Rally trademark issue needs closure

It’s time to put the Sturgis Motorcycle Rally trademark dispute to rest once and for all.

The name Sturgis is a valuable brand — no doubt. The city of Sturgis and its citizens should be the benefactors of that brand. They are the ones who bear the burden of hosting nearly half a million motorcycle enthusiasts each year. 

Many in Sturgis have thought it crazy that the city must pay royalties to use its own name. And for many years, vendors have objected to paying royalties on a portion of every T-shirt and shot glass they sell during the annual event to a private nonprofit corporation — Sturgis Motorcycle Rally Inc.

But the legal wrangling continues. 

SMRI, who call themselves the official stewards of the Sturgis brand, were gut-punched this past year when two separate courts ruled that they did not own or have valid trademark rights to names “Sturgis,” “Sturgis Rally & Races,” and “Sturgis Motorcycle Rally.”

A federal appeals court ruled in November 2018 that SMRI doesn’t own the Rally or its intellectual property. Then in February, Judge Jeffrey Viken of the U.S. District Court, District of South Dakota, Western Division ruled the same saying “The record does not support a finding that SMRI owns, produces, or operates the rally, or does anything else that might allow it to acquire ownership over the rally itself or its intellectual property.”

Sturgis Motorcycle Rally, Inc., was born in June 2010 when the Sturgis Chamber of Commerce board voted to convey the trademarks to a new organization. Chamber board members then knew it would take deep pockets to fight for the trademarks.

SMRI spends hundreds of thousands of dollars each year on the fight. It’s the lawyers, not the locals, who are reaping the most from this fight. 

SMRI has been overseeing the Officially Licensed Sturgis products since 2010. And they do give a portion of what they earn from the royalties - $50,000 — back to the Sturgis Rally Charities each year to benefit local nonprofits.

Although many Rally vendors objected to paying the licensing fee, they signed contracts with the group. That is except for Rapid City’s Rushmore Photo & Gifts.

So, in 2011 SMRI slapped them with a trademark infringement lawsuit. After four years of litigation, a jury rendered a verdict in favor of SMRI, awarding it $912,500 in damages. The award was later vacated by a judge.

The rulings this past year have reversed the course and left SMRI licensees and other interested parties confused. 

The case remains in litigation. United States Magistrate Judge Daneta Wollmann reports that SMRI and Rushmore Photo & Gifts were unable to reach a settlement agreement in the case following a settlement conference this spring. That means that the current motions related to the Sturgis trademark case are being considered by Judge Viken, who has yet to issue a decision.

Please, do us all a favor and find an amiable conclusion to this madness for the sake of the community and the future of this great event. 

Black Hills Pioneer Editorial Board

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