Company sues former owners over name use

Back in business after the forced sale of their upscale home furnishings business in Aurora in 2001, Victoria and Richard MacKenzie-Childs are facing a court challenge to the use of their own names by the owner of their former firm.
The arty couple’s distinctive home furnishings and dinnerware designs have been popular for years in trendy retail venues. They have been a mainstay at Parkleigh in Rochester, which features an entire MacKenzie-Childs department.
Now “broke and struggling” but working hard to re-establish their once-thriving franchise, Victoria and Richard MacKenzie-Childs have been selling a new line of wares for some 18 months, said their lawyer Paul Marshall in Manhattan.
The lawsuit filed in U.S. District Court in Rochester last week accuses the MacKenzie-Childses and their new company, the New York City-based V&R Emprise Ltd., of trademark infringement for attaching their own names to their new product lines.
How much damage the legal challenge will do to the couple’s hopes of re-establishing themselves remains to be seen, Marshall said.
A Victoria and Richard Emprise Web site maintained by the couple shows them living and working on a former ferry docked in the Hudson River and displays a product line consisting of various art-pottery items. The site directs consumers to retail locations, including Parkleigh, where the designers’ offerings can be purchased. It also offers private collectors a chance to lay out $2,500 toward the purchase of the couple’s designer goods. Collectors who subscribe will get first crack at limited-edition designs, the site states.
Suing V&R Emprise is MacKenzie-Childs Ltd., the company that acquired Victoria and Richard MacKenzie-Childs’ former business, buying the Cayuga County firm after it went through a Chapter 11 bankruptcy in 2000.
MacKenzie-Childs Ltd. attorney Stephen Salai of Harter, Secrest & Emery LLP could not be reached for comment.
MacKenzie-Childs Ltd. in its court papers describes itself as the company that bought the assets of the couple’s business from two entities, MCL Acquisition Corp. and MCNY Acquisition Corp.
Business names used by Victoria and Richard MacKenzie-Childs in their former enterprise include Victoria and Richard MacKenzie-Childs Ltd. and MacKenzie-Childs of New York Ltd., the lawsuit notes. In acquiring the MacKenzie-Childs’ assets, the court brief states, MacKenzie-Childs Ltd. came into ownership of the Victoria and Richard MacKenzie-Childs trademarks.
Not so, Marshall counters. His clients relinquished “some intellectual property” in the sale of their former companies, he concedes, but specifically retained rights to their own names.
The couple as recently as last year refused a “ridiculously low” offer from their former firm’s owner to sell the rights to their name, Marshall said.
The ultimate force behind the plaintiffs named in the suit, Marshall said, is Pleasant Rowland, creator of the American Girl Doll line. After selling her company, Pleasant Co., for some $700 million, he said, Rowland turned her attention to his clients who have found their interactions with her anything but pleasant.
Before the couple’s former company filed its Chapter 11, Marshall said, Rowland bought the firm’s debt from its lender and called the then-delinquent loan. That forced the firm into bankruptcy and ultimately forced Richard and Victoria MacKenzie-Childs into a personal bankruptcy filing.
Asked whether he would consider Rowland’s acquisition of the MacKenzie-Childs firm similar to a hostile takeover, Marshall said, “she took away their company when they wanted to keep it. I’d call that hostile.”
Marshall said this week neither he nor his clients had yet seen papers in the infringement action. And neither he nor his clients previously had any direct communication with Rowland or any MacKenzie-Childs Ltd. lawyers apprising them of infringement violation allegations.
“My clients haven’t heard anything from (Rowland) for three years,” Marshall insisted.
Rowland also had sent letters to some dozen retailers warning them not to carry V&R Emprise products and some have dropped them, Marshall said.
Parkleigh is “aware that there are tensions” between Victoria and Richard MacKenzie-Childs and the company that now owns their former business, but it is continuing to carry products offered by both, Parkleigh operations manager Daniel Mejak said. He is not aware of any warnings directing Parkleigh not to stock V&R Emprise lines.
U.S. Patent and Trademark Office records show that MacKenzie-Childs Ltd. of Aurora applied for trademark protection of the MacKenzie-Childs name on numerous items ranging from majolica pottery to decorative wall tiles, table bases and votive candles in 2003.
Victoria and Richard MacKenzie-Childs moved to block that trademark registration when they became aware of it, Marshall said.
USPTO records show that an opposition to the MacKenzie-Childs application was filed Jan. 26.
“She probably filed the lawsuit as a response to our opposition,” Marshall said.
In the court action, MacKenzie-Childs Ltd. is seeking a preliminary injunction to stop sales of new MacKenzie-Childs lines put out by V&R Emprise and for V&R Emprise profits to be put in a constructive trust pending the dispute’s outcome. It also asks unspecified punitive damages. No court date is yet scheduled.
The MacKenzie-Childs trademark fight could be seen as a reprise of Bully Hill Vineyards Inc. owner Walter Taylor’s highly publicized legal battles of some two decades back with the Coca-Cola Co.
Coca-Cola had purchased the Taylor family’s winery and sued Walter Taylor after Taylor started a new winery under his own name. Taylor lost the case but kept Bully Hill in the spotlight and some saw him as a winner who gained invaluable free publicity that helped put his Hammondsport-based winery on the map.
A possible point in the couple’s favor is that, like the now-deceased Taylor, they could cast themselves as colorful and whimsical but embattled Davids facing a remote and formidable Goliath.
After losing the court case to Coca-Cola, Taylor famously drew his own labels, which for a time featured a prominent black bar where his name might have gone and referred to Bully Hill’s owner as “a man who shall remain nameless without heritage.” Such efforts earned Taylor and his new winery numerous write-ups and features in national news media.
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03/03/06 (C) Rochester Business Journal