Judge Dismisses Monetary Damages In Sturgis Trademark Lawsuit

Judge Dismisses Monetary Damages In Sturgis Trademark Lawsuit

Sixteen months after a jury awarded nearly $1 million to Sturgis Motorcycle Rally Inc. following a six-year trademark infringement battle and a week-long trial, a federal judge Friday set aside the monetary award levied against a Rapid City merchant and the world’s largest retailer.

SMRI, stewards of the Sturgis logo, had sued Rushmore Photo & Gifts and Wal-Mart for improperly using the trademark “Sturgis” on merchandise they sold over a period of years. SMRI’s attorneys successfully argued in the October 2015 civil trial that the nonprofit owned that trademark and similar phrases when used in connection with the annual motorcycle rally.

But in a 64-page ruling issued Friday, Jeffrey Viken, chief judge of the U.S. District Court Western Division, largely ruled in favor of a series of plaintiff’s motions, but vacated the jury award against the defendants that totaled $912,500.

“Judge Viken upheld SMRI’s trademark rights per se, but the damages finding against the defendants has been vacated, dismissed basically,” said Minneapolis attorney Aaron Davis, who represented Rushmore Photo and Wal-Mart in the case. “There is no money judgment that survives this court order.”

Davis, who has worked on the trademark case for nearly six years, said he and his clients were extremely happy that the federal court had ruled in their favor regarding the monetary damages.

“It’s huge,” Davis said Monday afternoon. “Obviously having a judgment of 900-plus thousand dollars hanging over your head for something you’ve done for 20 years, is a hard thing to swallow. It’s a huge burden off of our clients.”

In the October trial, the defendants — including the three co-owners of Rushmore Photo & Gifts — asserted that the Sturgis Chamber of Commerce had lied when it persuaded the U.S. Patent and Trademark Office to grant the "Sturgis" trademark. The defense's argument was that "Sturgis" is a geographical descriptive, and thus could not be trademarked.

But the jury disagreed. Of the 21 questions before the five women and three men who listened to eight days of testimony, 18 issues were decided in favor of SMRI and just three in favor of the defendants.

The jurors awarded more than $900,000 in damages to SMRI, to be paid by some combination of Rushmore Photo & Gifts, the three owners — Paul Niemann, Carol Niemann and Brian M. Niemann, respectively a husband, wife and son — JRE Inc. and Wal-Mart.

Of the defendants, Wal-Mart took the heaviest hit in the damage award. The jury found that Wal-Mart owed $235,000 in damages. Rushmore Photo & Gifts and Brian Niemann owed $158,750 each, and Carol and Paul Niemann owe $156,250 each. JRE Inc. owed $52,500, under the jury award.

Judge Viken’s most recent court order did not address SMRI’s outstanding motion for a permanent injunction against defendants selling unlicensed Sturgis products in the future, although a temporary injunction remains in effect.

“The court will set a hearing on plaintiff’s motion for a permanent injunction,” Viken stated.

While an SMRI spokesman said Monday that the organization was pleased with that order, the defendants’ attorney was not. Davis also said he expected SMRI to appeal the ruling on damages.

“We weren’t overjoyed with the judge’s ruling deferring to the jury that SMRI had the (trademark) rights and that may be a point of appeal in the future,” Davis said. “I don’t think this case is necessarily over, but we’re happy the money judgments against our clients have been lifted."

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