Judge rules: Only trademarked merchandise on sale

2011-08-06T06:30:00Z 2011-12-11T20:16:22Z Judge rules: Only trademarked merchandise on saleAndrea J. Cook Journal staff Rapid City Journal
August 06, 2011 6:30 am  • 

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."

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.

 

Copyright 2015 Rapid City Journal. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(14) Comments

  1. Smalls
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    Smalls - August 11, 2011 9:18 pm
    This is absolutely ridiculous,every year I buy rally items and this year will not due to this ruling. I hope this works its way through the courts and this gets reversed. They definitely missed the boat with this decision.
  2. Joe Citizen
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    Joe Citizen - August 07, 2011 8:56 am
    If there is a t shirt I can't live without, I will be making dang sure it's NOT an official SMRI garment. I will not support this behavior I I will help spread the word to many to support the rally but boycott the greedy. Good luck RPG!
  3. sturgislocal98
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    sturgislocal98 - August 06, 2011 5:12 pm
    I am going to make my own rally shirt it is going to say on the front "Scoop Town Rally and Races" and on the back its gonna say "Don't park in my Driveway 2011!!"
  4. sturgislocal98
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    sturgislocal98 - August 06, 2011 4:58 pm
    I am starting my own shirts for the rally on the front it is gonna say "Scoop Town Rally and Races" and on the back its gonna say "Don't park in my driveway!! 2011
  5. Cody
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    Cody - August 06, 2011 2:49 pm
    I'll never buy any merchandise from the rally any longer. Rally merchandise used to make great gifts for family and friends across the country, but not any longer.
  6. rccitizen
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    rccitizen - August 06, 2011 1:09 pm
    This now makes it very easy for me to set my purchasing budget for purchasing anything from the rally this year. I will no be spending zero. I hope that all of those that show up for the rally like to be able to have only a handfull of designs for T-shirts, every year the selection of design decrease and so does the quality of the design. I would like to see if SMRi is willing to open there books to show how much money they take in and how much of that is actually given back. In the end this doesn't suprise me, greed as taken over the entire rally.
  7. LBoMacAroni
    Report Abuse
    LBoMacAroni - August 06, 2011 11:23 am
    This opens up a HUGE can of legal worms! With all the businesses around the area that use "Black Hills" in their name, there's gonna be YEARS of legal fights. Way to go SMRi. Maybe I should get my first name trademarked, then anyone else who uses it will have to pay me to use it in any way! Stroke of GENIUS! I'll make money off of Thingama___'s, Plumb____'s, Shiska____'s and so much more. Thanks for the idea SMRi! Seriously, this is one of the reasons I avoid the rally (can I use that word here?) anymore. It was so much more fun in the 70's and 80's. I wonder if locals will have to pay a royalty to have return address labels made for their correspondence?
  8. Donald
    Report Abuse
    Donald - August 06, 2011 10:56 am
    Chevy283 said: "The Judge was wrong on this matter. Then Sturgis Scooper will need to pay for the use of the name 'Sturgis'! Since they have the right's to the name 'Black Hills' also, Black Hills State University and Black Hills Speedway will need to pay for the use of the name 'Black Hills'!!!!Maybe I will get the copy-rights to Deadwood or South Dakota... "

    Please do a little more research and you will find that the trademarks for the words "Sturgis" and "Black Hills" only pertain to their use specifically with the motorcycle rally. Other uses of these geographic terms are not trademarked. The Sturgis Scoopers and Black Hills State University exist for purposes not related to the motorcycle event and will not be affected by this decision. Please use your favorite search engine and enter smri and Sturgis (Yes, the search engines can use the word Sturgis without paying royalties, unless they wish to be the official search engine of the Sturgis Motorcycle Rally) and you will find information far more truthful than the inflammatory posts of the uninformed.
  9. chrome
    Report Abuse
    chrome - August 06, 2011 10:43 am
    Rush Mountmore said: "Confiscation of counterfeits should be the penalty for selling them. "

    Which one would be concidered the conterfeit? I doubt all the designs included in the SMRi are totally origanal. I'm not so sure that SMRi itself couldn't be concidered conterfeit. It's just another copy of previous groups skimming money from rally vendors; and raising the costs of products to the point of ridiculous. Claiming rights to the word "Sturgis" I think is insane but I'm sure it pays well.

  10. chrome
    Report Abuse
    chrome - August 06, 2011 10:05 am
    I'd say this went totally wrong. It does not need to be contolled; but someone always wants a piece of the pie. For decades various groups have been trying to cash in on a rally they had done nothing or little to create. I believe in free enterprize. Create your own product; if the public likes it they buy it. End of Story.
  11. eifeldude
    Report Abuse
    eifeldude - August 06, 2011 9:46 am
    Talk about Greed. This is about the greediest grab I think i have ever seen. Maybe i need to be greedy too, if you can't beat them, join them. Think i will copyright "Rapid City"...look out Journal, you own name will be in trouble if I do that.
  12. Rob002
    Report Abuse
    Rob002 - August 06, 2011 9:28 am
    Confiscate today what was legal and permissable yesterday? Not fair. Now, the locals will not be able to create their own designs---and there ARE alot of creative, local folks with good ideas....The trademarked stuff is mass-produced, cookie-cutter stuff--cheap in quality, expensive in price.

    THis is a shame....and a sham.
  13. Chevy283
    Report Abuse
    Chevy283 - August 06, 2011 8:38 am
    The Judge was wrong on this matter. Then Sturgis Scooper will need to pay for the use of the name 'Sturgis'! Since they have the right's to the name 'Black Hills' also, Black Hills State University and Black Hills Speedway will need to pay for the use of the name 'Black Hills'!!!!
    Maybe I will get the copy-rights to Deadwood or South Dakota...
  14. Rush Mountmore
    Report Abuse
    Rush Mountmore - August 06, 2011 6:53 am
    Confiscation of counterfeits should be the penalty for selling them.
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