Sturgis Motorcycle Rally, Inc. v. Rushmore Photo & Gifts, Inc.; JRE, Inc.; Carol Niemann; Paul A. Niemann; Brian M. Niemann; Wal-Mart Stores, Inc.
No. 17-1762
United States Court of Appeals For the Eighth Circuit
November 2, 2018
Appeals from United States District Court for the District of South Dakota - Rapid City
Submitted: June 14, 2018
Sturgis Motorcycle Rally, Inc.
Plaintiff - Appellee
v.
Rushmore Photo & Gifts, Inc.; JRE, Inc.; Carol Niemann; Paul A. Niemann; Brian M. Niemann; Wal-Mart Stores, Inc.
Defendants - Appellants
No. 17-1869
Sturgis Motorcycle Rally, Inc.
Plaintiff - Appellant
v.
Rushmore Photo & Gifts, Inc.; JRE, Inc.; Carol Niemann; Paul A. Niemann; Brian M. Niemann; Wal-Mart Stores, Inc.
Defendants - Appellees
No. 17-2712
Sturgis Motorcycle Rally, Inc.
Plaintiff - Appellee
Rushmore Photo & Gifts, Inc.; JRE, Inc.; Carol Niemann; Paul A. Niemann; Brian M. Niemann; Wal-Mart Stores, Inc.
Defendants - Appellants
No. 17-2731
Sturgis Motorcycle Rally, Inc.
Plaintiff - Appellant
v.
Rushmore Photo & Gifts, Inc.; JRE, Inc.; Carol Niemann; Paul A. Niemann; Brian M. Niemann; Wal-Mart Stores, Inc.
Defendants - Appellees
Appeals from United States District Court for the District of South Dakota - Rapid City
Submitted: June 14, 2018
Filed: November 2, 2018
Before WOLLMAN, ARNOLD, and KELLY, Circuit Judges.
ARNOLD, Circuit Judge.
In 1987, the Chamber debuted a licensing program for the Monahan mark. The mark is in the shape of a circle horizontally bisected by two motorcycles and the word “Sturgis.” The words “Black Hills Motor Classic” are written in an arc pressed against the upper bounds of the circle. Filling in the rest of the circle‘s upper half are ten stars, also in an arc, and the head of a bird of prey in profile, facing right. In its lower half, six buffalo walk along the circle‘s edge. Written above them, in a curve parallel to the circle‘s lower edge, are the words “Rally & Races Black Hills S.D.” Finally, a couple feathers dangle from each end of the section that bisects the circle. The Chamber advertised that products displaying the mark could be called “officially licensed.” The Chamber registered the mark federally in 1996 and, in the 2000s, acquired two word marks that some rally vendors had also registered federally: “Sturgis Bike Week” and “Take the Ride to Sturgis.” These three marks are only some of the many words and designs that vendors have used to associate their goods and services with the rally, which has come to be known by many names, including just “Sturgis.”
The Sturgis motorcycle rally is now the largest such rally in the world, bringing several hundred thousand people and many millions of dollars into the region each year. In 2010, the Chamber assigned its rally-related marks to Sturgis Motorcycle
Paul and Carol Niemann, along with their son Brian Niemann, own Rushmore Photo & Gifts, Inc., a souvenir provider in Rapid City, South Dakota, that for years sold a long line of goods related to the rally, including some that it used to advertise were “officially licensed” even though they were not. With the sole exception of some postcards it once created that displayed the Monahan mark, Rushmore has not asked the Chamber or SMRI for permission to sell its rally-related products, many of which display the word “Sturgis” or the name “Sturgis Motor Classic.” In 2011, on receiving a federal registration for the word mark “Sturgis” when used on goods and services related to the rally, SMRI sued Rushmore, the Niemanns, JRE, Inc. (a dissolved South Dakota corporation that Paul and Carol Niemann had owned), and Wal-Mart Stores, Inc. (which had retailed some of Rushmore‘s rally-related products). In its amended complaint, SMRI alleged that the defendants, through their participation in the selling of Rushmore‘s unlicensed rally-related products, had violated several provisions of the Lanham Act, see
A jury rendered a verdict in favor of SMRI, awarding it $912,500 in damages. The district court largely denied the defendants’ motion for judgment as a matter of law, but granted it as to JRE since JRE is a dissolved corporation without any assets. The district court also held that SMRI is estopped by laches and acquiescence from recovering damages from the defendants. The district court entered a permanent
I
As an initial matter, SMRI maintains that we should vacate the district court‘s decision on the defendants’ motion for judgment as a matter of law because their post-verdict renewal of it was defective. SMRI contends that it was defective because even though the defendants timely filed it, see
SMRI argues that the district court also erred in holding that the defendants are not estopped from challenging the validity of its marks despite the fact that Rushmore once licensed the Monahan mark from the Chamber. Licensee estoppel is an equitable doctrine, see Restatement (Third) of Unfair Competition § 33 cmt. d (Am. Law. Inst. 1995), and we have apparently not addressed what standard of review applies here. The parties do not address the issue, either, but since we hold that the district court did not err, we leave the question of the standard of review for another day.
II
The jury found that the defendants as a whole had infringed five of SMRI‘s marks: its federally registered “Sturgis” and “Sturgis Bike Week” word marks, its federally registered Monahan mark, and its unregistered “Sturgis Motorcycle Rally” and “Sturgis Rally & Races” marks. The district court denied the defendants’ motion
A
SMRI has two federal registrations for the “Sturgis” word mark, but it appears that the certificate of registration for only one of them, see “Sturgis,” Registration No. 3,923,284, was admitted into evidence. The certificate says that the mark is registered under Section 2(f) of the Lanham Act, which applies to a mark that is not inherently distinctive, but “has become distinctive” of the registrant‘s goods based in part on his “substantially exclusive and continuous use thereof as a mark.”
Although the jury was not informed that it could not presume the validity of the “Sturgis” mark if the defendants began to infringe it before its date of registration, the defendants have preserved their argument that SMRI did not present sufficient proof of its validity and could not rely on a presumption of validity to do so. The defendants plainly raised this argument in their motion for judgment as a matter of law. See
Since SMRI was not entitled to a presumption of validity, the burden remained on it to prove that the “Sturgis” mark had acquired secondary meaning. See Cmty. of Christ Copyright Corp. v. Devon Park Restoration Branch of Jesus Christ‘s Church, 634 F.3d 1005, 1011 (8th Cir. 2011). SMRI maintains that it did so “by introducing proof that consumers associate the STURGIS® mark with [it] and its predecessors-in-interest.” But SMRI did not present any direct evidence of that association like, for instance, consumer testimony and surveys, choosing to rely instead on circumstantial proof alone. See Frosty Treats, Inc. v. Sony Comput. Entm‘t Am., Inc., 426 F.3d 1001, 1005 (8th Cir. 2005). SMRI has two basic arguments as to why the “Sturgis” mark is valid: First, the mark identifies it as a distinct source of rally-related goods and services because it and the Chamber, its predecessor-in-interest, have been the mark‘s continuous and substantially exclusive users in relation to the rally since July 1, 1987; and second, consumers associate the mark with the rally, and the rally is a service that it provides (or alternatively is a service the service-mark rights to which it has acquired) because the Chamber has “hosted” the rally since the 1940s and is today the rally‘s “sole organizer, promoter and sponsor.” The trial evidence supports neither argument, nor any other basis for finding that the word “Sturgis” identifies SMRI as a source of rally-related goods and services. The jury‘s finding that the mark is valid thus warrants reversal.
In arguing that the evidence supports the jury‘s finding that the “Sturgis” mark is valid, SMRI points us to voluminous portions of the record with little explanation of why those portions are relevant. SMRI, for example, provides us simply with three lines of citations to the record, after telling us that it “introduc[ed] proof that” the mark has secondary meaning. On the next page of its brief, it tells us that it “presented extensive secondary-meaning evidence” for all its marks, providing us with eight additional lines of citations to the record. SMRI does not tell us which citations are relevant to which mark. The only assistance that SMRI gives as to how those parts of the record are relevant are the nouns that precede each string of citations: e.g., “advertisements,” “licensed goods,” “product licensees,” “advertising on bags,” and “royalties.” But a litigant may not advert perfunctorily to an argument, hoping that we will do its work for it by developing the argument and putting flesh on its bones.
To establish that the word “Sturgis” had acquired secondary meaning, SMRI needed to show, among other things, its “long and exclusive use” of the word “in the sale of [its] goods.” Aromatique, 28 F.3d at 870. But many of the historical uses of the word that SMRI directs us to cannot reasonably be viewed as uses of the word as its mark. SMRI seems to assume, for example, that whenever it or its predecessors-in-interest used the word “Sturgis” to refer to either the rally or the City of Sturgis, they also used it as their mark. But if the word was being used descriptively (e.g., to refer to “Sturgis” the city or “Sturgis” the rally), it was not being used primarily to identify a specific source of rally-related products and services. See OBX-Stock, Inc. v. Bicast, Inc., 558 F.3d 334, 341 (4th Cir. 2009).
For example, Dean Kinney, SMRI‘s corporate representative, testified at trial about two advertisements for old rally products. He did not seem personally familiar with either ad—saying such things as, “This is also, I think, an advertising page,” and “We have what is here is a catalog listing—I think it‘s an ad, actually“—but he stated nonetheless that both ads used “Sturgis” as a mark. The first ad, from 1989, was for Greg Licht‘s film “Sturgis 1989: The Video,” a documentary of the 1989 Sturgis rally. Kinney asserted that the word “Sturgis” in “Sturgis 1989: The Video” was being used as a mark since it was “at the center of the advertising.” He testified similarly that the text on a Classic Silver Co. shirt from 1992, “Black Hills Classic, 1992, Sturgis,” also used “Sturgis” as a mark. Kinney did not say why he thought that either use of the word could be attributed to SMRI, but the ad for the movie displayed the Monahan mark and the shirt had the Monahan mark on its opposite side. So the producers of those goods were apparently licensees of the Monahan mark. There was no evidence, however, that they had also licensed the word “Sturgis” from the Chamber. SMRI does not tell us when the Chamber first started to license the word “Sturgis” as its own mark, but Kinney testified that it was not until around the year 2000 that the Chamber began to view the word as the “magic” term behind all its marks. But if the Chamber
SMRI‘s alleged evidence that it used the word “Sturgis” as a mark in the 1980s, 1990s, and even more recently tends to be of this character, coopting each appearance of the word in the ads and on the goods of the Chamber and its licensees. SMRI does not even attempt to explain how these seemingly descriptive uses of the word were actually uses of it as a mark, and we cannot see how that interpretation could be reasonable. If it already is “more difficult to trademark” a rally that features “just the name of the area that hosts it,” it is even more difficult to trademark a brand of goods and services based around the rally and the area. Cf. AuSable River Trading Post, LLC v. Dovetail Sols., Inc., 902 F.3d 567, 570 (6th Cir. 2018). We thus conclude that the jury could not possibly infer from those uses of the word “Sturgis“—by which we mean uses that predate the Chamber‘s licensing of the word by itself as a mark on rally-related goods and services—that the public had started to associate it with a particular source of goods and services.
SMRI also directs us to appearances of the word “Sturgis” in its other marks, including the Monahan and “Sturgis Bike Week” marks. Here, as well, the use of the word on those marks appears to be descriptive, referring to either “Sturgis” the rally or “Sturgis” the city, instead of “Sturgis” the brand of rally-related goods. SMRI again does not explain why consumers would view those uses of the word inside of another mark as a distinct mark that identifies not an association with “Sturgis” the rally or the city, but one of the many sources of goods that are related to the rally and the city. When the word “Sturgis” is simply being used as part of another mark that itself seeks to communicate an association with “Sturgis” the rally and city, the word is clearly not being used as its own distinct mark. We thus conclude that the jury had no basis to infer that consumers interpreted the word “Sturgis” in SMRI‘s other marks to be a
SMRI also appears to assume that whenever an independent user of the word “Sturgis” on rally-related goods and services becomes its licensee, all of that person‘s pre-licensed uses of the word are transformed into uses of it as SMRI‘s mark. So, for example, SMRI directs us to vendor Dean McNenny‘s eagle-wing patches as evidence that the word “Sturgis” identifies it as a source of rally-related products. The patches depict an eagle holding a banner on its wings that says, for instance, “Sturgis ‘88” for the 1988 rally. Since the 1980s, McNenny has created a new patch for each rally, and SMRI refers us to a trial exhibit that displays each of his patches from 1986 to 2015. McNenny has long used the word “Sturgis” on his souvenirs: SMRI identifies him as one of the rally‘s earliest vendors, and he testified that he has used “Sturgis” on his souvenirs since the late 1970s. He also testified that most of the rally souvenirs he has created simply show “the word ‘Sturgis’ and the date.” To be sure, he testified as well that he now buys a license to use the word “Sturgis” on his rally-related souvenirs, but the earliest license for the mark produced during his examination was from 2001.
Unless SMRI believes that McNenny‘s 2001 license retroactively turned all of his pre-2001 uses of the word “Sturgis” into uses of it as SMRI‘s mark, SMRI should not have pointed us to McNenny‘s patches from the 1980s and 1990s in support of its argument that the “Sturgis” mark has acquired secondary meaning. The very fact that McNenny had independently used the word “Sturgis” on his own rally-related goods for decades indicates that consumers had no reason to think that the word‘s presence on such goods indicated that they all came from a single source. Although McNenny became a licensee of the Monahan mark in 1987, the jury had no basis to infer that since some of McNenny‘s goods presumably displayed the mark, consumers therefore started to misidentify all of McNenny‘s goods as the Chamber‘s or, more relevantly, to misidentify the descriptive term “Sturgis” on his rally-related goods as indicating that the Chamber, instead of him, was their source. We thus conclude that a jury could not simply infer from a current licensee‘s past, independent uses of the word “Sturgis”
McNenny‘s reasons for buying a license from SMRI to use the word “Sturgis” illustrate why the jury could not infer from SMRI‘s licensing of the word that it is a valid mark. When asked why he participates in SMRI‘s licensing program, McNenny said that he first joined it because he “saw a need for a way to help the city with the cost of promoting the rally.” The program‘s profits—SMRI, and the Chamber before it, have advertised—go to support the City of Sturgis. The marketer for Black Hills Rally & Gold, the company that sells McNenny‘s rally-related goods, agreed that the “value” behind taking a license from SMRI was that “it‘s easier for us to sell a product and say part of the money does go back to Sturgis so that they all feel good about giving back to the community that does so much for them.” “A lot of people come to visit and they realize the stress that [the rally] probably puts on a town, so to be able to say that everything that we sell is licensed, and you are contributing back to the town when you purchase that, I think it adds value,” she added. But if McNenny and Black Hills Rally & Gold are licensees of SMRI because they like giving back to their community and selling customers on the idea that their purchases also give back to it, the jury had no basis to infer from their licenses and sales that consumers associate SMRI‘s marks with a single source of rally-related goods and services.
Jerry Berkowitz, SMRI‘s primary licensee, echoed these sentiments, testifying that he stopped opposing the Chamber‘s application to register the word “Sturgis” as a mark when he realized that the Chamber wanted to acquire it to help the rally “move forward in a manner that has subsistence.” Berkowitz stated that he was concerned that other motorcycle rallies “had been declining” since they “had no organization” and “the local[s] thought that they didn‘t [get] respected by the rally itself.” SMRI, the record shows, is the entity that the Chamber and Berkowitz helped create to provide the organization and community focus that he felt the rally had been lacking. The record shows that even people intimately involved in the rally can sign onto SMRI‘s licensing program even though they believe that some of its marks are not valid. For
SMRI exaggerates for how long and the degree to which it has used the word “Sturgis” as a mark. The record, moreover, does not support a finding that SMRI has used the word exclusively or substantially so in relation to the rally or rally-related goods and services for any period of time. The first item of evidence that SMRI relies on to support the jury‘s finding that the “Sturgis” mark is valid is the affidavit that then-Chamber president Marlin Martin sent to the U.S. Patent and Trademark Office as part of the Chamber‘s application to register the mark federally. In the affidavit, dated November 1, 2001, Martin stated that the Chamber had been the “continuous and substantially exclusive” user of the mark “in connection with the marketing and promotion of the Rally since . . . July 1, 1987.” Martin provided some examples of how the Chamber had promoted the rally, and they all involved the marketing and selling “of goods bearing the STURGIS mark,” like “caps, hats, [and] T-shirts.” But when asked to explain the factual basis of his statement, Martin provided an answer demonstrating that he had purposely and categorically excluded from his assessment relevant third-party uses of the mark. We thus conclude that no reasonable jury could
SMRI and the Chamber, the record makes clear, were only two of the many—perhaps hundreds—of entities that have used the word “Sturgis” to promote the rally and sell rally-related goods and services. In a video deposition that the jury watched, Martin conceded that a number of people and businesses other than the Chamber and its licensees had used the word “Sturgis” on their rally-related goods and services in the 1990s and 2000s. He conceded that the rally was commonly known as “Sturgis” and that the word “Sturgis” thus frequently appeared by itself on, for example, the t-shirts that vendors sold to commemorate the rally. He further conceded that vendors offering their own rally-related goods and services would promote the rally since the more people who attended it, the more customers they might have. But in conceding all of that, Martin made it impossible for any reasonable person to credit his assertion that the Chamber had nonetheless been the substantially exclusive user of the word “Sturgis” to promote the rally, including through the sale of rally-related goods.
The only way that Martin was able to assert that the Chamber had substantially exclusively used the word “Sturgis” for decades to promote the rally was by denying that virtually anyone else promoted it when they independently used the word to sell their own rally-related goods and services. So, for example, in his affidavit he stated that if a licensee of the Chamber sold a t-shirt bearing the word “Sturgis“—say, one that stated “Sturgis 2000” for the 2000 Sturgis rally—the Chamber thereby promoted the rally. But in his video deposition, he added that if an unaffiliated vendor then sold a similar t-shirt saying “Sturgis 2000,” the vendor thereby promoted only his shirt and not the rally. Martin testified as well that although the rally consists of many different activities, if the non-Chamber-affiliated group behind one of those activities used the “Sturgis” mark to promote it, the group thereby promoted only its own activity and not the rally itself. Although it was patently unreasonable for Martin to think that only Chamber-approved uses of the mark counted as rally-related uses, it was this logic that enabled him to tell the Trademark Office that the word “Sturgis” had become
Martin‘s logic was so incoherent and self-serving that no reasonable jury could accept it. If there were two shirts that said “Sturgis 2000,” but only one of them was produced through the Chamber, there were still two rally-related shirts displaying the word “Sturgis.” The fact that non-Chamber-affiliated producers were using the word on their rally-related products was directly relevant to whether the Chamber was its substantially exclusive user. Martin, however, ignored those third-party uses since he believed that only the Chamber actually promoted the rally. But he had no right to declare that by fiat. Even if we accepted his assumption that every non-Chamber-affiliated producer of, say, a “Sturgis 2000” t-shirt used the word “Sturgis” to signify and promote only his own rally-related goods, that would still undermine SMRI‘s case that its mark is valid since it would show that that producer was also using the word as a mark, i.e., to identify his line of goods as a distinct brand. But if others were using the word to brand their own rally-related products, Martin was wrong to ignore them. If, by contrast, those unaffiliated producers were using the word “Sturgis” on their goods simply to indicate an association with the rally, then they were not using it as a mark. See OBX-Stock, 558 F.3d at 341. And since those unaffiliated uses of the word would suggest that consumers also did not construe it as a mark indicating a brand, Martin was again wrong to ignore them.
It is not clear why Martin believed that only the Chamber‘s use of “Sturgis” on rally-related goods and services counted as promotions of the rally. It could not have been that the Chamber took on the job of promoting the rally from one of its original supporters: The Jackpine Gypsies are an original supporter and their motorcycle races remain one of the activities comprising the rally, but Martin nonetheless asserted that promoting a rally-related race promoted the race only and not the rally. It also could not have been that the Chamber promoted every rally event, whereas others promoted only their own rally event: Martin admitted that the Chamber did not promote all of the rally‘s events. It could not have been, either, that no one other than the Chamber
Martin was not the only person to testify that the Chamber (and, by extension, SMRI) had been the substantially exclusive user of the word “Sturgis” on rally-related goods and services. But when those other witnesses were asked to explain the factual basis of their assertions, they, like Martin, demonstrated that the assertion could not be credited. So, for example, Jerry Berkowitz, an SMRI board member who also owns Good Sports, Inc., the primary licensee of SMRI‘s marks, testified that many of the rally‘s seven hundred vendors have used the word “Sturgis” to sell their goods and to promote the rally and that when those vendors used it they did so to refer to the City of Sturgis (and thus not, by implication, a specific brand of rally-related goods). Since his own company had used the word “Sturgis” continuously since 1985 both to sell rally-related goods and to promote the rally, Berkowitz at first opposed the Chamber‘s application to register the word federally as its mark. But after years of litigation, he changed his mind, adopting the tendentious logic that Martin had used. He told the jury that he came to believe that although he has “promoted the rally [by] having rally products at the rally,” he does not do what the Chamber does: He now distinguishes between the Chamber promoting “the overall rally” and everyone else promoting only their own rally-related products and businesses. But that distinction, we have noted,
Dean Kinney, SMRI‘s corporate representative, similarly testified that only the Chamber and the City use the word “Sturgis” to promote the “overall” rally. He, like Martin and Berkowitz, had excluded from his assessment instances where a vendor unaffiliated with the Chamber and SMRI had used the word on its goods and services; he did so, he stated, because an unaffiliated vendor was trying “to get the people that are coming to the rally to spend a portion or all their time” and money on the vendor‘s own goods and services, and so the vendor was promoting only his own business and not, Kinney stated further, the rally as a whole. But, as we have explained, SMRI may not dismiss, nor ignore, those unaffiliated uses of the word “Sturgis” on rally-related goods and services. Consumers were still exposed to them, and those independent uses were relevant to whether those consumers associated the word “Sturgis” with a particular source of rally-related products. SMRI and its witnesses were therefore not credible as a matter of law when they told the jury that it and its predecessors-in-interest had been the substantially exclusive users of the word.
We have independently reviewed the record and found no alternative ground to support a finding that the Chamber and SMRI have been the substantially exclusive users of the “Sturgis” word mark in relation to the rally or rally-related products and services. But if a jury could not make that finding, it also had no basis to infer that the mark had “become so associated in the public mind with [the Chamber‘s and SMRI‘s] goods that the mark serves to identify the source of the goods and to distinguish them from those of others.” See Aromatique, 28 F.3d at 870. To be sure, Martin and a few others affiliated with SMRI testified that they believed that the mark was distinctive, but a trademark owner cannot establish that its mark is valid simply by getting its officials and agents to say that it is. Their beliefs, in the end, are irrelevant to whether the mark has secondary meaning in consumers’ minds. Co-Rect Prods., Inc. v. Marvy! Advert. Photography, Inc., 780 F.2d 1324, 1332 (8th Cir. 1985). The fact that SMRI and the Chamber have advertised that they use the word “Sturgis” as their mark—on
SMRI also asserts that its “Sturgis” word mark is distinctive because consumers associate it with the rally. To contend that a descriptive term has acquired secondary meaning because people associate it with what it describes would seem to be a losing proposition. SMRI does so nonetheless, arguing, for example, that since the “Sturgis” rally became famous in 1990, its mark also became famous at that time. But one does not follow from the other: Everyone could know of the rally as “Sturgis” and find that the City is now synonymous with the rally without also associating the word “Sturgis” with only one of the many sources of rally-related products and services. See OBX-Stock, 558 F.3d at 341. SMRI appears to believe that the jury could infer from the fact that the rally is famous that the “Sturgis” mark is also famous (and thus valid) because the Chamber has, SMRI contends, “hosted” the rally since the 1940s and is today the rally‘s “sole organizer, promoter and sponsor.” Even if the record showed—which it does not—that SMRI has a valid service mark for the word “Sturgis” in relation to the organizing and conducting of the rally, SMRI would still need to establish what it has not—that the word operates as its mark in other contexts. Owners of a mark “have no right in gross.” Anheuser-Busch, Inc. v. Balducci Publ‘ns, 28 F.3d 769, 777 (8th Cir. 1994). The record, in any event, does not support a finding that the Chamber has historically hosted the rally or is presently the organizer, promoter, and sponsor of the rally. So the record still does not support the jury‘s finding of validity.
SMRI maintains that the Chamber has hosted the rally since the 1940s, but it bases that assertion on the testimony of two people who stated that the Chamber used to host a picnic during the rally. One witness stated that he once saw a picnic that the
SMRI asserts that the Chamber has also been “the sole organizer, promoter and sponsor of the rally” since 1985. To support that assertion, SMRI directs us only to the testimony of Jack Hoel, son of the rally‘s founder, that in 1985 the Chamber “had no money and weren‘t equipped to know what” to do with the many requests it was receiving for information about the rally, and so it “hired” Neil Hultman to respond to the requests. The jury heard from only one other witness about how the Chamber had used Hultman. John Johnson, the banker who helped arrange the financing that led to the creation of SMRI, testified that in the 1980s “the chamber of commerce, which was two people at the time, basically an executive director and secretary, [was] overwhelmed with phone calls and information requests about the rally.” Johnson told the jury that the Chamber had hired Hultman “to field the questions and . . . cover the information that was needed.” Although the rally was “an unorganized event where motorcyclist[s] showed up in Sturgis the first week in August and had a good time,” Hultman was a member of the Jackpine Gypsies, which hosted “the majority of the [rally‘s] organized events.” He was thus in a position, presumably, to tell prospective rallygoers about what to expect if they attended.
Other witnesses testified in a conclusory manner that around 1985 the Chamber took over the rally‘s promotions, but the only details in the trial transcript about what that testimony could have meant is that the Chamber had hired Hultman to answer the rally-related questions that the Chamber received. Some of those witnesses, like Dean Kinney, stated that “a loose knit group of businessmen” that had formed in the 1970s to support the rally, the Black Hills Motorcycle Classic Group, became part of the Chamber around 1985. But it appears that the Chamber‘s acquisition of that group did not augment its rally-related responsibilities by much. Kinney, for example, said that
Even if we assumed that in the mid-1980s the Chamber became a clearinghouse of promotional information and materials about the rally, the jury, as we have held, had no basis to find that it was the only entity promoting the rally. Even if it had been the only one, the record can only be read as indicating that the Chamber was simply promoting an event that others—many others—were putting on. The record does not suggest that the Chamber or SMRI ever displaced those other people and groups. The witnesses, when asked, uniformly denied that any single entity owns or produces the rally; their testimony univocally indicated that, as Berkowitz said, the rally has always been made up of the different events that different groups put on. Coordinating with the City on when streets should be blocked off to traffic and how the City could best accommodate (and pay for) the sudden influx of rallygoers into the area does not, moreover, convert the Chamber into the organizer and sponsor of the rally. If the owners of the buildings on Sturgis‘s Main Street decided to set up attractive window displays each Christmas, but did not promote them or work with the City on how best to manage the foot traffic they caused, the Chamber would not usurp the owners to become the organizer and sponsor of the displays if it decided to do those things on its own initiative or even if the owners asked it to do those things for them.
SMRI also suggests that its “Sturgis” mark is valid because the City of Sturgis undertakes “the extensive planning required . . . to prepare for the Rally.” SMRI does not explain why the City‘s governmental actions should be attributed to it, and we do not see the connection. It is true that the City spends a tremendous amount of money providing the infrastructure that accommodating hundreds of thousands of people into a town of only a few thousand entails: Daniel Ainslie, the City Manager, testified that the “direct cost” to the City of “an average rally is right around a million dollars.” To
Insofar as SMRI might contend that its rights over the rally descend from the City itself, the record does not indicate that the City‘s involvement in the rally extends beyond the heroic provision of municipal services. The Supreme Court of South Dakota has noted that “[a] city can do much to support an event which draws people and dollars to the area,” but providing “inherent municipal functions,” including “law enforcement and maintenance of public areas,” and “cooperat[ing] to insure the event was an overall success” does not make the city “an official sponsor” of the event. In re Appeal of Jackpine Gypsies Motorcycle Club, Inc., 395 N.W.2d 593, 595 (S.D. 1986). We agree and hold that the jury could not infer from the onerous planning that the City undertakes to provide infrastructure for the rally that the City was the organizer or sponsor of the rally. To allow such an inference would be tantamount to saying that it would be reasonable to infer that the City of New York organizes the sessions of the United Nations General Assembly because of everything it does to assist their occurrence. One cannot infer from the fact that a city augments its municipal services to accommodate those who attend an event—e.g., a funeral or political protest—that it organizes, promotes, or sponsors the event in a way that would permit it to acquire ownership over the event or its intellectual property.
The parties elicited very little information at trial about how the rally itself, by which we mean the events that rallygoers attend, is currently organized. That is probably because, as SMRI‘s Treasurer testified, no particular entity actually produces it. In any event, the record does not support a finding that SMRI owns, produces, or
In sum, the jury‘s finding that the “Sturgis” word mark is valid cannot stand: The trial record does not support that SMRI owns the rally or its intellectual property, that SMRI and the Chamber before it have been the substantially exclusive users of the word “Sturgis” in relation to either the rally or rally-related goods and services, or that relevant consumers associate the word “Sturgis” with a single source of goods and services in any context.
Two things follow as a consequence of our conclusion that the record does not support the jury‘s finding that SMRI‘s “Sturgis” word mark is valid. First, we must reverse the jury‘s finding that the defendants diluted the “Sturgis” mark. See
B
Although two of SMRI‘s trademarks are unregistered, they are still entitled to protection if they serve to identify “a particular source of a product.” See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992). Since the parties agree that those marks are not inherently distinctive, they are protected only if they have “acquired distinctiveness through secondary meaning.” Id. at 769. The defendants maintain that they should have been granted judgment as a matter of law on the infringement claims relating to SMRI‘s unregistered marks, “Sturgis Motorcycle Rally” and “Sturgis Rally & Races,” because the jury was not presented with sufficient evidence to find that the marks had acquired secondary meaning. We agree.
It was SMRI‘s responsibility to prove to the jury that its unregistered marks had acquired distinctiveness by the time of the defendants’ challenged conduct. ZW USA, Inc. v. PWD Sys., LLC, 889 F.3d 441, 449 (8th Cir. 2018). SMRI again presented only circumstantial evidence of secondary meaning, and after a careful examination of the record we hold that that evidence did not provide a legally sufficient basis for the jury to find that the unregistered marks had acquired distinctiveness. The same difficulties that led us to hold that the record does not support a finding that the “Sturgis” word mark is valid occur here as well.
In contending that its marks have secondary meaning, SMRI‘s main brief barely mentions its unregistered marks. The only thing it says about them is that some of its witnesses “testified about the longstanding use and distinctiveness of the STURGIS RALLY & RACES and STURGIS MOTORCYCLE RALLY marks to connote SMRI and its licensees and their respective goods and services.” But the parts of the record that SMRI cites in support of that statement do not support it: One witness merely said that in the 1970s some people called the rally the Black Hills Motorcycle Classic and that people later called it the Sturgis Rally and Races. The fact that those names were popular names for the rally indicates, to the contrary, that they do not identify one of the many sources of rally-related goods and services. A second witness talked only about SMRI‘s licensing program without ever mentioning its unregistered marks. The final witness that SMRI identifies talked about the marks, but all he said is that SMRI and the Chamber have used them in their licensing programs. In the part of the record cited to us, however, the witness did not bring up the extent, nature, or effect of those
As we observed, in arguing that the record supported the jury‘s findings that its marks are valid, SMRI rarely discusses each finding separately even though the jury made specific findings about each mark. Evidence indicating that one of the marks had acquired secondary meaning does not necessarily show that any other mark had acquired it as well. SMRI nonetheless directs us primarily to evidence pertaining to its “STURGIS Marks,” eliding the fact that five different marks and as many jury findings are actually at issue here. A party should not leave for us the task of divining how its undifferentiated argument can be recast as the several specific arguments that it should have made instead. By doing so, the party risks having us declare that it has forfeited its argument. See id. We have nonetheless reviewed the parts of the record that SMRI says contains “extensive secondary-meaning evidence” for all of its marks to see whether they support the jury‘s findings about the unregistered marks.
SMRI points us to several pages of advertising in the record, but the ads rarely use the words in the unregistered marks as a mark. They instead use “Sturgis Motorcycle Rally” mostly to refer to the rally itself and only use “Rally & Races” as part of the Monahan mark, the federal registration for which disclaims the exclusive right to use “Motor Classic” or “Rally & Races.” See Registration No. 1,948,097. SMRI also directs us to photographs of its licensed products. But most of those products do not display the words “Sturgis Motorcycle Rally” or “Sturgis Rally & Races” as a standalone mark, using them instead—insofar as they use them—as part of a more elaborate name, such as SMRI‘s full corporate name, or mark. See, e.g., “75th Sturgis Motorcycle Rally 1938 2015,” Registration No. 4,871,446 (disclaiming the exclusive right to use “Motorcycle Rally“). Aside from the appearance of “Rally
Although some of SMRI‘s products use the words “Sturgis Motorcycle Rally” and “Sturgis Rally & Races” on their own, instead of as part of a more elaborate name or mark, SMRI did not present the jury with any direct proof of how consumers view those words. So the issue is whether the jury could reasonably infer that the primary significance of the words is as a source identifier. SMRI‘s fundamental difficulty here is that these unregistered word marks, like some of its registered marks, are common names for the rally itself. SMRI, for example, calls the rally the “Sturgis Motorcycle Rally” throughout its briefs, and it admits that the rally has been “known historically” as the “Sturgis Rally & Races.” But if the public already associates those names with the rally, the jury could not infer that whenever SMRI or the Chamber intended to use them as a mark (i.e., to identify SMRI or the Chamber as a source of rally-related goods and services), consumers actually interpreted them in that manner. Even when SMRI and the Chamber included trademark symbols within those names, the jury had no reason to infer that consumers interpreted the purported trademark as identifying a source of rally-related products and services, instead of the rally itself. Insofar as SMRI argues that the distinction between it, as a source of rally-related goods and services, and the rally itself is insignificant, we reiterate that the distinction is crucial: If consumers view SMRI‘s marks simply as indicating “an association with” the rally, then they are not viewing them as identifying a specific “brand” of rally-related things and thus are not viewing them as a mark. See OBX-Stock, 558 F.3d at 341.
The clearest uses of “Sturgis Motorcycle Rally” and “Sturgis Rally & Races” as marks are the hangtags that SMRI, and the Chamber before it, attached to some of their products. The tags declared that SMRI owns several marks, including “Sturgis Motorcycle Rally,” or that the Chamber owned some, too, including “Sturgis Rally & Races.” At some point, the Chamber also distributed shopping bags to vendors that told consumers to “Look for the Tag!” and buy officially licensed rally products. But SMRI does not provide us with much information about its hangtag campaign beyond the fact that it had one. A full-page ad for the campaign in the 2005 Official City of Sturgis Motorcycle Rally Magazine stated, “Browse through enough t-shirts, baseball caps and bandannas during the rally and you‘ll discover that there are dozens of different labels and logos for the event.” The ad made clear that only those labels and
C
Next, SMRI holds six federal registrations for its “Sturgis Bike Week” word mark, and certificates of registration for each of them were admitted into evidence. Some of the registrations were still contestable and thus subject to challenge for lack of secondary meaning. See
The defendants contest the jury‘s finding that the “Sturgis Bike Week” mark is valid, asserting that there was “no evidence” to support it. But that is not right: The certificates of registration in the record constituted prima facie evidence of the mark‘s validity. See WSM, 724 F.2d at 1326. We do not deny that evidence of a trademark‘s invalidity could be so overwhelming that no reasonable jury could refuse to accept it as rebutting a presumption that the mark is valid. The defendants, however, do not contend that that is the case here. The only proof of invalidity that the defendants cite is the testimony of three lay witnesses that “Sturgis Bike Week” is another common name for the rally. That is not overwhelming evidence, especially since the evidence supports a finding that Virginia Rhodes, who first registered the mark federally, has
The defendants also contend that the jury should have found that the “Sturgis Bike Week” mark is generic. See
Since the defendants do not dispute that the jury was presented with sufficient evidence to find that they had infringed the “Sturgis Bike Week” mark, if it is valid,
D
The defendants do not challenge the validity of the Monahan composite mark—only whether the jury had sufficient evidence to conclude that they both infringed it willfully and intentionally and also counterfeited it. Since the jury did not specify which of Rushmore‘s products infringed this mark, we must first determine what a reasonable jury could have found infringing. SMRI suggests that whenever Rushmore used the words “Sturgis,” “Sturgis Rally,” or “Sturgis Motor Classic” on a product, the jury could have found that it infringed the Monahan mark. But that is certainly not right. The Monahan mark is a composite mark displaying a specific, detailed design and almost a dozen words. It has long been the law that “[t]he commercial impression of a trade-mark is derived from it as a whole, not from its elements separated and considered in detail.” Estate of P.D. Beckwith, Inc. v. Comm‘r of Patents, 252 U.S. 538, 545-46 (1920). So “rather than consider the similarities between the component parts of the marks, we must evaluate the impression that each mark in its entirety is likely to have on a purchaser.” Sensient Techs. Corp. v. SensoryEffects Flavor Co., 613 F.3d 754, 764 (8th Cir. 2010). The fact that the dominant aspect of the Monahan mark and the “Sturgis,” “Sturgis Rally,” and “Sturgis Motor Classic” marks might be the word “Sturgis” does not mean that they are all similar. See id. That is especially true where, as here, the word “Sturgis” in the Monahan mark is descriptive of what the mark commemorates—the rally held each August in Sturgis, South Dakota—and thus represents a “weak” element of the mark. See Duluth News-Tribune v. Mesabi Publ‘g Co., 84 F.3d 1093, 1096, 1099 (8th Cir. 1996). Also, the federal registration for the Monahan mark disclaims the exclusive right to use the words “Motorcycle Classic” and “Rally & Races.” See Registration No. 1,948,097. The jury thus had no basis to conclude in the absence of direct proof that the defendants’ uses of “Sturgis,” “Sturgis Rally,” or “Sturgis Motor Classic” infringed the Monahan mark.
(On the left, Rushmore‘s shot glass; and on the right, SMRI‘s Monahan mark.)
1
The jury found not only that the defendants infringed the Monahan composite mark, but that they did so willfully and intentionally. The district court instructed the jury on the definition of “willfully” only in relation to SMRI‘s request to recover the defendants’ profits under
We hold that the trial evidence supports the jury‘s finding that the defendants’ infringement of the Monahan composite mark was willful and intentional. The record supports the findings that the Monahan mark has been widely used in connection with the rally since the mid-1980s and that some consider it, whether rightly or wrongly, the “official” logo of the rally (as opposed to the Chamber‘s and now SMRI‘s efforts in support of the rally). The record shows, moreover, that Rushmore knew about the mark and its frequent use on rally-related products, as evidenced by its 1999 license to use the mark for a year on postcards. The many similarities between the dominant design on the shot glass and the longstanding Monahan mark also provided the jury with a reason to conclude that Rushmore had consciously intended its glass to benefit from the goodwill that consumers may associate with the Chamber‘s and now SMRI‘s civic-minded mission statements: The mark and the dominant design on the glass share a circular shape; a geographic term (“Sturgis,” “Black Hills“) followed by the phrase “Motor Classic,” both names for the rally, are boldly written in an arc across the top; underneath those words, a bird of prey‘s head, facing right, emerges into each circle from the left; above and to the right of each bird‘s head are ten stars; under each bird and stars is a motorcycle; and near each circle‘s lower half are feather-shaped designs. The glass also states, “Genuine Article-Accept No Substitutes,” from which the jury could infer that Rushmore consciously intended consumers to confuse the dominant design on the glass with the closely similar “official” Monahan mark.
2
The jury found further that the defendants had produced “a counterfeit” of the Monahan mark. The Lanham Act defines “counterfeit” as “a spurious mark which is identical with, or substantially indistinguishable from, a registered mark.”
III
In addition to finding that the defendants had infringed five of SMRI‘s marks, the jury found that they also engaged in deceptive trade practices, false advertising, and unfair competition. The defendants say that the district court should have granted their motion for judgment as a matter of law as to these claims, too. We review the district court‘s decision de novo. Holmes, 895 F.3d at 1001.
SMRI claimed that the defendants had committed deceptive trade practices in violation of South Dakota law. The relevant statute makes it unlawful for a person “[k]nowingly [to] act, use, or employ any deceptive act or practice, fraud, false pretense, false promises, or misrepresentation or to conceal, suppress, or omit any material fact in connection with the sale or advertisement of any merchandise.” See
SMRI‘s claim had a statute of limitations of “four years after the occurrence or discovery of the conduct which is the subject of the action.”
Under South Dakota law, SMRI may recover only the “actual damages” that it suffered “as a result of” the defendants’ deceptive acts and practices.
The defendants also assert that “[t]he invalidity of the underlying marks defeats this [deceptive trade practices] claim.” But we have rejected the defendants’ argument that SMRI‘s “Sturgis Bike Week” mark is invalid since it is generic, and so the jury‘s finding of validity stands undisturbed. The defendants, moreover, did not contest the validity of SMRI‘s Monahan mark. Since they do not develop their argument beyond that single sentence, we hold that they have forfeited it. Roberts, 881 F.3d at 1053. We also reject their argument that the jury‘s verdict as to SMRI‘s false-advertising and unfair-competition claims must be reversed once we have held, for example, that SMRI did not prove that its “Sturgis” mark is valid. The district court did not submit
IV
SMRI challenges only one aspect of the district court‘s order on the defendants’ motion for judgment as a matter of law: It contends that the district court abused its discretion by considering JRE‘s defense that it was not subject to suit. Trip Mate, Inc. v. Stonebridge Cas. Ins. Co., 768 F.3d 779, 784 (8th Cir. 2014). Under South Dakota law, a party may not enforce any claims against a dissolved domestic corporation that lacks undistributed assets.
The defendants note that SMRI has known since at least 2012 that JRE is a defunct South Dakota corporation without assets: In the statement of material facts accompanying its summary-judgment motion in 2012, SMRI specifically noted that JRE had been dissolved since 2010, and in their response the defendants asserted that JRE no longer had any assets. But that is not exactly the issue. The issue is whether SMRI had actual notice that JRE was going to use those assertions as a legal defense. JRE does not direct us to any proof that it alerted SMRI to its defense before trial. But we have held that it may nonetheless be implied that a party consented to the trying of a defense “if evidence to support [it] was introduced at trial without objection.” Clark v. Martinez, 295 F.3d 809, 815 (8th Cir. 2002). At trial, the defendants, without objection, elicited testimony from Paul and Brian Niemann about JRE‘s dissolution as a corporate entity and the distribution of all of its assets to Rushmore to settle an outstanding debt. The single item of evidence that SMRI contends it had “no notice”
SMRI argues that the district court later erred in granting judgment to JRE since the jury was not instructed on the defense. But, as we explained, the failure to present an issue to the jury does not preclude our review of whether the district court should have granted judgment as a matter of law on the issue. Estate of Snyder, 789 F.3d at 886. SMRI‘s only other argument against the district court‘s decision is that since JRE sold its assets to Rushmore to pay its debt to Paul and Carol Niemann, SMRI should have been allowed to recoup the assets’ sales price, presumably from Paul and Carol Niemann, to satisfy the judgment against JRE. The relevant statute, however, permits the enforcement of a claim against only a defunct corporation‘s “undistributed assets,” see
V
After the jury rendered its verdict, the district court entertained the equitable defenses that the defendants had raised in their answers to the amended complaint, ruling that SMRI was estopped by laches and by its acquiescence from recovering damages from the defendants. SMRI argues that the district court should not have ruled on the equitable defenses since SMRI had a Seventh Amendment right to have a jury decide them and, SMRI argues further, the defendants forfeited their defenses when they did not submit them to the jury. That argument is wrong. In making it, SMRI misstates our precedent. In Masters v. UHS of Delaware, Inc., 631 F.3d 464,
SMRI contends that the district court could not consider the equitable defenses for another reason: When the defendants asked the court to determine their defenses, they did so in a filing that they styled a Rule 52 motion to make findings and amend the judgment. SMRI asserts that the filing was defective since its supporting brief was filed after the time limit set forth in Federal Rule of Civil Procedure 52(b). But that time limit applies only to motions to amend the findings that a district court has made “[i]n an action tried on the facts without a jury or with an advisory jury.” See
The district court thus properly considered the defendants’ equitable defenses, and we review its decision to apply the defenses of laches and acquiescence for an abuse of discretion. Champagne Louis Roederer v. J. Garcia Carrion, S.A., 569 F.3d 855, 858 (8th Cir. 2009). SMRI asserts that the district court abused its discretion in applying those equitable defenses because the jury‘s finding that the defendants had willfully infringed SMRI‘s marks was equivalent to a finding that they had unclean hands and thus could not receive equitable relief. See Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 814–15 (1945). To bind the district court‘s equitable powers, a jury‘s findings must be on an issue “common” to the action‘s legal and equitable claims; otherwise, the court is free to treat the jury‘s findings as “merely
Whether the findings of the court and the jury are about a “common” issue may not be obvious on their face. Here, for example, one might surmise that the issue of willfulness was common to both SMRI‘s claim for damages, see
Even if willfulness was a common issue, there are at least two reasons why the district court‘s findings supporting equitable relief might not have conflicted with the jury‘s findings that their trademark infringement—specifically, of the Monahan mark and the “Sturgis Bike Week” mark, which are the only two left in this case—had been willful. First, even if the defendants engaged in “willful act[s] concerning the cause of action which rightfully can be said to transgress equitable standards of conduct,” the district court may still have the discretion not to apply the doctrine of unclean hands. See Precision Instrument Mfg. Co., 324 U.S. at 815. We have observed in other contexts that the unclean-hands defense may be invoked only against a party that has committed wrongdoing “of serious proportions,” see Saxon v. Blann, 968 F.2d 676, 680 (8th Cir. 1992), indicating that it might not be sufficient that the wrongdoing was willful if it was not also substantial to an appropriate degree. Cf. Pfizer, Inc. v. Int‘l Rectifier Corp., 538 F.2d 180, 195 (8th Cir. 1976). Other courts have stated as much, holding that unclean hands do not preclude the application of an equitable defense unless the plaintiff proves that the defendant has “engaged in particularly egregious conduct.” Serdarevic v. Advanced Med. Optics, Inc., 532 F.3d 1352, 1361 (Fed. Cir. 2008). We agree that the fact that a defendant was a willful infringer does not necessarily preclude the district court from granting the defendant equitable relief from an infringement claim. See Tisch Hotels, Inc. v. Americana Inn, Inc., 350 F.2d 609, 615 (7th Cir. 1965). Equity demands flexibility and eschews mechanical rules. Holland v. Florida, 560 U.S. 631, 649–50 (2010). In an appropriate case, a district court might determine that the defendant‘s willful infringement was sufficiently minor compared to the plaintiff‘s delay and acquiescence that the balance of the equities still favors the defendant. See Tisch Hotels, 350 F.2d at 615.
We raise the above possibilities simply to make clear that equitable relief may be available to the defendants here and thus that a remand on the issue would not be futile. A remand is appropriate here because the district court‘s order granting the equitable defenses relied in part on its findings that Rushmore had sold rally-related products bearing the word “Sturgis” to both the Chamber and its agents. The district court was entitled to infer that the Chamber (and, by extension, SMRI) knew that Rushmore was selling infringing goods to the Chamber itself and its agents. But since we have held that rally-related products using the word “Sturgis” were not infringing, it is no longer clear whether the district court would conclude based on the evidence remaining that acquiescence and laches still apply. We thus vacate the district court‘s order granting those defenses. SMRI points out that the district court applied those defenses to non-Lanham Act claims without discussing whether or why they apply. If the district court determines after further fact-finding on remand that the equitable defenses apply, it should provide a “clear understanding” of the basis of its decision by setting forth in its order why each defense applies to each co-defendant and claim. See Rille v. PricewaterhouseCoopers LLP, 803 F.3d 368, 374 (8th Cir. 2015) (en banc).
The district court denied SMRI an award of attorney‘s fees under
VI
In conclusion, we affirm the district court‘s denial of judgment as a matter of law to the defendants on SMRI‘s claims of deceptive trade practices, false advertising, and unfair competition, and also on its trademark-infringement claims pertaining to its “Sturgis Bike Week” and Monahan marks. We also affirm the court‘s granting of judgment as a matter of law to co-defendant JRE, Inc. We vacate the judgment below as to SMRI‘s cybersquatting claim and remand it for a new trial. Since SMRI did not
We remand the case for further proceedings consistent with this opinion.