Jun. 17, 2003 - They say imitation is the sincerest form of flattery, but Ian Schrager wasn't flattered. 

When a gift shop right across from his Delano hotel in South Beach named itself the Delano Art Gallerie, the hip hotelier sued. His company had trademarked the name Delano in 1997. 

"We've been fortunate to have been successful, and it's frustrating when someone else wants to capitalize on our success," Schrager said. "Something like this is rarely an honest mistake." Schrager was alerted to the apparent copycat by his 9-year-old daughter, Sophia, who'd caught a glimpse of the shop while on vacation this year. 

"Daddy, can they do that?" she asked. 

The gallery sells bronze dolphins, six-foot-tall storks and gold-leaf, gilt-edged mirrors. 

"Not exactly my aesthetic," Schrager said. 

His lawyer, Steven Siff, said a cease-and-desist letter sent to the shop was ignored. And so the case went to federal court in Miami. 

On May 19, Judge Joan Lenard ruled that the name Delano Art Gallerie "constitutes an effort to mislead the public into believing there is an affiliation between the Delano hotel and DAG's shop when, in fact, no such affiliation exists.' The old sign came down. The new one reads: Art Gallerie. 

Schrager, however, is now suing for whatever profits the shop made under the Delano name. He believes that shop owner Raz Yoram wanted to squeeze the rewards of the Delano name for the duration of the tourist season. 

Yoram declined to comment for this article. His lawyer did not return phone calls. 

Schrager also went after the Skky Lounge, a bar at 66 SW Sixth St. in Miami, claiming that its name too closely matched that of the Skybar, the trendy watering hole in the Shore Club, which is under Schrager management. 

Siff fired off a letter to the Skky Lounge's owners on Feb. 6, demanding a name change. When the owners did not reply, Schrager sued. 

The parties reached a settlement agreement on March 6, and the owners agreed to change the name on the bar's sign, matchbook covers and napkins. The new name is Cielo (Spanish for sky or heaven). 

"I understand that you can't take a word out of the English language and make it your own," Schrager said, "but [the Skky Lounge] was opening on the heels of the Skybar." According to Bruce Ewing, a New York-based trademark lawyer, copycat naming is something that happens thousands of times a year. The main issue, he said, is whether a name confuses customers, which in turn could put the reputation of the original name holder at stake. 

Noah Lazes, one of the owners of the South Beach nightclub Level, has discovered unaffiliated nightclubs that go by the same name in Atlanta, Chicago and New York as well as in South Carolina and Cancún, Mexico. 

"We go after some, but it's tough," he said, "because a lot are fly-by-night promoters. It can damage our reputation. And a percentage of their business is, because of our name, attributed to us." Schrager said that the names of his other hotels, among them the Royalton, Morgans and the Paramount, had also been ripped off but that the offenders had quickly backed down. 

When asked about the widespread use of the name Studio 54, the infamous New York nightclub he co-founded, Schrager, who served time for tax evasion after the club shut down in 1979, said he had no complaints. 

"Studio 54 almost destroyed me," he said. "I let that trademark expire." 

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(c) 2003, The Miami Herald. Distributed by Knight Ridder/Tribune Business News.