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MGM Grand Sues Fantasy Media Group

Las Vegas- The MGM Grand is suing an adult entertainment company in Seattle to permanently shut down its Sex Studio 54 Web site. The site was shut down late last year after Judge Kent Dawson issued a temporary restraining order pending the resolution of the case.

The Fantasy Media Group is promising to fight the case, despite what it calls a David and Goliath imbalance between the two sides. For its part, MGM is equally determined to stop any unauthorized use of its trademark.

“We’re fiercely protective of all our trademarks,” says MGM spokesman Alan Feldman, who says the company sues whenever if discovers an infringement of its intellectual property.

The case is currently mired in jurisdictional issues about whether FMG does sufficient business in Nevada to keep the case in Las Vegas. According to FMG attorney Wolfe Thompson, the company has not sold any DVDs or videos to Nevada residents, which would be required to keep the case in Nevada. “By happenstance, there were no sales to Nevada,” he says, “and the 9th Circuit [Court of Appeals] has ruled in the cybersales case that a Web site does not expose jurisdiction. You have to target some portion of the state and have significant sales.”

Thompson wants to move the suit from the Nevada court because he thinks it gives MGM “a significant home town advantage” when a jury has to decide questions of fact.

The other big question before the substance of the case is decided is the bond MGM will be required to post for shutting down the Web site. FMG has already appealed to the San Francisco-based 9th Circuit because the restraining order was granted shutting down the site until the case is resolved, but MGM was only required to post a nominal $100 bond.

“And if that stands it would be the limit of our damages,” says Thompson. He estimates that the company could lose as much as $150,000 in revenue from the closure of the site in the next two years he expects it will take for the case to be heard and resolved.

The site generated revenue because by listing gay sites that would then pay for the referals, according to trade Web site, AVNonline. FMG spokesman Chris Bierrum says, “The kind of sites were AVS adult sites such as those offered by Adult Check or Cyber Age.”

“Overall, Sex Studio 54 represents a good introduction to what’s available for surfers of gay content who are new to the Web,” AVN concludes.

The name is important to FMG, according to Thompson, because of the cultural associations with the original New York disco. “Studio 54 is part of our collective consciousness,” he says. The site has been operating since 1999, but the suit was not filed until last December.

Thompson thinks FMG is being singled out because it is an adult entertainment site. “As far as I know we’re the only company that has fought back,” he says. “Most of the others were small operators who were appropriating the trademark and hoped to fly under the radar or they didn’t have the resources to fight back.”

Feldman denied that FMG was being singled out because of the nature of its business. “The propriety of what it is that they do is irrelevant,” he says. He was at a loss to explain the continued existence of other businesses using the Studio 54 name, including a nightclub in British Columbia, except to say that the company sends letters demanding that the owners not misuse MGM trademarks “whenever it is drawn to our attention.”

The substance of the case will turn on what Thompson describes as “a complicated eight-part test for use or misuse of trademarks. “It boils down to this,” he says, “Is the public going to be confused that products offered by my client are made by MGM?” The answer will be decided, he adds, by a jury as a matter of fact.

FMG is also going to make a First Amendment defense to its use of the name Studio 54 by claiming the site was a “parody” of the original Studio 54. “Parody is one of the exceptions explicitly provided in the trademark law,” says Thompson. “Our defense will be that this is a fair use.”

Feldman is skeptical. “They may run that one, but they still don’t have a right to use out trademark,” he says.



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