Slep-Tone Entertainment Corporation; Phoenix Entertainment Partners, LLC, Plaintiffs-Appellants,
Wired for Sound Karaoke and DJ Services, LLC; Ernest Z. McCullar, Defendants-Appellees.
and Submitted December 12, 2016 San Francisco, California
from the United States District Court for the District of
Arizona, No. 2:12-cv-02631-NVW Neil V. Wake, District Judge,
M. Harrington (argued), Harrington Law P.C., Pineville, North
Carolina, for Plaintiff-Appellant.
Lorraine Morey (argued), Morey Law PLLC, Phoenix, Arizona,
Before: Susan P. Graber and Andrew D. Hurwitz, Circuit
Judges, and Richard F. Boulware, [*] District Judge.
panel affirmed the district court's dismissal of claims
for trademark infringement and unfair competition brought
under the Lanham Act by a producer of karaoke music tracks.
plaintiff alleged that the defendants performed karaoke shows
using unauthorized "media-shifted" files that had
been copied onto computer hard drives from the compact discs
released by the plaintiff. Agreeing with the Seventh Circuit,
the panel held that the plaintiff did not state a claim under
the Lanham Act because there was no likelihood of consumer
confusion about the origin of a good properly cognizable in a
claim of trademark infringement.
concurrently filed memorandum disposition, the panel reversed
the district court's summary judgment on a claim for
breach of a settlement agreement. Judge Hurwitz concurred in
part and dissented in part from the memorandum disposition.
is a "form of entertainment, originating in Japan, in
which a person sings the vocal line of a popular song to the
accompaniment of a pre-recorded backing tape, and the voice
is electronically amplified through the loudspeaker system
for the audience." OED Online (Dec. 2016),
http://www.oed.com/view/Entry/243613. Plaintiff Slep-Tone
Entertainment Corporation produces karaoke music tracks. The
tracks are marketed under the trademark "Sound
Choice." Plaintiff releases them on compact discs
encoded in a format known as "CD-G, " which
accompanies karaoke music with graphics, lyrics, and singing
cues when played on compatible equipment.
users are capable of copying the content of these CD-Gs onto
computer hard drives as digital files; Plaintiff refers to
this process as "media-shifting, " but it is also
popularly known as "ripping." Plaintiff
acknowledges the convenience of digital files for karaoke
operators (who need not use numerous CD-Gs during a
performance), but also reports that this widespread practice,
when combined with unauthorized file-sharing, "nearly
drove [the company] out of business." In the past,
Plaintiff "opposed all commercial media-shifting."
Today, it allows the practice within the confines of a
four-point "media-shifting policy" requiring that
users make only one digital copy per source CD-G; that the
physical media used to create the digital files are kept
"on the shelf" unused; that users notify Plaintiff
if they intend to create media-shifted copies; and that users
submit to auditing for compliance with these conditions.
Ernest Z. McCullar and his business, Wired for Sound Karaoke
and DJ Services, LLC, operate a karaoke business in the
Phoenix area. As alleged in the complaint, Defendants use
Plaintiff's Sound Choice tracks. In 2009, Plaintiff
learned that Defendants were using unauthorized media-shifted
files instead of Plaintiff's original CD-Gs. Plaintiff
filed a federal action against Defendants, alleging trademark
infringement. See Slep-Tone ...