Yosemite National Park’s former concessionaire surprised federal officials by quietly trademarking high-profile park names and then “grossly” overvaluing the intellectual property in an unjustified bid for millions of dollars, government lawyers contend in a new legal filing this week.
With an aggressive, 25-page lawsuit response that foreshadows more maneuvering to come, the Justice Department publicly asserts for the first time that the former Yosemite concessionaire proposed an “improper and wildly inflated” value for the trademarked park names.
The company, DNC Parks & Resorts at Yosemite Inc., demanded to be paid for the trademarks it valued at $44 million. The National Park Service, by contrast, said the trademarks for such park names as “The Ahwahnee” hotel were worth only $1.63 million.
“DNCY’s parent company has apparently embarked on a business model whereby it collects trademarks to the names of iconic property owned by the United States,” Justice Department attorney John H. Robertson wrote.
The parent company, Buffalo, N.Y.-based Delaware North, also has a concession at the Kennedy Space Center in Florida and “has a trademark application for the name ‘Space Shuttle Atlantis,’ ” Robertson pointedly noted.
The company declined to comment Tuesday.
By setting forth a grossly exaggerated and improper fair value of $51 million for its intellectual property . . . (the company) has breached its duty of good faith and fair dealing.
U.S. Justice Department legal filing
The Justice Department’s legal filing in the U.S. Court of Federal Claims, submitted late Monday, is the government’s initial response to a lawsuit filed last September by the Delaware North subsidiary. It’s also evidence, at least for now, that settlement negotiations have gotten stuck.
“The relevant parties have been and are engaged in discussions about a possible resolution of the issues,” the Justice Department had written in a more optimistic-sounding Dec. 17 request for additional time to file its response.
In its lawsuit, the company seeks compensation related to the loss of the lucrative Yosemite concessions contract.
Delaware North began running Yosemite’s primary concession operations in 1993. The original contract expired in 2008 and was extended several times. The Yosemite operations include managing 1,542 guest rooms, 25 food and beverage units and various venues from the Wawona golf course to the Badger Pass ski area.
Delaware North competed for renewal of the 15-year contract, estimated to be worth about $2 billion, but the park service last June awarded it instead to an Aramark subsidiary called Yosemite Hospitality, LLC.
The Aramark subsidiary will take over at Yosemite on March 1.
Amid the contract competition, Delaware North had valued its overall “intangible” property in Yosemite at $51 million, with the trademarks pegged at $44 million and other assets such as a customer database at $7 million.
The lawsuit asserted that the park service’s “failure to require Aramark to purchase and pay fair value for the property” hurt Delaware North.
“It is . . . sad and unfortunate that DNC Yosemite was left with no recourse other than to go to court to seek fair treatment regarding the transfer of the Yosemite National Park concessions contract,” the company said in a prepared statement when the suit was filed.
The Justice Department’s filing Monday countered that Delaware North had kept the park service in the dark about its trademark maneuvers.
In 2002, Robertson recounted, the company did not inform the park service when it sought trademark protection for names including “The Ahwahnee,” “Wawona,” “Curry Village” and “Yosemite National Park.” While the company hired a firm to assess the value of its Yosemite intellectual property in 2010, Robertson noted, the park service wasn’t informed until 2014.
Michael Doyle: 202-383-0006, @MichaelDoyle10