Up and down Sturgis streets this week, vendors are displaying banners proclaiming that official Sturgis products are sold under their tents and in their stores.

Frank Hess of Daytona, Fla., has sold T-shirts at the rally off and on for 15 years.

Each of the 108,000 T-shirts Hess brought to the rally carries an official product tag from Sturgis Motorcycle Rally, Inc. (SMRi), the not-for-profit development group that holds several rally-related trademarks.

Each tag costs $1. And an employee must attach the tags, he said.

Hess said the licensing is wrong.

“The money is not staying in South Dakota,” he said.

The licensing fee did not go directly to SMRi. Instead, the money went to Connecticut-based Good Sports, owned by Jerry Birkowitz, an SMRi board member.

“There’s nothing about this that’s for the community,” Hess said. “The money should go to the city and the residents.”

Trademarking and defending those trademarks is important to the future of the rally and for Sturgis residents, according to SMRi chairman Dean Kinney.

Kinney called a news conference Tuesday to explain his group’s position on the trademark battle that started in 2001 with the Sturgis Chamber of Commerce and continues today.

The news conference was held for a select few. Two challengers to SMRi’s ownership of the trademarks Sturgis and Black Hills, Brian Niemann and Kent Mortimer, were refused entrance despite presenting media passes issued by the city of Sturgis.

Kinney claims the licensing program that controls the number of licensees, but not the number of retailers permitted to sell licensed products, is necessary.

“The idea is to have a limited number of licensees that are providing a large variety of products to the marketplace,” Kinney said. The system ensures quality control and it makes it possible to audit the licensees to guarantee that the proper fees are being collected, he said.

“It also provides for customer-friendly distribution channels so retailers that want to carry official product can find it easy to handle,” Kinney said.

Not every vendor is happy about paying for the orange and black and holographic tags that are as prevalent as black leather, but they have no choice, said Mortimer, the California-based owner of Renegade Classics.

Among the registered trademarks held by SMRi are “Sturgis” and “Black Hills” when used in connection with the annual motorcycle rally.

Mortimer is heavily involved with Concerned Citizens for Sturgis, a group formed last year when SMRi started enforcing its trademark rights on products sold at the rally. There are many people who support Concerned Citizens who have chosen to stay anonymous because they fear retaliation, he said, but they are financially supporting a challenge to the trademarks.

“We’re paying our legal fees with donations,” Mortimer said.

Weeks before the 2011 rally, SMRi filed a federal lawsuit against Niemann’s Rushmore Photo & Gifts with the intention of forcing the Rapid City company to pay a licensing fee or stop selling rally-related merchandise bearing the name Sturgis.

Niemann is marketing products this year carrying his own black and brown tags and his Sturgis Motor Classic trademark. Printed patches on many products boldly announce that SMC is “not affiliated with, sponsored or endorse by SMRI."

Niemann’s rally business took a 50 percent hit last year when many customers refused to buy his products. Taking a stand has been a huge benefit to business.

“We’re up 20 percent from last year,” Niemann said.

Other customers have simply decided not to buy anything Sturgis related this year, he said.

Aside from Rushmore Photo & Gifts, there is one other notable exception to merchandise offered at the rally: The banners are noticeably missing at any Black Hills Harley-Davidson location. Harley-Davidson has a confidential contract with Sturgis Motorcycle Rally, Inc., SMRi chairman Kinney said.

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

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(3) comments

rcwraith
rcwraith

It has been my thought since the beginning of this sordid mess, that allowing an organization (whether it is under the guise of being a not-for-profit agency or whether it is to benefit the community as a whole or a private party) claim ownership of the entire event itself is a travesty. However, allowing this NFP organization to design, manufacture, produce or sell items that can be labeled the only "Official Sturgis Brand" would be fine. Nobody would have issues with that, as long as they were not restricting others from using the publically owned "name" of a city (Sturgis) or entire “region” of a publically owned state (Black Hills). They do not own those names. They do not own those entities or the names of them. They do not own the rally. They legitimately and undeniably own only the products they choose to sell as official products of the rally, and for those items the court can surely allow them to be called the only “Official” products, but not the only “allowed” products of the Sturgis Rally. If I want to buy an item that is designated as “unofficial”, so be it, that is my right as a consumer. They should have simply developed a quality line of official products and work with the manufacturers of those products to ensure they were of the highest quality and deserving the label of “Official Sturgis Merchandise” stamped upon them. They should have spent far less than what they have wasted thus far on their elf-inflicted litigation to publicize the information that all proceeds from any “Official Merchandise” would benefit the community and city of Sturgis, SD, (allowing the event to continue for years to come, etc...) and if we as consumers feel like we want to make a difference with what we buy, and keep the proceeds in our area, we would buy their wares and not support the “unofficial” merchandise from Florida or other giant traveling commercial “Rally vendors”. But again, that would be our CHOICE, as it should be. It was explained to me yesterday by one of the vendors who primarily sells items requiring these SMRi holographic stickers, in the best way I have heard so far. They said that if SMRi was just a bunch of private businessmen just doing this for a buck, and to cash in on something they don’t deserve, they as a retailer would not support it. But since it is eventually (theoretically) going to benefit the community, as soon as they are done paying for all the legal fees for litigation, they will see that benefit locally, and all will be well again. In my opinion, any court decision that removes the personal choice of consumers should not be allowed to happen. Any business entity who does this the way SMRi did, rather than the proper way as I described, should be stopped from doing so, and the proper way should be created in its place. Shouldn’t be that hard to alter how it is done and they would probably make more in the process as they would not lose the support of the community as they have up to this point.

Just askin
Just askin

Just askin!
According to one prominent US politician those Vendors didn't build their own businesses anyhow it was done by roads,bridges and now apparently SMRI [the non-profit?] organization.

Joe Citizen
Joe Citizen

I am so glad to see the truth of this matter finally getting around. The money that SMRI collects does not stay in this area and does not directly benefit any SD charity yet alone anyone in Sturgis, as proclaimed. SMRI is claiming that they'd be able to donate more if it wasn't for all of their legal expenses....legal expenses that they incurred on their own! They began the costly legal battles by going after "Little Sturgis," Kentucky. With that settlement money (amount undisclosed) they initiated legal action against Rushmore Photo & Gifts and their vision has grown from there. The businesses belonging to the Board Memembers of SMRI seem to be the only ones to benefit from this action. If they had nothing to hid, their press conference would have been open to EVERYONE yesterday and they would have answered some of the MANY questions people have.

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