On Monday July 15, 2013 the Sturgis Officials invited residents to a city council to share any concerns they may have with the city taking side with SMRI, the organization currently owner of the Sturgis trademarks, but challenged in court by opponents who allege that these trademarks were fraudulently acquired. Dean Kinney and Ross Lamphere, respectively president and member of SMRI, came to the meeting to present the organization and convince the Sturgis officials that nobody care more about Sturgis than SMRI.
SMRi President Dean Kinney, speaking before the council said “that if SMRi didn’t protect the marks they could be lost to someone else.” As a matter of fact, opponent Jack Hoel, son of “Pappy Hoel” who is considered the founder of the Sturgis Motorcycle Rally, correctly reminded those present that the rally did pretty well the first 50 years without the greed factor being thrown in by SMRI. The marks never got lost to anyone or to any group…until SMRI acquired it. “Don’t fall for that line” (the name Sturgis could be lost to someone else) added Jack Hoel “We are not best served by one group controlling the words Sturgis or Black Hills.” In 2011, SMRi started a federal lawsuit against Rushmore Photo & Gifts and Wal-Mart, alleging that they have infringed on its trademarks by selling items that say “Sturgis” without getting the permission of SMRi. The courts recently have said that the question should be determined by a jury.
Sturgis City Manager Daniel Ainslie acknowledged that the creation of SMRI, the defense and en forcement of their trademarks have been quite contentious and divisive throughout the community, but also stated that the trademarks have resulted in the single largest return to the community. of Sturgis The total value of the city’s licensing program in 2012 was $269,440, $115,057 in sponsorship and $154,383 from magazine income. But the city paid Sturgis Motorcycle Rally Inc. $26,944 in 2012 in licensing fees so that the city could solicit Sturgis rally sponsorships. Under a five-year contract approved in January with SMRi, the city if Sturgis will continue to pay 10 percent to SMRi for the use of the Sturgis trademarks (the name Sturgis, Sturgis Motorcycle Rally, Sturgis Bike Week, Take the Ride to Sturgis, Sturgis Rally & Races, and Black Hills.)
Ainsle added that “It is undeniable that this act (the creation of SMRI) was contentious and has fostered deep suspicion amongst several within our community. However, the transfer has occurred and for the first time the Sturgis motorcycle rally trademarks have been perfected and are all housed within one non-profit organization” “It’s impossible for the community to turn back now with regards to the trademark issue.”
SMRI opponent Jack Hoel said that the city is setting itself up for liability by supporting SMRi. “Given the fact that a city is deemed to have ‘deep pockets’ Sturgis may have to pay a steep penalty for being on the wrong side,” Ainslie doesn’t agree. “Though a very understandable concern, this would not occur. The act of supporting an organization or having a representative on a nonprofit board does not financially bind one entity to another.” The Sturgis city council plans to take a definitive position, for or against SMRI. at its meeting on July 29.