Wal-Mart has been thrown in the mix of a lawsuit for the right to use the word mark Sturgis on merchandise after a federal judge allowed Sturgis Motorcycle Rally Inc. (SMRi) to name Wal-Mart as a defendant in the case. According to an Associated Press article on Yahoo! Finance
Retail giant Wal-Mart has been drug into the trademark dispute over the use of the Sturgis and Black Hills word marks after the Spearfish Wal-Mart apparently was selling t-shirts using logos without approval of the SMRi, who owns the rights to the trademark.
District Judge Jeffrey Viken granted SMRi’s motion to add Wal-Mart as a defendant earlier this week as SMRi owns the rights to the word marks after obtaining the federal trademark
last year. SMRi sued Rushmore Photo and Gifts last June for a similar perceived infringement.
Apparently the Spearfish Wal-Mart was selling t-shirts with a “Sturgis Motor Classic” logo with tags stating it is an “Officially Licensed Sturgis” product, resulting in the conflict of interest. But according to the AP article, Wal-Mart does not believe anybody has “valid or enforceable trademark rights to the name Sturgis.” The company states that it respects others intellectual property rights but argues that Sturgis is a place name that nobody has a right to.
A comparable case was resolved earlier this year over rights to use the words “Daytona Beach Bike Week
” for merchandising after a New York-based holding company threatened local Daytona Beach businesses with legal action if they sold merchandise using those words. The New York holding company had bought the state trademark to “Daytona Beach Bike Week” for the paltry sum of $87.50 and claimed that its local affiliate, Joe Cool Inc., had been selling t-shirts and merchandise with the logo since 1987. The Daytona Regional Chamber of Commerce cried foul though and fought the move in court because it had been acting managers of Daytona Beach Bike Week since 1988 and several other businesses said they had been using the term even longer than that. A U.S. District Court Judge decided in favor of the Daytona Chamber, saying “Daytona Beach Bike Week and its functional equivalents are generic and cannot receive trademark protection.” Many believe the Sturgis trademark should be eliminated as well.
The conflict for the Sturgis word mark began almost immediately after SMRi obtained its federal trademark last year. SMRI established official licensees who charged vendors a fee to use the mark and threatened to take action against vendors who weren’t in compliance. The dispute resulted in a lawsuit between SMRi and a local company out of Rapid City, Rushmore Photo & Gifts, which had been in business in the area since 1937 and claimed it had been selling Sturgis-related merchandise since 1987.
The owners of Rushmore Photo and Gifts, Paul and Brian Niemann, along with Kent Mortimer of Renegade Classics formed a group called the Concerned Citizens for Sturgis
, who questioned the SMRi’s motivation and integrity. Their suspicions surround members of the non-profit SMRi who originally opposed the Sturgis Area Chamber of Commerce’s attempt to register the mark name in 2001 on the grounds that “The name Sturgis is primarily geographically descriptive” and “The name Sturgis is merely descriptive.” In their statements, both Jerry Berkowitz of Hot Leathers and Black Hills Harley-Davidson owner Jim Burgess admitted that over 700 vendors already used the name “Black Hills” in connection with the promotion of the rally. Nine years later, Berkowitz and Burgess, two of the eight members who serve on the board of the SMRi, did a complete 180 on their stance and fought for the trademark obtained by SMRi. Both men’s businesses also profit from their own sales of “Sturgis” and “Black Hills” merchandise, casting further concerns for the "Citizens" about their motivations.
According to the AP report, Wal-Mart believes that “no one has exclusive rights to use ‘Sturgis’ as trademark or prevent others from using the name ‘Sturgis.’” As it stands, motions in the case are due by Oct. 31 and the trademark appeal will eventually go before a three-judge panel, which could be at least a year away. Until then, SMRi still owns the rights to the trademarks and will be asking vendors to sign a contract and pay a fee to use the word mark again this year until the lawsuit is resolved.
SMRi’s outlines its three primary duties as “management of the word marks, improvement and promotion of the Sturgis Motorcycle Rally and to give back funds to the Sturgis area in the form of charitable contributions.” The organization followed up by donating $50,000 to the Sturgis Rally Charities Foundation from money generated by the licensing fees.