODAH: So what you really mean is that you want to REGISTER your mark, right?

BOB: Yeah, sure, I guess.

Said differently, "trademark," when used as a verb, to my knowledge, has no meaning other than to register a trademark. If someone thinks it has some other meaning, I'm happy to read about it.

 

[Tax Counsel]

when "trademark" is used as a verb, the speaker or writer almost always is referring to registration.

I agree. Properly used in the legal sense trademark is only a noun. Thus, Black's Law Dictionary only defines it as a noun. However, nonlawyers sometimes mangle legal terms, and if that use is pervasive enough it makes its way in the general English dictionaries. Nonlawyers do often mangle trademark to use it as a verb to refer to registration of a trademark. Webster's is the most commonly used dictionary of American English, and its definition of trademark includes the use as a verb to mean: ": to secure trademark rights for : register the trademark of".

The OED site specifically notes that:

The Oxford English Dictionary is not an arbiter of proper usage, despite its widespread reputation to the contrary. The Dictionary is intended to be descriptive, not prescriptive. In other words, its content should be viewed as an objective reflection of English language usage, not a subjective collection of usage 'dos' and 'don'ts'.​

That applies to Webster's, too. Both dictionaries tell you how people are using words, not necessarily what the proper use is. All one has to do is see the definition of "ain't". Any English instructor will tell you that "ain't" isn't proper English. But enough people use it that Webster's includes it anyway. That's the purpose of general dictionaries — so you can find out what people mean when they use a word, whether the use is proper or not is another matter.

In this instance, as properly used as a legal term, trademark is only a noun. That's the benefit of specialized technical dictionaries like Black's.

 

[zddoodah]

nonlawyers sometimes mangle legal terms, and if that use is pervasive enough it makes its way in the general English dictionaries. Nonlawyers do often mangle trademark to use it as a verb to refer to registration of a trademark. Webster's is the most commonly used dictionary of American English, and its definition of trademark includes the use as a verb to mean: ": to secure trademark rights for : register the trademark of".

For those who find my frequent making of this point (something I've done almost as long as the roughly 20 years I've been posting on legal message boards) to be annoying, I am well aware of this point (and appreciate the manner in which TC made it). That's why, after making my comment about it, I proceed to explain about how trademark rights are acquired and the fact that registration is not a prerequisite to the acquisition of rights (all of this, by the way, is also true of copyright subsequent to 1/1/1978). My biggest frustration with using these terms as verbs is that, IMO, it perpetuates the myth that registration is something necessary to the acquisition of rights.

 

[flyingron]

Again, if people are making mistakes, it's not limited to lay people. You can find TRADEMARK used as a verb in various Federal court decisions. In that sense they are using it to mean protected/protectable by trademark (not just registration in particular).

And if you want to bring up the registration vs. trademark rights confusion, lay people do that all the time even when they use trademark as a noun.

And for those who were maligning my cite of the OED, understand that the OED is not just a British reference. It is a compendium of historical usage from all English speaking sources and will call out those things that are unique to one "dialect" or another. But TM does point out that even American-centric references bear me out.