Teresa Scassa - Blog

Wednesday, 23 December 2015 09:06

Forced closure of iconic Mellos diner pits property against intellectual property rights

Written by  Teresa Scassa
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Mellos, an iconic diner in Ottawa’s Byward Market, was forced to close its doors this week after the restaurant’s landlord refused to renew their lease. The diner, which had been in that location for over 70 years had the down-at-heel feel of a real diner yet boasted a quirky menu of terrific food. Its next door neighbor, a much more upscale restaurant will be taking over Mellos’ space – just a coincidence and not a conquest or so the story goes.

The owners of Mellos have had to leave their long-time location, but they do have plans to find another space within the Byward Market area and to reopen as soon as possible. The fact that they are down, but not out, has led to an interesting conflict between private property rights and intellectual property rights.

Mellos diner had a classic neon outdoor sign that hung over the Dalhousie sidewalk outside its door. Because it is located in a Heritage Conservation area, both the building and its sign are protected under the province’s Heritage Act. Any changes to the building, including the removal or relocation of the sign would have to be approved by a series of committees and City Council. At the same time, the sign itself is a fixture – a piece of once moveable property that by reason of its attachment to a building has become a part of the building. This means that the sign is the property of the landlord. And, to make it more interesting, the name on the sign – Mellos – is the intellectual property of the restaurant owners. It is an unregistered trademark – and given that its owners intend to reopen in the same general area – the goodwill in the trademark is certainly still in existence.

According to the Ottawa Citizen, the sign was taken down late in the evening of December 21 – the day that Mellos finally closed its doors. The police have apparently been called – it is not clear by whom – and an investigation is underway.

The problem is a thorny one. The real piece of heritage – the diner itself – has been closed. The desire to preserve what is left – the iconic sign – is well-meaning. However, for the owners of the trademark it would clearly be unacceptable to have the sign hang over another restaurant if Mellos were to reopen in the same area. This would send one of at least 3 confusing messages to the public: that the restaurant that moved into the space is somehow linked to Mellos; that Mellos is closed and no longer exists; or that the newly opened Mellos at a fresh location is not the same as the original. From a trademark law point of view, the sign simply cannot stay where it is, fixture or not. The heritage laws would permit a relocation – but this would only happen after a long and bureaucratically taxing process – something that might also not be acceptable from a trademark law point of view – since in the meantime the sign would stay in place, conveying its potentially confusing message to the public. Finally, the building owner might insist upon its private property rights – placing these squarely in conflict with Mellos trademark rights. To insist upon maintaining a sign that is confusing to the public, and potentially in violation of trademark rights, would seem unreasonable, but this does not appear to have been an amicable parting of the ways in any event.

Now that the sign is down – and safely stored – the dispute can play itself out. The real loss to Ottawa’s heritage has been Mellos – the living, breathing restaurant – and the best outcome would be to see it re-established in the market – with its iconic sign hanging outside. Whether the tangle of property, intellectual property and heritage property laws – and the costs of resolving all of the issues they raise – will ultimately permit this remains to be seen.

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