My Strangest Business Deal Ever

What’s the name of a $66M aircraft really worth?

I once had the opportunity to sell a $66 million aircraft back to the company that built it. Doesn’t happen very often. Here’s the crazy story.

Let me start at the beginning. Absolute Entertainment was a video game publisher from the early 1980’s through the mid-1990’s. I was one of several co-founders of the company, and the CEO. In 1988, we published a military action game on the Commodore 64 and the Atari 7800 titled F-18 Hornet. For you retro game aficionados who care about such minutia, the game was developed by John Van Ryzin, of H.E.R.O. fame.

As was standard practice at our company, for each title, we had our trademark attorney file for protection of the name of the title. Ergo, in early 1989, we filed a trademark for F-18 Hornet in the category of Computer Game Programs.

Now, some of you might be hollering at your screen right now saying “just hold on a minute, that name was already taken.” Well, that’s actually not how trademarks work. A company can own a trademark in one market segment, and another company can hold the same mark in a different, unrelated market. The example my trademark lawyer always used to tell me was the trademark Cadillac; you can have Cadillac automobiles, and Cadillac dog food. As long as the consumer wouldn’t mistake one product for another, you were ok.

After the USPTO office clears the usage of your proposed mark, it then publishes advance notice to the public of your intention to register the trademark in question. This information is published in the Trademark Official Gazette (I have a collection of mint-condition back issues if anyone is interested). If a 3rd party has a problem with your proposed use of the mark in the area you’ve filed, they have 30 days to oppose the application. F-18 Hornet passed that stage without opposition.

Finally, when you file a trademark, you also have to show evidence of use of the name in commerce; in other words, you can’t just run around and trademark a bunch of names unless you are actually planning to use them. In this case, we had proof of the first use in commerce of F-18 Hornet as June 5th, 1998.

In the end, the trademark went through, with an official registration date of September 18, 1990. Note the tiny “TM” to the right of the title on the box art, shown below:

Now, back to that business deal.

It was a few years later. Everything was going just ducky that day when I answered my office line. The caller on the other end of the phone (we’ll call him Mr. McD) identified himself as in-house counsel at McDonnell Douglas, one of the preeminent aerospace manufacturers in the world. I said to myself, “what would McDonnell Douglas want with us?”

Mr. McD cordially started the conversation by confirming that I was in-fact THE “Garry Kitchen” listed as the administrative contact on U.S. Trademark serial number 7xxxxxx specific to the mark “F-18 Hornet.” I responded that I was, at which point, my telephone exploded. In a diatribe of disbelief, exasperation and consternation, Mr. McD demanded to know how it was possible that the trademark for an aircraft that his company had designed and built, at a cost of $40 billion, had wound up in the possession of a small video game company situated over a movie rental store in Glen Rock, New Jersey.

I placed the phone handset on my desk. After it had cooled enough to the touch that I could pick it up, I had a brainstorm. I knew how to clear this up. Taking a page from our trademark attorney, I ever-so-gently enlightened him with the anecdote of the coexistence of the Cadillac automobile and Cadillac dog food. That didn’t go well.

Instead, Mr. McD explained to me that, while our use of the mark in Computer Game Programs was irrelevant to them at the time we had filed it, McDonnell Douglas had since started developing flight simulation software under the “F-18 Hornet” mark. When I heard that, I was livid. I wanted to jump up and scream “what the hell gives you the right to do that?” I didn’t. I also wondered briefly if their software ran on the Commodore 64 and Atari 7800 platforms, as ours did, but I thought better of asking.

Finally, I inquired as to why he was calling me, at which point, we got down to business. In a voice dripping with venom, as the smell of charred mammal flesh came through the receiver, he responded “I guess we’re going to have to buy the trademark from you.

At that moment, TIME STOPPED. The makers of the Cadillac automobile had suddenly and inexplicably found themselves in the dog food business. It was a miracle; truly manna from heaven.

Now I must admit, while I’m usually pretty good on my feet, I hadn’t anticipated negotiating with a multibillion dollar aerospace manufacturer about selling them the naming rights to an aircraft they developed at a cost of $40 billion. I needed a moment to think; I had never sold a military aircraft to anyone.

I started high, he low-balled me. We went back and forth as the gap between our counteroffers narrowed. Finally, I went a little bit higher than halfway to gauge how much I could get away with, but he had tired of the conversation. I heard a growl, “We’re willing to pay $$$$$, but not a dime more.” We had a deal.

I took the rest of the day off for a job well done.

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Garry Kitchen is a retro video game designer whose titles include Donkey Kong (2600), Keystone Kapers, GameMaker (1985) and Bart (Simpson) vs the Space Mutants.

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