United States District Court, D. South Dakota, Western Division
JEFFREY L VIKEN CHIEF JUDGE
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 the amended order, the court issued an
amended preliminary injunction. (Docket 490).
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 [.]" (Docket 496). Accompanying defendants'
motion were an affidavit and exhibit. (Dockets 497 85 497-1).
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).
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 8s 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 85 509-11).
reasons stated below, plaintiff's motion for
reconsideration (Docket 501) is denied, defendants'
motion for judicial notice (Docket 496) is granted and
defendants' motion to cancel the Sturgis trademark
registrations (Docket 492) is granted.
its motion for reconsideration and brief in opposition to
defendants' motion, plaintiff asserts the court erred on
several issues. (Dockets 500-502). Because plaintiffs
arguments are the same in each submission, the court will
cite to plaintiffs 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.
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.
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.
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
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.
Id. at p. 7.
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.
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)
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
Plaintiffs pleaded registrations." Id. Had
defendants done so, SMRI declares "Plaintiff would have
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.
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.
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 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 "[cancellation 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]n 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 Plaintiffs 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.
response to plaintiffs 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." 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 ...