Update- Sturgis Motorcycle Rally Wins Trademark Dispute

A few weeks ago, I wrote about how Sturgis Motorcycle Rally had sued Walmart and Rushmore Photo and Gifts for use of the “Sturgis” trademark. I also pointed out that I seemed to be writing a lot about motorcycle clubs and trademarks. So, when I saw that a jury had reached a verdict in the case, I couldn’t help but write another. Here’s the update on the case, which is Part 4 in my ongoing series on bikers and trademarks.

As I mentioned in my last post, Walmart and Rushmore argued that Sturgis’ trademark was “geographically descriptive” and not entitled to trademark protection. The reasoning behind this rule stems from the basic purpose of trademarks: to indicate the source of goods and services. A trademark that is merely descriptive of the goods or services is not entitled to trademark protection because its primary association is “what” the goods or services are, not “who” they come from. Owners of descriptive trademarks need to show some sort of “secondary meaning” (that the trademark designates source in the mind of consumers) to get trademark protection. In other words, trademarks need to indicate “who” the goods or services come from, not “what” they are.

The geographic significance rule applies the general descriptiveness principle to “where” the goods or services come from. According to the USPTO, a “mark is primarily geographic if it identifies a real and significant geographic location, and the primary meaning of the mark is the geographic meaning.” So, while it may seem like a good idea to call your Nashville-based recording studio “Nashville Records”, it’s a pretty bad idea from a trademark protection perspective. If you think about it, it makes sense. It’s not really reasonable to allow one company to prevent other Nashville record companies from saying “where” they are located and “what” they do, unless the trademark has actually become a designation of “who” the goods or services are coming from in the minds of consumers. Of course, like everything else in the law, there is ton of minutiae to this rule and a million or so exceptions (for instance, although “Walt Disney World” is a place, it’s not a geographic location), so bear that in mind when reading the next sentence.

According to the Washington Times, the jury did not buy the geographic descriptiveness argument and awarded Sturgis Motorcycle Rally, Inc. $912,000, even though “Sturgis” is the name of the town where the rally is held every year. Notwithstanding the verdict, it may not be time for the folks at Sturgis to start popping champagne bottles wheelies just yet. The verdict was far less than the $7 million Sturgis requested and far more than the $0 the defendants wanted to pay. Paul Neimann, Rushmore’s owner, has vowed to appeal the verdict (part 5 of this series, coming soon!).

Here are the major takeaways from this ongoing saga thus far: First, the verdict in this case makes it clear that trademarks are extremely valuable. Second, to make the most of that value, it’s better not to use descriptive terms (geographic or otherwise) in your trademarks. Finally, and most importantly, everyone should now be on notice of the fact that bikers love trademarks and do not hesitate to enforce them.