Judge recommends jury decision on key Sturgis trademark issues

Publish Date: 
Mar 13, 2013
By Holly J. Wagner

RAPID CITY, S.D. – A jury should decide at least two key issues that will likely determine whether the term Sturgis can be trademarked and if so, who has the right to the mark, a judge in the federal trademark case has recommended.

If a senior judge approves, issues destined for a jury trial are:

  • whether claims were fraudulent or merely untrue that the Sturgis Area Chamber of Commerce, before the formation of SMRI, exclusively used the terms Sturgis and Black Hills in connection with the rally; and 
  • whether Sturgis is distinctive enough as a source of goods to merit trademark protection.

The recommendation is a long-awaited step in a lawsuit filed in July 2011 by Sturgis Motorcycle Rally Inc. (SMRI) against Rushmore Photo & Gifts (RPG), alleging the souvenir and T-shirt maker infringed upon SMRI trademarks by making shirts and tchotchkes with the words Sturgis or Black Hills on them.

U.S. Magistrate Judge John Simko, assessing motions from both sides to decide the case without a trial, found that certain facts in dispute should be decided by a jury. His report and recommendation goes to U.S. District Court Judge Jeffrey L. Viken, who is presiding over the case and who assigned the analysis to Simko.

“Fraud on the [Patent and Trademark Office] presents a question to be decided by a jury,” Simko wrote. Contrary to SMRI's claim that it and predecessors had exclusive use of the term Sturgis, "the term was commonly used by hundreds of others during the time plaintiff represented its exclusive use of Sturgis. But there is a fact question for a jury to decide – was it the intention of plaintiff [SMRI] to defraud the PTO?

“There is also a fact question whether Sturgis has acquired distinctiveness as a result of secondary meaning, and if so, whether the distinctiveness identifies plaintiff [SMRI] as the source of products or whether the secondary meaning of Sturgis is the event itself,” Simko wrote. RPG and others have asked the USPTO to invalidate the marks, but the administrative case is on hold until the court case is resolved.

Among SMRI's arguments was that retailer Rushmore Photo & Gifts (RPG) and others were barred from seeking invalidation of the mark during the course of a suit to enforce it. Simko disagreed.

“[SMRI] apparently contends that its mark cannot be cancelled by the court in this lawsuit unless there is a counterclaim. The court disagrees,” Simko wrote. Part of RPG's defense to the SMRI suit and its request for dismissal rested on the idea that the marks themselves are invalid, so SMRI's efforts to enforce them are also invalid. Simko summarized the prongs of the defense: 

“The Rushmore defendants have alleged as defenses...among other matters, (1) Sturgis is geographically descriptive, merely descriptive, and not distinctive and, therefore, cannot acquire distinctiveness sufficient to be registered as a trademark; and (2) the STURGIS marks were obtained by fraud on the PTO.” 

SMRI registered the trademarks in mid-2011. The company was formed earlier that year by the Sturgis Chamber of Commerce, which had sought to register the marks with the United States Patent and Trademark Office (USPTO), and Good Sports Inc. (parent of Hot Leathers) and Black Hills Harley-Davidson. Good Sports and Black Hills H-D originally had opposed the trademark action.

"After the Chamber and these opposing parties made a deal and banded together to create the new corporation Sturgis Motorcycle Rally, Inc., Good Sports and Black Hills Harley Davidson withdrew their opposition to the application for registration," Simko wrote. "Good Sports and Black Hills Harley Davidson, who had opposed the registration for eight or nine years because Sturgis was not used exclusively by the Chamber to identify the source of the Chamber's products, now changed their tune...." (continued)