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Lfp Ip, LLC Et. Al. v. Midway Venture LLC Et. Al.

December 1, 2010

LFP IP, LLC ET. AL.
v.
MIDWAY VENTURE LLC ET. AL.



The opinion of the court was delivered by: The Honorable David O. Carter, Judge

CIVIL MINUTES - GENERAL

O

Title:

Kathy Peterson Not Present

Courtroom Clerk Court Reporter

ATTORNEYS PRESENT FOR PLAINTIFFS: ATTORNEYS PRESENT FOR DEFENDANTS:

NONE PRESENT NONE PRESENT

PROCEEDING (IN CHAMBERS): DENYING MOTION FOR ORDER REFERRING THIS ACTION TO THE UNITED STATES BANKRUPTCY COURT

Before the Court is a Motion by Defendants Midway Venture LLC et. al. ("Defendants") for an Order Referring this Action to the United States Bankruptcy Court ("Motion") (Docket 28). The Court finds this matter appropriate for decision without oral argument. Fed.R.Civ. P. 78; Local Rule 7-15. After considering the moving, opposing and replying papers thereon, and for the reasons set forth below, the Court hereby DENIES the Motion.

I. BACKGROUND

Plaintiffs LFP IP, LLC, LFP Publishing Group, LLC and Larry Flynt (collectively, "Plaintiffs") allege that in or about April 2006, Plaintiff LFP Publishing Group, LLC ("LFP Publishing") entered into a written license agreement with non-party Pacers, Inc. ("Pacers"). Through the agreement, LFP Publishing granted Pacers a license to market and operate an adult night club located at 3310, 3314, 3334 and 3336 Midway Drive, San Diego, California as a "Hustler Club" ("San Diego Night Club"). Decl. of M. Klein, ¶ 9.

On or about August 27, 2009, Pacers filed for bankruptcy. In re Pacers Inc., Case No. 09-12378-LA11 ("Pacers Action"). By an Order dated June 8, 2010, the Bankruptcy Court approved the sale of certain Pacers business assets, pursuant to a written Agreement for Purchase and Sale of Certain Assets ("Purchase Agreement"). Among the assets sold pursuant to the Purchase Agreement was the San Diego Night Club.

According to Plaintiffs, the Purchase Agreement specifically excludes the sale of any right of continued use of the "Hustler," "Hustler Club," or "Larry Flynt" trademarks in connection with the operation of the San Diego Night Club. Plaintiffs point specifically to Recital D of the Purchase Agreement. Recital D references "certain business names, trademarks and/or promotional materials ... certain branded merchandise ... and/or ... other licensed names materials products and/or services ... including but not limited to agreements with LFP Publishing Group" that Pacer either had used in the past or was presently using. Recital D then provides

"Notwithstanding any such past or present uses of and/or business attributes arising out of such IP licenses ... Buyer acknowledges and agrees that Buyer will not receive any rights or interests respecting such IP licenses ... and Buyer agrees that, from and after Closing as provided herein, Buyer will remove ...


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