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

FILED
SEP 26 2013UNITED STATES DISTRICT COURT
~~	DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
STURGIS MOTORCYCLE RALLY, 	CIV. 11-5052-JLV
INC.,
Plaintiff, 	ORDER SUSTAINING IN
PART AND OVERRULING IN
vs. 	PART PARTIES'
OBJECTIONS AND
RUSHMORE PHOTO & GIFTS, 	ADOPTING REPORT
INC.; JRE, INC., CAROL 	AND RECOMMENDATION
NIEMANN; PAUL A. NIEMANN; 	AS AMENDED
BRIAN M. NIEMANN; and
WAL-MART STORES, INC.,
Defendants.
Pending before the court are four motions: plaintiffs motion for summary
judgment (Docket 66); plaintiffs motion to strike parts of defendant Wal-Mart
Stores, Inc,'s (Wal-Mart) answer (Docket 70); defendants' motion for summary
judgment (Docket 76); and plaintiffs motion to strike the defendants' motion
for summary judgment (Docket 93). 	The court referred the motions to
Magistrate Judge John E. Simko for resolution pursuant to 28 U .S.C. § 636.
(Dockets 104 & 105). 	On March 6, 2013, Magistrate Judge Simko filed a report
recommending the court deny plaintiffs motion for summary judgment, deny
plaintiffs motion to strike parts of Wal-Mart's answer, deny plaintiffs motion to
strike the defendants' motion for summary judgment, and deny the defendants'
motion for summary judgment. 	(Docket 107). 	The parties timely filed
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objections. 	(Dockets 108 & 109). 	The parties also filed responses to the
opposing party's objections. 1 (Dockets 110 & 111).
The court reviews de novo those portions of the report and
recommendation which are the subject of objections. 	Thompson v. Nix, 897
F.2d 356,357-58 (8th Cir. 1990); 28 U.S.C. § 636(b)(1). 	The court may
then "accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge." 	28 U.S.C. § 636(b)(1).
For the reasons stated below, the parties' objections are granted in part
and overruled in part. The court adopts the report and recommendation of the
magistrate judge as amended by this order.
For continuity and ease of analysis of the parties' objections, the court
will address the parties' motions in the following order.
I. 	PLAINTIFF'S MOTION TO STRIKE PARTS OF WAL-MART'S ANSWER
On April 24, 2012, plaintiff Sturgis Motorcycle Rally, Inc., (SMRI) filed an
amended complaint against defendants alleging trademark infringement and
other claims. 	(Docket 52). 	On May 18, 2012, defendant Wal-Mart filed its
answer. 	(Docket 60). 	SMRI moves to strike parts of Wal-Mart's answer
pursuant to Fed. R. Civ. P. 12(f). 	(Docket 70). 	SMRI argues Wal-Mart
"intentionally did not plead counterclaims against Plaintiff, but nevertheless
pleads 42 paragraphs of impertinent and insufficient 'common facts for
1 Fed. R. Civ. P. 72(b)(2) allows a party to respond to an opposing party's
objections.
2
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additional affirmative defenses' at Paragraphs 98-150 ... which 'common facts'
parrot the counterclaim allegations of the other defendants." 	Id. at pp. 1-2.
SMRI believes because Wal-Mart did not assert "any affirmative claim[,]" it
cannot achieve the relief Wal-Mart seeks, that is, "cancellation of SMRI's
federally-issued STURGIS® registration .. .injunctive relief ... and recovery
under a damages statute 	.... " 	Id. at p. 2.
The magistrate judge recommends denial of plaintiffs motion to strike
parts of Wal-Mart's answer "because the challenge to the validity of the
registered STURGIS trbut ademark does not need to be in the form of a
counterclaim and can be challenged by asserting defenses to the claims
asserted in the Amended Complaint." 	(Docket 107 at p. 27 1 2). 	SMRI objects
to this recommendation for three reasons, summarized as:
1. 	Wal-Mart cannot seek money damages pursuant to 15 U.S.C.
§ 1120;
2. 	Aromatique, Inc. v. Gold Seal, 28 F.3d 863 (8th Cir. 1994), does
not stand for the proposition that 15 U.S.C. §§ 1115(a)-(b) & 1119
do not require a counterclaim as a condition precedent to a
challenge to plaintiffs trademark; and
3. 	License estoppel and equitable estoppel were not issues raised by
plaintiffs motion to strike.2
2SMRI also objects to the magistrate judge's discussion of a petition to
cancel a trademark under 15 U.S.C. § 1064 as no petition to cancel was filed
relative to this case. 	(Docket 108 at p. 17). 	The court finds the magistrate
judge's discussion of a petition to cancel a trademark is simply an illustration
of an alternative way a trademark may be challenged and not a separate basis
for the recommendation made. 	Plaintiffs objection on this basis is overruled.
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(Docket 108 at pp. 16-17). 	SMRI argues "[t]he sole question to be answered by
Plaintiffs motion to strike ... is whether a party can request affirmative relief,
namely cancellation of Plaintiffs STURGIS registration, while intentionally
avoiding the pleading of a counterclaim." 	Id. at p. 16. 	Each of plaintiffs
objections will be addressed separately.
1. 	WAL-MART CANNOT SEEK MONEY DAMAGES PURSUANT TO
15 U.S.C. § 1120
As part of its prayer for relief, Wal-Mart "request[ed] ... [an] award ... of
Wal-Mart's 'costs and attorney fees, in accordance with ... 15 U.S.C.
§§ 1117(a) and 1120, and otherwise according to law." 	(Docket 60 at p. 25 -,r e).
Wal-Mart acknowledged that "[t]he one inadvertent reference to '1120' in
paragraph (e) is withdrawn." 	(Docket 87 at p. 5 n. 2).
Once relief under a statutory claim is withdrawn, there is no need for
either the magistrate judge to "recommend striking Wal-Mart's claim for
damages under 15 U.S.C. § 1120 ... " or for the court to enter an order
striking the statutory reference. 	(Docket 108 at p. 15). 	Wal-Mart's counsel's
declaration is sufficient and binding on the defendant. 	State Farm Mutual
Automobile Ins. Co. v. Worthington, 405 F.2d 683, 686 (8th Cir. 1968)
("judicial admissions are binding for the purpose of the case in which the
admissions are made . . . .").
Plaintiffs objection on this basis is overruled.
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2. 	AROMATIQUE, INC. v. GOLD SEAL, 28 F.3d 863 (8th Cir.
1994), DOES NOT STAND FOR THE PROPOSITION THAT
15 U.S.C. §§ 1115(a)-(b) & 1119 DO NOT REQUIRE A
COUNTERCLAIM AS A CONDITION PRECEDENT TO A
CHALLENGE TO PLAINTIFF'S TRADEMARK
Plaintiff objects to the magistrate judge's use of Aromatique as support
for the conclusion 15 U.S.C. §§ 1115(a)-(b) and 1119 allow Wal-Mart's use of
an affirmative defense in seeking cancellation of SMRI's trademark
registration.3 (Docket 108 at p. 15). 	Plaintiffs objection is misplaced. 	The
magistrate judge specifically analyzed the language of 15 U.S.C. §§ 1115(a), (b),
(b)(I), and 1119, and concluded "[t]hese statutes do not require a counterclaim
as a condition precedent to ordering cancellation." 	(Docket 107 at p. 15). 	The
magistrate judge's reference to Aromatique was to confirm a "federally
registered mark[] should be canceled pursuant to Section 37 of the Lanham Act,
which gives courts the power to order cancellation of registered marks. 	15 U.S.C.
§ 1119." 	(Docket 107 at p. 15) (citing Aromatique, 28 F.3d at 875) (emphasis
added by the magistrate judge). 	While plaintiffs ultimate objection to the use
of an affirmative defense, as opposed to a counterclaim, to obtain cancellation
of a registered trademark will be addressed later in this order, the magistrate
judge's analysis and reference to Aromatique was appropriate.
Plaintiffs objection on this basis is overruled.
3In Aromatique the defendant did assert a counterclaim seeking
cancellation of plaintiffs trademark registration. 	Aromatique, 28 F.3d at 866.
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3. 	LICENSE ESTOPPEL AND EQUITABLE ESTOPPEL WERE NOT
ISSUES RAISED BY PLAINTIFF'S MOTION TO STRIKE
The magistrate judge concluded "Walmart is not barred by licensee
estoppel because it never was a licensee even of the composite logo." 	(Docket
107 at p. 24). 	After analyzing the doctrine of equitable estoppel the magistrate
judge concluded, "licensee estoppel could not possibly apply to preclude
Walmart from challenging the STURGIS trademarks because Walmart has
never been licensee of either the Tom Monohan composite logo or any STURGIS
trademark.,,4 	Id. at pp. 25-26.
Plaintiff objected to the magistrate judge's first conclusion. 	(Docket 108
at p. 31 ~ 10). 	It did not file an objection to the magistrate judge's second
conclusion which was expanded to include the STURGIS trademark or as
"equitable estoppel" if the statement is seen as a typographical error. 	SMRI
objected to the magistrate judge's recommendation denying plaintiffs motion to
strike "because license estoppel and equitable estoppel do not preclude
Walmart from contesting the validity of STURGIS® .... " 	Id. at p. 33 ~ 3.
SMRI argues its potential estoppel defenses against Wal-Mart are not
before the court.
4The court finds the last conclusion is a typographical error as the
sentence at the bottom of page 25 of the report should read as follows: "And
[equitable] estoppel could not possibly apply to preclude Walmart from
challenging the STURGIS trademarks because Walmart has never been licensee
of either the Tom Monohan composite logo or any STURGIS trademark."
(Docket 107 at pp. 25-26). 	The report is amended consistent with this order.
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Plaintiff does not concede that Wal-mart can avoid estoppel in light
of its selling products produced by Defendant [Rushmore Photo &
Gifts, Inc., ("RPG")]. 	However, what is clear is that Wal-mart's own
failure 	to plead counterclaims estops Wal-Mart from challenging
Plaintiffs marks .... Moreover, by not pleading counterclaims, Wal
mart has precluded Plaintiff from asserting any proper defenses to
the claims of cancellation in the first place. 	In short, Wal-Mart's
improper pleading works to 	prevent Plaintiff from 	asserting any
defense. 	This is prejudicial to 	Plaintiff and improper under the
Federal Rules.
Id. at p. 31 ~ 10. 	"Whether Wal-mart should be estopped under the doctrines
of licensee estoppel or equitable estoppel has no bearing on whether Wal-Mart
must plead its requests for affirmative relief as counterclaims." 	Id. at p. 33 ~ 3.
Plaintiffs motion for summary judgment sought judgment in its "favor as
to its estoppel defenses, and against all counterclaims of the Defendants
Rushmore Photo & Gift, Inc., JRE, Inc., Carol Niemann, Paul A. Niemann and
Brian M. Niemanns except for their counterclaim seeking a declaration of non-
infringement, on the basis that Defendants are estopped under the doctrines of
licensee estoppel and equitable estoppel from contesting the validity of
Plaintiffs STURGIS® mark or related registration." 	(Docket 66 at pp. 1-2). 	No
mention is made of defendant Wal-Mart either in the text of plaintiffs motion or
its supporting brief. 	(Dockets 66 & 67). 	Nor are the estoppel defenses
identified in plaintiffs motion to strike parts of Wal-Mart's answer or plaintiffs
brief in support of the motion. 	(Docket 70 & 71).
SCollectively referred to as the "RPG Defendants."
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The court agrees the doctrines of equitable estoppel and licensee estoppel
were not properly before the magistrate judge in considering SMRI's motion to
strike parts ofWal-Mart's answer. 	The doctrines of licensee estoppel and
equitable estoppel are not relevant to plaintiffs motion to strike. 	For this
reason, plaintiffs objection to the report on this basis is sustained.
The sentences referencing Wal-Mart on pages 24-26 of the report are
stricken and the recommendation to deny plaintiffs motion to strike Wal-Mart's
answer at page 27 on the basis of licensee estoppel and equitable estoppel are
stricken. 	The report and recommendation is amended consistent with this
order.
4. 	WHETHER WAL-MART CAN REQUEST AFFIRMATIVE RELIEF,
NAMELY, CANCELLATION OF PLAINTIFF'S STURGIS
REGISTRATION, WHILE INTENTIONALLY AVOIDING THE
PLEADING OF A COUNTERCLAIM
The report recommended denying SMRI's motion to strike Wal-Mart's
answer because federal law does "not require a counterclaim as a condition
precedent to ordering cancellation." 	(Docket 107 at p. 15). 	Plaintiff argues the
magistrate judge erred because "defenses cannot give rise to affirmative relief
.... " 	(Docket 108 at p. 15).
SMRI's argument is without merit as federal law clearly allows an
affirmative defense as the basis for cancellation of a trademark registration.
Any registration issued [by the Patent and Trademark Office (PTO)]
... and owned by a party to an action shall be admissible in evidence
and shall be prima facie evidence of the validity of the registered
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mark ... , but shall not preclude another person from proving any
legal or equitable defense or defect, 	including those set forth in
subsection (b) of this section, which might have been asserted if such
mark had not been registered.
15 U.S.C. § 1115(a). 	Subsection (b) identifies a number of those defenses:
To the extent that the right to use the registered mark has become
incontestable under section 1065 of this title, the registration shall
be conclusive evidence of the validity of the registered mark and of
the registration of the mark, of the registrant's ownership of the
mark, and of the registrant's exclusive right to use the registered
mark in commerce .... Such conclusive evidence of the right to use
the registered mark shall be subject to proof of infringement ... and
shall be subject to the following defenses or defects:
(1) 	That the registration or the incontestable
right 	to 	use 	the 	mark 	was 	obtained
fraudulently; or ...
(9) 	That equitable principles, including laches,
estoppel, and acquiescence, are applicable.
Id. at § 1115(b). 	The court has the authority to resolve issues concerning
trademark registration.
In any action involving a registered mark the court may determine
the right to registration, order the cancelation (sic) of registrations, in
whole or in part, restore canceled registrations, 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 records of the
Patent and Trademark Office, and shall be controlled thereby.
15 U.S.C. § 1119.
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. 	While a counterclaim may be a
9
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preferred method of identifying a defendant's defense and remedy, there is no
requirement a counterclaim be filed. 	Plaintiffs objection does not cite to any
such requirement. 	(Docket 108 at pp. 15-17).
There are, however, a number of cases in which a defendant asserted the
affirmative defense of fraud, some with a cancellation of trademark
counterclaim and others without a corresponding counterclaim seeking
cancellation. 	"A trademark infringement claim is subject to the affirmative
defense of fraud. 	See 15 U.S.C. § 1115(b)(1)." 	Martal Cosmetics. Ltd. v.
International Beauty Exchange. Inc., No. 01-cv-7595(TLM)(JO), 2010 WL
2179022 at *2 (E.D.N.Y. May 28,2010). 	The Martal court found: "[t]here is
sufficient evidence in the record before the Court for defendants' affirmative
defense of fraud to survive summary judgment. 	The existence of 'clear and
convincing evidence' of fraud in plaintiffs ... Registration ... is a question of
fact to be determined at trial." 	Id. 	"The defendant's affirmative defenses of
abandonment and fraudulent registration, however, remain for trial. 	See 15
U.S.C. § 1115(b)(1) and (2)." 	National Council of Young Men's Christian
Associations of United States v. Columbia Young Men's Christian Association of
Columbia. S.C., CIV. A. No. 3:86-3304-16, 1988 WL 144986 at *1 	(D.S.C.
Sept. 2, 1988). 	See also Salu. Inc. v. Original Skin Store, CIV S-08
1035FCDjKJM, 2010 WL 1444617 (E.D. Cal. Apr. 12, 2010) (summary
judgment for defendant denied on defendant's first affirmative defense of fraud
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on the United States Patent and Trademark Office); Holley Performance
Products. Inc. v. Quick Fuel Tech., Inc., No. 1:07-CV-00185-JHM, 2011 WL
3159177 at *6 (W.D. Ky. July 26,2011) (the affirmative defense of fraud on the
Patent and Trademark Office must be plead with particularity under Fed. R.
Civ. P. 9(b)); Target Training International, Ltd. v. Extended Disc North
America. Inc., CIV. No. H-10-3350, 2011 WL 3235683 at * 5 n. 6 (S.D. Tex.
July 27,2011) (same).
The court concludes the magistrate judge properly analyzed the
applicable law and arrived at the correct conclusion in recommending denial of
plaintiffs motion to strike part of Wal-Mart's answer. 	There is no statutory
requirement a counterclaim seeking cancellation of a trademark registration is
a condition precedent to an affirmative defense of fraud on the Patent and
Trademark Office which may have the ultimate consequence of cancellation of
plaintiffs trademark registration. 	Plaintiffs objection on this basis is
overruled.
II. 	PLAINTIFF'S MOTION TO STRIKE DEFENDANTS' MOTION FOR
SUMMARY JUDGMENT
On June 26, 2012, the RPG Defendants and defendant Wal-Mart
(hereinafter jointly referred to as the "defendants") filed a motion for summary
judgment. 	(Docket 76). 	As required by Fed. R. Civ. P. 56(c)(1) and D.S.D. Civ.
LR 56.1(A), defendants filed a statement of material and uncontroverted facts
in support of the motion. 	(Docket 78).
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Plaintiff did not file a statement of material facts. 	Fed. R. Civ. P. 56(3)
and D.S.D. Civ. LR 56.1(B). 	Instead, plaintiff moved to strike the defendants'
motion for summary judgment. 	(Docket 93). 	Plaintiff argues the defendants'
motion for summary judgment should be stricken on three grounds,
summarized as:
1. 	The defendants' counterclaim of genericness6 was withdrawn7;
2. 	The defendants are barred by the doctrine of estoppel from
challenging SMRI's trademark rights; and
3. 	Defendants' motion for summary judgment is premature.
(Docket 94 at p. 2).
The report recommends denying plaintiffs motion to strike because
defendants' motion is not premised on unpled claims and plaintiff fails to state
a proper ground to strike defendants' motion. 	(Docket 107 at p. 27). 	The
report also recommends denying plaintiffs motion for summary judgment
6" A generic term refers to 'a particular genus or class of which an
individual article or service is but a member,' it suggests the 'basic nature of
articles or services.' 	The test for deciding whether a word has become a
generic title of a product or service is one of buyer understanding: 'What do the
buyers understand by the word for whose use the parties are contending?' »
WSM. Inc. v. Hilton, 724 F.2d 1320, 1325 (8th Cir. 1984) (internal citations
omitted).
7SMRI argues the RPG defendants, as well as defendant Wal-Mart, are
pursuing a summary judgment motion on a claim of genericness which was
earlier withdraw by the RPG defendants. 	(Docket 94 at p. 2).
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"because licensee estoppel and equitable estoppel do not preclude [the RPG
Defendants] from contesting the validity of' plaintiffs trademark claims.8 Id.
SMRI objects to the magistrate judge's recommendations. 	(Docket 108 at
p. 17-26). 	Those objections are summarized as:
1. 	SMRI's motion to strike was proper;
2. 	Defendants' motion for summary judgment is not
properly before the court; and
3. 	SMRI should be allowed additional discovery before
defendants' motion for summary judgment is
considered.
Id. 	Each of these objections will be addressed separately.
1. 	SMRI'S MOTION TO STRIKE WAS PROPER
The magistrate judge found "[SMRI] did not respond to [defendants']
motion for summary judgment as contemplated by Federal Rule of Civil
Procedure 56 and Local Rule 56.1. 	Instead [SMRI] moved to strike
[defendants'] motion for summary judgment or in the alternative to postpone
the deadline for [SMRI's] response until 30 days following the close of
discovery." 	(Docket 107 at p. 11). 	SMRI "chose to put its eggs in its motion to
strike basket, asking for additional time to respond to [defendants1 summary
judgment motion if its choice turns out to be the wrong choice." 	Id. at p. 12.
8Because the estoppel doctrines are more closely related to the merits of
the plaintiffs motion for summary judgment, that challenge by SMRI will be
addressed in Part III of this order.
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"Rule 56(a) nowhere mentions a motion to strike. 	And nowhere else does Rule
56 mention a motion to strike. [SMRI's] response to [defendants'] motion for
summary judgment is a circular non-response." 	Id. at p. 12.
The essence of plaintiff's motion to strike is its claim that defendants'
motion for summary judgment is based on genericness, "a claim they withdrew
... when they amended their counterclaims to delete their claim ... that
SMRI's asserted trademarks were 'generic' .... " 	(Docket 94 at p. 2). 	Plaintiff
argues the defendants are seeking summary judgment on unpled claims. 	Id. at
p.4. 	"To permit the ... Defendants to raise this claim after the close of time
for amending pleadings without even attempting to seek leave to amend to re
assert the claim would be unduly prejudicial to Plaintiff." 	Id. at p. 5 (emphasis
in original). 	"Now, nearly one year later and after the close of time for
amending pleadings, the genericness issue is back." 	Id. at p. 3.
Plaintiff fails to acknowledge the genericness issue is not only back, but
properly pled in defendants' answers to the amended complaint. 	Both the RPG
Defendants and defendant Wal-Mart used the same language to assert the
affirmative defense of genericness.
Plaintiff's claims are barred in whole or in part based upon "Sturgis,"
"Sturgis Bike Week," "Sturgis Motorcycle Rally," and "Sturgis Rally &
Races," being generic names in that they are not "trademarks" and do
not indicate a single source, but are instead generic names for the
long-time Sturgis biker rally.
(Dockets 55 at p. 12 , 	95; 60 at p. 12'95). 	The genericness defense was
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properly pled as an affirmative defense and was before the court at the time of
defendants' motion for summary judgment.
Plaintiff objects to the report's dismissal of SMRI's argument. 	"[T]he
Report presents Plaintiff with a Hobson's choice: Plaintiff may take any course
of action they (sic) so choose, so long as they (sic) consent that genericness is a
valid and subsisting claim ... and consent that Wal-mart can seek affirmative
relief without pleading any counterclaims. 	But Plaintiff is not at liberty simply
to respond on the merits. 	To do so may revive Defendants' previously
dismissed claim and to make unpleaded claims a part of this case." 	(Docket
108 at p. 24).
Plaintiffs argument ignores the interplay between Fed. R. Civ. P. 8 and
15. 	Rule 15 allows amendment to an issue not raised in the pleadings when
the issue is tried by "express or implied consent." 	Rule lS(b)(2). 	However, Rule
8 allows SMRI potentially to avoid trial of the genericness issue by consent by
declaring plaintiff objects to the genericness issue as unpled and then by
arguing in the alternative that genericness should fail as a matter of law. 	"If a
party makes alternative statements, the pleading is sufficient if anyone of
them is sufficient." 	Rule 8(d)(2). 	It is elementary to civil pleading practice "[a]
party may state as many separate defenses as it has, regardless of
consistency." 	Rule 8(d)(3).
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Plaintiff asserts an alternative basis upon which its motion to strike
should be granted. 	"Plaintiff seeks judgment against Defendants on the basis
that they are estopped from making any challenge whatsoever against
Plaintiffs STURGIS marks. 	If the Court grants Plaintiffs motion, the
Defendants' ... summary judgment becomes moot." 	(Docket 94 at p. 6 n. 2)
(emphasis in original). 	It is difficult to understand why plaintiff would fail to
respond to the defendants' motion for summary judgment and move to strike
defendants'motion apparently assuming that the court will grant plaintiffs
motion for summary judgment. 	That is truly "putting all one's eggs in one
basket."
The court need not resolve the theoretical question, that is, whether a
motion to strike the entirety of an opposing party's motion for summary
judgment is proper. 	It is clear on the record in this case that plaintiffs motion
to strike the defendants' motion for summary judgment was improper.
Plaintiffs objection on this basis is overruled.
2. 	DEFENDANTS' MOTION FOR SUMMARY JUDGMENT IS NOT
PROPERLY BEFORE THE COURT
As indicated above, SMRI did not file its own statement of material facts
in opposition to defendants' statement of material and uncontroverted facts.
The critical nature of the statement of material facts is emphasized in the local
rules:
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B .... A party opposing a 	motion for summaty judgment shall
respond 	to 	each 	numbered 	paragraph 	in 	the 	moving 	party's
statement of material facts with a separately numbered response and
appropriate citations to the record. 	A party opposing a motion for
summaty judgment shall identify any material facts as to which it is
contended that there exists a genuine material issue to be tried.
C .... A party shall attach to an affidavit all relevant documentaty
evidence in support of or in opposition to a motion for summaty
judgment.
D. 	. . . All material facts set forth in the movant's statement of
material facts will be deemed to be admitted unless controverted by
the opposing party's statement of material facts.
D.S.D. Civ. LR 56.1(B), (C) and (D) (emphasis added). 	These provisions
mandate plaintiff either respond to the defendants' motion for summaty
judgment submission or risk suffering the consequences. 	The report found the
defendants' "statement of facts stands undisputed in this record." 	(Docket 107
at p. 13). 	"It remains only to decide whether these undisputed facts constitute
all the material facts and whether the undisputed material facts entitle the ...
defendants to judgment as a matter of law." 	Id.
SMRI "objects to the Report's finding that 'the ... defendants have
alleged [certain1 defenses' and that SMRI 'needed to defend its Amended
Complaint from ... summary judgment attack.'" 	(Docket 108 at p. 23). 	SMRI
goes now: "[t[he Report misapprehends that the Defendants seek judgment on
claims, not defenses 	.... Yet Defendants' Motion for Summary Judgment
does not seek a mere finding that Plaintiffs claims are 'barred,' the only relief
available if Defendants were seeking merely to establish defenses." 	Id.
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"Rather, the RPG Defendants move for judgment on the claims asserted at
pages 12-31 of the Answer to the First Amended Complaint and an unpled and
withdrawn claim asserting genericness ... while Wal-Mart moves for summary
judgment wholly on the basis of unpleaded claims." 	Id.
The court finds defendants' motion for summary judgment is properly
before the court. 	Fed. R. Civ. P. 56 and D.S.D. Civ. LR 56.1. 	The genericness
pleading issue is resolved earlier in this order and Rule 56 clearly allows the
court to grant summary judgment on any "claim or defense-or the part of each
claim or defense-on which summary judgment is sought." 	Fed. R. Civ. P. 56(a).
Plaintiffs objection on this basis is overruled.
3. 	SMRI SHOULD BE ALLOWED ADDITIONAL DISCOVERY
BEFORE DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
IS CONSIDERED
The magistrate judge discussed SMRI's additional discovery request.
SMRI "urges [defendants'] motion for summary judgment is premature as
discovery has not closed and counsel ... needs more time to conduct discovery
and intends to take depositions from each of the ... defendants on the issues
of likelihood of confusion and false advertising." 	(Docket 107 at p. 13). 	"While
this mention of the need for discovery is as close as [SMRI] comes to asking
that consideration of [defendants1 motion should be deferred, it was after this
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motion and brief were filed that the court filed its OrderlO suspending discovery
until after the summary judgment motions were decided. 	Again, [SMRI] was
silent about the need for more time or for more discovery after the court filed
its Order staying discovery." 	Id. at pp. 13-14 (emphasis in original). 	The
magistrate judge concluded SMRI "did not object [to] the Order [staying
discovery]. 	[SMRI] did not move to set the Order aside so that [SMRI] could
acquire facts to respond to [defendants'] motion for summary judgment."
(Docket 107 at p. 11).
SMRI objects declaring "[t]he Report is highly prejudicial to SMRI,
faulting SMRI for not contesting the ... Court's sua sponte stay order .... "
(Docket 108 at p. 26). 	"The Magistrate's Report ... errs for several reasons."
Id. 	"First, only Plaintiffs motions had the potential to be dispositive ....
Defendants' motion has no dispositive effect .... Second, the parties had been
conducting discovery throughout the Summer of 2012 .... [T]he Court was
permitting the issues to be narrowed before the parties invested tens of
thousands of dollars on potentially unnecessary discovery on issues such as
genericness." 	Id. (emphasis added).
9SMRI's motion for summary judgment and brief were filed on July 20,
2012. 	(Dockets 93 & 94).
lo-rhe order staying discovery was filed on August 27,2012. 	(Docket
102). 	An amended order was entered on August 28, 2012. 	(Docket 104).
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Rule 56 (d) specifically allows additional discovery before consideration of
a motion for summary judgment. 	"If a nonmovant shows by affidavit or
declaration that, for specified reasons, it cannot present facts essential to
justify its opposition, the court may: (1) defer considering the motion or deny it;
[or] (2) allow time to obtain affidavits or declarations or to take discovery .... "
Fed. R. Civ. P. 56 (d)(l) & (2). 	SMRI took no such action, but instead
submitted an affidavit of one of its attorneys of record, Jason M. Sneed, in the
event plaintiffs motion to strike the defendants' motion for summary judgment
was denied. 	(Docket 93-1). 	The affidavit in support of plaintiffs alternative
Rule 56(d) request cites the need to take discovery "of each of the six
Defendants and the Defendants' expert witness, Robert Reitter ... to acquire
testimony from them to be used on summary judgment as to issues that could
include (depending on what survives the motion to strike): (a) the activities of
each of the Defendants that infringe the rights of the Plaintiff; (b) the various
admissions, affidavits, declarations and statements of each of the RPG
Defendants pertaining to the claims and defenses of the parties; and (c) the
basis for the report rendered by Mr. Reitter." 	Id. at p. 2 ~ 4. 	In plaintiffs brief,
SMRI suggested depositions of each of the defendants "as to the issues of
likelihood of confusion and false advertising .... " 	(Docket 94 at p. 2).
Contrary to plaintiffs brief and Mr. Sneed's affidavit, SMRI's objections to the
report and recommendation suggested plaintiff wanted to conduct "discovery
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on issues such as genericness." 	(Docket 108 at p. 26).
"Rule [56(d)Fl is not a shield that can be raised to block a motion for
summary judgment without even the slightest showing by the opposing party
that his opposition is meritorious. 	A party invoking its protections must do so
in good faith by affirmatively demonstrating why he cannot respond to a
movant's affidavits as otherwise required by Rule 56(e) and how postponement
of a ruling on the motion will enable him, by discovery or other means, to rebut
the movant's showing of the absence of a genuine issue of fact. 	Where ... a
party fails to carry his burden ... , postponement of a ruling on a motion for
summary judgment is unjustified." 	United States through Small Business
Administration v. Light, 766 F.2d 394, 397-98 (8th Cir. 1985).
A generalized declaration that a party wants to engage in discovery on a
number of subjects before the court considers the movant's motion for
summary judgment, without the specificity required by Rule 56(d), is
insufficient. 	SMRI "did not identify specific facts that further discovery might
uncover and show how those facts would rebut [the defendants'] showing of the
absence of genuine issues of material fact." 	Chambers, 668 F.3d at 568.
"Where a party fails to carry [its] burden under Rule 56(f), postponement of a
ruling on a motion for summary judgment is unjustified." 	Stanback v. Best
Diversified Products. Inc., 180 F.3d 903, 911 (8th Cir. 1999) (internal quotation
U"Rule 56 (f)-recodified "without substantial change" as Rule 56(d)
effective December 1, 2010 .... " 	Chambers v. Travelers Companies. Inc., 668
F.3d 559, 568 (8th Cir. 2012).
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marks and citation omitted).
Plaintiffs objection on this basis is overruled.
III. 	PARTIES' CROSS·MOTIONS FOR SUMMARY JUDGMENT
A. 	MAGISTRATE JUDGE'S FINDINGS OF FACT
Plaintiff filed twelve objections to the report's recommended factual
findings. 	(Docket 108 at pp. 8-14). 	Defendants filed no objections to the
magistrate judge's recommended factual findings. 	(Docket 109). 	Without
repeating the statement in the report to which plaintiff objects, each objection
will be separately addressed by the corresponding number of each objection.
1. 	The statement of Francie Ruebel-Alberts constitutes
inadmissible hearsay. 	(Docket 108 at p. 8 If 1). 	The objection
is based on Rule 56(e) and Fed. R. Evid. 901. 	Id.
It must be noted plaintiff did not file an objection to the statement when
it was submitted in support of defendants' statement of material and
uncontroverted facts. 	Fed. R. Civ. P. 56(c)(2). 	Moreover, the affidavit of Aaron
W. Davis states the declaration of Ms. Ruebel-Alberts "is a true and correct
copy of the Declaration of Francie Ruebel-Alberts filed April 17, 2000 in the
case captioned Sturgis Area Chamber of Commerce and City of Sturgis, South
Dakota v. Sturgis Bike Week, before the United States District Court, District of
South Dakota, Western Division (Case 5:00-cv-05023-KES)." 	(Docket 79 at p.
8 1 49). 	In addition, the declaration of Ms. Ruebel-Alberts was made under
penalty of perjury. 	(Docket 80-24 at p. 10 1 32).
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There is no requirement a declaration be made only by a party to the
present proceeding or that the declaration is objectionable because the
declarant has not been deposed by the party opposing the declaration's
contents. 	Rule 56(c)(4). 	All that is required of an affidavit or declaration is that
it "must be made on personal knowledge, set out facts that would be
admissible in evidence, and show that the affiant or declarant is competent to
testify on the matters stated." 	Rule 56(c)(4). 	Ms. Ruebel-Albers'declaration
complies with Rule 56. 	The defendants have "produce[d] evidence to support a
finding that the item is what the proponent claims it is." 	Fed. R. Evid. 901.
Plaintiffs objection 1 is overruled.
2. 	The document cited in the statement constitutes inadmissible
hearsay. 	(Docket 108 at p. 8 , 	2). 	The objection is based on
Rule 56(e) and Fed. R. Evid. 901. 	Id.
It must be noted plaintiff did not file an objection to the statement when
it was submitted in support of defendants' statement of material and
uncontroverted facts. 	Fed. R. Civ. P. 56(c)(2). 	The affidavit of Aaron W. Davis
states the two notices of opposition are true and correct copies of the
documents prepared by the identified corporate officials. 	(Docket 79 at pp. 2
~ 8; 3 ~ 9). 	Good Sports Sturgis, Inc. ("Good Sports") and Sturgis Motorcycles,
Inc., d/b/ a Black Hills Harley-Davison, d/b/ a Sturgis Harley-Davidson
("Sturgis Motorcycles") were the declarants identified in the notices of
opposition. 	Id. 	Jerry Berkowitz as the declarant for Good Sports affirmed "all
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statements made of his own knowledge are true and all statements made on
information and belief are believed to be true." 	(Docket 79-7 at p. 15). 	Jim
Doyle as the declarant for Sturgis Motorcycles affirmed "all statements made of
his own knowledge are true and all statements made on information and belief
are believed to be true." 	(Docket 79-8 at p. 19). 	Jerry Berkowitz of Good
Sports, Jim Burgess of Sturgis Motorcycles and others formed SMRI. 	(Docket
78 at p. 16 ~ 88). 	Shortly thereafter, Good Sports and Sturgis Motorcycles
withdrew the notices of opposition. 	Id. at ~ 91.
Each of the notices of opposition complies with Rule 56(c)(4) and Fed. R.
Evid. 901. 	The notices of opposition are admissible under Fed. R. Evid. 803(8)
as there is "adequate foundation as a public record." 	Amtrust Inc. v. Larson,
388 F.3d 594, 599 (8th Cir. 2004). 	"The burden is on the party opposing
admission to prove the report's untrustworthiness." 	Id. 	In addition, the
declarations constitute admissions against the interests of plaintiff and its
corporate organizers. 	Fed. R. Evid. 801(d).
Plaintiffs objection 2 is overruled.
3. 	The document cited in the statement is inadmissible for lack
of personal knowledge by the declarant. 	(Docket 108 at p. 9
1f3). 	The objection is based on Fed. R. Evid. 901. 	Id.
The declarant of the statement of fact endorsed by the report is Brian M.
Niemann. 	(Docket 107 at p. 3). 	SMRI objects to Mr. Niemann's statement
because he could have no "personal knowledge about what Rushmore Photo &
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Gift, Inc., mayor may not have sold in the 'mid-1980s.'" 	(Docket 108 at p. 9 ,-r
3).
Plaintiff did not file an objection to Mr. Niemann's statement when it was
submitted in support of defendants' statement of material and uncontroverted
facts. 	Fed. R. Civ. P. 56(c)(2). 	Additionally, Mr. Niemann's statement was
included in defendants' response to plaintiffs statement of material and
uncontroverted facts. 	(Docket 73 at p. 11 -,r 44).
Mr. Niemann is the secretary and treasurer of RPG and was authorized
to submit an affidavit on behalf of the corporation. 	(Docket 82 at p. 2 -,r 2). 	He
declared "[t]he statements herein are based on my personal knowledge." 	Id. at
,-r 3. 	"Since 2003, [Mr. Niemann has] been managing the daily operations and
[has] since joined the ownership." 	Id. at -,r 5. 	As the corporate representative,
Mr. Niemann is permitted under Fed. R. Evid. 803(6) to testify regarding the
historical activities and business of RPG. 	Fed. R. Evid. 803(6)(A)-(C). 	The
testimony supporting Mr. Niemann's statement also satisfies the requirements
of Fed. R. Evid. 902(11). 	See Dockets 73 at p. 11 -,r-,r 45-47; 78 at p. 8 -,r-,r 45
47.
Plaintiffs objection 3 is overruled.
4. 	The statement is not supported by plaintiff's facts or
defendants' rebuttal facts. 	(Docket 108 at pp. 9-10 ~ 4).
The magistrate judge's statement is based on the resolution of JRE, Inc.,
assigning all of its corporate assets to Rushmore Photo & Gift, Inc., at the time
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of the dissolution of JRE, Inc. 	(Docket 82-32 at p. 2). 	Plaintiff argues the
magistrate judge should not have considered this statement as "this material
fact is in dispute 	.... " 	(Docket 108 at p. 10 1 4).
Plaintiff did not file an objection to the JRE resolution when it was
submitted in support of defendants' statement of material and uncontroverted
facts. 	Fed. R. Civ. P. 56(c)(2). 	Additionally, the resolution was included in
defendants' response to plaintiffs statement of material and uncontroverted
facts. 	(Docket 73 at p. 11 1 44).
In determining whether summaty judgment should issue, the facts and
inferences from those facts must be viewed in the light most favorable to the
nonmoving party. 	Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587-88 (1986). 	While plaintiff may challenge the statement at trial, for
purposes of summaty judgment, the magistrate judge was entitled to consider
the statement in the light most favorable to the defendants as the non-moving
party on plaintiffs motion for summaty judgment.
Plaintiffs objection 4 is overruled.
5. 	The statement constitutes inadmissible hearsay. 	(Docket 108
at p. 10 ~ 5). 	The objection is based on Rule 56(e) and Fed. R.
Evid. 901. 	Id.
Plaintiff objects because the document supporting the statement in the
report was created by the Sturgis Area Chamber of Commerce ("Sturgis
Chamber") which is not a party to this litigation. 	[d. 	The Sturgis Chamber is
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the predecessor-in-interest of plaintiff SMRI. 	(Docket 68 at p. 1 1 1). 	The
affidavit of Mr. Davis articulates the manner in which he was able to recover
the document from the Sturgis Chamber's website. 	(Docket 79 at p. 2 1 2). 	It
is obvious the document was created by the Sturgis Chamber on its website on
June 7, 2012. 	(Docket 79-1).
There is no requirement a declaration be made only by a party to the
present proceeding. 	The declaration is not objectionable because the declarant
has not been deposed by the party opposing the declaration's contents. 	Rule
56(c)(4). 	All that is required of an affidavit or declaration is that it "must be
made on personal knowledge, set out facts that would be admissible in
evidence, and show that the affiant or declarant is competent to testify on the
matters stated." 	Rule 56(c)(4). 	The defendants have "produce[d] evidence to
support a finding that the item is what the proponent claims it is." 	Fed. R.
Evid.901.
Plaintiff's objection 5 is overruled. 12
12While not stated as a formal objection, plaintiff also objects to the
magistrate judge's statement that "Defendant JRE is a dissolved South Dakota
corporation with its principal place of business in Custer, South Dakota."
(Docket 107 at p. 10 n. 1). 	Plaintiff objects because the magistrate judge
referenced the amended complaint and the RPG Defendants' answer as
opposed to the summary judgment materials. 	Id. 	The amended complaint
makes the declaration which constitutes the principal content of the statement
and the defendants' answer admitted the declaration. 	Compare Dockets 52 at
p. 3 1 6 & 55 at p. 6 1 6. 	Defendants' answer is a judicial admission. 	"The
purpose of a judicial admission is that it acts as a substitute for evidence in
that it does away with the need for evidence in regard to the subject matter of
the judicial admission." 	State Farm Mutual Automobile Ins. Co., 405 F.2d at
686. 	Plaintiff's informal objection is overruled.
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6. 	The statement constitutes inadmissible hearsay. 	(Docket 108
at p. 10 , 	6). 	The statement is also made without supporting
factual basis.
Plaintiff objects to the magistrate judge's finding the Sturgis Chamber
first became involved in the rally in "1984." 	Id. 	The citation to the record does
not support the report's statement. 	(Docket 107 at p. 4 n. 24). 	However, it is
evident that "as early as July 1, 1986" the Sturgis Chamber began making
"extensive investments in time, energy and money marketing and promoting
the STURGIS mark throughout the United States and internationally .... "
(Docket 79-6 at p. 27 ~ 3).
Plaintiffs objection 6 is sustained. 	The report and recommendation is
amended consistent with the language and citation above.
7. 	The composite logo with the phrases "2013" and "73rd
Anniversary" is not cited in the record and the report
constitutes "independent fact research by the Magistrate."
(Docket 108 at pp. 10-11 , 	7).
The report does include a composite logo which includes the words
"2013" and "73rd Anniversary." 	(Docket 107 at p. 6). 	The remainder of the
composite logo is as represented by defendants. 	(Dockets 1-1 at p. 6, 74-2 at
p. 1; 79-2 at p. 1). 	Defendants did not provide the court with a "cut and paste"
copy of the original composite logo which was the subject of the Patent and
Trademark Office service mark registration. 	Id. 	The court presumes the
magistrate judge was able to find and "cut and paste" the 2013 composite logo
from an internet website. 	The court finds the magistrate judge did not violate
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the spirit or purpose of the rule against independent factual research. 	Araoz v.
United States, 337 F. App'x 207, 210 (3d Cir. 2009).
Plaintiffs objection 7 is sustained. 	The court will amend the report to
reflect that the phrases "2013" and "73rd Anniversary" were not part of the
original composite logo and those phrases are not relevant to the analysis
conducted by the court.
8. 	The statement is incomplete and an improper redaction of the
document from which the statement originates. 	(Docket 108
at pp. 11-12 ~ 8).
The report cites the proper location from which the text is taken. 	(Docket
107 at p. 7 n. 36). 	The complete statement appears in both the defendants'
objections to the plaintiffs statement of material and uncontroverted facts and
defendants' statement of material and uncontroverted facts. 	(Dockets 73 at p.
16 ~ 76 & 78 at pp. 12-13 ~ 76).
The key phrase of the statement is the continuous and substantially
exclusive use of the STURGIS mark language. 	The Patent and Trademark
Office "may accept as prima facie evidence that the mark has become
distinctive, as applied to the applicant's goods in commerce, proof of
substantially exclusive and continuous use thereof as a mark by the applicant
in commerce for the five years next preceding the date of the filing of the
application for its registration." 	Park 'N Fly. Inc. v. Dollar Park & Fly. Inc., 469
U.S. 189, 210 n. 10 (1985) (J. Stevens dissenting) (emphasis deleted) (citing 15
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U.S.C. § 1052(f)).
SMRI objects to the use of an edited portion of the statement because the
"statement of fact is not supported by the record, and must be rejected .... "
(Docket 108 at p. 12). 	The court finds the statement as used in the report is
accurate and sufficient for the analysis necessary to consider the parties' cross-
motions for summary judgment.
SMRI argues the complete statement is not false and the court "should
affirm the statement as true."13 	(Docket 108 at p. 13). 	As the propriety of the
statement is a conclusion of law, plaintiffs argument will be addressed when
the court evaluates SMRI's legal objections.
Plaintiffs objection 8 is overruled.
9. 	The statement of fact "is not supported by record and is not
viewed in the light most favorable to the nonmovant .... "
(Docket 108 at p. 13 , 	9).
SMRI argues the magistrate judge made an improper determination
regarding the credibility of Mr. Martin's statement because there is insufficient
record evidence to support the "assertion" made. 	Id. 	Plaintiff did not file an
objection to the documents submitted by defendants in support of defendants'
13Plaintiff also references the court's findings during the temporary
restraining order hearing. 	(Docket 108 at p. 13 n. 2). 	"None of the witnesses at
that hearing could identify any false statement made by Mr. Martin." 	Id. 	After
the TRO hearing, defendants filed their answers to the amended complaint and
alleged the mark registration was "fraudulently obtained." 	(Dockets 55 at p. 10
1 79; 60 at p. 10 1 79). 	Plaintiffs reference to the TRO hearing is without
merit.
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statement of material and uncontroverted facts as required by Fed. R. Civ. P.
56(c)(2}. 	(Docket 78 at pp. 13-16 ~~ 77 A-85). 	Additionally, that same or very
similar documentary evidence was included in defendants' response to
plaintiffs statement of material and uncontroverted facts. 	(Docket 73 at pp.
16-19 ~~ 77-86). 	Whether considered as part of defendants' objection to
plaintiffs motion for summary judgment or in support of defendants' motion
for summary judgment, the documentary evidence provides adequate proof Mr.
Martin's declaration to the Patent and Trademark Office may not be true.
An "allegedly fraudulent statement[] may not be the product of mere
error or inadvertence to mislead the PTa." 	Orient Express Trading Co .. Ltd. v.
Federated Department Stores. Inc., 842 F.2d 650, 653 (2d Cir. 1988) (internal
quotation marks and brackets omitted). 	"[U]ncompromising candor ... is
required ... before that agency." 	Id.
As the court indicated its intent to deny summary judgment to all parties
consistent with the recommendations of the magistrate judge's report, whether
Mr. Martin's declaration is false or true will ultimately be determined by a jury.
"[A]t at the summary judgment stage the [court's] function is not ... to weigh
the evidence and determine the truth of the matter but to determine whether
there is a genuine issue for trial." 	Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 249 {1986}. 	"[T]he issue of intent to mislead the PTa remains a question
of fact to be resolved by a jury." 	(Docket 107 at p. 20).
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Plaintiffs objection 9 is overruled.
10. 	The statement is not supported by the Appendix. and relies on
inadmissible evidence. 	(Docket 108 at p. 13 , 	10).
SMRI argues the report references "a list" in the appendix which does not
exist. 	Id. 	The court finds the appendix itself is a listing or itemization of the
other businesses and entities referenced in the body of the report. 	Plaintiffs
objection is without merit. 	Additionally, plaintiffs argument that a number of
the documents referenced in earlier objections are inadmissible hearsay is
rejected for all the reasons stated earlier in this order.
Plaintiffs objection 10 is overruled.
1l. 	The statement references inadmissible hearsay. 	(Docket 108
at p. 14 , 	11).
The documents referenced in plaintiffs objection were analyzed in
connection with plaintiffs earlier objections. 	For the same reasons stated
previously in this order, the notices of opposition are not inadmissible hearsay.
Plaintiffs objection 11 is overruled.
12. 	The statement is not supported by the record. 	(Docket 108 at
p. 14 , 	12).
Plaintiff argues the statement in the report references documents which
do not support the inference suggested. 	Id. 	The court finds the documents
support the inference made and plaintiffs objection is without merit.
SMRI's articles of incorporation in March of 2010 identify the initial
board of directors to be:
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Name 	Address
Jerry Berkowitz 	349 Progress Dr.
P.O. Box 840
Manchester, CT 06045
Jim Burgess 	2820 Harley Drive
Rapid City, SD 57702
John Johnson 	13168 North Piedmont Road
Piedmont, SD 57769
Dean Kinney 	1612 Junction Avenue #4
Sturgis, SD 57785-2166
(Docket 74-9 at p. 5). 	The articles of incorporation also identify the
incorporators as:
Name 	Address
Karen Simmons 	1612 Junction Avenue, Suite 3
Sturgis, SD 57785
Jerry Berkowitz 	349 Progress Dr.
P.O. Box 840
Manchester, CT 06045
Al Rieman 	2820 Harley Drive
Rapid City, SD 57702
Id. at p. 6.
Jerry Berkowitz executed the notice of opposition on behalf of Good
Sports. 	(Docket 74-7). 	Good Sports reported its "place of business" as "349
Progress Drive, Manchester, Connecticut 06045 ... ," the same address used
by Mr. Berkowitz in SMRI's articles of incorporation. 	Id. at p. 1.
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When Jim Doyle executed a notice of opposition on behalf of Sturgis
Motorcycles, he identified his business partners as Jim Burgess and Al
Rieman. 	(Docket 74-8 at pp. 14-15 ~~ 57 & 59). 	The court takes judicial
notice the address of record for Sturgis Motorcycles, Inc., since at least July of
2006 has been "2820 Harley Drive, Rapid City, SD 57702-2432. »14
Mr. Kinney was the President of the Sturgis Chamber in March of 2000
and had been a board member since 1998. 	(Docket 80-23 at p. 1 ~ 1). 	Mr.
Kinney's deposition was taken in October of 2005 as the corporate
representative for the Sturgis Chamber. 	(Docket 80-1 at p. 1). 	Karen
Simmons, a CPA in Sturgis, South Dakota, is also a member of the Sturgis
Chamber. 	(Docket 80-1 at p. 25 [deposition page 99 at lines 12-20]).
Mr. Kinney was also the president and chief executive officer of
Homeslice. 	(Docket 80-1 at p. 3 [deposition p. 9 at lines 23-24 "hereafter depo.
p.-:-- 	"]). 	He was not a member of the Sturgis Chamber when it
applied for the STURGIS trademark registration. 	(Docket 80-1 at p. 4 [depo. p.
14:21-24]).
When counsel filed a stipulation of dismissal of the oppositions filed with
the Patent and Trademark Office, it was because the "Opposers, Sturgis
Motorcycles ... Good Sports ... and Applicant, Sturgis Area Chamber of
14South Dakota Secretary of State website
http://sdsos.gov Ibusiness/Documents.aspx?cid=DB041685.
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Commerce ... have reached a settlement on June 30, 2010 .... " 	(Docket 74
12 at p. 1). 	This settlement was reached just three months after SMRI filed its
articles of incorporation. 	(Docket 74-9).
Plaintiff acknowledges that representatives of the Sturgis Chamber and
the City of Sturgis were included as SMRI's incorporators. 	(Docket 108 at p.
15). 	Mr. Kinney and Ms. Simmons were those public entity representatives. 	It
makes little sense the other people identified in SMRI's articles of incorporation
were merely individuals and not representatives of Good Sports and Sturgis
Motorcycles. 15 Id. 	The court finds the statement in the report is a fair
comment on the relationship of those who initially protested the STURGIS
mark registration by the Sturgis Chamber, then together formed SMRI, and
later withdrew opposition to the STURGIS mark registration.
Plaintiffs objection 12 is overruled.
The court adopts all other facts in the report and recommendation.
28 U.S.C. § 636(b)(I).
B. 	MAGISTRATE JUDGE'S CONCLUSIONS OF LAW
Plaintiff filed twelve objections to the magistrate judge's recommended
conclusions of law. 	(Docket 108 at pp. 26-32). 	Defendants filed two objections
15When Mr. Kinney executed the 2011 annual report with the Office of
the Secretary of State of South Dakota for SMRI he identified his address as
"1612 Junction Ave. St. 4, Sturgis, SD 57785-2166," Mr. Burgess' address as
"2820 Harley Drive, Rapid City, SD 57702-9693," and Mr. Berkowitz's address
as "349 Progress Dr., Manchester, CT 06045-2296." 	(Docket 74-10 at p. 1).
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to the recommended conclusions oflaw. 	(Docket 109). 	Without repeating the
statement in the report to which a party objects, each objection will be
separately addressed by the corresponding number of each objection.
PLAINTIFF'S OBJECTIONS
1. 	The conclusions are not admitted for purposes of summary
judgment. 	(Docket 108 at p. 26 4f 1).
Plaintiff argues the factual conclusions made in the statement "were
raised first in opposition to Plaintiffs motion for summary judgment .... they
do not stand admitted for purposes of summary judgment." 	Id. at pp. 26-27.
In determining whether summary judgment should issue, the facts and
inferences from those facts must be viewed in the light most favorable to the
nonmoving party. 	Matsushita Elec. Indus. Co., 475 U.S. at 587-88. 	That is
exactly the analysis the magistrate judge used. 	"In reviewing a motion for
summary judgment, [the magistrate judge] is required to view the facts in a
light most favorable to the non-moving party and to give the non-moving party
the benefit of any inferences that can logically be drawn from those facts.
Moreover, [the magistrate judge] is required to resolve all conflicts in favor of
the non-moving party." 	(Docket 107 at p. 16). 	The court finds the analysis
used by the magistrate judge was proper and the conclusions reached in the
statement were proper based upon the contested material facts submitted.
Plaintiffs objection 1 is overruled.
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2. 	The conclusion is not admitted for purposes of summary
judgment. 	(Docket 108 at p. 27 ~ 2).
For the same reasons stated immediately above, plaintifrs objection 2 is
overruled.
3. 	The conclusion is not accurate as the benefits of the license
agreement referenced inure to SMRI's benefit. 	(Docket 108 at
p. 27 ~ 3).
SMRI argues "[a]s an assignee stands in the shoes of the assignor with
respect to assigned trademarks, the benefits associated with the license inure
to Plaintiff irrespective of Plaintifrs date of incorporation." 	Id. 	The conclusion
expressed in the report was simply intended to be background for the
relationship between RPG and Sturgis Rally & Races, Inc. 	Whether the benefit
of the license assigned to RPG ultimately inures to the benefit of SMRI was not
relevant to the particular analysis undertaken by the magistrate judge at that
juncture of the report.
Plaintifrs objection 3 is overruled.
4. 	The conclusion is not accurate and "remains an undecided
issue of fact.» 	(Docket 108 at p. 28 ~ 4).
Plaintiff argues the conclusion reached by the magistrate judge in this
legal conclusion was submitted by defendants in rebuttal to plaintifrs motion
for summary judgment and thus "remains an undecided issue of fact." 	Id. 	The
conclusion is a correct statement of a legal conclusion necessary to resolve the
parties' cross-motions for summary judgment. 	Whether "STURGIS" and
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"STURGIS RALLY & RACES" are nearly identical or legally the same remains an
issue to be resolved by the jury under the law of the case.
Plaintiffs objection 4 is overruled.
5. 	The conclusion is in error. 	(Docket 108 at p. 28 ~ 5).
SMRI ties its legal objection to plaintiffs factual objection 8 above. 	Id.
As indicated, the key phrase of the statement is the continuous and
substantially exclusive use of the STURGIS mark language. 	Park 'N Fly, Inc.,
469 U.S. at 210 n. 10 (citing 15 U.S.C. § 1052(£)). 	For summary judgment
purposes regarding whether Wal-Mart's affirmative defense and the RPG
defendants' affirmative defense and counterclaim of fraud on the Patent and
Trademark Office are meritorious trial issues, the magistrate judge's conclusion
Mr. Martin's statement "is false" is an appropriate finding. 	(Docket 107 at p.
23). 	Whether the statement was in fact false and was intended to mislead the
Patent and Trademark Office remain issues for the jury at trial.
Plaintiffs objection 5 is overruled.
6. 	The conclusion is a misinterpretation of the submissions of
the parties. 	(Docket 108 at p. 28 ~ 6).
The factual analysis supporting the conclusion was fully addressed in
plaintiffs factual objection 12 above. 	The conclusion is an appropriate and
valid inference from the facts. 	The report's use of the term "owners" is accurate
in the sense each person is a member of SMRI and benefits from the purposes
for which SMRI was incorporated. 	(Docket 107 passim). 	Whether there are five
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members or more than five members is not relevant to the analysis. 	The
phrase "five member" is stricken. 	Id. at p. 23.
Plaintiffs objection 6 is sustained in part and denied in part.
7. 	The conclusion is inappropriate as it is based on inadmissible
hearsay. 	(Docket 108 at pp. 28-29 , 	7).
Plaintiff argues the references to Mr. Berkowitz's involvement in Florida
litigation "constitute[s] inadmissible hearsay and are not properly before the
Court." 	Id. at p. 29. 	Defendants included the Florida litigation and the
conduct of Mr. Berkowitz in that case for consideration by the court in this
case. 	(Docket 78 at pp. 31-33 ~~ 144-156). 	Plaintiff did not file an objection to
this documentary evidence when it was submitted in support of defendants'
statement of material and uncontroverted facts. 	Fed. R. Civ. P. 56(c)(2).
For purposes of summary judgment analysis, the magistrate judge's use
of the Florida litigation in his evaluation of the submissions of Mr. Berkowitz in
the present case was proper. 	The defendants' statements of material and
uncontroverted facts properly identified the citation to the Florida litigation.
The remainder of plaintiffs argument was not presented to the magistrate
judge and does not constitute a valid basis for striking the conclusion. 	See
Dockets 72 & 88.
Plaintiffs objection 7 is overruled.
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8. 	The conclusion is a misstatement of the law. 	(Docket 108 at
p. 30 ~ 8).
Plaintiff argues the conclusion "is a false choice not recognized by the
Lanham Act or otherwise in trademark law. 	A word or phrase can connote a
'source of products,' 'the event itself,' or both." 	Id. (emphasis in original).
"Plaintiffs STURGIS®-formative marks represent both a source of products
and services and an event." 	Id. (emphasis in original). "[T]he mere fact of
geographic use of the term 'Sturgis' by nonparties does not preclude Plaintiff
from holding a registration for the STURGIS® trademark with respect to the
Sturgis Motorcyle Rally." 	Id.
The report properly noted the "presumption to which STURGIS is entitled
... is that STURGIS acquired secondary meaning as of February 22, 2011."
(Docket 107 at p. 21). 	The next inquiry as to what secondary meaning
STURGIS achieved is also appropriate. 	Id. 	While SMRI objected to the next
two sentences, the court presumes plaintiff agrees the first conclusion is a
correct statement of the law: "If STURGIS means the source of products, then
STURGIS is registrable because it identifies the source of products." 	Id.
Whether STURGIS means the event itself remains a jury question. 	"How a
particular word has been used and how it has been understood by the public is
a question of fact." 	WSM. Inc .. v. Hilton, 724 F.2d 1320, 1325 (8th Cir. 1984).
If STURGIS does not identify the source of a product and the event only, the
word is not subject to trademark protection. 	"Marks which are merely
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descriptive of a product are not inherently distinctive. 	When used to describe a
product, they do not inherently identify a particular source, and hence cannot
be protected." 	Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763,769 (1992).
"Secondary meaning occurs when 'in the minds of the public, the primary
significance of a [mark] is to identify the source of the product rather than the
product itself.'" 	Gateway, Inc. v. Companion Products. Inc., CIV.
01-4096-KES, 2003 WL 22508907 at *19 (D.S.D. Aug. 19,2003) modified,
CIV.01-4096-KES, 2003 WL 23532885 (D.S.D. Dec. 19,2003) and aII'd, 384
F.3d 503 (8th Cir. 2004) (citing Wal-Mart Stores, Inc. v. Samara Bros., Inc.,
529 U.S. 205, 211 (2000)). 	The court finds the conclusion to be a fair
statement of the law. 	Whether the STURGIS mark identifies the rally or the
source of the product remains a jury question. 	WSM. Inc., 724 F.2d at 1326.
Plaintiffs objection 8 is overruled.
9. 	The conclusion is an error as a matter of law. 	(Docket 108 at
pp. 30-31 ~ 9).
Plaintiff argues the magistrate judge erred as a matter of law because as
a licensee of SMRI's predeceasor-in-interest, RPG is "estopped from challenging
Plaintiffs rights under either the doctrine of licensee estoppel or promissory
estoppel .... " Id. at p. 31.
The magistrate judge properly analyzed the law of licensee estoppel.
(Docket 107 at pp. 21-22). 	The report recognized RPG was a licensee of Sturgis
Rally & Races, Inc. 	Id. at p. 23. 	The license for use of the composite logo was
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in existence for only three months in 1999. 	Id. 	The word STURGIS was never
the specific focus of the license, particularly in light of the fact RPG had been
using the word STURGIS in its merchandising since 1987. 	Id. at p. 22-23.
"[TJhe doctrine of licensee estoppel should not preclude the defendant from
challenging rights derived from subsequent registration of the marks. 	This is
so because the alleged fraud or abandonment would have occurred after the
license expired." 	National Council of Young Men's Christian Associations of
United States, 1988 WL 144985 at *5 (emphasis in original). 	See also STX, Inc.
v. Bauer USA. Inc., 	No. C 96-1140 FMS, 1997 WL 337578 at *10 (N.D. Cal.
June 5, 1997) ("[FJormer licensees may challenge the validity of the mark if
such challenge is based upon facts which arose after the license expires.")
(referencing 	WCVB-TV v. Boston Athletic Association, 926 F.2d 42, 47 (1st
Cir.1991) ("[WJe can find no case that would even prevent a challenge by a prior
licensee, based upon post-license facts, after the license has expired .. , . We
cannot think of any reason why such a licensee ought to be estopped; or why, a
grant of a license should permanently immunize a trademark holder from legal
attack." (emphasis in original)).
There is no evidence upon which the court could conclude that either
Sturgis Rally & Races, Inc., or RPG believed the 1999 license was intended to
protect the term "STURGIS," 	The conduct which the RPG Defendants claim to
be fraudulent on the part of SMRI's predecessors-in-interest occurred much
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later. 	The conclusion expressed in the report is an appropriate application of
the law.
Plaintiffs objection 9 is overruled.
10. 	The conclusion expressed was not properly before the
magistrate judge. 	(Docket 108 at p. 31 ~ 10).
The content of this conclusion was analyzed in section 1(3) above and
was stricken by this order. 	The same logic and legal analysis applies here.
Plaintiffs objection 10 is sustained.
11. 	The conclusion expresses a mathematical error and is a
misapplication of the law. 	(Docket 108 at pp. 31-32 ~ 11).
Plaintiffs argument properly calculates RPG's license "expired thirteen
years ago." 	Id. at p. 32. 	For that reason, the report is amended consistent
with this order.
Plaintiffs objection 11 is sustained.
12. 	The conclusion is an error as a matter of law. 	(Docket 108 at
p. 32 ~ 12).
Plaintiff argues the magistrate judge improperly concluded RPG did not
acknowledge ownership of the STURGIS mark. 	Id. at ~ 11. 	While the license
agreement did constitute a valid written contract, for the reasons stated in
plaintiffs legal objection 9 above, plaintiffs objection 12 is without merit.
Whether "RPG acknowledged that ownership" remains a jury question at trial.
Plaintiffs objection 12 is overruled.
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DEFENDANTS'OBJECTIONS
Defendants make two objections to the magistrate judge's legal
conclusions and the recommended action. 	(Docket 109). 	Those will be
addressed separately.
1. 	The magistrate judge erred and the STURGIS mark and its
functional equivalents should be determined to be generic as a
matter of law. 	(Docket 109 at p. 3 ~ I).
The magistrate judge concluded it is a jury question whether the
STURGIS mark is generic. 	(Docket 107 at p. 21). 	"The test for deciding
whether a word has become a generic title of a product or service is one of
buyer understanding: What do the buyers understand by the word for whose
use the parties are contending? .... How a particular word has been used and
how it has been understood by the public is a question of fact." 	Id. at p. 19
(citing WSM, 724 F.2d at 1325).
Defendants argue plaintiff "failed to submit any contrary evidence or in
any way rebut the evidence submitted by the Defendant." 	(Docket 109 at p. 3).
"[E]ven more compelling in this circumstance is that much of the genericness
evidence submitted by Defendants originated from Plaintiff'S own witnesses and
documents." 	Id. (emphasis in original). 	"On this undisputed record, no
reasonable jury could find for Plaintiff on the issue of genericness .... " 	Id. at
p.7.
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The court agrees with the magistrate judge's conclusion that a factual
issue exists as to whether the STURGIS mark is generic or has a unique and
specific identification purpose in the eyes of the public likely to be influenced
by the term. 	The court rejects the defendants' invitation to make this factual
determination without the benefit of a jury's verdict.
Defendants' objection 1 is overruled.
2. 	The magistrate judge erred and the intent to defraud the
Patent and Trademark Office should be established as a matter
of law. 	(Docket 109 at p. 5 ~ II).
While defendants have established for summary judgment purposes that
Mr. Martin's statements to the Patent and Trademark Office were false, the
question of intent to defraud on a material matter is still the critical inquiry.
(Docket 107 at pp. 19-20). 	Defendants argue this conclusion is in error
because defendants produced "overwhelming, uncontroverted evidence ...
that Plaintiff and the Sturgis Area Chamber of Commerce ... knew at the time
that the representations to the Trademark Office were made that those
statements were false." 	(Docket 109 at p. 5) (emphasis in original). 	"On this
undisputed record, no reasonable jury could find for Plaintiff on the issue of
... fraud." 	Id. at p. 7.
"[T]he knowing misstatement must have been with respect to a material
fact-one that would have affected the PTO's action on the application[]."
Orient Express Trading Co .. Ltd., 842 F.2d at 653 (emphasis in original).
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Whether the submission of the Sturgis Chamber to the Patent arid Trademark
Office was "greatly exaggerated," "disingenuous," not reflective of a lack of
"uncompromising candor," or false with the intent to mislead the Patent and
Trademark Office must be established by "clear and convincing" evidence. 	Id.
While the court may surmise the submission fraudulently intended to
overcome the Patent and Trademark Office's earlier rejection of the STURGIS
mark registration, the defendants' evidence does not rise to the standard of
clear and convincing evidence required to make such a determination during
the summary judgment analysis. 	The court rejects the defendants' invitation
to make this factual determination without the benefit of a jury's verdict.
Defendants' objection 2 is overruled.
ORDER
Based upon the above analysis, it is hereby
ORDERED that plaintiffs objections (Docket 108) are sustained in part
and overruled in part.
IT IS FURTHER ORDERED that defendants' objections (Docket 109) are
sustained in part and overruled in part.
IT IS FURTHER ORDERED that the report and recommendation (Docket
107) is adopted as modified by this order.
IT IS FURTHER ORDERED that plaintiffs motion to strike part of the
defendant Wal-Mart Stores, Inc, answer (Docket 70) is denied.
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IT IS FURTHER ORDERED that plaintiffs motion to strike the
defendants' motion for summary judgment (Docket 93) is denied.
IT IS FURTHER ORDERED that plaintiffs motion for summary judgment
(Docket 66) is denied.
IT IS FURTHER ORDERED that defendants' motion for summary
judgment (Docket 76) is denied.
Dated September 2, ,2013.
BY THE COURT:
~ ~ I 	!D=I=f==I411--¢-~---
~ VIKEN \S
CHIEF JUDGE
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