Guest Blogging at Synnovatia

I wrote a guest post over at Synnovatia, “Business Entity Basics: a Quick and Dirty Guide.” Check it out!

http://www.synnovatia.com/blog/bid/102352/Business-Entity-Basics-A-Quick-and-Dirty-Guide

Demolition Derby: Richard Neutra’s Kronish House Controversy

The architectural gem pictured above (and the only remaining intact Richard Neutra house in Beverly Hills) has been slated for demolition by its owners.  The resulting brouhaha, including an 11th hour Beverly Hills city council meeting, highlights the tension between private property rights and public interest in historically and artistically significant properties.

According to the Los Angeles Conservancy, the 1955 Neutra-designed home garnered $5.8 million at foreclosure, and the owners were asking just shy of $14 million.

It appears that the asking price is just a tad too high for a fixer-upper, albeit a modern masterpiece. Now, the owners are seeking to tear it down.  The Los Angeles Conservancy, an advocacy group for historic preservation in LA, and the architect’s son and project leader, Dion Neutra, spearheaded a campaign urging the mayor and city council to intervene.  Unfortunately, the Kronish House may meet the same bitter end as other famed Beverly Hills properties, including Sidney Eisenshtat’s Friar’s Club, and John Lautner’s Shusett House.

At issue is the owners’ application for a demolition permit from the City of Beverly Hills, which currently has no historic preservation laws.  According to a survey by the LA Conservancy, more than 50 cities in LA County do not have historic preservation ordinances.  Normally, the power to protect historical buildings lies at the city level, granted to it by the state. Such ordinances typically have a structure in place, such as a nominating commission and a review or appeals board, and a process to follow such as a public hearing.

Here, no such structure exists, so it appears that there is no legal obstacle to the owners’ permit application.  However, the plot thickens!  Apparently California Government  Code § 65858 allows local governments to pass an interim ordinance prohibiting an action that may be in conflict with a zoning law the city intends to make within a reasonable time.  It operates as an emergency stay.  The catch is, it can only happen if the proposed action is a current and immediate threat to the public health, welfare or safety.

While preservation advocates called for Beverly Hills to enact such an ordinance to protect the Kronish House from the wrecking ball, it doesn’t seem likely that this case meets the danger to the public welfare standard.

Apparently last week’s city council meeting was quite eventful, because the owners’ attorney agreed to stay demolition until October.  According to Neutra author Barbara Lamprecht, who was present at the meeting, prior owners surfaced out of the woodwork claiming they had pending litigation of some sort against the current owners.  There might be a legal challenge to demolition if title to the house isn’t clear, which was brought up at the meeting.  To the relief of architecture fans, the city council asked the planning commission to begin drafting a historic preservation ordinance for Beverly Hills.

Another potential stay of execution might be found in environmental laws.  Demolitions of this type sometimes call the California Environmental Quality Act (“CEQA”) into play. This state law mostly concerns government projects, but also private activities with environmental impact, if discretionary governmental review is required in order to proceed.  In this case, the Kronish House owners simply want to demolish the house and have not presented a proposal to rebuild, so the permit would be considered “ministerial”, not “discretionary”, and CEQA provisions wouldn’t apply.  Do not pass go, do not collect $200.

According to Lamprecht, the owners presented a litany of home repair woes at the city council meeting to make the case for demolition vs. restoration, familiar to homeowners everywhere.  (I have an old home myself, and my new hobby is looking up DIY drywall videos on youtube.  Just saying.)  Now, the owners are an investment company and arguably, a sophisticated buyer.  The condition of the house, costs of repair, and potential headaches are all known and ostensibly bargained for in the purchase price.  However, what else can be used to give owners the incentive to purchase and renovate historic properties?

One option is a tax credit under the Mills Act, an incentive program that many cities have adopted, including LA.  Under this program, the property owner applies for qualification for historic property, and then signs a contract with local government for 10 years (with yearly extensions thereafter) to receive property tax abatements in exchange for an agreement to restore and maintain the property.  Beverly Hills is now considering adopting Mills Act legislation.

At the end of the day, the Kronish House could still meet a fateful end, as many other great buildings in Southern California have.  It sits waiting for a Neutra knight in shining armor.

–Nicholle Mineiro

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Want to see a house tour?  Check out the Curbed LA photo gallery.

Really fired up about the constitutional issues involved in historic preservation?  That’s beyond the scope of this blog post, but there’s a great writeup here and here by the good folks at the National Trust for Historic Preservation, on due process, equal protection, and takings clause law.

Cocktail Conundrum: Can I Copyright My Cocktail Recipe?

This question comes to us from an artisan cocktail purveyor who asks, how can I protect my cocktail names and recipes? As the craft cocktail movement is in full bloom out here in LA and New Orleans’ “Tales of the Cocktail” Conference just wrapped up, many bartenders/ bar owners, small batch distillers, drink makers and caterers are wondering the same thing.   It’s an important question no doubt, as that distinctive item on your menu might be worth quite a few extra dollars in licensing or a higher contract with a business partner.  On the flip side, it may be distressing to see your cocktail show up at a pop up bar event across town and steal the food blogger limelight.

This issue has also made it to the courtroom steps as of late.  You may have heard of the Painkiller bar debacle in NYC, in which Pusser’s Rum Ltd. sued the popular Painkiller bar in federal court for the use of the tiki drink moniker. Painkiller settled, agreeing to change its name to PKNY, turn over its website URL, and not to use the name “Painkiller” for any cocktail unless it contains Pusser’s rum.  The court never got a chance to weigh in on this one, so we’ll never know if the “Painkiller” name, used in cocktails for years before Pusser’s trademarked it, would have been considered public anyway.  It’s also debatable whether an alcohol company can claim that its rights to a drink name extend to forcing a bartender to replicate the recipe to the letter, including the brand of spirit used.  Legitimate right to protect a brand name, or highway robbery?  You be the judge.  Anyhoo,  PKNY gets to indulge in a bit of Schadenfreude as bartenders across the country are boycotting Pusser’s.  (Other similar legal challenges have befallen the Dark and Stormy, and the Hurricane).

So if you came up with an original cocktail idea, you should be in the catbird seat, right?  Well, not entirely.

First, can you copyright a cocktail recipe?  According to the U.S. Copyright office, you cannot copyright the recipe itself. However, if your recipes involve extensive annotation, notes and original description, or if you have created a book of recipes, copyright protection may be available.  If you are not writing and researching your own historical narratives a la Jason Wilson or Ted Haigh, this is probably not for you.  You may be a distiller yourself and are looking into sponsoring events with other small batch producers and bartenders, with special drink menus.  If you want to ensure that your brand of spirit is used in that particular recipe, another option is to consider a trademark, then entering into an agreement with others to set limits on the use of the name.

What is involved in trademarking the cocktail name?  The U.S. Patent and Trademark Office does offer trademark registration, to the nonrefundable tune of $325 for each online application.  You would have to apply separately for each recipe name you’d like to trademark.   You’d also have to file renewal forms and pay a $100 renewal fee at regular intervals. While the cost is steep, you’d have to evaluate your business and how you’re planning on using the recipes. Do you publish your recipes on a website, create your own cocktail menus, and work with other bars and catering companies? Would others be willing to pay to use your distinctive names?  Sometimes the name makes the cachet of the drink- especially in a market that thrives on vintage cred (Exhibit A:  The Sazerac.  Exhibit A1: The Flirtini). On the other hand, craft cocktail culture places a premium on knowledge sharing, somewhat akin to the open-source software community.  You may risk souring potential business relationships by striking the wrong note.

It’s also important to note that we’re talking about names, here.  You can’t prevent people from using your drink idea and simply serving it under a different name.  Unless it can only be created by using some Rube Goldberg-like method requiring distilled griffin tears and cold fusion and you got a patent.  And probably not even then.

The bottom line?  It is going to be expensive to legally register your cocktail recipe name, and license its use to others. Practically speaking, you’d spend at minimum $1000 on a few recipes, not to mention legal fees for trademark application preparation, consultation, maintenance and contract drafting.  If you are in the “raising funds via Kickstarter” stage, this may be a tall order.  In any event, these could be points to build into your budget and contract negotiations.

–Nicholle Mineiro

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Handy links: (as WordPress is not letting me embed links right now.  See that?  Actual steam. Coming out of my ears.)

http://www.thelodownny.com/leslog/2011/06/lawsuit-costs-painkiller-its-name-and-website-health-dept-inspection-turns-up-trouble.html

http://www.techdirt.com/articles/20110619/23443214746/pussers-rum-wins-ridiculous-trademark-battle-loses-war-as-bartenders-protest-boycott.shtml

http://www.nytimes.com/2009/07/05/fashion/05shaken.html

http://www.theatlantic.com/life/archive/2010/08/the-era-of-copyrighted-cocktails/62153/

Pleased to meet you.

 

Let the blogging commence.