Sturgis city officials say the city has no part in a Sturgis Area Chamber of Commerce lawsuit alleging trademark infringement by a motorcycle rally in Sturgis, Ky.

The city issued a news release saying the chamber filed the lawsuit without the knowledge or consent of the city.

"We didn't know it was coming," Pepper Massey, director of the city Rally Department, said.

The suit was filed March 20, in U.S. District Court in Rapid City.

Sturgis City Manager David Boone said Friday that the city is not involved in the lawsuit, and the city's annual payment to the chamber is not being used to pay for the lawsuit.

Boone said the annual stipend to the chamber - about $90,000 - is targeted only to retail, tourism and visitor-services efforts.

The chamber receives 10 percent of the rally sponsorship revenue generated by the city, Boone said. The chamber uses proceeds from licensing the rally name and logos to support community and economic development projects, according to the complaint.

Chamber board president Scott Reiman said Friday that no city tax money nor regular chamber operating funds are being used for the lawsuit. Reiman said funding for the lawsuit comes from revenues the chamber receives from licensees who use the chamber trademark. The chamber's attorney is working without pay on the suit, according to chamber executive director Michele Loobey-Gertsch.

Boone said the city also is not a party to other ongoing trademark disputes between the chamber and several other entities, including Sturgis Bike Week.

But Boone said the chamber is doing what it believes to be in the best interests of the chamber members in enforcing the trademarks.

"If you don't enforce the trademarks and protect them, you in effect lose them," Boone said.

Chamber officials said in the complaint that they have organized, sponsored, marketed and promoted the rally, spending substantial sums of money, and that they are filing the complaint to protect the return on that investment.

The complaint alleges the Kentucky group's use of the name "Little Sturgis Rally" constitutes trademark infringement, false designation of origin, unfair competition and deceptive trade practice.

The trademark lawsuit has drawn some criticism. Shannon Willett of Rapid City, a former resident of Sturgis, Ky., in a letter to the editor of the Rapid City Journal, said the small town needs its rally to generate income. The Kentucky Sturgis has no big grocery stores or department stores, relying mainly on farming and coal mining, she said.

Jack Hoel of Sturgis, son of the Sturgis rally founder the late Pappy Hoel, called the lawsuit an "embarrassment."

"I think it's shameful," Hoel said. "The chamber of commerce does nothing for the rally. The only thing they do is try to sell their logo."

Hoel argues that the chamber is trying to protect a trademark that it hasn't been granted.

Hoel referred to other disputes between the chamber and Sturgis Bike Week and other parties over rally trademarks.

Sturgis Bike Week has a trademark for that logo on T-shirts and caps, according to Francie Ruebel-Alberts, a spokeswoman for Sturgis Bike Week. In 2000, Sturgis Bike Week applied to the U.S. Patent and Trademark Office to expand its trademark for other products. The chamber opposed that move, and Sturgis Bike Week opposed the chamber's registration of the Sturgis trademark.

The issue, along with those raised by two other groups, remains before the Patent and Trademark Office, Ruebel-Alberts said.

Reiman said the overall trademark issue has been simmering for about eight years.

Reiman said the chamber filed suit against Little Sturgis, Ky., after not getting any response to a letter sent to that rally several months ago.

He said the chamber has nothing against the people of Sturgis, Ky., nor the charity that benefits from that rally.

"It's unfortunate that we had to file this complaint, but we did it because we were advised that if we are going to have a trademark, we have to try to protect it," Reiman said Friday.

He noted that there are two city council representatives on the chamber board, which voted about six months ago to take action against the Kentucky rally.

Boone and Reiman said the city and the chamber are working with other parties to resolve the trademark issues.

"I think we're making headway," Reiman said. "We're trying to do everything we can right now to put this thing to rest."

Meanwhile, the chamber is not seeing major fallout from its members, executive director Loobey-Gertsch said. "I have one concerned member," she said, but no members have pulled out of the chamber.

"I've had very limited response from outside of the community," she added.

Contact Steve Miller at 394-8417 or steve.miller@rapidcityjournal.com