United States District Court, S.D. Texas, Houston Division
MEMORANDUM AND OPINION
Rosenthal Chief United States District Judge
case brings with it an education on karaoke. The word
apparently comes from combining two Japanese words,
“kara, ” which means empty, and “okesutora,
” or orchestra. Karaoke, or “empty orchestra,
” is a type of interactive entertainment in which
amateur singers, here, customers of bars, restaurants, or
clubs, sing along with recorded music and video displays,
using a microphone and a public address system. A
“karaoke jockey” manages and plays the music and
shows the displays, announces the songs, and identifies whose
turn it is at the microphone. As this case and other similar
lawsuits demonstrate, karaoke is a highly competitive
business. This suit is one of hundreds that the plaintiff and
its predecessor, a producer and distributor of karaoke
accompaniment tracks, has brought around the country invoking
the Lanham Act, 15 U.S.C. § 1051 et seq., to
challenge the unauthorized copying and performance of its
commercial karaoke files as a form of trademark infringement.
case, Phoenix Entertainment Partners sued Houston-area bars
and two karaoke jockeys, alleging trademark and copyright
infringement of karoake tracks created under the Sound Choice
brand. (Docket Entry No. 26). Some defendants have moved to
dismiss. (Docket Entries No. 10, 28). Based on the briefs,
the complaint, and the applicable law, the motions to dismiss
are granted in part and denied in part.
alleges that the defendants infringe its goods marks when
they illicitly download and play Sound Choice-branded karaoke
tracks. That is trademark lipstick on a copyright pig.
Recognizing as much, both the Seventh and Ninth Circuits
affirmed dismissals of Slep-Tone or Phoenix suits alleging
substantially the same goods-mark infringement theories.
Phoenix Entertainment Partners v. Rumsey, 829 F.3d
817 (7th Cir. 2016); Slep-Tone Entm't Corp. v. Wired
for Sound Karaoke & DJ Servs., LLC, 845 F.3d 1246
(9th Cir. 2017). These well-reasoned opinions are on point
and persuasive. The claims based on copying and performing
tracks with the Sound Choice goods marks are dismissed with
prejudice and without leave to amend, because amendment would
cases apply only to the goods marks. The claims based on the
Sound Choice service marks and copyrights may proceed.
reasons for these rulings are explained in detail below.
complaint allegations, taken as true on this motion to
dismiss, are as follows. Phoenix Entertainment Partners is
the successor in interest to Slep-Tone Entertainment
Corporation. Slep-Tone created karaoke tracks under the
popular Sound Choice brand. Compl. ¶¶ 30-31. Sound
Choice karaoke tracks were sold on special compact discs in a
“CD” or “MP3” format.
Id. ¶ 31. The tracks contain both a re-recorded
version of a popular song and graphics (the
“”). Id. The graphics include song
lyrics and visual cues for display to the karaoke performer,
and an image of the Sound Choice trademark logo.
Choice karaoke tracks are “wildly popular, ”
accounting for more than half of the karaoke tracks played at
shows in the United States, including shows at bars like
those sued in this case. Their popularity is at least in part
due to the high quality of the recordings and the accuracy of
the singing cues. Id. ¶ 33-35. Phoenix sells,
and its predecessor sold, karaoke tracks exclusively in
compact disc format, bearing the Sound Choice name and logo.
Tracks from the CDs can be remotely “ripped, ” or
downloaded and saved, into a computer hard drive.
Id. ¶ 36-37. The digital compression required
to rip the tracks onto a computer hard drive often results in
lower-quality audio and graphics. Id. ¶ 38. The
ripped tracks still display the Sound Choice trademark when
played. Id. ¶ 41. This easy electronic
duplication has “resulted in the widespread copying and
distribution of Sound Choice-branded karaoke tracks, ”
without payment to or permission from Phoenix. Id.
alleges that it owns the copyright to, among others, 24
specific audiovisual karaoke tracks-separate from the
copyrights for the underlying songs-set out in the complaint,
as well as four federally registered Sound Choice trademarks.
Id. ¶¶ 46-50; id. at Appendixes A
and B. Two of the marks cover goods. These goods marks
protect the Sound Choice name and logo as a mark appearing on
“[p]re-recorded . . . compact discs containing musical
compositions and compact discs containing video related to
musical compositions.” The other two marks cover
services. These marks protect the Sound Choice name and logo
in connection with “[c]onducting entertainment
exhibitions in the nature of karaoke shows.” Compl.
Phoenix's business is “licensing . . . the Sound
Choice Marks for karaoke accompaniment tracks, . . .
licensing the Sound Choice Marks for karaoke entertainment
services provided to patrons of commercial customers, and . .
. licensing sets of Sound Choice karaoke accompaniment
tracks, all to commercial karaoke operators.”
Id. ¶ 53. Karaoke jockeys must spend
“significant sums of money” to receive a license.
Id. ¶ 54. As part of the license agreement,
karaoke jockeys who use digital copies of Sound Choice tracks
must submit to quality audits to ensure that their copied
tracks meet Sound Choice's standards. Id. ¶
is also the sole owner of Sound Choice Entertainment, LLC, a
Texas company that provides karaoke-entertainment services to
venues throughout the United States, including in Texas.
Id. ¶ 57. Sound Choice Entertainment directly
competes with other karaoke-entertainment service providers
in the karaoke jockey market.
defendants are karaoke jockeys and bars that hire jockeys to
provide entertainment for their patrons. Herbert and Jodie
Boyte are karaoke jockeys who own and operate Karaoke
Houston, a business that provides karaoke entertainment at
bars and restaurants around Houston. The Boyte karaoke system
uses computer software to access and play karaoke tracks
ripped from CDs and copied to a hard drive. A
“substantial number” of the tracks that the
Boytes or their employees play at the venues where they
perform bear the Sound Choice logo and brand. The
Boytes's karaoke shows also included renditions of the 24
works for which Phoenix owns the copyright. Id.
¶ 77. The Boytes did not purchase any Sound Choice disks
or license. “[M]any, if not most” of the Sound
Choice-branded tracks they played were created by downloading
the tracks from illicit filesharing sites or other
unauthorized copying. Id. ¶¶ 58-64. The
Boytes display the Sound Choice marks “dozens of times
over the course of a typical four-hour karaoke show.”
Id. ¶ 71. Phoenix alleges that this
“frequent, repeated display” of the Sound Choice
trademark is likely to cause karaoke consumers to assume that
the Boytes's karaoke operation is affiliated with
Phoenix, or that Phoenix sponsors or approves of their
services. Id. ¶ 72-76.
William Knights operates “Mr. Karaoke, ” a
business similar to the Boyte business, “Karaoke
Houston.” Phoenix alleges that Knights, like the
Boytes, regularly plays Sound Choice-branded karaoke tracks
at his shows, without purchasing or licensing those tracks.
Knights is also alleged to have ripped the tracks, without
paying or securing permission from Phoenix. Id.
¶¶ 83-89. Phoenix alleges that Knights's shows
are likely to confuse customers about the origin of the
karaoke tracks and about Knights's relationship with
Phoenix. Id. ¶¶ 96-100.
rest of the defendants are venues that hire either the Boytes
or Knights as karaoke jockeys, providing karaoke services to
entice patrons to come to the bar and purchase food and, even
better, drinks. Id. ¶¶ 103-132. Phoenix
notified each bar in a letter dated July 15, 2016 that the
karaoke jockeys it hired were playing unlicensed, infringing
karaoke tracks at all the bars where they played.
Id. ¶ 124.
asserts claims against all the defendants under 15 U.S.C.
§ 1114(1) for infringing its registered trademarks, and
under 15 U.S.C. § 1125(a) for unfair competition.
Phoenix also asserts a ...