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Parties Clash over Ownership of H&H Bagels Trademark

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While its actual stores and manufacturing plants have gone out of business, the corporate trademark title of H&H Bagels continues to legally exist – and several parties are fighting to own the classic company name.

Helmer Toro, the founder and owner of the famed bagel emporium who created an expansive corporate entity through multiple limited partnerships, has been engaging in every possible legal maneuver to maintain his ownership of the name. Unfortunately for Toro, most of his corporate partners have gone bankrupt, and one of them is in debt to the IRS for well over a million dollars, prompting the tax agency to seize the H&H trademark.  

In response, Toro filed a petition two weeks ago in U.S. Tax Court, in which he claimed that the IRS acted unlawfully and was hurting the trademark’s value by making it vulnerable to claims from the other two men seeking ownership. “The IRS should be preventing third parties from making claims against the trademark…,” Toro stated in his petition.

The men to whom Toro was referring are Randy Narod, a Long Island businessman who runs a chain of bagel stores, and Harry Abrams, a partner in American Financial Services Group. In his bid for the famous name, Narod has registered with the U.S. Patent and Trademark Office for the “Original H&H Bagels” trademark, and is awaiting his application’s approval. In July, Narod disclosed that he is preparing to open a store in lower Manhattan this fall.

According to attorney Marc Reiner, who serves as chairman of the intellectual property group at Anderson Kill & Olick, it is not likely that the patent office will grant Narod the H&H Bagels trademark while the existing trademark is still in play, as that could potentially cause confusion. Toro’s attorney, Eric Weinstein, countered that even if Narod’s application is rejected, he could still attempt to open a new store. If Narod would do so, Toro would be required to seek an injunction from a federal district court.
Toro said that Abrams, the third party in the dispute, agreed last year to give him a loan of $12,000, with the H&H Bagels corporate name put up as collateral. Toro claimed that he has not repaid the loan because Abrams charged him interest rates at a usurious 20%. Abrams has lodged a claim, or lien, against the trademark for security interest.

The director of business development for Davidovich Bakery in Woodside, Queens, Marc Fintz, revealed that he was one of a number of potential investors who went to meetings convened by Abrams this past spring to raise funds for an effort to reintroduce H&H Bagels into the retail marketplace, with a plan to establish nationwide franchises. However, Davidovich ultimately decided against investing in the venture.

“There was an explanation of the fact that Helmer had pledged the name H&H Bagels, the agreement was breached, and that the name was forfeited so there was a right to use that name,” said Fintz, who at one time served as national business manager for H&H.

Weinstein, Toro’s lawyer, said that his client has secured a letter from the IRS which states that although the trademarks have been seized, they are still owned by Toro until the title to the trademarks is sold. Weinstein said that any sale is on hold until Toro’s appeals will be heard.

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