A group of vendors who for years produced and sold rally merchandise at the Black Hills Motor Classic in Sturgis, S.D., recently joined forces to fight rally-related trademark claims and have the trademarks invalidated.
Calling itself Concerned Citizens for Sturgis, the group is collecting money to challenge nine trademark registrations made by Sturgis Motorcycle Rally Inc. (SMRI) and two unregistered marks – Sturgis Rally & Races and Sturgis Motorcycle Rally -- that SMRI claims to own.
Brian Niemann, a partner with his parents in Rushmore Photo & Gifts, is the point man for the group. He says it has a dozen official member companies already, and the number of interested parties swells to 35 so far.
“We were formed with the sole purpose of overturning these marks. We’re going to see it through to the end. If there is any money left after that, we will give it to the city,” Niemann says.
“I don’t know who the Concerned Citizens for Sturgis is. I don’t know anybody who does know who that is,” says SMRi chairman Dean Kinney. “I don’t even know if it’s anyone from Sturgis.”
South Dakota certified the group as a nonprofit July 7. Niemann says the group will accept anonymous donations, but anyone who decides to become a member must agree to be identified after the group’s first board meeting, which will reportedly happen this week. Among discussion items at that meeting will be the protocol for disclosing the names of member companies and legal strategy.
Too late for this year? One possibility is that the group might seek a preliminary injunction to prevent SMRI from enforcing the contested marks at this year’s rally, which will be held next month. But that would still be too late for some people.
The Niemanns’ sell goods from their store in Custer, S.D., and online. Niemann says business is suffering because of legal threats against Rushmore Photo & Gifts, its customers and vendors. “The exact dollar amount it fuzzy because the year isn’t over yet, but so far we are off by over 25 percent, and as much as 50 percent on some categories, like T-shirts,” Niemann says.
“We have a lot of companies that have told us, ‘this year we’re out.’ Companies I sell a large amount of merchandise to most years are waiting or just selling South Dakota merchandise.”
SMRI received registrations earlier this year for nine marks related to the Sturgis rally and began an aggressive campaign of enforcement. (The company won a settlement with organizers of a rally in Sturgis, Ky., that was known as the ‘Little Sturgis’ rally, but in the future will be known as Kentucky Bikerfest.)
Vendors for this year's Sturgis rally have been told that they must sell only licensed Sturgis rally goods: SMRI designated licensees for various categories of souvenirs. One of those licensees, Hot Leathers owner Jerry Berkowitz, is also empowered to grant sublicenses. But some vendors have complained that the fees for sublicensing were too high and that Berkowitz was offering only one-year sublicenses, leaving them with an uncertain future.
Berkowitz was originally the primary opponent of the chamber registering the marks until he became a board member and licensee of SMRI.
“Jerry is getting beat up, but he is a businessman. He is one of 21 licensees. Clearly that benefits him, but he does not benefit from his role on the board in any way,” Kinney says. “We wanted to have a representative of licensees to this board. If it had been any of the licensees, that person would have been under scrutiny.”
While SMRI didn’t exactly expect a challenge to the registrations, Kinney adds, the form it took when it happened was no surprise.
A week ago SMRI sued Rushmore Photo & Gifts and its owners, claiming they infringe SMRI’s trademarks by selling rally-related souvenirs and T-shirts. On July 6 attorneys for the store's owners filed an answer to SMRI’s lawsuit and incorporated claims to invalidate the trademarks. The basis of their argument is that the names of geographic locations, such as Sturgis, and terms like a year-date, are too generic to be trademarked, and that rally organizers abandoned the marks by failing to register or enforce them for years, even decades.
“Because SMRI’s Sturgis Registrations and Unregistered Terms have become known to the relevant public and adopted by consumers as the name of the products and service rather than a brand identifier of such products or service, the Sturgis Registrations and Unregistered Terms are generic, invalid, and unenforceable as a trademark or service mark,” the complaint states.
The complaint also alleges that SMRI is trying to use the marks in violation of antitrust laws, and seeks compensation for business that Rushmore Photo & Gifts says it lost because of SMRI’s legal threats. The complaint notes that the U.S. Patent and Trademark Office (USPTO) originally rejected the Sturgis Area Chamber of Commerce application to register the marks, and alleges the chamber, which later sold its marks to SMRI, committed fraud by claiming exclusive use of the terms for five years prior to registration.
“We thought this mark was never going to be registered because of the opposition,” Niemann says, “but the opposition switched sides.”
Kinney says SMRi is trying to work with vendors ahead of the rally to minimize the need for enforcement on site. He says he isn’t aware of threats some vendors say they have received that Immigration and Customs Enforcement (ICE) agents would raid any unlicensed vendors.
“We’re not in the business of telling ICE what to do, but it’s a federally protected mark,” Kinney says. “On the other hand, we are trying to work with people. If they come to us and they are up front with us, we try to work with them.”
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