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Howard Stutz

Hard Rock chain owner says "Rehab" hurts image

24 September 2010

LAS VEGAS, Nevada -- Are pool parties at the Hard Rock Hotel free publicity for the Hard Rock name? Or an example of "drunken debauchery" and excess that casts the Hard Rock name in a negative light?

Owners of the Orlando-based Hard Rock Cafe restaurant chain have sued owners of the Hard Rock Hotel and Casino in Las Vegas over its name, saying the casino's party image has damaged the name enough to justify ending a 14-year-old licensing agreement.

Lawyers for Hard Rock Cafe International Inc. said in a new lawsuit that the cable reality show "Rehab: Party at the Hard Rock Hotel" on truTV casts its brand in a bad light.

According to the lawsuit, the television show portrays the hotel-casino as a place that "revels in drunken debauchery" and other actions that most people would find offensive.

"The behavior depicted in the Rehab television program that is authorized, created and distributed by defendants is entirely at odds with the brand image of the Hard Rock marks (trademarks) and is likely to damage and has damaged the goodwill of the Hard Rock marks among consumers,' the lawsuit said.

New York-based Morgans Hotel Group Co., a company entirely separate from the cafe chain, owns 14.2 percent of the Hard Rock and operates it day-to-day.

Hard Rock Cafe agreed to let the hotel use its name, but now wants to rescind the deal. If the restaurant chain wins its lawsuit, the hotel-casino would be forced to change its name and brand, which have been central to its strategy of marketing to music lovers and others who know the Hard Rock name.

The 110-page lawsuit, which was filed in New York District Court on Tuesday, notes that the restaurant chain was co-founded by Peter Morton. Morton retained ownership of the Hard Rock Hotel and Casino when he opened in 1995 -- as well as the option to develop additional properties under the trademarks Hard Rock Hotel and Hard Rock Casino in the Western United States, the complaint noted. But as part of the agreement, the Las Vegas location also had to abide by licensing and trademark rules, including protecting the goodwill of the trademarks.

The lawsuit says the show portrays the hotel-casino as a place that "revels in drunken debauchery, acts of vandalism, sexual harassment, violence, criminality and a host of other behavior" that most people would find offensive, including patrons of Hard Rock restaurants.

The lawsuit is not the first time the Rehab pool parties stirred up controversy.

In 2009, Las Vegas police arrested eight people on prostitution and drug charges. The arrests brought scrutiny from Nevada gaming regulators, which opened an investigation into the program.

A spokeswoman for the Hard Rock did not return a phone call or e-mail message seeking comment on the case.

In June, Morgans hired former M Resort executive Joe Magliarditi as chief executive officer, replacing Randy Kwasniewski, who died March 9 from a self-inflicted gunshot wound.
Hard Rock chain owner says "Rehab" hurts image is republished from