Visitors planning to take home a memento of the 71st Sturgis motorcycle rally will fill their saddlebags with only officially branded merchandise if they want a souvenir labeled "Sturgis."

U.S. District Judge Jeffrey Viken denied a last minute request by Rushmore Photo & Gifts for a temporary restraining order and a preliminary injunction that would have permitted the local merchandiser to sell products bearing the word "Sturgis."

Viken reached his decision at 9:50 p.m. Friday, after seven hours of testimony.

Viken said there is little likelihood that Rushmore Photo & Gifts can win a legal dispute with Sturgis Motorcycle Rally Inc., commonly called SMRi, to use the word "Sturgis" on products it manufactures and sells throughout the region in connection with the annual Sturgis motorcycle rally.

"We're disappointed with the outcome," said Brian Niemann, co-owner of Rushmore Photo & Gifts. Niemann said his company will continue to oppose SMRi in court.

The "Sturgis" mark is a registered trademark that SMRi has the exclusive right to use in relation to specific goods as itemized on the national registration, Viken said.

Testimony presented Friday by witnesses supporting and opposing the temporary restraining order proved that more than 50 percent of the vendors selling products at this year's rally are displaying SMRi licensed merchandise, Viken said.

The number of vendors selling the licensed merchandise shows that they believe they have an "exclusive product to sell," Viken said.

Viken also noted that because royalties from the licensing agreements are used to support the rally and Sturgis charities, the harm to the community would outweigh any harm done to the vendors who are prohibited from using the word "Sturgis" on their products.

SMRi is a not-for-profit 501(c)(6) corporation of volunteers that controls the major trademarks and intellectual property associated with the Sturgis rally.

SMRi, which was formed last summer, handles the licensing of several trademark names associated with the rally, including the word "Sturgis." The group requires final approval on all designs and packaging of products.

"Sturgis" was registered as a SMRi trademark in February.

By that time, Rushmore Photo & Gifts and other wholesale and retail businesses that used "Sturgis" as part of their designs on products ranging from T-shirts to shot glasses had already started preparing for this summer's rally.

Paul Niemann and Brian Niemann, co-owners of Rushmore Photo & Gifts, testified that their company has distributed products labeled "Sturgis" for more than 20 years. Only once in all of those years did the company sign a licensing agreement with the Sturgis Chamber of Commerce in connection with a rally logo. That was for an unsuccessful postcard, Paul Niemann said.

The Niemanns have sold merchandise carrying a label indicating their products are licensed.

The Niemanns were sued by SMRi in June. They filed a counter claim and sought a temporary restraining order and a preliminary injunction so they could market their products without fear of the merchandise being seized.

The Niemanns also organized a Concerned Citizens for Sturgis with another rally vendor, Kent Mortimer of Fresno, Calif., to encourage a boycott of licensed rally products.

Paul Niemann testified that his retail clients were not buying his products because they were afraid the merchandise would be confiscated or they would be sued for selling it.

John Schroeder of Sturgis, a supporter of the injunction, testified in support of the Niemanns.

Schroeder's black leather vest was covered with embroidered rally patches commemorating more than a decade of rallies. He created the design that features a bald eagle perched on the word "Sturgis."

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Schroeder said it was vital to his business to be able to use the word "Sturgis" on his products.

"If you can't eat it, it's got to have ‘Sturgis' on it," Schroeder said.

As a wholesaler, Schroeder's situation was similar to the Niemanns.' Customers refused to buy nonlicensed products.

Like many of the vendors who testified, Schroeder bought some licensed merchandise to sell in his Sturgis booth.

Bar Meltzer of Jumbo Trading LLC of Rapid City had refused to sign a licensing agreement because she did not want to submit her designs to the exclusive control of SMRi.

Dean Kinney of SMRi testified that trademarks and licensing are necessary to ensure quality control of the products connected with the rally.

Royalties from the licensing agreements support the rally and its promotion, Kinney said.

The loss of the control of the trademarks would be devastating to the community and the rally, Kinney said.

Contact Andrea Cook at 394-8423 or andrea.cook@rapidcityjournal.com.

 

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