U.S. Second Circuit - The FindLaw 2nd Circuit Court of Appeals Opinion Summaries Blog

Sharks Can Fight Over The Sloppy Tuna Trademark

It may not be an old fisherman's tale, but when a group of Wall Street investors and seafood loving friends opened The Sloppy Tuna restaurant in Montauk in 2011, they likely didn't expect to be embroiled in litigation, especially against each other.

However, the Sloppy Tuna owners split up the business in typical corporate protect-against-exposure style. There was a business that owned the property, another that ran the operations, and a third that owned the IP. And when one of the two owners of the business that held the IP was ousted from the Wall Street investment group they all belonged to, litigation commenced over that IP and more.

Not Just Any Sloppy Tuna

Interestingly, the big fight is over the trademark rights for the name and logo for the restaurant, which quickly became a familiar stomping ground for those that frequent the Hamptons and Montauk. After the partner that conceived the idea and IP was ousted from the same Wall Street investment group as his partners, the Sloppy Tuna business relationship got messy and hostile.

Over a period of a few years, multiple lawsuits were cast, and in an effort to ensure The Sloppy Tuna didn't go belly up during litigation, a court appointed receiver was appointed to run it.

Curiously, the merits of the trademark battle still haven't been reached yet, despite the years of litigation. The Second Circuit Court of Appeals was recently tasked with deciding whether the co-owner of the business that holds the IP could properly represent the restaurant's interests in a derivative action. And to the surprise of many, the appellate court ruled that so long as certain conditions are met, such as the corporate board being consulted first, the derivative action could proceed.

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