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

239 F.Supp.3d 1128

STURGIS MOTORCYCLE RALLY, INC., Plaintiff,

v.RUSHMORE PHOTO & GIFTS, INC. ; JRE, Inc., Carol Niemann; Paul A. Niemann; Brian M. Niemann; and Wal–Mart Stores, Inc., Defendants,andRushmore Photo & Gifts, Inc. ; JRE, Inc.; Carol Niemann; Paul A. Niemann; and Brian M. Niemann, Counterclaimants,

v.Sturgis Motorcycle Rally, Inc., Counterclaim Defendant.

CIV. 11–5052–JLV

United States District Court, D. South Dakota, Western Division.

Signed March 10, 2017

Michael C. Loos, Courtney R. Clayborne, Clayborne, Loos & Sabers, Rapid City, SD, Jason M. Sneed, Charles Marvin Landrum, III, Megan E. Sorokes, Sneed PLLC, Davidson, NC, for Plaintiff.

Brian L. Stender, Eric H. Chadwick, Aaron W. Davis, Patterson Thuente Pedersen P.A., Minneapolis, MN, Jana Smoot White, Jeffrey R. Connolly, J. Crisman Palmer, Gunderson, Palmer, Goodsell & Nelson, LLP, Michael S. Beardsley, Beardsley, Jensen & Lee, Prof. L.L.C., Rapid City, SD, for Defendants.

ORDER

JEFFREY L. VIKEN, CHIEF JUDGE

INTRODUCTION

On April 24, 2012, plaintiff Sturgis Motorcycle Rally, Inc., ("SMRI") filed an amended complaint alleging trademark infringement and other claims. (Docket 52). On May 4, 2012, defendants Rushmore Photo & Gifts, Inc., JRE, Inc., Carol Niemann, Paul Niemann, and Brian Niemann (jointly referred to as the "RPG Defendants") filed their answer and counterclaim. (Docket 55). On May 16, 2012, SMRI filed its reply to the RPG Defendants' counterclaim. (Docket 58). On May 18, 2012, defendant Wal–Mart filed its answer.¹ (Docket 60).

On October 30, 2015, after a ten-day jury trial, the jury returned a unanimous verdict in SMRI's favor on the following counts: (1) registered trademark infringement, (2) unregistered trademark infringement; (3) trademark dilution; (4) deceptive trade practices; (5) violations of the Anti–Cybersquatting Consumer Protection Act; (6) false advertising; and (7) unfair competition. (Docket 264). The jury unanimously found in favor of SMRI on its claims of infringement of the registered STURGIS®, STURGIS BIKE WEEK®>, and Composite Design marks and of the unregistered STURGIS MOTORCYCLE RALLY™ and STURGIS RALLY & RACES™ marks (jointly referred to as "SMRI's Marks"). (Docket 264). The jury also unanimously found in favor of SMRI on its claim of dilution of the famous STURGIS® mark. Id. The court entered judgment on those claims in favor of SMRI on December 2, 2015. (Docket 269).

On December 30, 2015, the defendants filed a motion for judgment as a matter of law under Federal Rule of Civil Procedure 50(b) or, in the alternative, for a new trial. (Docket 275). The defendants also filed a motion asking the court to enter findings of fact and conclusions of law on the defendants' equitable defenses. (Docket 276).

On December 31, 2015, SMRI filed a motion for a permanent injunction and seeking additional relief. (Docket 278). On January 19, 2016, the court entered an amended order staying briefing on all motions pending the filing of the trial transcripts. (Docket 285). On February 11, 2016, the court entered a preliminary injunction. (Docket 299). In that order, the court denied SMRI's request for a permanent injunction. Id. at p. 8. During the injunctive relief hearing held on February 5, 2016, the court advised the parties it would revisit plaintiff's request for a permanent injunction, if appropriate, following resolution of defendants' Rule 50(b) motion and the equitable defenses motion.²

The court resolves defendants' two motions (Dockets 275 & 276) in this order.

ANALYSIS

RULE 50(b) MOTION

The Federal Rules of Civil Procedure governing post-trial motions provide:

If the court does not grant a motion for judgment as a matter of law made under Rule 50(a), the court is considered to have submitted the action to the jury subject to the court's later deciding the legal questions raised by the motion. No later than 28 days after the entry of judgment—or if the motion addresses a jury issue not decided by a verdict, no later than 28 days after the jury was discharged—the movant may file a renewed motion for judgment as a matter of law and may include an alternative or joint request for a new trial under Rule 59. In ruling on the renewed motion, the court may:

(1) allow judgment on the verdict, if the jury returned a verdict;

(2) order a new trial; or

(3) direct the entry of judgment as a matter of law.

Fed. R. Civ. P. 50(b).

A Rule 50(a) motion can only be granted if "a reasonable jury would not have a legally sufficient evidentiary basis to find for [plaintiff] ...." Fed. R. Civ. P. 50(a). "Judgment as a matter of law is appropriate only when all of the evidence points one way and is susceptible of no reasonable inference sustaining the position of the nonmoving party." Howard v. Missouri Bone & Joint Center, Inc. , 615 F.3d 991, 995 (8th Cir. 2010) (internal quotation marks and citation omitted). The court "must not engage in a weighing or evaluation of the evidence or consider questions of credibility ... and ... must give great deference to the jury's verdict." Id. (internal quotation marks and citations omitted). The court may not reverse a jury's verdict unless it finds "no reasonable juror could have returned a verdict for the non-moving party." Anderson Marketing, Inc. v. Maple Chase Co. , 241 F.3d 1063, 1065 (8th Cir. 2001) (citation and internal quotation marks omitted); see also Structural Polymer Group, Ltd. v. Zoltek Corp. , 543 F.3d 987, 991 (8th Cir. 2008) ("In reviewing the sufficiency of the evidence to support the jury's verdict, [the court] interpret[s] the record in a light most favorable to the prevailing party, affirming unless no reasonable juror could have reached the same conclusion.").

During trial, defendants reserved their motion under Fed. R. Civ. P. 50(a) until the close of all the evidence. (Docket 315 at p. 245:1–15; see also Docket 316 at pp. 227:22–228:10).³ At the close of all the evidence defendants made and argued their motion pursuant to Rule 50(a) as to all of plaintiff's claims. (Docket 318 at pp. 189:6–272:5). The court granted defendants' motion as to plaintiff's state registration claims. Id. at pp. 263:20–264:22. The remainder of defendants' motion was denied. Id. at pp. 189:6–272:2.

SMRI moves to dismiss defendants' Rule 50(b) motion as untimely and because the defendants did not file a brief in support of the motion as required by Fed. R. Civ. P. 7(b)(1) and D.S.D. Civ. LR 7.1(B). (Docket 372 at pp. 3–5). For these reasons, plaintiff argues the court should deny defendants' Rule 50(b) motion. Id. at p. 5.

SMRI acknowledges the 28–day deadline under Rule 50(b) was December 30, 2015. Id. at p. 4. Defendants' motion was filed on December 30, 2015. (Docket 275). Defendants' motion also requested a stay of briefing until the trial transcript was received. Id. at p. 4. The court granted defendants' motion to stay briefing. (Docket 277 at p. 1). Defendants' brief in support of the Rule 50(b) motion was timely filed. (Docket 349). Plaintiff's motion to dismiss the defendants' motion as untimely is denied. (Docket 372 at p. 3).

Each component of the defendants' Rule 50(b) motion will be separately addressed. The court will summarize the trial testimony in the light most favorable to support the jury's verdict. Anderson Marketing, Inc. , 241 F.3d at 1065 ; Structural Polymer Group, Ltd. , 543 F.3d at 991.

A. "STURGIS"

Defendants argue "STURGIS" is generic and the court must vacate the jury's verdict and grant the Rule 50(b) motion because "[t]here are no material facts in dispute with respect to genericness." (Docket 349 at p. 6). Defendants also challenge the court's jury instruction on the definition of "generic." (Docket 384 at p. 2 n.1).

The court will first address the jury instruction challenge. Prior to the pretrial conference, defendants proposed an instruction on the definition of "generic." (Docket 174 at p. 52). Critical to the present analysis is the language within defendants' proposed instruction which stated: "If the primary significance of the alleged mark to the consuming public is to identify the product or service rather than a single source of that product or service, the term is a generic name and cannot be a valid trademark." Id.

The court's proposed "Instruction No. 24—Affirmative Defense–Generic Name," which ultimately was given to the jury, in material part stated: "A term is ‘generic’ if its primary meaning to prospective purchasers is the product category itself rather than a single source of that product." (Docket 235 at p. 38) (capitalization omitted). The court's instruction required the defendants to prove by the greater convincing weight of the evidence the word "STURGIS" was generic. Id. at p. 39.

During the settlement of primary instructions,⁴ defendants objected to the court's proposed language. (Docket 214 at pp. 177:8–186:25). Defendants argued:

[Plaintiff's attorneys] are misstating the law and to limit it that it only can be through a product category; it's also talking about a product; it can also be a service.... [I]n in this situation, we have somebody referring to Sturgis that we are putting up evidence that people are going to know what that means. And I don't mean that they know that Sturgis refers to that generic term I used to refer to that motorcycle rally that takes place around Sturgis in early August of every year.

Id. at p. 181:5–8 & 14–19. The court asked for briefing to propose a definition of "product category." Id. at pp. 183:1–17 and 186:13–18.

Plaintiff's counsel assured the court that post-pretrial conference briefing would provide a definition of "product category" for use in the court's instruction. Id. at p. 186:19–20. Plaintiff did not provide the court with a definition of "product category." See Dockets 207 & 212. Defendants' brief reemphasized their objection to the use of the phrase "product category."

[I]f the primary significance of the name "Sturgis" is to identify the product or service, and not to identify their source , then the name "Stu

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