This Monday, seven-time Grammy Award-winning recording artist Gladys Knight commenced a federal unfair competition lawsuit against her own son and his businesses in connection with a chain of Atlanta-area chicken and waffle restaurants bearing Knight’s name and likeness.
How can businesses avoid legal issues related to third-party names and brands?
Gladys Knight’s Chicken & Waffles
According to the restaurant chain’s website, Knight and her son Shanga Hankerson developed “Gladys Knight’s Chicken & Waffles” in 1997. The eatery has served up a full menu of Southern and soul food classics since 1997 at its three locations in Atlanta and Lithonia, Georgia.
Knight claims that she and Hankerson signed a contract authorizing the Gladys Knight-themed restaurants in exchange for royalty payments. When the deal expired, Knight allegedly gave Hankerson and his companies “oral licenses” to extend the arrangement, provided that they did not engage in any intentional or reckless activity that might harm her name or reputation.
Hankerson was arrested this June amidst allegations of criminal tax evasion. Shortly thereafter, Knight purportedly terminated her licensing agreement with Hankerson and his businesses and demanded that they cease and desist from using her name and likeness, recipes and memorabilia.
Unfair Competition Lawsuit
On August 29, 2016, Knight commenced an unfair competition lawsuit against Hankerson and his companies in the U.S. District Court for the Northern District of Atlanta (Case No. 1:16-cv-03160-LMM), alleging that their continued unauthorized use of Knight’s intellectual property gives consumers the false and misleading impression that Hankerson and his restaurants are sponsored or endorsed by Knight.
In addition to unspecified damages, Knight has asked the Court to order Hankerson and his companies to return all of her memorabilia and to stop using her name, likeness and other intellectual property.
As the above-referenced case illustrates, businesses with names, themes, logos, goods/services or other identifiers that reference third-party brands, celebrities – or even one’s own mother – without permission may find themselves subject to an unfair competition lawsuit or other legal action. The legal risks associated with such third-party references should be carefully vetted by experienced intellectual property counsel as early in the creative process as possible.