The trademark disagreement that's at the crux of why a Portland icon has lost its lease after nearly 112 years in the same location is now going to court.
To recap: News broke on Monday that Besaw's restaurant was being forced to move because the building's owners, who have plans to redevelop the building, refused to renew the restaurant's lease after several years of negotiations with restaurant owner Cana Flug, who bought the business in 2005. But later that day, details of a trademark dispute came to light. The landlord, C.E. John Inc., claims the Besaw's name comes with the building and filed a trademark application in January. Flug disagrees, saying she bought the name when she bought the business, and filed her own trademark application in March as a result. The landlord then refused to renew the lease, which ends May 31.
Flug has been actively searching for a new location for Besaw's within the neighborhood. But Jeff Thompson, C.E. John co-president, said the company plans to find another restaurateur to re-open a restaurant called Besaw's in the same location.
So Flug has filed a lawsuit against C.E. John, asking the court to decide who is the rightful owner of the Besaw's name. The lawsuit details the business transactions and lease agreements leading up to this point, and makes a case that, according to trademark law, the name belongs to the restaurant owner.
"When the current owner, my client, bought the restaurant in 2005, what she purchased was the goodwill and the name of the restaurant," says Flug's lawyer Dennis Steinman of Kell, Alterman & Runstein. That should be pretty clear-cut, but the building's previous owner added a section to the lease that says the landlord grants the tenant the right to use the name for as long as they're a tenant.
"The problem is the trademark, under trademark law, always goes with the goods and services that you offer," says Steinman. "Trademarks are always associated with the goodwill of a business and not a real property. They're associated with the kinds of things offered to consumers like breakfast, lunch and dinner. The claim that the name only goes with whoever is in the location is contrary to the concept of what trademarks are all about."
Of course, someone could trademark a name and license it for use, "but they maintain really tight control over how someone is using it," says Steinman. "In this case the building owners collected rent and that's all they did."
Under Flug's ownership, Besaw's has grown from a quiet breakfast and lunch spot to a full-fledged neighborhood destination with dinner service. "I think what's important is that my client has continuously operated a business under that name for 10 years now, and purchased that right from the prior owner, and has built it up into a really great restaurant. She deserves to keep the goodwill of the business she built up."
We've reached out to C.E. John for comment and will update this post if we get it.
Update: CE John released a statement, in which the company writes: "When we purchased the property four years ago, we were assigned and retained all landlord rights under to the existing lease agreement, including ownership of the name Besaw's and Besaw's Café as our sole and exclusive property. The current restaurant operator, Tuatara Enterprises, Inc., assumed the current lease agreement in 2005 from the previous tenant acknowledging these landlord and owner rights.
"People associate the name Besaw's with the building and restaurant that has welcomed visitors for more than 100 years, and provides charm to NW 23rd Street. Since we own the building and the name, we filed a federal trademark application for the name Besaw's."
You can read the full case below: