Golden Nugget Must Take Trademark Case to Trial

LAS VEGAS (CN) - The Golden Nugget casino is entitled to summary judgment on some claims in its renewed battle with a company with whom it previously settled trademark infringement claims, but it will be up to a jury to decide others, a federal judge ruled.

Golden Nugget owner GNLV and the owners of the former Golden Nugget Arcade in Canton, Ohio, have been embroiled in a legal battle over use of the "Golden Nugget" name since 2010..

In exchange for an undisclosed settlement amount and agreeing to " immediately and permanently cease using the Golden Nugget or similar names and marks in relation to gaming services," GNLV in January 2013 voluntarily dismissed its original complaint against T. Warren Enterprises, the owner of the Ohio business.

But almost immediately after the settlement was approved by a federal judge, the defendants in the initial obtained a permit to open an "Internet cafe/skilled games arcade" named the Golden Nugget Arcade in Canton. Within five months, the IRS raided the business and confiscated several gaming machines.

Upon learning of the raid, GNLV filed a new trademark infringement complaint in the federal court in Las Vegas, requesting summary judgment on several counts. Named as defendants are T. Warren Enterprises, an Ohio corporation formerly known as Golden Nugget Arcade; Great Vibe Entertainment; Tracie Pastore; and Yabacushyanei Bennett.

In its complaint, GNLV accused T. Warren Enterprises of breaching the prior settlement, trademark infringement, unfair competition and interference with prospective economic advantage. GNLV also accused T. Warren Enterprises of business disparagement, conspiracy, bad faith, fraud and misrepresentation.

U.S. District Judge James Mahan granted GNLV summary judgment on most of its claims, but declined to do so for the plaintiff's breach of implied covenant of good faith and fair dealing, and fraudulent misrepresentation claims.

In the case of the breach of good faith and fair dealing claim, Mahan noted the Nevada Supreme Court has held that good faith is a question of fact.

"Whether the defendants breached the implied covenant of good faith and fair dealing is a question that should be left to the jury, therefore, summary judgment is not appropriate."

As for the fraudulent misrepresentation claim, Mahan said "Plaintiff argues that the defendants falsely represented they were going to comply with the terms of the settlement agreement while simultaneously creating a new business entity which would continue to run as the Golden Nugget Arcade.

"The court finds that the plaintiff relied upon the representations of the defendants when they voluntarily dismissed the previous lawsuit as a condition of the settlement agreement. Also, the court agrees that the plaintiff has suffered damaged in that they were forced to bring yet another lawsuit against the same defendants.

"However, the plaintiff has not shown by clear and convincing evidence that the defendants had knowledge of the misrepresentation, or that they intended to induce the plaintiff to act upon the misrepresentation. This issue is a question of fact that should be left for the jury to decide."

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