Why Did the Hountalas LLC Apply for a New “Cliff House” Trademark in May 2023?
Ironing Out a New Wrinkle
At the end of December 2020, Dan and Mary Hountalas took their marbles and went home.
For the 40 years prior to 2018, the Hountalases — more accurately, their food-service company, Peanut Wagon, Inc.—had operated the landmark Cliff House, in San Francisco, under two consecutive 20-year leases with the Cliff House’s owner, the National Park Service (NPS).
When the second of these leases expired in 2018, NPS did not offer a new long-term Cliff House contract to Peanut Wagon, or to anyone else. Peanut Wagon continued to operate The Cliff House under one or more short-term contracts with NPS, even as the company continued to push for a new long-term lease.
Against the backdrop of the COVID-mandated closure of The Cliff House in 2020, negotiations between Peanut Wagon and NPS deadlocked; the Hountalases walked away; and The Cliff House closed at the end of 2020.
On New Year’s Eve 2020, the Hountalases’ performative removal of the monumental lighted “CLIFF HOUSE” sign letters was one of a number of…signs that Dan and Mary Hountalas were not going to go quietly.
In fact, their physically taking the name “Cliff House” off of the landmark would prove to signal a larger legal play:
Over the nearly three years since leaving The Cliff House, the Hountalases repeatedly have insisted that, since they have trademarked the name “Cliff House,” any other entity is prohibited from using the name—including for the landmark itself.
In addition to the fact that a succession of landmarks on this site have been named “Cliff House” since 1863—fully 110 years before the Hountalases arrived on the scene—it appears there are two major problems with their trademark claim:
1
None of the five “Cliff House” trademarks that the Hountalases have registered, or own, through their company PWIIP, LLC, apply to the landmark itself (see here).
2
In 2003, the Detroit-based bank Comerica loaned Peanut Wagon as much as $12 million to finance Peanut Wagon’s share of its 2003–4 renovation and expansion of The Cliff House. Under a 2016 “Intellectual Property Security Agreement” with Comerica, PWIIP signed over to Comerica absolute rights to all five of its Cliff House trademarks as collateral security for Peanut Wagon’s loan, pending repayment of the loan (see here).
Last month, NPS announced that it had awarded the next 20-year Cliff House lease to Sutro Lands End Partners, LLC. A press release from representatives of the company noted:
Mr. and Mrs. Hountalas claim to be the exclusive owners of the trademark and are seeking payment in order to allow the building to continue to be called the Cliff House.
Those two little words — “seeking payment”—may be what really underlies the Hountalases’ trademark machinations.
The truth is: Four of the five “Cliff House” trademarks registered to the Hountalas-owned PWIIP, LLC, would be of little interest to the new lessee. One, “Cliff House Classic,” is for “packaged mixes for baked goods” and “bottled non-alcoholic cocktail mixes.” Three others pertain to the specific logo and tagline that Peanut Wagon used at The Cliff House.
Probably the fifth trademark—a general “service mark” for “The Cliff House”—is the only one that would be of any real value to Sutro Lands End Partners.
To understand why, it helps to know that every trademark is registered for one or more International Classes (IC), depending on which goods or services are to be provided under the mark.
Since being registered in September 1993, the service mark for “The Cliff House” has been classed IC 042: “restaurant services and retail gift shop services.” Here’s a detail of the current United States Patent and Trademark Office (USPTO) record for this mark:
Trademarks must be renewed every 10 years—and, it so happens that this service mark for “The Cliff House” expired last month. (Originally registered in 1993, the mark was renewed in 2003 and again in 2013.)
So—given that it likely is this specific mark that Dan and Mary Hountalas have been using to press their trademark claims for the last three years—it’s curious to learn that…
Rather than simply renew the mark for another 10-year term, Dan Hountalas—5 months ago, in May 2023—applied for a brand-NEW service mark for “The Cliff House” that is a de facto copy of the mark that just expired — and that Hountalas companies have owned for 30 years.
Here is the USPTO record for Hountalas’ application for the mark:
Note that, 5 months after the filing date, the application still “has not yet been assigned to an examiner.”
As you can see, the International Class nomenclature we touched on earlier has changed since the mark last was renewed in 2013. The “restaurant services and retail gift shop services” previously denoted by IC 042 now is split across two classes: IC 043 for “restaurant and bar services” and IC 035 for “gift shop services.”
But, apart from this administrative revision, it appears that the mark would function in precisely the same way as before.
My understanding is that Dan and Mary Hountalas could have simply renewed the EXISTING service mark for “The Cliff House” and amended the classes to reflect the current nomenclature.
So, why not do that? Perhaps because the existing mark is entailed to Comerica Bank.
My bet: Applying for a new mark for “The Cliff House” is about sidestepping the agreement under which the existing mark is being held by the Hountalases’ bank as loan collateral.
Under this theory, Dan and Mary Hountalas are not free to monetize the existing mark — but, they would be free to try to monetize a new one.
In applying for a new service mark for “The Cliff House,” Dan Hountalas signed—as USPTO requires—a pro forma declaration of PWIIP’s “bona fide intention…to use the mark in commerce on, or in connection with” both “restaurant and bar” and “gift shop” services.
This stretches credulity, given that Dan is about 88 and his wife Mary about 82. Are we to believe that that Dan and Mary Hountalas (or their associates) intend to open and run a restaurant/bar and a gift shop trading on the “Cliff House” name?
What seems more likely is that, in applying for a new “Cliff House” trademark, the Hountalases are trying to create a commodity that they can sell to the most obvious buyers: the National Park Service or the next Cliff House operator (which NPS had not yet selected in May 2023).
But, here’s the thing: Even if the Hountalases are successful in securing a new service mark for “The Cliff House” for “restaurant and bar services” and “gift shop services”…
And, even if they are successful in getting NPS or Sutro Lands End Partners to buy this mark…
None of this has anything to do with the name of the landmark itself.
“Cliff House” is not—and never has been—trademarked as the name of the landmark. Sutro Lands End Partners is free to call the landmark what it and its predecessors have been called since 1863: The Cliff House.
For more on this issue, see my other 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)
“The Question at the Heart of the Cliff House Name Dispute” (Oct 2023)
“On Cliff House Name, Mary and Dan Hountalas Continue to Jerk San Francisco Around” (Nov 2023)
