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

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
STURGIS MOTORCYCLE RALLY, INC.,
Plaintiff,
CIV. 11-5052-JLV
vs.
RUSHMORE PHOTO & GIFTS, INC.;
JRE, INC., CAROL NIEMANN; PAUL A.
NIEMANN; BRIAN M. NIEMANN, and
WAL-MART STORES, INC.,
Defendants,
-AND-
RUSHMORE PHOTO & GIFTS, INC.;
JRE, INC., CAROL NIEMANN; PAUL A.
NIEMANN; and BRIAN M. NIEMANN,
Coun terclaimants,
vs.
STURGIS MOTORCYCLE RALLY, INC.,
Counterclaim Defendant.
INTRODUCTION
ORDER
By an amended order dated February 15, 2019, the court confirmed
"that the U.S. Registration No. 3,923,284 for STURGIS is invalid and may be
subject to cancellation .... and that the U.S. Registration No. 4,440,406 for
STURGIS is invalid and may be subject to cancellation." 	(Docket 489 at p. 8).
The court noted that prior to the entry of the order "[n]o motion for cancellation
[had] been made." 	Id. at p. 8 n.2 & n.3. 	On the same day, consistent with
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the amended order, the court issued an amended preliminary injunction.
(Docket 490).
On February 22, 2019, the defendants filed a motion to cancel the
Sturgis registrations, together with a supporting brief, an affidavit and two
exhibits. 	(Dockets 492-94, 494-1 & 494-2). 	Defendants subsequently filed a
motion asking the court to take judicial notice of "SMRI's February 22, 2019
Status Report filing before the Trademark Trial and Appeal Board[.]" 1 	(Docket
496). 	Accompanying defendants' motion were an affidavit and exhibit.
(Dockets 497 & 497 -1).
Plaintiff filed a response in resistance to defendants' motion to cancel the
Sturgis registrations. 	(Docket 500). 	Plaintiff also filed a motion and
supporting brief asking the court to reconsider its February 15, 2019, order
and the accompanying amended preliminary injunction. 	(Dockets 501-02).
Plaintiff filed an objection to defendants' motion for judicial notice. 	(Docket
506).
Defendants filed a reply brief in support of their motion to cancel the
Sturgis registrations, together with an affidavit and two exhibits. 	(Docket 503,
504, 504-1 & 504-2). 	Defendants also filed a brief in opposition to plaintiff's
motion for reconsideration, together with a supporting brief, five affidavits and
four exhibits. 	(Dockets 506, 507, 507-1, 507-2, 508, 508-1 & 	509-11).
For the reasons stated below, plaintiff's motion for reconsideration
(Docket 501) is denied, defendants' motion for judicial notice (Docket 496) is
1 Defendants' filing is captioned as a "request." 	(Docket 496). 	For
purposes of this order the court will address defendants' request as a motion.
2
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granted and defendants' motion to cancel the Sturgis trademark registrations
(Docket 492) is granted.2
ANALYSIS
In both its motion for ·reconsideration and brief in opposition to
defendants' motion, plaintiff asserts the court erred on several issues.
(Dockets 500-502). 	Because plaintiff's arguments are the same in each
submission, the court will cite to plaintiff's brief in opposition to cancellation of
the STURGIS mark. 	(Docket 500). 	· SMRI's remaining claims seeking
reconsideration of the court's amended order and amended preliminary
injunction of February 15, 2019, will be addressed in a later section of this
order.
CANCELLATION OF REGISTRATIONS
Defendants' motion seeks an order of cancellation of the STURGIS
Registrations No. 3,923,284 and No. 4,440,406 (jointly "the STURGIS
Registrations") pursuant to 15 U.S.C. § 1119. 	(Docket 493 at p. 1). 	Because
the court "invalidated the STURGIS Registrations," defendants argue "allowing
them to live on in the Patent and Trademark Office will only confuse the
public." 	Id. at p. 2. 	"To avoid any public confusion" and using its authority
under § 1119, defendants submit "the Court should order cancelation of the
STURGIS Registrations." 	Id.
2The court deferred entry of this order to permit the parties to mediate
their differences with United States Magistrate Judge Daneta Wollmann. 	The
magistrate judge reported mediation was unsuccessful. 	(Docket 516).
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Defendants contend "Section 1119's plain language gives this Court
broad discretion to order cancelation of the STURGIS Registrations." 	Id. at
p. 3 (referencing 15 U.S.C. § 1119 and B & B Hardware, Inc. v. Hargis
Industries, Inc., __ U.S. __ , 135 S. Ct. 1293, 1307 (2015)). 	Defendants
submit "[t]he Eighth Circuit held that the jury's STURGIS validity finding
cannot stand for goods and services in any context .... This Court then
invalidated the STURGIS Registrations and mark. ... Invalid marks are neither
protectable nor registrable." 	Id. (referencing Sturgis Motorcycle Rally, Inc. v.
Rushmore Photo & Gifts, Inc., 908 F.3d 313, 333 (8th Cir. 2018) ("SMRI v.
RP&G"); Docket 489 at pp. 7-8; Aromatique, Inc. v. Gold Seal, Inc., 28 F.3d
863, 875 (8th Cir, 1994) (other references omitted). 	Defendants argue "[u]ntil
the public record is corrected consistent with the holdings of this Court and
the Eighth Circuit Court of Appeals, the public will remain[] confused about the
STURGIS mark. 	15 U.S.C. § 1119 is intended to prevent this exact kind of
confusion." 	Id. at p. 6.
In addition to seeking cancellation of the STURGIS Registrations,
defendants ask the court to notify the United States Patent and Trademark
Office ("USPTO") of proceedings before the Trademark Trial and Appeal Board
("TTAB") involving the STURGIS registrations. 	Id. 	Defendants contend there
are two known proceedings:
1.
2.
Id. at p. 7.
Concerned Citizens for Sturgis, 	Inc .• v. 	Sturgis Motorcycle
Rally Inc., Cancellation No. 92054714; and
Sturgis Motorcycle Rally, 	Inc., v. 	Sturgis Black Hills Rally
S.D .• LLC, Opposition No. 91202965.
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Plaintiff opposes defendants' motion for cancellation of the STURGIS
Registrations. 	(Docket 500). 	SMRI contends defendants' "motion [is] neither
required nor endorsed by the Eighth Circuit opinion, and ... it would be in
error for the Court to order the cancellation of the registrations, one of which
was not even pled in Plaintiff's Amended Complaint.". 	Id. at p. 1. 	SMRI
submits:
[It] does not consent and has not consented to trying the issue of
cancellation of its U.S. registrations, including one that it did not
even assert in its operative complaint, and Plaintiff does not consent
to any amendment of the Defendants' pleadings to assert such new
claims.
Id. at p. 2.
Plaintiff acknowledges that during the jury trial "SMRI needed to prove
... the [STURGIS] mark had attained secondary meaning." 	Id. 	Plaintiff
argues:
The jury accepted SMRI 's proof of secondary meaning, finding the
STURGIS mark to be a valid, protectable mark . . . and rejected
Defendants' defenses of fraud and genericness. 	While the Eighth
Circuit Court of Appeals in [SMRI v. RP&G] vacated the portion of
the jury verdict finding validity because 	SMRI 	did 	not meet its
burden of proof, it did not disagree with the jury's refutation of
Defendants' invalidity (genericness and fraud) defenses.
Id. 	In furtherance of this argument, SMRI contends that at trial defendants
"never presented, in jury instructions or in the jury verdict form, any
instructions about the findings necessary to obtain cancellation of Plaintiff's
pleaded registrations." 	Id. 	Had defendants done so, SMRI declares "Plaintiff
would have objected." 	Id.
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Plaintiff argues the court's declaration that the STURGIS mark is invalid
is wrong because the court "misreads the Eighth Circuit's [decision] by relying
on it to make such declaration, as the Eighth Circuit merely cited Plaintiff for
its failure to offer sufficient proof of validity, without going so far as to declare
the mark invalid." 	(Docket 500 at p. 3). 	To the contrary, plaintiff contends
"[t]he Eighth Circuit did not find that the STURGIS® mark is invalid, just that
Plaintiff failed to put on evidence sufficient to prove the validity element in the
present case." 	Id. 	In other words, plaintiff argues it only "failed to sustain its
burden of proof against the Defendants in this case." 	Id.
As an extension of its argument regarding the decision in SMRI v. RP&G,
plaintiff contends:
It is entirely possible ... that SMRI may be able to prove that the
STURGIS mark is a 	valid trademark, 	and enforceable against a
junior user, in another case, against another infringer. 	SMRI will
have to establish, through presumption or evidence, that it has a
valid STURGIS mark, but nothing in the Eighth Circuit's opinion
forecloses SMRI's ability to do so. 	In such a future case, SMRI may
rely 	on 	survey 	evidence 	to 	prove 	secondary 	meaning, 	or 	other
"direct" and indirect testimony.
Accordingly, while it was appropriate for the Court, following the
Eighth Circuit's guidelines on remand, to vacate the jury's special
jury finding that the STURGIS mark was proven to be valid, the
District Court errs to go further by holding the mark to be invalid.
Id. at p. 4.
Plaintiff submits it "did not rely on U.S. Reg. No. 4,440,406 for the
STURGIS mark in its Amended Complaint nor did it rely on the registration at
trial. ... Thus, SMRI's Reg. No. 4,440,406 for the STURGIS mark was not at
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issue at trial." 	Id. at p. 5. 	SMRI proposed defendants "have not asserted any
counterclaim to cancel [U.S. Reg. No. 4,440,406]. 	It would be a manifest error
for the Court to order the cancellation of a U.S. trademark registration not
pleaded in the operative pleadings, not subject to a counterclaim for
cancellation, and not made [an] issue at trial." 	Id. at pp. 5-6. 	In support of
this position, SMRI argues "[c]ancellation counterclaims are compulsory before
the U.S. Trademark Trial and Appeal Board." 	Id. at p. 6 (referencing 37 C.F.R.
§§ 2.106(b) & 2.114(b); 5 McCarthy on Trademarks and Unfair Competition
30: 112 (5th ed.); OBX-Stock, Inc. v. Bicast, Inc., 558 F.3d 334, 342 (4th Cir.
2009)).
As its final argument on this issue, SMRI submits:
[I]ri the event the Court is inclined to grant Defendants' motion,
Plaintiff respectfully requests that the Court certify for appeal to the
Eighth 	Circuit Court of Appeals 	the 	question 	of cancellation of
Plaintiff's federal registrations, before providing any direction to the
USPTO, so as to avoid additional complications in other proceedings
at the USPTO before this matter is finally decided.
Id. at p. 7.
In response to plaintiff's arguments, defendants counter that SMRI
"offered both STURGIS Registrations as trial exhibits and also does not dispute
it cited them as evidence of secondary meaning to survive summary judgment
of invalidity." 	(Docket 503 at p. 2) (referencing Trial Exhibits 16 & 17; Dockets
121 at p. 9, 122-3 & 122-4). 	Defendants contend "SMRI admits that the
parties tried secondary meaning to the jury .... The Court instructed the jury
on secondary meaning .... The jury even asked for further explanation on it."
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Id. at p. 3 (internal references omitted). 	Defendants argue that during the
settlement of jury instructions and the interrogatory style verdict form, SMRI
acknowledged "invalidity for lack of secondary meaning was plainly in the case
... The parties tried invalidity for lack of secondary meaning to the jury." 	Id.
at p. 5 (internal references omitted).
Defendants assert "SMRI cannot now take the contradictory argument
that the jury did not decide on invalidity for lack of secondary meaning." 	Id.
Defendants ask the court to reject plaintiff's argument because "SMRI does not
cite a single case or statute supporting its purported distinction between
secondary meaning and invalidity." 	Id.
In response to SMRI's argument it did not consent to litigate the
cancellation issue, defendants submit SMRI is wrong for three reasons:
(1) defendants sought cancellation of Registration No. 3,923,284 in their
answer; (2) SMRI used Registration No. 4,440,406 to survive summary
judgment; and (3) SMRI offered both the STURGIS Registrations as exhibits at
trial. 	Id. at pp. 6-7 (references omitted). 	For these reasons, defendants
contend SMRI's "argument is irrelevant and misleading." 	Id. at p. 7.
Defendants submit SMRI's "counterclaim argument" has twice been
rejected by the court and "should be rejected for a third time." 	Id. 	They point
out SMRI's argument that a cancellation counterclaim was mandatory before
cancellation could be ordered was rejected in the magistrate judge's report and
recommendation and the court's order adopting the report and
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recommendation. 	Id. at pp. 7-8 (referencing Dockets 107 at pp. 14-
15) (Section 1119 "did not require a counterclaim as a condition precedent to
ordering cancellation."); 119 at pp. 5 & 8-11 ("SMRI's argument is without
merit .... There is no requirement in the trademark statutes which requires a
party to assert a counterclaim as a condition precedent to the court ordering
cancellation of a trademark registration.").
Defendants contend:
After examining the evidence, the Eighth Circuit held that SMRI's
use of STURGIS was deficient as [a] matter of law "in any context"
because STURGIS was not used "to identify a specific source of rally-
related products and services." ... It further held that there had
never been long and exclusive use of STURGIS: "perhaps hundreds"
of other entities have used "Sturgis" to promote the rally and sell
rally related goods.
Id. at p. 9 (referencing SMRI v. RP&G, 908 F.3d at 324 & 327). 	For these
reasons, defendants assert "[t]he mark underlying both Registrations is
invalid." 	Id.
Defendants ask that SMRI's request to certify the cancellation question
for interlocutory appeal be denied. 	Id. at p. 10. 	They contend SMRI's request
fails to satisfy all three of the statutory prerequisites. 	Id. (referencing Union
County. Iowa v. Piper Jaffray & Co., 525 F.3d 643, 646 (8th Cir. 2008).
Section 1119 of Title 15 provides:
In any action involving a registered mark the court may . . . order
the 	cancelation 	of registrations, 	in 	whole 	or 	in 	part, 	. 	. 	. 	and
otherwise rectify the register with respect to the registrations of any
party to the action. 	Decrees and orders shall be certified by the
court to the Director, who shall make appropriate entry upon the
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records of the Patent and Trademark Office, and shall be controlled
thereby.
15 U.S.C. § 1119. 	"[D]istrict courts can cancel registrations during
infringement litigation, just as they can adjudicate infringement in suits
seeking judicial review of registration decisions." 	B & B Hardware,· Inc., 135 S.
Ct. at 1307 (referencing 15 U.S.C. § 1119; other reference omitted).
There is no right to claim "property rights in invalid marks." 	Aromatique, Inc.,
28 F.3d at 875. 	When a mark is "neither registrable nor protectable ...
federally registered marks should be canceled pursuant to [15 U.S.C. § 1119]
which gives courts the power to order the cancellation of invalid marks." 	Id.
I
Section 1119 "arms courts with the power to effectively put the public on notice
of its trademark-related judgments." 	Central Manufacturing, Inc. v. Brett, 492
F.3d 876, 883 (7th Cir. 2007). 	"Because a court's decision may raise doubts
about the validity of a trademark registration, § 1119 arms the court with the
power to update the federal trademark register to account for a mark's actual
legal status (or lack thereof) after it has been adjudicated, thereby reducing the
potential for future uncertainty over the rights in a particular mark." 	Id.
"Where ... a registrant's asserted rights to a mark are shown to be invalid,
cancellation is not merely appropriate, it is the best course." 	Id.
See also Dymo Industries, Inc. v. Tapeprinter, Inc., 326 F.2d 141, 143 (9th Cir.
1964) ("[Section] 1119 ... provides that in any action involving a registered
mark, the court may determine the right to registration. 	A registered
trademark may be cancelled by direct attack as prescribed by the statute, and
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it m:ay also be collaterally attacked in any action where the validity of the mark
is properly in issue."); Bascom Launder Corp. v. Telecoin Corp., 204 F.2d 331,
335-36 (2d Cir. 1953) ("Since the defendant set up its registered trade-mark as
a defense, we think this was an 'action involving a registered mark' within ...
§ 1119, conferring jurisdiction to order the mark's cancellation. 	The evidence
so clearly shows that the mark was merely descriptive that the judge should
have directed the cancellation of its registration."); Fair Isaac Corp. v. Experian
Information Solutions Inc., 711 F. Supp. 2d 991, 1006 (D. Minn. 2010), afpd
650 F.3d 1139 (8th Cir. 2011) ("Under§ 1119 courts have the power to order
cancellation in any action involving a registered mark, and the plain language
of§ 1119 does not require any prompting by a party as a prerequisite to the
exercise of that power.").
"Cancellation ... is a discretionary matter for the district court." 	Fair
Isaac Corp., 711 F. Supp. 2d at 1006 (citing Pinnacle Pizza Co., Inc. v. Little
Caesar Enterprises, Inc., 598 F.3d 970, 979 (8th Cir. 2010). 	A district court's
decision to order cancellation pursuant to § 1119 is reviewed for abuse of
discretion. 	Central Manufacturing, Inc., 492 F.3d at 883.
Contrary to plaintiff's argument, OBX-Stock, Inc. does not stand for the
proposition that a counterclaim for cancellation is mandatory before the
district court may order cancellation under§ 1119. 	In OBX-Stock, Inc., the
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district court noted the defendant did not file a counterclaim for cancellation.3
OBX-Stock, Inc., 558 F.3d at 342. 	But the district court chose not to exercise
its discretion to order cancellation pursuant to § 1119 because the "evidence
does not conclusively establish that every one of [OBX-Stock's] trademark
registrations should be cancelled." 	Id. 	The Court of Appeals for the Fourth
Circuit found "[i]n the totality of the circumstances ... we do not find that the
district court abused its discretion." 	Id. at 343.
Whether Registration No. 4,440,406 was included in SMRI's amended
complaint is not a barrier to the court's analysis.
When an issue not raised by the pleadings is tried by the parties'
express or implied consent, it must be treated in all respects as if
raised in the pleadings. 	A party may move-at any time, even after
judgment-to amend the pleadings to conform them to the evidence
and to raise an unpleaded issue. 	But failure to amend does not
affect the result of the trial of that issue.
Fed. R. Civ. P. 15(b)(2). 	Contrary to SMRI's representations, Registration No.
4,440,406 was admitted as Trial Exhibit 17. 	(Docket 236 at p. 2). 	"The
validity of both registrations [No. 3,923,284 and No. 4,440,406] was litigated at
trial." 	(Docket 489 at p. 2). 	SMRI's argument is without merit.
SMRI's argument the STURGIS mark is still valid and· can be enforced
against others ignores the 8th Circuit's holding that STURGIS is not a valid a
mark. 	SMRI v. RPG, 908 F.3d at 323 & 333. 	"[W]hen used by the
defendants, or anyone else for that matter, [the term STURGIS does] not
3The court noted that a cancellation claim is a compulsory counterclaim
before the Patent and Trademark Office. 	OBX-Stock, Inc., 558 F.3d at 342-43.
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infringe on SMRI's marks." 	(Docket 489 at p. 7). 	"SMRI is bound by this
decision under the doctrines of res judicata and collateral estoppel." 	Id.
The United States Court of Appeals for the Eighth Circuit has spoken.
The STURGIS mark is invalid. 	As long as the public records in the Patent and
Trademark Office continue to represent that the STURGIS Registrations are
valid, the public will be confused. 	Section 1119 gives authority to the court to
remove that confusion. 	B & B Hardware, Inc., 135 S. Ct. at 1307; Aromatigue,
Inc., 28 F.3d at 875. 	Because SMRI's STURGIS mark has been "shown to be
invalid, cancellation is not merely appropriate, it is the best course." 	Central
Manufacturing. Inc., 492 F.3d at 883.
Section 1292 of Title 28 governs interlocutory appeals. 	"When a district
judge, in making in a civil action an order not otherwise appealable ... shall be
of the opinion that such order involves a controlling question of law as to which
there is substantial ground for difference of opinion and that an immediate
appeal from the order may materially advance the ultimate termination of the
litigation, he shall so state in writing in such order." 	28 U.S.C. § 1292(b).
"Section 1292(b) establishes three criteria for certification: the district court
must be of the opinion that (1) the order involves a controlling question of law;
(2) there is substantial ground for difference of opinion; and (3) certification will
materially advance the ultimate termination of the litigation." 	Union County.
Iowa, 525 F.3d at 646 (citing White v. Nix, 43 F.3d 374, 376 (8th Cir. 1994)).
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There is no substantial ground for a difference of opinion as to whether
the STURGIS mark is invalid or that the two registrations are subject to
cancellation. 	The court's ruling on invalidity is mandated by the decision in
SMRI v. RP&G, 908 F.3d at 333. 	Cancellation of the two registrations with the
USPTO is not only logical but necessary to extinguish the confusion SMRI
continues to broadcast to the public. 	Central Manufacturing, Inc., 492 F.3d at
883. 	This case lacks a "novel controlling issue[] of law." 	Union County, Iowa,
525 F.3d at 64 7. 	Certification for interlocutory appeal will not "materially
advance the ultimate termination of [this] litigation." 	Id. at 646.
Plaintiff's motion for certification for an interlocutory appeal (Docket 500
at p. 7) is denied.
JUDICIAL NOTICE
Contemporaneous with defendants' motion for cancellation, they ask
the court to take judicial notice of SMRI's recent filing with the TTAB. 	(Docket
496 at p. 1) (referencing Fed. R. Evid. 201). 	SMRI's filing is a February 22,
2019, status report before the TTAB. 	(Docket 497-1). 	Defendants argue Rule
201 permits the court to take judicial notice of this status report because it is
part of the "official Records of the United States Patent and Trademark Office[.]"
(Docket 496 at p. 2) (referencing Duluth News-Tribune, a Division of
Northwest Publications, Inc. v. Mesabi Publishing Co., 84 F.3d 1093, 1096 n.2-
(8th Cir. 1996)).
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SMRI opposes defendants' motion. 	(Docket 505). 	SMRI claims
"Defendants have merely alleged-without any further explanation-that the
status report, filed in an unrelated action, 'is relevant' to its motion[] ... to
cancel SMRI's STURGIS® trademark registrations." 	Id. at p. 3. 	SMRI is
puzzled as to how defendants believe the status report is relevant to the issues
presently before the court. 	"SMRI cannot know for what purpose Defendants
seek to have a status report from a proceeding in which none of the Defendants
are a party admitted into this proceeding. 	The proposed evidence is of no
consequence in the determination of this action and does not extend to a
matter properly provable in the case." 	Id. at pp. 3-4.
· 	SMRI contends the status report is not admissible under Rule 201
because its "status report contains more than just facts-it contains legal
arguments and statements by SMRI's counsel as to why the unrelated
proceeding at the Trademark Trial and Appeal Board should remain
suspended." 	Id. at p. 4. 	SMRI argues "[a]lthough the filing of the status
report is indisputable, the contents of the report are not. 	Simply because the
status report is publicly available, does not mean the significance of its
contents are 'not subject to reasonable dispute.'" 	Id. (referencing Fed. R.
Evid. 201(b)). 	SMRI submits that "[a]rguably, Defendants would disagree with
many of the statements in the status report, such as the finality of this Court's
proceeding or suggestion that this Court's conclusion that 'the STURGIS mark
is invalid' is 'not based in law.'" 	Id. (referencing Docket 497-1 at p. 2). 	In
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conclusion, SMRI contends "[t]he issues contained in the status report are not
capable of accurate and ready determination without supporting evidence or
further argument and they can be reasonably questioned, thus judicial notice
is not appropriate." 	Id.
"The court may judicially notice .a fact that is not subject to reasonable
dispute because it: (1) is generally known within the trial court's territorial
jurisdiction; or (2) can be accurately and readily determined from sources
whose accuracy cannot reasonably be questioned." 	Fed. R. Evid. 20l(b).
Courts may take judicial notice of documents from the U.S. Patent and
Trademark office which "are public records subject to judicial notice on a
motion to dismiss." 	Kaempe v. Myers, 367 F.3d 958, 965 (D.C. Cir. 2004)
(citations omitted). 	The court may also take judicial notice of related
litigation. 	See Levy v. Ohl, 477 F.3d 988, 991 (8th Cir. 2007); Stahl v. United
States Department of Agriculture, 327 F.3d 697, 700 (8th Cir. 2003).
SMRI acknowledges that "the filing of the status report is indisputable[.]"
(Docket 505 at p 4). 	What SMRI does not want this court to see is that SMRI
maintains before the TTAB that the invalidity of the STURGIS mark is not final.
As a filing before the TTAB, the court finds the validity of the status
report "can be accurately and readily determined from sources whose accuracy
cannot reasonably be questioned." 	Fed. R. Evid. 201(b). 	Pursuant to Fed. R.
Evid. 201, the court grants defendants' motion (Docket 496) and takes judicial
notice of SMRI's status report (Docket 497-1) filed before the TTAB.
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In its status report of February 22, 2019, SMRI declares:
[T]he civil action for which the [TTAB] suspended this proceeding,
Sturgis Motorcycle Rally, Inc. v. Rushmore Photo & Gifts, Inc., et al.
(5: 11-cv-05052-JLV), has not yet reached finality and the Amended
Order for Remand concluding that "the STURGIS mark is invalid" is
subject to 	appeal 	and 	not 	based in 	law, 	such 	that 	[Concerned
Citizens for Sturgis, lnc.,'s] request for cancellation of U.S. Reg. Nos.
3,923,284 and 4,440,406 is not final or likely to become final.
(Docket 497 -1 at p. 1). 	"In view of the foregoing, [SMRI] respectfully request[ s]
that the present cancellation remain suspended pending full resolution of the
civil action."4 	Id. at p. 2.
As the court acknowledged earlier, the United States Court of Appeals for
the Eighth Circuit has spoken-the STURGIS mark is invalid. 	SMRI v. RP&G,
908 F.3d at 333. 	Yet, SMRI's February 22, 2019, status report fails to
acknowledge that the Eighth Circuit's decision was filed on November 2, 2018.
(Docket 468). 	SMRI's continuing effort to perpetuate misleading assertions
before the TTAB are a calculated attempt to confuse not only the TTAB and
USPTO but also the public about the STURGIS Registrations. 	Using its
authority under § 1119, the court must remove that confusion. 	B & B
Hardware, Inc., 135 S. Ct. at 1307; Aromatique, Inc., 28 F.3d at 875. 	SMRI's
STURGIS mark is invalid, making cancellation "the best course" of action.
Central Manufacturing, Inc., 492 F.3d at 883.
41n the proceeding before the TTAB, Concerned Citizens for Sturgis, Inc.,
seeks cancellation of the Sturgis mark. 	(TTAB, Cancellation 92054714,
Docket # 1). 	SMRI defends against cancellation alleging its Sturgis
Registration No. 3,923,284 is and remains valid. 	Id. at Document #2.
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PLAINTIFF'S MOTION FOR RECONSIDERATION
"Rule 60(b) authorizes relief in only the most exceptional of cases."
Noah v. Bond Cold Storage, 408 F.3d 1043, 1045 (8th Cir. 2005). 	The Rule
provides:
(b) Grounds for Relief from a Final Judgment, Order, or Proceeding.
On motion and just terms, the court may relieve a party or its
legal representative from a final judgment, order, or proceeding
for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence,
could not have been discovered in time to move for a new
trial under Rule 59(b);
(3) 	fraud 	(whether previously called intrinsic 	or extrinsic),
misrepresentation, or misconduct by an opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released or discharged; it
is based on an earlier judgment that has been reversed or
vacated; or applying it prospectively is no longer equitable;
or
(6) any other reason that justifies relief.
Fed. R. Civ. P. 60(b).
In addition to the issues addressed above, plaintiff raised other
matters in support of its motion for reconsideration. 	See Docket 502. 	For
the same reasons SMRI asserts the court erred regarding the STURGIS
mark, plaintiff contends the court erred regarding the STURGIS
MOTORCYCLE RALLY mark and STURGIS RALLY & RACES mark. 	Id. at
p. 5-6. 	SMRI contends the court in SMRI v. RP&G did not declare these
marks invalid, "just that SMRI had failed to put on sufficient proof of
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validity, such as by relying upon direct evidence of secondary meaning."
Id. at p. 5.
For the same reasons articulated above regarding the STURGIS mark,
the court rejects plaintiff's argument. 	The Eighth Circuit did not find that
the two marks, STURGIS MOTORCYCLE RALLY and STURGIS RALLY &
RACES, are valid. 	SMRI v. RP&G, 908 F.3d at 336 ("[T]he jury was not
presented with sufficient evidence to conclude that SMRI's unlicensed
marks, 'Sturgis Motorcycle Rally' and 'Sturgis Rally & Races,' are valid and
protected."). 	The STURGIS MOTORCYCLE RALLY mark and STURGIS
RALLY & RACES mark are invalid. 	(Docket 489 at pp. 9-10). 	The
amended order following remand (Docket 489) contains no "mistake" or "any
other reason thatjustifies relief' on this issue. 	Fed. R. Civ. P. 60(b)(l) &
(6).
Plaintiff argues the court erred by issuing "a preliminary injunction
[and] not a permanent one." 	(Docket 502 at p. 8). 	Plaintiff's argument is
premised on its assertion that "[a]fter the merits have been decided, the
injunction must be a permanent one." 	Id. 	Plaintiff asks the court to issue
a permanent injunction and remove the bond requirement so "the parties
... right to appeal the injunction" is ripe. 	Id.
Plaintiff's motion fails to acknowledge that all the issues which may
be the subject of an injunction have not been resolved. 	Unresolved issues
include plaintiff's anti-cybersquatting claim and attorney's fees and court
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costs. 	Until these issues are resolved, the court is in no position,
considering the remand requirements of SMRI v. RP&G, to enter a
permanent injunction. 	The amended preliminary injunction (Docket 490)
contains no "mistake" or "any other reason thatjustifies relief' on this issue.
Fed. R. Civ. P. 60(b)(l) & (6).
Plaintiff's final claim in support of its motion for reconsideration is its
argument the court violated Fed. R. Civ. P. 65(c) in requiring SMRI to post a
bond of $376,539. 	Id. at p. 8. 	Plaintiff argues the court abused its
discretion by failing to articulate findings to support the bond requirement.
Id. 	Plaintiff contends the court failed to consider that "SMRI is a non-
profit, with limited financial resources[.]" 	Id. at p. 9. 	SMRI argues this
error causes "financial hardship to the plaintiff." 	Id.
Defendants oppose SRMI's motion for reconsideration. 	(Docket 506).
The court will only discuss one section of defendants' brief as their other
arguments were resolved earlier in this order. 	With respect to the amount of
the bond, defendants state "there is no mystery to the underlying facts
supporting the Court's order that SMRI post a bond of $376,539. 	This is the
exact amount defendants requested in their motion briefed in the summer of
2016, which was supported by affidavit detailing the costs incurred in 2016
relating to the injunction." 	Id. at p. 2 (referencing Docket 480 at pp. 13-14)
(referencing Docket 363).
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During testimony in May 2016, Brian Niemann testified that his
employees spent "well over 2,600 hours," performing impoundment activities.
(Docket 345 at p. 72: 10-73:23). 	At an average hourly wage of $13.00, this
equated to $34,320 in employee wages. 	(Docket 364 ,r 6). 	RP&G also issued
$221,059 in credits for exchanges of impounded products. 	Id. ,r 7.
Additional net profits estimated to be lost in 2016 were $123,160. 	Id. ,r 15.
Defendants requested a security bond in 2016 of $376,539.5 	Id. ,r 17. 	The
court finds Mr. Niemann's testimony credible. 	While defendants argue they
suffered additional damages for having "been wrongfully enjoined for three
years" and that loss "far exceeds the estimate submitted years ago," they "re-
urge the court sua sponte to require SMRI to post a bond in the amount of
$376,539 as a condition of the [preliminary] injunction." 	(Docket 480 at pp.
13-14).
The court finds SMRI's argument that it is a poor, not-for-profit
corporation is disingenuous. 	The trial evidence disclosed SMRI took in
hundreds-of-thousands of dollars each year. 	SMRI leadership testified its
trademark leasing agreements controlled hundreds of vendors during the
Sturgis Motorcycle Rally.
5There is a $2,000 typographical error between the calculation of
employee wages expended and the amount of employee wages Mr. Niemann
asks to be considered in calculating the security bond. 	Compare Docket
364 ,r 6 ($34,320) and ,r 17 ($32,320). 	Consistent with defendants' request,
the court will use the lower number to arrive at the total of $376,539.
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The Federal Rules of Civil Procedure require that the movant post
security for the issuance of a preliminary injunction. 	Fed. R. Civ. P. 65(c).
"Although [the Eighth Circuit] allow[s] the district court much discretion in
setting bond, [it] will reverse [the district court's] order if it abuses that
discretion due to some improper purpose, or otherwise fails to require an
adequate bond or to make the necessary findings in support of its
determinations." 	Hill v. Xyguad, Inc., 939 F.2d 627, 632 (8th Cir. 1991).
While the court believes a bond requirement of $376,539 may not fully
cover defendants' damages in the event the amended preliminary injunction
was wrongfully issued, the court finds that sum consistent with defendants'
summary of their minimum losses and adequate to meet the requirements of
Rule 65(c).
The court finds plaintiff's motion for reconsideration fails to identify any
mistake or other error warranting relief from the amended order following
remand and the amended preliminary injunction. 	Fed. R. Civ. P. 60(b)(l) &
(6). 	For the reasons stated in this order, plaintiff's motion for reconsideration
(Docket 501) is denied.
ORDER
Based on the above analysis, it is
ORDERED that plaintiff's motion for reconsideration (Docket 501) is
denied.
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IT IS FURTHER ORDERED that consistent with this order and the
terms of the amended preliminary injunction, SMRI shall post security in
the amount of $376,539 on or before January 10, 2020.
IT IS FURTHER ORDERED that defendants' motion for judicial notice
(Docket 496) is granted.
IT IS FURTHER ORDERED that defendants' motion for cancellation
(Docket 492) is granted.
IT IS FURTHER ORDERED that plaintiff's motion for certification of
the issue of cancellation for interlocutory appeal to the United States Court
of Appeals for the Eighth Circuit (Docket 500 at p. 7) is denied.
IT IS FURTHER ORDERED that pursuant to 15 U.S.C. § 1119 .the
STURGIS mark evidenced by Registration Nos. 3,923,284 and 4,440,406 is
canceled and this order of cancellation is certified to the Director of the
United States Patent and Trademark Office so that appropriate entries may
be made to its records.
IT IS FURTHER ORDERED that the United States Patent ahd Trademark
Office is notified pursuant to Trademark Manual of Examining Procedure
§ 1610 that the following proceedings before the Trademark Trial and Appeal
Board, namely:
1. 	Concerned Citizens for Sturgis, Inc., v. 	Sturgis Motorcycle
Rally Inc., Cancellation No. 92054714; and
2. 	Sturgis Motorcycle Rally, Inc., v. Sturgis Black Hills Rally S.D.,
LLC, Opposition No. 91202965
involve the STURGIS registrations.
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IT IS FURTHER ORDERED that the Clerk of Court shall mail, by certified
mail return receipt requested, a certified copy of this order to:
Office of the Solicitor
Mail Stop 8
Director of the United States Patent and Trademark Office
P.O. Box 1450
Alexandria, VA 22313-1450
Dated December -/1, 2019.
BY THE COURT:
CHIEF JUDGE
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