On Cliff House Name, Mary and Dan Hountalas Continue to Jerk San Francisco Around
But, Do the Landmark’s Former Operators Even Have a Chip to Bargain With?
The previous operators of San Francisco’s Cliff House, Mary and Dan Hountalas, want at least a million dollars from the new operator, Sutro Lands End Partners—led by San Francisco attorney Alexander Leff—for the rights to use the name “Cliff House.”
That would seem to be the most obvious interpretation of the following passage from a new San Francisco Chronicle article that reports on some of the trademark claims being made by the Hountalases—and Leff’s response to those claims:
The two parties have had “preliminary discussions” about selling the Cliff House trademark [singular], Mary Hountalas said. She declined to share a price, but said she and her husband have spent seven figures to preserve the trademark [singular] over the decades. They ran the Cliff House and its restaurants from 1973 until 2020, after lease negotiations with the National Park Service broke down.
“The name needs to go back on that building,” Mary Hountalas said. But, she wrote in an email: “We are not in a position to give away the marks [plural] and feel they still have considerable value.”
The Hountalases—through their company PWIIP, LLC—own five Cliff House-related trademarks. Four of these use the term “Cliff House.” The other is for a tagline, “Where San Francisco Begins.”
So, is “seven figures” the amount the Hountalases spent to preserve all five marks? Just the four “Cliff House” marks? Some specific “Cliff House” mark? And, if so, which?
If Mary Hountalas is floating “seven figures” as some kind of negotiating position, the answers to these questions matter.
The answers are especially pertinent, because it appears that only one of the Hountalas trademarks really is in play—a general “service mark” for the term “The Cliff House,” for the specific use of “restaurant services and retail gift shop services.”
Please note: This trademark is for restaurant and retail use. Contrary to the Hountalases’ persistent claims, it has nothing to do with the name of the landmark itself. And, it does not prohibit the new operator from calling the landmark “The Cliff House”—or from putting signage on the landmark that memorializes that historical name. If it were possible to trademark the name of a building in the omnipotent, all-encompassing way that the Hountalases claim to have done at The Cliff House, the owners or leaseholders of landmarks like the Empire State Building and the Chrysler Building would have done the same—but, they haven’t. For a look at the trademarking approach being used at those two landmarks—an approach currently being pursued by the primary leaseholder of the San Francisco Ferry Building—see my article here.
Two other Hountalas trademarks are for specific logos that use the term “Cliff House.” But, these logos—with dated graphics created in the late 1990s—are associated explicitly with the Hountalases; it’s hard to imagine Sutro Lands End Partners principal Alexander Leff’s having any interest in them.
The fourth “Cliff House” trademark, “Cliff House Classic,” is registered for “packaged mixes for baked goods” and “bottled non-alcoholic cocktail mixes”—again, something that doesn’t appear to be an obvious priority for Leff.
Trademarks are registered—and can be renewed—for 10-year terms.
Mary and Dan Hountalas originally registered the one mark that probably would be of interest to Alexander Leff—the service mark for “The Cliff House” in the restaurant / retail category—in September 1993. After two renewals, in 2003 and 2013, the mark expired in September 2023.
In May 2023, the Hountalases filed a new application for a carbon copy of this trademark. The application is pending at the United States Patent and Trademark Office; in fact, USPTO hasn’t even assigned the application an “examining attorney” yet.
The Hountalases repeatedly have insinuated, suggested, and claimed that their “Cliff House” trademark(s) give them some sort of blanket, absolute right to the use of the name—nope!—and that any future operator who wishes to use the name in any context—up to, and including, calling the landmark itself “Cliff House” and installing “Cliff House” signage—will have to have pay for that right by purchasing their trademarks.
It’s pretty clear that the Hountalases are trying to inflate the relevance and value of their “Cliff House” trademarks, so as to inflate the selling price in any negotiation with Alexander Leff and Sutro Lands End Partners.
But, the Hountalases can sell only what they own outright.
In 2016, the Hountalases signed an “Intellectual Property Security Agreement” with the bank, Comerica, that in 2003 provided them with the loan that helped to fund their renovation and expansion of The Cliff House. Under this 2016 agreement, the Hountalases put up all five of their trademarks as collateral for the yet-to-be-paid-off loan.
In a recent article, I postulated that, perhaps, the loan still was active, meaning that the Hountalas’ bank still had a hold on their trademarks—and that this was why the Hountalases applied for a new trademark that they would be free to sell.
The Hountalases say they’ve paid off their loan and have full control of their trademarks. Meanwhile, the new Chronicle article has the Hountalases’ longtime IP lawyer, Mark Steiner, offering a different reason for why the Hountalases have applied for a new service mark for “The Cliff House” in the categories of “restaurant and bar services” and “gift shop services”—rather than simply renew the existing service mark that they’ve had since 1993:
The Hountalases’ attorney, Mark Steiner, said this was done “out of an excess of caution” in case the older trademarks were for some reason not renewed. The application is pending; Steiner expects it to be approved next year.
“For some reason not renewed”? What reason? USPTO does require that an entity wishing to renew a trademark provide evidence that the mark has been in continuous use. The office also has a process whereby an entity seeking renewal can explain extenuating circumstances for why the use of the mark has been interrupted—for example, due to a mandated COVID closure.
In any case: The Hountalases’ existing service mark for “The Cliff House” expired on 7 September 2023. USPTO provides a 6-month grace period for renewing a mark with the payment of an additional fee. After that final deadline, USPTO records the mark as having been abandoned.
The final deadline for the Hountalases’ expired service mark for “The Cliff House” is 7 March 2024. If the Hountalases were going to apply to renew this mark, one would expect them to have applied for the renewal by now. But, the USPTO website’s record for the mark shows no such application.
Comes this nugget a little later in the Chronicle article:
Their newest venture, they say, will be a Cliff House food truck, though they have not yet purchased a truck and there is no timeline for when it will launch, Mary Hountalas said.
“They fully expect to continue using the trademarks,” Steiner said.
So, to recap…
One the one hand, we are told that the Hountalases need their service mark for “The Cliff House” in the restaurant and retail category, because Dan, 88, and Mary, about 82, plan to open a Cliff House food truck—a truck they have yet to purchase—at some undefined point in the future.
On the other hand, Mary and Dan are making it very clear that they won’t need that trademark as badly, if Alexander Leff brings a check with enough zeros on it.
As to which specific restaurant / retail service mark for “The Cliff House” the Hountalases would use or try to sell to Leff…
- The Hountalases allowed the mark they had for 30 years, from 1993 to 2023, to expire in September 2023. They’ve made no apparent effort to renew it. If they do not renew it by March 2024, the United States Patent and Trademark Office will archive it as an abandoned, “dead” mark.
- In May 2023, the Hountalases applied for a new mark that is a mirror of the old one. But, USPTO has not approved this.
Unless I am missing something, it appears that Mary and Dan Hountalas are making a lot of noise about trademarks and naming rights—but that they don’t have a hell of a lot to bring to the table right now. Their “sound and fury” doesn’t signify nearly as much as they would have everyone believe.
Even if the Hountalases did have a registered and up-to-date restaurant and retail service mark for “The Cliff House,” it’s not obvious that Alexander Leff and his Sutro Lands End Partners would need such a mark—unless they wished to use the phrase “Cliff House” in the names of the restaurant or gift shop spaces themselves.
Since “The Cliff House” is not trademarked as the name of the landmark, Leff would be free to use “The Cliff House” in descriptions of the amenities within the landmark.
For the same reason, he and his partners would be free to put up a “Cliff House” sign, as the sign would refer to the name of the landmark—something that is outside the orbit of any of the Hountalas trademarks.
For more on this issue, see my previous articles:
“The 5 Hountalas Trademarks for The Cliff House” (Feb 2021)
“Does the Bank Still Have a Claim on the Hountalas Trademarks for The Cliff House?” (Feb 2021)
“Why Did the Hountalas LLC Apply for a New ‘Cliff House’ Trademark in May 2023?” (Oct 2023)
“The Question at the Heart of the Cliff House Name Dispute” (Oct 2023)
