Sturgis Motorcycle Rally, Inc. v. Rushmore Photo & Gifts, Inc. et al

Filing 419

ORDER denying 375 Motion for Reconsideration. Signed by Chief Judge Jeffrey L. Viken on 3/2/17. (SB)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
CIV. 11-5052-JLV

STURGIS MOTORCYCLE RALLY, INC.,
Plaintiff,
vs.
RUSHMORE PHOTO & GIFTS, INC.;
JRE, INC., CAROL NIEMANN; PAUL A.
NIEMANN; BRIAN M. NIEMANN, and
WAL-MART STORES, INC.,

ORDER DENYING MOTION FOR
RECONSIDERATION

Defendants,
-ANDRUSHMORE PHOTO & GIFTS, INC.;
JRE, INC., CAROL NIEMANN; PAUL A.
NIEMANN; and BRIAN M. NIEMANN,
Counterclaimants,
vs.
STURGIS MOTORCYCLE RALLY, INC.,
Counterclaim Defendant.
INTRODUCTION
On October 30, 2015, after a ten-day jury trial, the jury returned a
unanimous verdict in SMRI’s favor on the following counts: (1) registered
trademark infringement, (2) unregistered trademark infringement; (3) trademark
dilution; (4) deceptive trade practices; (5) violations of the Anti-Cybersquatting
Consumer Protection Act; (6) false advertising; and (7) unfair competition.
(Docket 264). In its verdict, the jury unanimously found in favor of SMRI on its

claims of infringement of the registered STURGIS®, STURGIS BIKE WEEK®, and
Composite Design marks and of the unregistered STURGIS MOTORCYCLE
RALLY™ and STURGIS RALLY & RACES™ marks (jointly referred to as “SMRI’s
Marks”). (Docket 264). The jury also unanimously found in favor of SMRI on
its claim of dilution of the famous STURGIS® mark. Id. The court entered
judgment on those claims in favor of SMRI on December 2, 2015. (Docket 269).
On December 31, 2015, SMRI filed a motion for a permanent injunction
and seeking additional relief. (Docket 278). On February 11, 2016, the court
entered a preliminary injunction. (Docket 299). On June 10, 2016, the court
permitted the defendants to sell certain symbols and artwork (“symbols and
artwork order”). (Docket 358). Plaintiff now moves the court to reconsider the
symbols and artwork order. (Docket 375). The RPG defendants resist
plaintiff’s motion for reconsideration. (Docket 383). Plaintiff’s motion is
denied.
ANALYSIS
Rule 60 provides in material part:
The court may correct a . . . mistake arising from oversight or
omission whenever one is found in a judgment, order, or other
part of the record. . . . On motion . . . the court may relieve a
party . . . from a final judgment, order or other proceeding for
the following reasons:
(1)

mistake, inadvertence, surprise, or excusable
neglect;

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(2)
...
(6)

newly discovered evidence that, with reasonable
diligence, could not have been discovered in time
to move for a new trial under Rule 59(b);
any other reason that justifies relief.

Fed. R. Civ. P. 60(a) and (b)(1)(2) & (6). A district court’s decision on a motion for
reconsideration rests within its discretion. Hagerman v. Yukon Energy Corp.,
839 F.2d 407, 413 (8th Cir. 1988). “Motions for reconsideration serve a limited
function: to correct manifest errors of law or fact or to present newly discovered
evidence.” Id. at 414 (quoting Rothwell Cotton Co. v. Rosenthal & Co., 827 F.2d
246, 251 (7th Cir.), as amended, 835 F.2d 710 (7th Cir. 1987)).
SMRI claims the symbols and artwork order was issued “under the fiction
that the use of the term ‘Sturgis’ with ‘South Dakota’ without any rally-related
words, and ‘Legendary Sturgis,’ are not perceived by the public to be Sturgis
Motorcycle Rally-related merchandise.” (Docket 375 at p. 1). SMRI asserts
“[t]he Court lacked any information regarding the perception of these goods
[authorized by the symbols and artwork order] by the public or their manner of
sales in stores.” Id. SMRI contends its “newly discovered evidence” discloses
that RPG’s merchandise is “not only . . . sold in close proximity to [SMRI’s]
licensed merchandise, but also that SMRI’s retailers perceive Defendants’ ‘new’
designs as STURGIS® Motorcycle Rally™-related and not merely geographic
references.” Id. at p. 3.
The basis for SMRI’s argument is that “[t]he Court committed manifest
errors of fact” by the following:
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1.

Concluding that the United States Patent and Trademark
Office (“PTO”) limited all of SMRI’s trademarks to merchandise
related to the Sturgis Motorcycle Rally (“Rally”);

2.

Misconstruing SMRI’s concession regarding geographic,
non-rally related uses; and

3.

Misinterpreting the restriction of the use of “Legendary
Sturgis” in the preliminary injunction.

Id. at pp. 2-3. Based on its argument, SMRI moves the court to “reconsider and
withdraw or narrow” the symbols and artwork order. Id. at p. 3.
The RPG defendants oppose plaintiff’s motion. (Docket 383).
Defendants argue “[w]ithout question, the words ‘Sturgis’ and ‘South Dakota’
can be used freely as geographical indicators.” Id. at p. 3. Defendants assert
plaintiff’s argument that the merchant must reside in Sturgis, South Dakota, to
distribute merchandise with these geographical indicators is “absurd,” as SMRI
cites to “no law to support its . . . within-the-city-limits position.” Id. at p. 6.
Defendants acknowledge that at trial their RPG designs containing
“ ‘Legendary Sturgis’ had multiple indicia of the rally on them.” Id. at p. 7
(references to trial exhibits omitted). Consistent with the court’s symbols and
artwork order, defendants argue they are permitted to use “Legendary Sturgis”
and “Legendary Deadwood, Legendary Custer, Legendary Yellowstone,
Legendary Badlands, Legendary Devil’s Tower, and Legendary Bearizona” on
“non-rally-related” merchandise. Id.
Defendants argue “for Plaintiff to allege that its alleged common-law rights
in STURGIS MOTORCYCLE RALLY are not limited to the Sturgis motorcycle rally
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is baffling, and contrary to Plaintiff’s own witness testimony [at trial].” Id. at
p. 8. Defendants point out that “[a]fter having its application rejected by the
Trademark Office, Plaintiff limited the scope of the STURGIS Registration to
make clear that geographic uses were not covered.” Id. (referencing Trial
Exhibit 769 at DEFS 000479) (“Applicant has amended the subject wording to
indicate that the ‘general merchandise and souvenirs’ relate to the STURGIS
motorcycle rally.”). Defendants ask that plaintiff’s motion be denied because
“[t]he text of the marks themselves, the Trademark Office’s and Plaintiff’s
limitation on the STURGIS mark, and the admissions of Plaintiff’s own witnesses
at trial all show that the enforceable scope of the marks is limited to rally-related
products.” Id.
Regarding plaintiff’s claim of newly discovered evidence, defendants argue
that claim fails because plaintiff’s own exhibit “shows[] there were other
non-rally-related garments [other than those belonging to RPG] next to Plaintiff’s
rally-related shirts.” Id. at p. 9 (referencing Docket 375-9). Defendants pose
the question: Are those “ ‘South Dakota’ garments . . . rally-related too, guilty by
proximity . . . .[?]” Id. In conclusion, defendants argue “Plaintiff’s arguments
that some unspecified contextual factors must be considered in order to
determine whether a design violates the preliminary injunction are without any
basis in the law and are contrary to Plaintiff’s previous positions and testimony.”
The court finds SMRI’s position to be both overreaching and without merit.
The court previously found in the symbols and artwork order that:
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SMRI does not have trademark rights to American flag images, bald
eagle images, gothic artwork, skull and crossbones images, flames,
pistols, or any combination of those symbols or artwork. Whether
some members of the motorcycle community, rally attendees or
SMRI may envision these symbols and artwork as signs of the rally,
that argument was not the basis of plaintiff’s claims at trial and not
the foundation for the jury’s verdict in favor of SMRI. Nor was that
argument pertinent to the court’s decision to enter a preliminary
injunction.
(Docket 358 at p. 12).
In context, the symbols and artwork order intended to recognize that the
PTO limited SMRI’s STURGIS trademark to “ ‘rally-related’ products.” Id. The
PTO approved the STURGIS trademark only after SMRI limited the registration
so that geographic uses of the word “Sturgis” were not covered. See Trial
Exhibit 769 at DEFS 000479 (“Applicant has amended the subject wording to
indicate that the ‘general merchandise and souvenirs’ relate to the STURGIS
motorcycle rally.”) and DEFS 000484 (“Applicant has amended the Identification
of Goods and Services . . . to also clarify that the goods and services covered by
the present application will relate to the STURGIS motorcycle rally.”) (emphasis
added).
SMRI’s argument that RPG is not a Sturgis, South Dakota, based business
and is therefore outside plaintiff’s concession permitting the geographic use of
the term “Sturgis” is disingenuous. “In closing argument during the jury trial,
SMRI’s attorney specifically told the jury that plaintiff’s trademark claims were
not asserted against the defendants or others ‘using Sturgis fairly to denote their
geographic location. That’s a fair use.’ ” (Docket 358 at p. 12) (reference to the
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trial record omitted). Similarly, during the May 13, 2016, hearing SMRI’s
attorney “reiterated the limitations of plaintiff’s marks when he stated
‘Plaintiff[’s] Sturgis mark is Sturgis relating to the Sturgis Motorcycle Rally.’ ”
Id. (reference to the hearing record omitted). SMRI’s on-going effort to control
the use of “Sturgis” in any and all settings beyond the motorcycle rally conflicts
with its own representations to the PTO, the testimony of its witnesses at trial
and its concessions to the jury and this court.
Regarding “Legendary Sturgis,” SMRI ignores the context of the trial
testimony and exhibits and the language of the preliminary injunction. “Trial
Exhibit 565 contained the phrases ‘Legendary Sturgis,’ ‘2015,’ ‘75 years,’ and
‘Sturgis Motor Classic.’ When used with the motorcycle rally-related phrases
‘2015,’ ‘75 years,’ and ‘Sturgis Motor Classic,’ . . . in that context ‘Legendary
Sturgis’ was a reference to the rally.” Id. at p. 8. The preliminary injunction
“specifically enjoined [the defendants] from using ‘Legendary Sturgis’ in any
context associated with the motorcycle rally.” Id. (referencing Docket 299 at
p. 9). The preliminary injunction excluded any use of the phrase “Legendary
Sturgis” when referring to Sturgis, South Dakota, as a geographical location.
See Docket 299 at p. 11 (“[U]se of the name Sturgis or other phrases which
contain the name Sturgis in the distribution, marketing and sale of non-rallyrelated Sturgis, South Dakota, products is not enjoined or prohibited by this
preliminary injunction.”).

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SMRI’s “new evidence” does not change the conclusions reached in the
symbols and artwork order. That SMRI and two members of the public may
envision the authorized RPG merchandise as symbolic of the motorcycle rally is
unpersuasive and unimportant. RPG’s merchandise authorized by the symbols
and artwork order “are a ‘safe distance’ from any trademark infringement or
violation of the preliminary injunction.” Id. at p. 13 (citations omitted). The
same can be said about other vendors’ “South Dakota” merchandise. SMRI
cannot control marks, symbols or artwork over which they have no legal
ownership.
The court finds no “manifest errors of law or fact” or “newly discovered
evidence” to warrant a modification of the symbols and artwork order.
Hagerman, 839 F.2d at 414. SMRI’s motion is denied.
ORDER
Based on the above analysis, it is
ORDERED that plaintiff’s motion (Docket 375) is denied.
Dated March 2, 2017.
BY THE COURT:
/s/ Jeffrey L. Viken
JEFFREY L. VIKEN
CHIEF JUDGE

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