As The Trademark Turns: Delaware North Amends Yosemite Lawsuit

When last we left the trademark tussle at Yosemite National Park, the federal government had responded to Delaware North Co.'s claim for more than $10 million for not being compensated for trademarks it holds to names of iconic lodges in the park and other intangible property. Now Delaware North has fired back with an amended claim, alleging that the National Park Service low-balled the value of its property at Yosemite and changed the lodge names in a bid to "drive down the value" of its trademarks.

In short, the amended claim filed Monday (attached below) alleges that the Park Service was devious in its dealings with DNC Parks & Resorts at Yosemite and wanted to keep acquisition costs down for Aramark Leisure, which takes over as Yosemite's main lodging and dining concessionaire on March 1 through its Yosemite Hospitality, LLC, subsidiary.

NPS refused to cooperate with DNCY in arriving at a mutually agreeable “fair value” for the Other Property, in the hope of forcing DNCY into a direct negotiation with the new concessioner. NPS also worked hand-in-hand with its selected new concessioner (Aramark) in negotiating against DNCY’s contract-backed entitlement to receive fair value for its Other Property. NPS also devised and implemented a plan to change the iconic names of properties in Yosemite, apparently in the mistaken belief that the name changes would drive down the value of DNCY’s trademarks in those names and would create a public outcry that would force DNCY to relinquish the Other Property for less than its fair value, ultimately to the financial benefit of NPS and Aramark.

The government and Delaware North, DNCY's parent, have been battling over Yosemite since 2014 at least. After DNCY lost the concessions contract, Delaware North filed a $10 million-plus claim against the government last September. In that claim, DNCY alleged breach of contract by the Park Service for its failure to require Aramark's subsidiary to purchase DNCY's intangible properties after landing the Yosemite contract.

The Park Service had initially inserted an amendment to the concessions contract stating that any new concessionaire, other than DNCY, would have to purchase DNCY's intangible property, but later withdrew that requirement. However, in a letter dated Dec. 31, 2015, the Park Service again reversed course, and said Aramark would have to purchase DNCY's trademark holdings. However, while DNCY placed a $51 million value on its trademarks and other intangible property, which includes a customer database with more than 720,000 names and "75 different informational fields," domain names and websites, the Park Service placed a $3.5 million value on it.

The Justice Department early this month asked the court to dismiss DNCY's claim, charging that Delaware North seeks to bolster its bottom line by securing trademarks to iconic U.S.-owned properties and then "wildly inflates" their value. The Justice Department also argued that DNCY wrongly was seeking compensation of nearly $15 million for "other assets" in the form of maintenance and improvements it had performed in Yosemite. That work, the government maintained, fell under the concessionaire's "non-compensable maintenance and repair obligations."

That filing was followed two weeks ago by the Park Service's decision to change the names of iconic lodges in the park. The Ahwahnee Hotel, for instance, would be known going forward as the Majestic Yosemite Hotel. Elsewhere in the park, the Park Service said Yosemite Lodge at the Falls would become Yosemite Valley Lodge, that Curry Village would become Half Dome Village, the Wawona Hotel would become Big Trees Lodge, and Badger Pass Ski Area would become Yosemite Ski & Snowboard Area.

In its 25-page amended claim, Delaware North charged that by changing the names to these facilities the Park Service was discarding "more than a century of accumulated goodwill in Yosemite, which through the stewardship of DNCY and its predecessors grew to iconic status not only in the United States, but around the globe." The claim also noted that, since Delaware North had offered a royalty-free license for the trademarked names until the court determined the damages owed the company, there was no need for the Park Service to change the property names.

The Park Service declined that offer, Delaware North's lawyers claim, because the agency saw the name change "(1) as an effort to reduce the value of DNCY’s trademarks in the mistaken belief that Aramark will have to pay less money for the trademarks if NPS and Aramark decline to use them; and (2) to create public pressure on DNCY to accept less than fair value for its intellectual property in order to avoid reputational harm and the loss of future concession contract bids."

Additional background on the trademark dispute in Yosemite and elsewhere in the National Park System can be found in these Traveler stories:

http://www.nationalparkstraveler.com/2014/12/what-value-ahwahnee-hotel-c...

http://www.nationalparkstraveler.com/2014/12/historian-says-delaware-nor...

http://www.nationalparkstraveler.com/2015/01/yosemite-trademark-discussi...

http://www.nationalparkstraveler.com/2015/01/us-code-might-allow-nationa...

http://www.nationalparkstraveler.com/2015/01/xanterra-parks-resorts-make...

http://www.nationalparkstraveler.com/2015/01/national-park-service-will-...

http://www.nationalparkstraveler.com/2015/02/new-prospectus-grand-canyon...

http://www.nationalparkstraveler.com/2015/03/xanterra-parks-resorts-aban...

http://www.nationalparkstraveler.com/2015/09/delaware-north-companies-su...

http://www.nationalparkstraveler.com/2015/10/new-yosemite-concessionaire...

http://www.nationalparkstraveler.com/2016/01/government-calls-delaware-n...

http://www.nationalparkstraveler.com/2016/01/dnc-says-national-park-serv...