Contracts, Trademarks, and Bears, Oh My!: The National Park Service Fights its Contractor over Intellectual Property.

yosemiteBy Robin Hammond

A subsidiary of the food service and hospitality company Delaware North (“DNCY”), recently lost a 15-year contract to run Yosemite National Park’s hotels, restaurants, and outdoor activities. The contract was worth approximately $2 billion. This change has prompted several lawsuits, petitions to the federal trademark board, a bid protest with the federal Government Accountability Office, and a bill in the California State Legislature. The trademark dispute provides an interesting discussion of intellectual property rights, contract interpretation, and public policy.

At the heart of the issue are the trademarks DNCY acquired during its contract with the National Park Service. According to DNCY, the previous concession company developed and used registered and unregistered trademarks, servicemarks and logos in its operations. DNCY argues that the National Park Service required it to purchase these intangible assets, and the new concessioner should purchase its Intellectual Property (“IP”). DNCY claims its IP is worth $51 million dollars, while the National Park Service claims it is worth about $3.5 million.

 The National Park Service states that all the marks were trademarked without prior National Park Service concurrence. Some of the marks were acquired by DNCY when it took over concessions, and others were registered during its contract with the National Parks Service. For example, DNCY acquired the mark “The Ahwahnee” for Hotel and Restaurant Services from the previous concessioner and later registered the mark “The Ahwahnee” for tourist goods.

The National Park Service has chosen to change the names at issue and remove ‘infringing’ goods. The new names were chosen to eliminate trademark issues for the new concessioner: Yosemite Lodge at the Falls will become Yosemite Valley Lodge, The Ahwahnee will become The Majestic Yosemite Hotel, Curry Village will become Half Dome Village, Wawona Hotel will become Big Trees Lodge and Badger Pass Ski Area will become Yosemite Ski & Snowboard Area. Additionally, all souvenirs bearing the park’s name “Yosemite National Park” were removed from the sales racks in early March.

Reaction has been strong. The Sacramento Bee, a local newspaper, has deemed it a “shakedown” and calls for changes in federal law. The paper points out that a subsidiary of Delaware North has concessions at Sequoia National Park and owns the trademark “Wuksachi Lodge.” A subsidiary of Delaware North claims concessions at the Kennedy Space Center, where it owns the trademarks for the “Space Shuttle Atlantis.” This begs the question: should a federal policy be enacted to deal with the ability to trademark nationally significant properties?

California State legislators reacted strongly to the situation. Assemblymen in the California State legislature introduced Assembly Bill 2249 to prevent state contractors from obtaining trademarks for ‘historic names of California state parks.’ If a contractor has a history of trademarking ‘heritage names,’ then this fact makes the party ‘unfit’ to contract with the State of California. The bill was set to be heard in the Committee on Water, Parks, and Wildlife on Tuesday March 29th.

 The outcome of the litigation, the petitions, and the legislation will not likely provide clear answers. The situation does provide great fodder for discussions of property rights, contract interpretation, and public policy considerations. How will DNCY use the trademarks? Will they seek further retribution for the loss of their contract? Most interestingly, how will this high-profile dispute impact law at the federal at the state level?

Image source: tenayalodge.com.

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