Seventh Circuit – Trademark Law: Unauthorized Copying of Karaoke Tracks May be Piracy, but Not Trademark Infringement

Chicago, Illinois – The Seventh Circuit Court of Appeals ruled against Plaintiffs Slep-Tone Entertainment Corp. and its successor in interest Phoenix Entertainment Partners LLC (collectively, “Slep-Tone”) in a Lanham Act lawsuit asserting trademark infringement and trade dress infringement.

Trademark attorneys for serial litigant Slep-Tone have filed more than 150 lawsuits throughout the country under the Lanham Act alleging unauthorized copying and performance of Slep-Tone’s karaoke tracks. Slep-Tone contends that such activities constitute trademark infringement and trade dress infringement.

This federal litigation springs from a technology upgrade available to Slep-Tone customers. Earlier formats on which karaoke songs were offered included CD+G compact discs (with the +G referring to the graphic component) and MP3+G media. With the advent of large-capacity hard drives, some customers opted to transfer the files contained on their lawfully purchased CD+G or MP3+G to a hard drive, a practice known as “media shifting.” Because many compact discs can be stored on one hard drive, media shifting removed the need to swap between multiple discs to access different songs. This transfer was permitted by Slep-Tone as long as the customers notified Slep-Tone, agreed to certain terms that restricted multiple copies from being made and agreed to submit to an audit to certify compliance with Slep-Tone’s media-shifting policy.

In this lawsuit, filed against Defendants Basket Case Pub, Inc. of Peoria, Illinois and Dannette Rumsey, its president and owner, Slep-Tone alleged that Defendants violated the media-shifting policy. This, it asserted, resulted in an improper “passing off” of illegitimate “bootleg” copies of tracks as genuine Slep-Tone tracks.

Slep-Tone contended that when these unauthorized copies were played by Defendants, the pub’s customers would be confused, believing that “they are seeing and hearing a legitimate, authentic Slep-Tone track, when in fact they are seeing an unauthorized copy.” This conduct, it claims, is prohibited trademark and trade dress infringement.

A district court in the Central District of Illinois concluded that Slep-Tone had not plausibly alleged that Defendants’ conduct resulted in consumer confusion as to the source of any tangible good sold in the marketplace and dismissed Plaintiffs’ complaint.

The Seventh Circuit agreed. While the appellate court granted that Slep-Tone may have had a plausible complaint of copyright infringement for “theft, piracy, and violation of Slep-Tone’s [media-shifting] policy,” consumer confusion is the touchstone of trademark infringement and such confusion was not present. It stated:

What pub patrons see and hear is the intangible content of the karaoke tracks. They will see Slep-Tone’s trademark and trade dress and believe, rightly, that Slep-Tone is the source of that intangible content. But patrons will neither see nor care about the physical medium from which the karaoke tracks are played; consequently, any confusion is not about the source of the tangible good containing the karaoke tracks.

Because Slep-Tone’s assertions did not constitute trademark infringement or trade dress infringement, the Seventh Circuit affirmed the district court’s dismissal of the lawsuit.

The case was heard by Chief Judge Diane P. Wood, Illana D. Rovner and John Robert Blakey, District Judge, sitting by designation under Case No. 15-2844.

Opinion by Overhauser Law Offices on Scribd

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