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8/8/2019 Hard Rock Hotel Answer & Counterclaims
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23299369
UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK----------------------------------------------------------- X
HARD ROCK CAFINTERNATIONAL (USA), INC.,
Plaintiff,
v.
HARD ROCK HOTEL HOLDINGS, LLC,HARD ROCK HOTEL, INC., HRHH IP, LLC,MORGANS HOTEL GROUP CO., MORGANSHOTEL GROUP MANAGEMENT, LLC,DLJMB HRH VOTECO LLC, TURNERBROADCASTING SYSTEM, INC., BRADLACHMAN PRODUCTIONS, INC. and GENCOENTERTAINMENT, INC.,
Defendants.
:::::::::::
::::::
Case No. 10 CV 7244
ANSWER AND COUNTERCLAIMS OFDEFENDANTS HARD ROCK HOTELHOLDINGS, LLC, HARD ROCK HOTEL,INC. AND HRHH IP, LLC
----------------------------------------------------------- X
Defendants Hard Rock Hotel Holdings, LLC (Hard Rock Hotel Holdings), Hard
Rock Hotel, Inc. and HRHH IP, LLC (HRHH IP) (the Hard Rock Defendants)hereby submit this Answer and Counterclaims in response to the complaint of Hard Rock
Caf International (USA) Inc. (the Caf).
Preliminary Statement
1. The Hard Rock Defendants have done nothing wrong and, in fact, are
victims of systematic legal and business harassment by the Caf, which todays
countersuit seeks to remedy. The Hard Rock Defendants enjoy an exclusive, perpetual
and royalty-free right to use the Hard Rock family of marks for hotel-casinos and
casinos west of the Mississippi and in certain international locations. These rights are
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clearly spelled out in a 1996 license agreement, which the Caf is unhappy with but
legally bound by. Under that license, the Hard Rock Defendants operate the popular
Hard Rock Hotel and Casino Las Vegas; have developed Hard Rock Hotel-Casinos in
Tulsa and Albuquerque, through tribal sublicensees; and are actively pursuing other
hotel-casino and casino development opportunities in the territories where they enjoy
exclusive rights. Per the license agreement, none of the revenue from these ventures goes
to the Caf or ever will.
2. The Caf has brought the present lawsuit a meritless grab bag of claimsfor breach of license, trademark infringement, trademark dilution and unfair competition
in an attempt to terminate or rewrite the 1996 license agreement. The Caf complains
about a range of alleged trademark abuses that in many cases it has long known about,
tolerated or even approved. Most notably, the Caf claims to be shocked and disturbed
by the popular reality television show Rehab: Party at the Hard Rock Hotel, filmed at
the Hard Rock Hotel and Casino Las Vegas despite the fact that this show and the
lively behavior it portrays have already been on the air for two years; depicts an event
similar to the Detox party held at one of the Cafs properties; and has brought
enormous positive publicity to the Hard Rock brand. Likewise, the Caf purports to be
upset about the Tulsa and Albuquerque ventures despite having offered public praise
about both ventures. The meritless and untimely nature of the Cafs allegations confirms
that this lawsuit is nothing more than an attempt to escape the disadvantageous 1996
license agreement.
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3. Frustrated at being contractually excluded from a lucrative business in a
large territory, the Caf, in addition to filing the Complaint, has also resorted to improper
business tactics. The Caf has actively pursued its own projects in the Hard Rock
Defendants exclusive territories in direct violation of the letter and spirit of the license
agreement. The Cafe has interfered with the Hard Rock Defendants development
projects, including by making untrue and overreaching public statements to deter
potential partners from doing business with the Hard Rock Defendants. This misconduct
by the Caf violates the license agreement and the law, and it must stop.
Answer
The Hard Rock Defendants answer as follows the Complaint filed by the Caf.
Any allegation not specifically admitted herein is denied.
1. Paragraph 1 consists of legal conclusions to which no response is required.
To the extent a response may be required, deny, except admit that certain of the Hard
Rock Defendants operate or have authorized others to operate certain hotel-casinos in
parts of the western half of the United States, including the Hard Rock Hotel and Casino
in Las Vegas, Nevada, and that Defendant HRHH IP is a licensee of the Caf.
2. Deny.
3. Paragraph 3 consists of legal conclusions to which no response is required.
To the extent a response may be required, deny.
4. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations.
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5. Admit, except deny that the zip code associated with Hard Rock Hotel
Holdings address is 89109. Aver that the correct zip code is 89169.
6. Admit, except deny that the zip code associated with Hard Rock Hotel,
Inc.s address is 89109. The correct zip code is 89169.
7. Admit.
8. Aver that they are not required to respond to the allegations because the
allegations are directed to another defendant.
9. Aver that they are not required to respond to the allegations because theallegations are directed to another defendant.
10. Aver that they are not required to respond to the allegations because the
allegations are directed to another defendant.
11. Aver that they are not required to respond to the allegations because the
allegations are directed to another defendant. To the extent that a response may be
required, deny knowledge or information sufficient to form a belief as to the truth of the
allegations.
12. Aver that they are not required to respond to the allegations because the
allegations are directed to another defendant. To the extent that a response may be
required, deny knowledge or information sufficient to form a belief as to the truth of the
allegations.
13. Aver that they are not required to respond to the allegations because the
allegations are directed to another defendant. To the extent that a response may be
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required, deny knowledge or information sufficient to form a belief as to the truth of the
allegations.
14. Paragraph 14 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny.
15. Paragraph 15 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny.
16. Paragraph 16 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny, except admit that New York isthe principal place of business of HRHH IP and that New York is the contractually
designated forum for the resolution of claims under the license agreement.
17. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations, except admit that the original Hard Rock Caf was co-founded by
Peter Morton and Isaac Tigrett in 1971.
18. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations.
19. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations.
20. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations.
21. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations.
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22. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations.
23. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations.
24. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations, except refer to Hard Rock Hotel Holdings 10-K for the fiscal
year ended December 31, 2009 for its contents.
25. Deny having knowledge or information sufficient to form a belief as to thetruth of the allegations.
26. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations.
27. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations.
28. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations, except admit that the Hard Rock Hotel and Casino in Las Vegas
opened in 1995, that a copy of the License Agreement is attached to the Complaint as
Exhibit 3 and refer to the License Agreement for its contents.
29. Deny having information or knowledge sufficient to form a belief as to the
truth of the allegations, except admit the allegations contained in the second sentence.
30. Admit.
31. Deny and refer to the License Agreement for its contents.
32. Deny and refer to the License Agreement for its contents.
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33. Deny and refer to the License Agreement for its contents.
34. Deny and refer to the License Agreement for its contents.
35. Deny and refer to the License Agreement for its contents.
36. Deny and refer to the License Agreement for its contents.
37. Deny and refer to the License Agreement for its contents.
38. Deny and refer to the License Agreement for its contents.
39. Deny and refer to the License Agreement for its contents.
40. Deny and refer to the License Agreement for its contents.41. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations, except admit that a television program entitled Rehab: Party at
the Hard Rock Hotel began airing on the truTV cable channel in or about November
2008.
42. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations, except admit that the first two seasons of Rehab: Party at the
Hard Rock Hotel consisted of eighteen episodes that originally aired between November
2008 and November 2009.
43. Deny having knowledge or information sufficient to form a belief as to the
truth of the allegations, except admit that a third season of Rehab: Party at the Hard
Rock Hotel began airing on September 7, 2010 on truTV.
44. Deny, except admit that Rehab is a reality television program
concerning pool parties held on Sundays at the Hard Rock Hotel and Casino in Las
Vegas.
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45. Deny the allegations contained in the first sentence, except admit that
Morgans Hotel Group Co. and DLJMB HRH VoteCo LLC are two members of Hard
Rock Hotel Holdings. Hard Rock Defendants aver that they are not required to respond
to the allegations contained in the second and third sentences because the allegations are
directed to other defendants.
46. Paragraph 46 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants and deny having knowledge or information sufficient to form abelief as to the truth of the remaining allegations.
47. This paragraph is the subject of Hard Rock Defendants planned partial
motion to dismiss and to compel arbitration and stay proceedings, and accordingly will
not be answered at this time.
48. This paragraph is the subject of Hard Rock Defendants planned partial
motion to dismiss and to compel arbitration and stay proceedings, and accordingly will
not be answered at this time.
49. This paragraph is the subject of Hard Rock Defendants planned partial
motion to dismiss and to compel arbitration and stay proceedings, and accordingly will
not be answered at this time.
50. This paragraph is the subject of Hard Rock Defendants planned partial
motion to dismiss and to compel arbitration and stay proceedings, and accordingly will
not be answered at this time.
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51. This paragraph is the subject of Hard Rock Hotel Defendants planned
partial motion to dismiss and to compel arbitration and stay proceedings, and accordingly
will not be answered at this time.
52. Paragraph 52 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 52 because the allegations are directed
to other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.denies having knowledge or information sufficient to form a belief as to the truth of the
allegations.
53. Paragraph 53 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny. Hard Rock Hotel, Inc. avers that it is not required to respond to the
allegations contained in Paragraph 53 because the allegations are directed to other
defendants; to the extent that a response may be required, Hard Rock Hotel, Inc. denies
having knowledge or information sufficient to form a belief as to the truth of the
allegations.
54. This paragraph is the subject of Hard Rock Defendants planned partial
motion to dismiss and to compel arbitration and stay proceedings, and accordingly will
not be answered at this time.
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55. This paragraph is the subject of Hard Rock Defendants planned partial
motion to dismiss and to compel arbitration and stay proceedings, and accordingly will
not be answered at this time.
56. Paragraph 56 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 56 because the allegations are directed
to other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.denies having knowledge or information sufficient to form a belief as to the truth of the
allegations.
57. Paragraph 57 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants, and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
58. Paragraph 58 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
59. Paragraph 59 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny.
60. Deny the allegations pertaining to the Hard Rock Defendants, except
admit that HRH Tower and HRH Tower Spa Villas are among the facilities currently
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at the Las Vegas property bearing the acronym HRH. Deny having knowledge or
information sufficient to form a belief as to the truth of the remaining allegations.
61. Deny the allegations pertaining to the Hard Rock Defendants, except
admit that the advertising and promotional materials attached to the Complaint as Exhibit
4 were disseminated by Hard Rock Defendants. Deny having knowledge or information
sufficient to form a belief as to the truth of the remaining allegations.
62. Deny the allegations pertaining to the Hard Rock Defendants, and deny
having knowledge or information sufficient to form a belief as to the truth of theremaining allegations.
63. Deny and refer to the registrations and applications for their contents.
64. Paragraph 64 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 64 because the allegations are directed
to other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.
denies having knowledge or information sufficient to form a belief as to the truth of the
allegations.
65. Paragraph 65 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 65 because the allegations are directed
to other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.
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denies having knowledge or information sufficient to form a belief as to the truth of the
allegations.
66. Paragraph 66 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 66 because the allegations are directed
to other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.
denies having knowledge or information sufficient to form a belief as to the truth of theallegations.
67. Paragraph 67 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 67 because the allegations are directed
to other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.
denies having knowledge or information sufficient to form a belief as to the truth of the
allegations.
68. Paragraph 68 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 68 because the allegations are directed
to other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.
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denies having knowledge or information sufficient to form a belief as to the truth of the
allegations.
69. Paragraph 69 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
70. Paragraph 70 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to theHard Rock Defendants and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
71. Paragraph 71 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny.
72. Deny the allegations pertaining to the Hard Rock Defendants, except
admit that HRHH IP and Hard Rock Hotel Holdings sublicensed the Hard Rock Hotel
and Hard Rock Casino trademarks to Cherokee Nation Enterprises, LLC, which operates
a Hard Rock Hotel-Casino in Tulsa, Oklahoma. Deny having knowledge or information
sufficient to form a belief as to the truth of the remaining allegations.
73. This paragraph is the subject of Hard Rock Defendants planned partial
motion to dismiss and to compel arbitration and stay proceedings, and accordingly will
not be answered at this time.
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74. This paragraph is the subject of Hard Rock Defendants planned partial
motion to dismiss and to compel arbitration and stay proceedings, and accordingly will
not be answered at this time.
75. Paragraph 75 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
76. Paragraph 76 consists of legal conclusions to which no response isrequired. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
77. Paragraph 77 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
78. Paragraph 78 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 78 because the allegations are directed
to other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.
denies having knowledge or information sufficient to form a belief as to the truth of the
allegations.
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82. Paragraph 82 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 82 because the allegations are directed
to other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.
denies having knowledge or information sufficient to form a belief as to the truth of the
allegations.
83. Paragraph 83 consists of legal conclusions to which no response isrequired. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
84. Paragraph 84 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
85. Paragraph 85 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny.
86. Deny the allegations pertaining to the Hard Rock Defendants, except
admit that HRHH IP and Hard Rock Hotel Holdings sublicensed the Hard Rock Hotel
and Hard Rock Casino trademarks to the Pueblo of Isleta, a federally recognized Indian
tribe, which operates a Hard Rock Hotel-Casino in Albuquerque, New Mexico. Deny
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having knowledge or information sufficient to form a belief as to the truth of the
remaining allegations.
87. This paragraph is the subject of Hard Rock Defendants planned partial
motion to dismiss and to compel arbitration and stay proceedings, and accordingly will
not be answered at this time.
88. This paragraph is the subject of Hard Rock Defendants planned partial
motion to dismiss and to compel arbitration and stay proceedings, and accordingly will
not be answered at this time.89. Paragraph 89 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
90. Paragraph 90 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants, except admit that Exhibit 8 depicts a mark used at the
Albuquerque property. Deny having knowledge or information sufficient to form a belief
as to the truth of the remaining allegations.
91. Paragraph 91 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
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92. Deny the allegations pertaining to the Hard Rock Defendants, except
admit that the Albuquerque property is operated by the Pueblo of Isleta Indian tribe,
which has a sponsorship arrangement with the Pavilion. Deny having knowledge or
information sufficient to form a belief as to the truth of the remaining allegations.
93. Paragraph 93 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 93 because the allegations are directedto other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.
denies having knowledge or information sufficient to form a belief as to the truth of the
allegations.
94. Paragraph 94 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 94 because the allegations are directed
to other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.
denies having knowledge or information sufficient to form a belief as to the truth of the
allegations.
95. Paragraph 95 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 95 because the allegations are directed
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to other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.
denies having knowledge or information sufficient to form a belief as to the truth of the
allegations.
96. Paragraph 96 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 96 because the allegations are directed
to other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.denies having knowledge or information sufficient to form a belief as to the truth of the
allegations.
97. Paragraph 97 consists of legal conclusions to which no response is
required. To the extent a response may be required, Hard Rock Hotel Holdings and
HRHH IP deny the allegations. Hard Rock Hotel, Inc. avers that it is not required to
respond to the allegations contained in Paragraph 97 because the allegations are directed
to other defendants; to the extent that a response may be required, Hard Rock Hotel, Inc.
denies having knowledge or information sufficient to form a belief as to the truth of the
allegations.
98. Paragraph 98 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
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99. Paragraph 99 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
100. Paragraph 100 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny.
101. Deny the allegations pertaining to the Hard Rock Defendants, except
admit that Hard Rock Hotel, Inc. has registered several Internet domain names in thecourse of its business operations, and deny having knowledge or information sufficient to
form a belief as to the truth of the remaining allegations.
102. Deny the allegations pertaining to the Hard Rock Defendants, except
admit that cherokeehardrockhotel.com, hrhpokeronline.com and hardrockroyalty.com are
Internet domain names currently registered to Hard Rock Hotel, Inc. and that Hard Rock
Hotel, Inc. is the registrant for each of the Internet domain names listed in Exhibit 9.
Deny having knowledge or information sufficient to form a belief as to the truth of the
remaining allegations.
103. Paragraph 103 consists of legal conclusions to which no response is
required. To the extent a response may be required, deny the allegations pertaining to the
Hard Rock Defendants and deny having knowledge or information sufficient to form a
belief as to the truth of the remaining allegations.
104. Repeat and reallege the responses to the foregoing paragraphs.
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105. Deny, except admit that the Caf as a successor is a party to the License
Agreement with HRHH IP as a successor.
106. Deny.
107. Deny.
108. Deny.
109. Repeat and reallege the responses to the foregoing paragraphs.
110. Deny.
111. Deny.112. Repeat and reallege the responses to the foregoing paragraphs.
113. Deny.
114. Deny.
115. Deny.
116. Repeat and reallege the responses to the foregoing paragraphs.
117. Deny.
118. Deny.
119. Deny.
120. Repeat and reallege the responses to the foregoing paragraphs.
121. Deny.
122. Deny.
123. Deny.
124. Repeat and reallege the responses to the foregoing paragraphs.
125. Deny.
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126. Deny.
127. Deny.
128. Repeat and reallege the responses to the foregoing paragraphs.
129. Deny.
130. Deny.
131. Deny.
132. Repeat and reallege the responses to the foregoing paragraphs.
133. Deny.134. Deny.
135. Deny.
Answer To Prayer For Relief
To the extent any response is required to Plaintiffs Prayer for Relief, the Hard
Rock Defendants deny each and every allegation contained therein that is directed to
them. Hard Rock Defendants deny that Plaintiff is entitled to any of the relief requested
or to any other relief.
AFFIRMATIVE DEFENSES
First Affirmative Defense
The Complaint and each count thereof fails to state a claim upon which relief may
be granted.
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Second Affirmative Defense
Hard Rock Defendants have at all times acted in good faith and without any intent
to trade on any goodwill of Plaintiff or any third party.
Third Affirmative Defense
The claims contained in the Complaint are barred in whole or in part by the
doctrines of waiver, equitable estoppel, acquiescence, unclean hands and laches.
Fourth Affirmative Defense
The claims contained in the Complaint are barred in whole or in part because
Plaintiff fails or has failed to mitigate, minimize and/or avoid any purported damages.
Fifth Affirmative Defense
Plaintiff has suffered no damages.
Sixth Affirmative Defense
The alleged acts of the Hard Rock Defendants did not cause any confusion or
mistake, nor likely confusion or mistake, and did not dilute or tarnish Plaintiffs alleged
trademarks.
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Counterclaims
Nature Of The Action
1. The Cafs misconduct has given rise to counterclaims for breach of
contract, breach of the covenant of good faith and fair dealing, and tortious interference
with business relations. The Hard Rock Defendants are complying with their obligations,
and pursuing their legitimate economic opportunities, pursuant to the License Agreement.
Yet, the Caf is systematically trying to deprive the Hard Rock Defendants of the benefits
of the License Agreement, not only through meritless litigation, but throughimpermissible efforts to develop business ventures in the Hard Rock Defendants
exclusive territory, and false and overreaching statements designed to deter potential
partners from doing business with the Hard Rock Defendants.
2. The Cafs wrongful efforts are designed to misappropriate for the Caf
the benefits of the good name, goodwill and stellar reputation of the Hard Rock
Defendants, and to convey to potential business partners the false impression that the
Hard Rock Defendants do not, on their own, have the right to sublicense the Hard Rock
marks for use in development projects. The Hard Rock Defendants have lived up to their
end of the bargain under the parties license agreement; now the Caf must live up to its
end.
3. Unless the Cafs misconduct is stopped, the Hard Rock Defendants
goodwill, standing and reputation among key industry players (including hotel-casino
owners and operators) will be further damaged. Accordingly, the Hard Rock Defendants
bring this action seeking permanent injunctive relief to prevent the Caf from causing any
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more harm through its unlawful conduct, as well as damages to compensate the Hard
Rock Defendants for the harm the Caf already has caused.
Jurisdiction And Venue
4. This Court has jurisdiction over the subject matter of this action pursuant
to 28 U.S.C. 1332. The amount in controversy exceeds the sum or value of $75,000.
5. Personal jurisdiction over the Caf is appropriate under New York Civil
Practice Law and Rules 302. On information and belief, the Caf owns, operates and/or
franchises several Hard Rock Caf locations in New York State. Moreover, New York isthe contractually designated forum for the resolution of claims.
Facts
The 1996 License Agreement
6. Under the License Agreement, HRHH IP enjoys the exclusive, royalty-
free and perpetual right to use and exploit the HARD ROCK HOTEL and HARD ROCK
CASINO trademarks in connection with hotel-casino operations and casino operations in
certain specified territories - in relevant part, [t]he State of Illinois and all states and
possessions of the United States which are located west of the Mississippi River.
Certain international locations, including Australia, Brazil, Israel, Venezuela and
Vancouver, British Columbia, are also included in the licensed territories. These licensed
territories are known collectively as the Morton Territories, after Peter Morton, the
original licensee to whom HRHH IP is a successor.
7. The License Agreement also provides that HRHH IP has the right to
sublicense or franchise any or all of the rights and licenses granted under the License
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Agreement. The License Agreement states that [a]ny sublicense or franchise granted
hereunder shall contain provisions whereby the sublicensee or franchisee agrees to
assume, observe and perform all of the obligations of [HRHH IP] and be bound by all of
the restrictions under [the License] Agreement and [HRHH IP] shall provide a copy of
such sublicense or franchise to [the Caf].
8. Nothing in the License Agreement requires HRHH IP to seek approval
from the Caf when developing a hotel-casino or when sublicensing trademarks. The
License Agreement also does not provide for any veto right by the Caf over proposeddevelopments or sublicense agreements by the Hard Rock Defendants. Nothing in the
License Agreement provides for any sharing of revenues with the Caf.
9. In addition, the License Agreement allows the Caf to develop, maintain
and update a World Wide Web page for the Hard Rock Caf Restaurants, and other Hard
Rock Facilities [which is defined to include Hard Rock Hotel/Casinos, Hard Rock
Casinos and Hard Rock Caf restaurants] as they may developexcept that [HRHH IP]
may develop, maintain and update a Web page for the Hard Rock Hotel/Casinos or
Casinos in the Morton Territories (emphasis added). The License Agreement goes on
to provide that [i]n connection with their respective Web sites, both parties agree to
include links to the other partys Web pages.
Business Operations Of the Hard Rock Defendants
10. Under the License Agreement, Hard Rock Hotel Holdings operates the
Las Vegas Hard Rock Hotel and Casino, a premier destination entertainment resort with a
rock music theme. Since it began operations in 1995, the Hard Rock Hotel and Casino in
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Las Vegas has developed a strong following among its target customer base (i.e.
consumers), who seek a vibrant, energetic entertainment and gaming experience with the
services and amenities associated with a boutique luxury resort hotel. The Hard Rock
Defendants have explored and continue to explore opportunities to develop other casinos
and hotel-casinos in the Morton Territories.
11. On or about November 11, 2008, certain of the Hard Rock Defendants
executed a sublicense agreement with Cherokee Nation Enterprises, LLC (CNE). The
Hard Rock Defendants agreed to license certain intellectual property, including theHARD ROCK HOTEL and HARD ROCK CASINO trademarks, to CNE in connection
with a Hard Rock Hotel-Casino that CNE operates in Catoosa, Oklahoma. CNEs
Catoosa, Oklahoma hotel/casino reopened as the renovated and newly branded Hard
Rock Hotel and Casino Tulsa in the summer of 2009.
12. On or about October 13, 2009, certain of the Hard Rock Defendants
executed a sublicense agreement with the Pueblo of Isleta Indian tribe (Isleta), pursuant
to which the Hard Rock Defendants agreed to license certain intellectual property,
including the HARD ROCK HOTEL and HARD ROCK CASINO trademarks, to the
Isleta in connection with a Hard Rock Hotel-Casino that the Isleta operates in
Albuquerque, New Mexico. The renovated and newly branded Hard Rock Hotel and
Casino Albuquerque opened in the summer of 2010 under the operation of the Isleta.
13. In accordance with their rights, the Hard Rock Defendants constantly
pursue other hotel-casino and casino development opportunities within their licensed
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territories, including through frequent conversations with Native American tribes and
other potential partners in the development or operation of hotel-casinos.
The Cafs Wrongful Business Dealings
14. In breach of its obligations under the License Agreement, the Caf has
pursued a campaign of engaging in hotel-casino business development in the Hard Rock
Defendants exclusive territories and interfering with the Hard Rock Defendants
sublicensees and potential sublicensees. The Caf also has breached its duty of good faith
and fair dealing, including its obligation not to take actions that frustrate or limit the HardRock Defendants exercise and enjoyment of their rights under the License Agreement.
15. For example, on information and belief, as certain of the Hard Rock
Defendants were developing their Tulsa project, the Caf engaged in discussions with
potential partners in Tulsa, within the Morton Territories, to open or brand a competing
hotel/casino or similar venture that would have been associated with the Hard Rock
trademarks.
16. As a further example, on information and belief, the Caf also sought to
interfere with the Hard Rock Defendants development efforts in New Mexico by seeking
to engage one or more potential licensees to open a Hard Rock Caf and/or a Hard Rock
Live! music venue in conjunction with the potential licensees hotel-casino and to place
associated signage promoting the venues in and around the property. This too would
have been within the Morton Territories. The Cafs plans to place Hard Rock Cafs
and/or Hard Rock Live! venues in hotel-casinos reflected a scheme to effectively brand
these hotel-casinos as Hard Rock Hotel-Casinos in violation of the exclusive license
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granted to Hard Rock Defendants to use the Hard Rock marks for hotel-casinos in the
Morton Territories.
17. In addition to the aforementioned efforts, on information and belief, the
Caf has also contacted numerous other hotel-casino operators in the Morton Territories
to propose opening Hard Rock Cafs or other Hard Rock-branded venues at or near their
properties, and otherwise explored such potential development projects, in violation of
the letter and spirit of the License Agreement.
18. On information and belief, the Caf also has communicated directly withthe actual and/or potential business partners of the Hard Rock Defendants to suggest that
these partners not do business with the Hard Rock Defendants and that they do business
with the Caf instead, to falsely assert that the Hard Rock Defendants lack legal authority
over the Hard Rock marks, and/or to otherwise obstruct the Hard Rock Defendants
legitimate, authorized and exclusive business development efforts in the Morton
Territories.
19. The Cafs efforts to develop projects in the Morton Territories are in
violation of Article 2(a) of the License Agreement, reflect a concerted strategy to deprive
the Hard Rock Defendants of the benefits of the license in violation of the Cafs
obligation of good faith and fair dealing, and interfere with the Hard Rock Defendants
own development efforts.
20. In addition to its efforts to develop projects in the Morton Territories, the
Caf has violated its obligations under the License Agreement with respect to Worldwide
Web Site development and maintenance. On or about October 19, 2009, just days after
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certain of the Hard Rock Defendants and the Isleta executed a sublicense agreement for
the Hard Rock Hotel-Casino in Albuquerque, the Caf registered for itself the Internet
domain name hardrockcasinoalbuquerque.com. The registration of this Internet
domain name by the Caf violates the License Agreement, which grants HRHH IP, not
the Caf, the right to develop, maintain and update a Web page for the Hard Rock
Hotel/Casinos or Casinos in the Morton Territories.
21. The Caf has also failed to include the Hard Rock Hotel-Casinos in Tulsa
and Albuquerque on their pull-down lists of all Hard Rock Hotel/Casinos contained ontwo websites it maintains, hardrock.com, available at http://www.hardrock.com/, and
hardrockhotels.com, available at http://www.hardrockhotels.com, in violation of its
obligations under the License Agreement. The Cafs failure to include these properties
on the prominent listings on its websites further conveys to potential business partners the
false impression that the Hard Rock Defendants did not, on their own, have the right to
sublicense the Hard Rock marks for use in the Tulsa and Albuquerque development
projects.
The Cafs False Statements Regarding Its Ability to BlockThe Hard Rock Defendants Sublicense Deals
22. Jim Allen, a senior executive of the Caf, recently gave an interview to
Global Gaming Business Magazine, a leading monthly gaming trade magazine that
focuses on the international casino gaming industry, in which he made untrue and
overreaching statements designed to deter potential partners from doing business with the
Hard Rock Defendants. The audio of this interview is available at
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http://ggbnews.com/issue/vol-8-no-35-september-13-2010/article/global-gaming-
business-podcast-jim-allen-chairman-hard-rock-international. In the interview, Mr. Allen
falsely stated that the Hard Rock Defendants cannot do a transaction without [the
Cafs] approval. So anything in that particular territory, they still need to submit back
to [the Caf] for approval to eventually pursue utilizing the Hard Rock brand
(emphasis added).
23. Additionally, in an article entitled Hard Sell published by Global
Gaming Business Magazine in its September 2010 edition based on this interview, Mr.Allen was quoted as saying that the Hard Rock Defendants cannot do a transaction in
[the Cafs] territory without submitting it to [the Caf] for approval. A copy of this
article is attached hereto as Exhibit A.
24. On information and belief, false statements of the kind made to Global
Gaming Business Magazine have also been made by Mr. Allen or other agents of the
Caf in multiple other contexts, including to potential development partners or
sublicensees of the Hard Rock Defendants.
25. These statements are utterly untrue and have no basis whatsoever in the
License Agreement. These false statements were directed to and were heard by potential
sublicensees, lenders and other business partners of the Hard Rock Defendants, and were
damaging to the Hard Rock Defendants relationship with and reputation among these
persons and entities.
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FIRST COUNTERCLAIM
Breach of Contract
26. The Hard Rock Defendants repeat and reallege each and every allegation
set forth above.
27. The Caf has intentionally and materially breached the License Agreement
as described herein, thereby causing damage.
28. As a result of the Cafs intentional and material breaches, the Hard Rock
Defendants are entitled to entry of permanent injunctive relief against future breaches bythe Caf or third parties in privity with the Caf, an award of damages in an amount to be
determined at trial, pre-judgment and post-judgment interest, and such other and further
relief as this Court may deem just and proper.
SECOND COUNTERCLAIM
Breach of Contract Covenant of Good Faith and Fair Dealing
29. The Hard Rock Defendants repeat and reallege each and every allegation
set forth above.
30. The Caf has intentionally and materially breached the covenant of good
faith and fair dealing implied in the License Agreement by destroying or injuring the
Hard Rock Defendants right to receive the fruits of the License Agreement as described
herein.
31. As a result of the Cafs intentional and material breaches, the Hard Rock
Defendants are entitled to entry of permanent injunctive relief against future breaches by
the Caf or third parties in privity with the Caf, an award of damages in an amount to be
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determined at trial, pre-judgment and post-judgment interest, and such other and further
relief as this Court may deem just and proper.
THIRD COUNTERCLAIM
Tortious Interference with Business Relations
32. The Hard Rock Defendants repeat and reallege each and every allegation
set forth above.
33. The Caf has engaged in behavior that has significantly interfered and
continues to interfere with business relationships that the Hard Rock Defendants possessor are attempting to develop with sublicensees and prospective sublicensees in the
Morton Territories.
34. Such acts are dishonest, unfair and improper means of competition, and
are intentionally aimed at disrupting the Hard Rock Defendants business relationships.
35. The Hard Rock Defendants have suffered damages as a result of the
Cafs intentional interference with its business relationships and prospective
relationships.
36. As a result of the Cafs intentional and wrongful interference, the Hard
Rock Defendants are entitled to an award of damages in an amount to be determined at
trial, pre-judgment and post-judgment interest, and such other and further relief as this
Court may deem just and proper.
PRAYER FOR RELIEF
WHEREFORE, the Hard Rock Defendants respectfully pray that this Court enter
judgment on their behalf and against the Caf and award as follows:
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(a) A declaration that the Caf has breached the License Agreement, and the
covenant of good faith and fair dealing contained within it;
(b) An Order enjoining the Caf from engaging in any further acts in
contravention of the License Agreement or interfering with the Hard Rock Defendants
actual or prospective business relationships;
(c) Compensatory damages, in an amount to be determined at trial;
(d) Punitive damages, in an amount to be determined at trial;
(e) The Hard Rock Defendants costs and disbursements in this action; and(f) Such other relief as this Court may deem just and proper.
Dated: New York, New YorkNovember 12, 2010
DEBEVOISE & PLIMPTON LLP
By: /s/ Jeremy Feigelson____________Bruce P. [email protected]
Jeremy Feigelson [email protected] M. Calderon Rizzo [email protected]
919 Third AvenueNew York, New York 10022
(212) 909-6000 Attorneys for Hard Rock Hotel Holdings, LLC, Hard Rock Hotel, Inc., and HRHH IP, LLC
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