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Operator of another Blue Coral wants rights fees from OSI

TAMPA Fla. The operator of an independent restaurant in Chatham, Mass., wants Outback Steakhouse parent OSI Restaurants Partners to pay for the use of the name “Blue Coral,” but so far Anthony Gullotti’s attempts to negotiate a settlement over rights to the name have been fruitless.

Six years ago Gullotti and wife Margaret Gullotti christened their Cape Cod restaurant The Blue Coral Seaside Cuisine and Spirits. Last year, however, behemoth OSI opened its upscale seafood restaurant, Blue Coral Seafood and Spirits restaurants in California, and has said publicly it plans to open more.

Gullotti said that he was contacted last July by a California reporter who asked him about the opening of his second restaurant in Newport Beach. “I told him I wasn’t, and we hung up. He called back the next day and told me it was OSI starting a new upscale chain called Blue Coral Seafood and Spirits,” he said.

Gullotti said he didn’t give the idea much thought until a few months later when someone called him with an offer from an unnamed client to purchase rights to the name for $10,000. At that point Gullotti hired his own attorney, who told him to sit tight to see what OSI did.

Gullotti said that when he started the restaurant, he was new to the business and never thought to trademark the name. Still, the attorney told him he had trademark rights to the name on Cape Cod, and probably in all of New England and perhaps nationwide.

Then in December, Gullotti said, OSI attorney Joseph Kadow contacted him. According to Gullotti, Kadow offered to purchase naming rights. Gullotti would not say what was offered, but apparently it wasn’t as much as Gullotti and his attorney thought fair, as he countered.

“We asked for what is considered the norm in such cases, but OSI only offered us a price  [on the] low side of reasonable,” he said.

A call to OSI’s media department to confirm the story yielded a comment that the issue was a question for the legal department, which, a spokeswoman said, was offsite and therefore currently unavailable.

While Gullotti could appeal the registration with the U.S. Patent and Trademark Office, wait for the chain to expand or enter litigation, his attorney advised him that a fight would be both costly and lengthy.  “I just cannot afford to take on those deep pockets. Especially if I lost,” Gulotti said. 

Gullotti said he has not heard from OSI, operator or franchisor of 1,400 casual-dining restaurants, in more than a month, and feels he is being ignored.  “Kadow has blown my attorney off, won’t answer his phone calls. A few times Kadow even told him that they weren’t happy with performance of the concept and probably weren’t going to pursue the name,” he said.

He added that the similar names have caused confusion as he has received phone calls asking him if he has opened up in California.

The silver lining, said Gullotti, is that a recent article in the Cape Cod Chronicle highlighted his dilemma and that in itself has brought in business. “About 30 to 40 people who have never been in before have come into Blue Coral in the last couple of weeks, and they’ve said they saw the article and want to support us,” he said.

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