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Austin Sound Check

Update: SXSW lawsuit forces local restaurant to change name

by awolken on May 9th, 2008

The restaurant formerly known as South by South First will be changing it’s name, due to the previously reported lawsuit filed by SXSW Inc. With the ominous burden of a long, expensive legal battle, restaurant co-owner Gary Miller decided to change the name rather than fight SXSW Inc.

Their decision definitely makes business sense. South by South First was a purely local business, going up against the corporate conglomerate that is SXSW Inc. Of course that makes the estimated $5000 already spent on signage, menus, etc. that much more meaningful.

Source [Austin360]

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Lee Nichols
May 9, 2008 at 10:55 am

First off, a disclaimer: I work for The Austin Chronicle, which is owned by the same people who own SXSW. Okay, with that out of the way:

“Corporate conglomerate”?!? Seriously? You might want to study up on SXSW (and look up the definition of “corporate conglomerate”). It is also a “purely local business,” and not a particularly big one at that. Because SXSW is successful and well-run run, people are often under the misconception that it is some huge megacorporation. Yes, they do partner up with some big companies for sponsorship, but go by their headquarters on 40th Street, about half a block west of I-35, and tell me if that place looks like a “corporate conglomerate” to you.

You should study up on copyright law as well. SXSW’s decision, just like South by South First’s, makes “business sense” – companies that don’t defend their copyright can lose it. I guarantee you that if another business opens up here in town with a name that strongly resembles “Austin Sound Check,” you’re not going to be happy.
awolken
May 9, 2008 at 10:59 am

I’m not anti-SXSW by any means. But, I also don’t think it fits the mold of a purely local business.

I don’t disagree with their lawsuit. But I can also see the difference between a huge festival and a local restaurant, no matter what either of them is called. Little chance of confusing the two simply because they share a few words in the name.
awolken
May 9, 2008 at 11:09 am

Also… SXSW and The Austin Chronicle are owned by the same people. Weekly news publishing and music festivals are two seemingly different industries, correct?

Conglomerate: a corporation consisting of a number of subsidiary companies or divisions in a variety of unrelated industries, usually as a result of merger or acquisition.

Sorta fits, doesn’t it?
Lee Nichols
May 9, 2008 at 11:18 am

Okay, I promise I won’t drag this out into a back-and-forth fight — mainly because SXSW can defend itself just fine without my help — but: I’m not sure what you think isn’t “purely local” about SXSW. They briefly ran a “North by Northwest” fest up in Portland, but gave up on that in 2001. As far as I know, they have no business interests outside of Austin, but I could be wrong.

And perhaps you’re bright enough to know the difference between a restaurant and a music fest, but I assure you other people aren’t. SXSW runs the risk that people will think they own SXS1st (which really becomes a problem if that business develops a bad reputation). They’ve been fighting this battle, constantly, since the fest was founded. I swear, half the businesses in this town would be called South by Something if they could get away with it.

Trust me, I know it seems stupid, but this is the state where people refer to any kind of soda as “Coke,” even if what they’re drinking is clearly Orange Crush or Dr. Pepper or Nehi Grape.

Okay, I’ll shut up now. I have to get back to work for the Black & Barbaro-owned company that actually pays me money.
awolken
May 9, 2008 at 11:21 am

Don’t forget about the beer blog. We beer snobs have to stick together!
Lee Nichols
May 9, 2008 at 11:39 am

The Chron and SXSW are separate companies. Same owners, yes, but two separate corporations that as far as I know have no actual financial connection. I know to most people that might seem like splitting hairs, but in business terms, it’s an important distinction. “Corporate conglomerate” is better applied to, say, General Electric, which runs several businesses all under a single parent, with the financial liabilities of each shared by the company as a whole. By contrast, if SXSW gets into money trouble, the Chronicle bears no responsibility for it, and vice-versa.
Scooby
May 9, 2008 at 12:59 pm

One way to prevent trademark infringement is to make the trademark undesirable- such as filing trademark defense suits so that no one wants to be associated with such a pack of uncool corporate tools.

I think that’s catch-23, a corollary to catch-22.
Sense
May 10, 2008 at 10:23 pm

There might be no formal legal connection (i.e., filings with the TX Secretary of State identifying structural relationships) between the Austin Chronicle and SXSW but there is absolutely no denying the promotional and financial synergy between the two businesses. One only has to look at the extensive promotion of SXSW in the Chronicle, which undoubtedly draws many eyeballs and much advertising to the publication. Furthermore, the Austin Chronicle is identified as a “platinum” sponsor of SXSW. How does that work?

Finally, as noted above, this is an issue of trademark not copyright. The point of trademark is to identify good or services used in the stream of commerce. Trademark law is pretty well defined, and a trademark that has been in use as long as SXSW is generally not in threat of being lost. In this case, the owner of mark has a set of choices that he or she may make in defending it based on the perceived damage to the mark. In other words, one picks one’s own fights. Teaming with a white-shoe law firm against a local restaurant is an interesting fight to pick. I think that, over time, SXSW will reap the negative rewards of such choices.