slep-tone v. duffy's : 13-cv-00560

7/29/2019 Slep-Tone v. Duffy's : 13-cv-00560

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IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF OREGON

SLEP-TONE ENTERTAINMENTCORPORATION,

Pl a i n t i f f ,v.

DUFFY'S IRISH PUB and BCK,CORPORATION,Defendants.

COFFIN, Magis t ra te Judge:

No. 6:13-cv-560-TCFINDINGS & RECOMMENDATION

P l a i n t i f f br ings t h i s ac t ion a l leg ing t rademark in f r ingement ,unfa i r competi t ion, and common law pass ing o f f . Defendants move todismiss .

P l a i n t i f f obta ins l i censes to copyr ighted songs to c rea teder iva t ive works packaged and branded as Sound Choice produc t andmarketed to th e karaoke i ndus t ry . P l a i n t i f f owns the Sound Choicet rademark and the assoc ia ted display t rademark, as wel l as thet r ade dress .

1 - FINDINGS & RECOMMENDATION

Case 6:13-cv-00560-TC Document 29 Filed 09/18/13 Page 1 of 7 Page ID#: 142


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P l a i n t i f f a l leges t h a t defendant i s in possess ion of andr egu la r ly u t i l i ze s unauthorized "media-shi f ted" and " format -sh i f t ed" dupl ica tes of karaoke accompaniment t racks which have beenfa l se ly marked with p l a i n t i f f ' s t rademarks and /or carry d i s t i nc t ivet rade dress . 1 While p la in t i f f permi t s media-shi f t ing and/orformat-sh i f t ing of i t s authorized product , it does so only underce r t a in condi t ions and to lerances . 2 Pl a i n t i f f a l leges t h a t it hasnot au thor ized defendant to use and display p l a i n t i f f ' s productbear ing i t s t rademark and t rade dress nor has it authorizeddefendant to provide se rvices in connect ion with such marks ort rade dress . Accordingly, p la in t i f f a l leges t h a t defendant has notobtained permiss ion to conduct media-shi f t ing or format-sh i f t ing ofp l a i n t i f f ' s or ig ina l product .

P l a i n t i f f a l leges t h a t defendan t s ' use of p l a i n t i f f ' s marks i sl i ke ly to cause confusion or deceive defendant s ' customers in tobe l ieving t ha t defendant s ' karaoke se rvices are author ized and t ha t

1 "Media-shi f t" means copying the karoake accompaniment t r acksfrom compact discs to o ther media such as a hard disc dr ive ."Format -sh i f t " means conver t ing the f i l e s of accompaniment t racksto a d i f f e r e n t format such as from CD+G to MP3G or WAV+G.

2 P l a i n t i f f does not exp l i c i t l y al lege any to le rancesassoc ia ted with f i l e compression t ha t may t ake place in formatsh i f t ing such as conver t ing a Red Book CD+G or WAV+g to a low b i tra t e MP3G. In addi t ion , p la in t i f f does not exp l i c i t l y al lege anydegradat ion in qua l i ty assoc ia ted with format-sh i f t ing . P l a i n t i f fdoes al lege t h a t "coun te r fe i t s " t ha t include i t s t rademark arev i r t ua l l y ind i s t ingu ishab le from the "genuine and l i censed SoundChoice mater i a l s . " Nonetheless , discovery on t h i s i ssue couldrevea l degradat ion and demonst ra te defendants are pass ing o ff ani n f e r io r product as p l a i n t i f f ' s produc t .2 - FINDINGS & RECOMMENDATION



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defendants ' music l ib ra ry contains l i censed Sound Choiceaccompaniment t r acks . P l a i n t i f f fu r the r a l l eges t h a t consumers arel ike ly to be deceived in to be l ieving t h a t p l a i n t i f f sponsored orapproved defendan t s ' se rv ices . P l a i n t i f f a lso a l leges t ha tdefendan t s ' use of i t s marks w i l l i l l e g i t im a te ly convey the t r acksas sourced di rec t ly from p l a i n t i f f .

Defendant BCK asse r t s t h a t it obta ined a karaoke machineloaded with approximately 14, 000 t r a cks when purchased Duffy 'sI r i s h Pub in Lebanon, Oregon in 2008. Defendants concede t h a t someof th e t r acks on the machine di sp lay th e Sound Choice mark whenplayed. P l a i n t i f f a l l eges t h a t th e t r a cks were "crea ted throughunauthor ized dup l ica t ion ," and "or ig ina ted , d i r e c t ly or ind i rec t lyin an unbroken sequence, from the same ul t imate source , namelycompact di sc s sold by the p l a i n t i f f and made from master recordingsbelonging to th e p l a i n t i f f . " Fi r s t Amended Complaint (#8) a t '!I 85.

Defendants argue t h a t the complaint must be dismissed becausep l a i n t i f f a s se r t s a copyright cla im disgu i sed as t rademarkinf r ingement i n .v io la t ion of the Supreme Cour t ' s hold ing in DastarCorp. v. Twent ie th Century Fox Film Corp. , 539 U.S. 23 (2003) .

The i s sue r a i sed by the motion to dismiss i s not whether thecompla int adequate ly pleads the elements of t rademark infr ingement .Rather , defendants a s se r t t h a t t rademark law cannot be extendedin to t h i s case because th e cla im i s ac tua l ly occupied by copyright




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law. 3 The problem with i n t e l l e c t u a l proper ty , as opposed to aphys ica l product , with re spec t to p ro tec t ions af fo rded under th eLanham Act proh ib i t ing unfa i r compet i t ion and th e Trademark Actproh ib i t ing t rademark in f r ingement , i s th e p o t e n t i a l fo r c o n f l i c twith copyr igh t law. For ins tance , in Dastar , the i s sue was whethera pass ing o ff claim with respec t to a movie in th e publ ic domain inessence permi t t ed a cause of ac t ion where th e r igh t to copy withouta t t r i bu t ion had passed on to the pub l ic . In other words, th ei n t e l l e c t u a l proper ty a t i s sue was no longer pro tec t ed by copyr igh tlaw, but the producer of the work sought to asse r t a t rademarkinfr ingement c laim fo r fa i l ing to a t t r i bu t e i t s or ig in to th eproducer . The Court held , however, t ha t "reading th e phrase' o r ig in of goods ' in the Lanham Act in accordance with th e Act ' scommon-law foundat ions (which were not designed t o p r o t ec to r i g i n a l i t y or c re a t iv i t y ) , and in l i g h t of the copyr igh t andpa ten t laws (which were ) , we conclude t h a t the phrase re fe rs tothe producer of the t ang ib le goods t h a t a re of fe red for sa le , andnot to the au thor of any idea , concept , or communication embodiedin those goods." Id . a t 37. In t h i s case, defendants argue t h a tp l a i n t i f f nominal ly a l leges a claim asse r t ing t rademarkinfr ingement based on confusion about th e source of the t r a cks t h a t

3 I t appears t h a t p l a i n t i f f cannot a s se r t cla ims fo r copyr igh tv io la t ion because it only has a l i cencesongs. I t i s not c l ea r if the a r t i s t s or apubl i sh ing companies re ta in th e r i g h tin f r ingement .4 - FINDINGS & RECOMMENDATION

to use the underlyingr igh t s management/musicto sue fo r copyright



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a r i ses when they are played, but t h a t what p l a i n t i f f rea l ly a l legesi s t h a t it was not paid fo r the unauthorized copies of the t r a ck s ,i . e . , a copyright type of cla im. Defendants contend t h a t p l a i n t i f fi s at tempt ing to use t rademark law to p ro tec t the i n t e l l ec t ua lcontent of crea t ive works in v io la t ion of Dastar .

However, it does not appear p l a i n t i f f i s seeking to p ro t e c tth e i n t e l l ec t ua lp l a i n t i f f merely

con ten tholds a

of the underlyingl i cence to c rea te

work. I t appearsder iva t ive works.

P l a i n t i f f ' s t rademark pro tec t s th e l i c ensee and i t s der iva t ive workand se rv ice , which i s not protec ted by copyr igh t a t any t ime.P l a i n t i f f i s not plac ing i t s t rademark on the karaoke t r a cks todemonst ra te it i s the au thor of the underlying songs, but t h a t iti s in e f f e c t a sponsor of the der iva t ive work and se rvices r e l a t e dto a pa r t i c u l a r type of use of the underlying songs assoc ia ted withkaraoke. The value of the product i s not th e underlying au thorsh ipof the songs, but the brand assoc ia ted with the karaoke show.Indeed, p l a i n t i f f a l leges t h a t th e elements of i t s t r ade dressrepresent a spec i f i c design choice as one of many ways to conveyth e necessary in format ion to permi t th e karaoke s inge r to be cuedor appropr i a t e ly supported in h is or her performance.

The Ninth Ci rc u i t ' s ru l ing in Sybersound Records , Inc. v. UAVCorp. , i s not on poin t with t h i s case. In Sybersound, the cour theld t h a t where a karaoke d i s t r i bu to r sought to br ing an u n f a i rcompet i t ion claim aga ins t compet i tors who were producing competing




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products without th e proper l i cens ing to the underlying works, theLanham Act could not be used because it would requi re l i t i ga t ion ofthe underlying copyrights and Sybersound lacked s tanding to br ingsuch copyr igh t c la ims . Id . a t 1144. P l a i n t i f f does not a l leget rademark v io la t ion based on defendant ' s fa i lu re to obta in r igh t sto the underlying songs and thus gaining an unfa i r advantage byse l l ing a cheaper to produce ( i l l ega l ) product . P l a i n t i f f i sasse r t ing t ha t defendants are using p l a i n t i f f ' s product as ifp l a i n t i f f au thor ized such use in compliance with p l a i n t i f f ' sto le rances , causing confusion to consumers . The cour t need notdetermine whether defendants have v io la ted th e copyr igh t of theunderlying songs. Of course, us ing an apparen t ly exac t r ep l i c a ofp l a i n t i f f ' s der iva t ive work may not ac tua l ly cause any customerconfusion, but t ha t i s not an i s sue appropr i a t e ly resolved on amotion to dismiss . Further , as noted above, p l a i n t i f f a l leged lyprovides "se rvices" along with th e under ly ing works and defendanta l legedly deceives i t s customers in to be l ieving t h a t such se rv ice sare sanct ioned and within the to le rances of the Sound Choice brand.Accordingly, the case i s not subjec t to dismissa l a t t h i s s t age .

CONCLUSIONFor the reasons s t a t ed above, defendan t s ' motion to dismiss

(#20) should be denied.




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This recommendation i s not an order t h a t i s immediate lyappealab le to the Ninth C i rc u i t Court of appea ls . Any not ice ofappea l pursuan t to Rule 4(a) (1) , Federa l Rules o f Appel la teProcedure , should not be f i l e d u n t i l en t ry of the d i s t r i c t c o u r t ' sjudgment or appea lab le order . The p a r t i e s sh a l l have four teen (14)days from the date of s e rv i ce o f a copy o f t h i s recommendationwith in which to f i l e s p ec i f i c wri t t en objec t ions with the cour t .Thereaf te r , the p a r t i e s s h a l l have four teen (14) days with in whichto f i l e a response to th e objec t ions . Fai lu re to t imely f i l eobjec t ions to any fac tua l determinat ion o f th e Magis t ra te Judgew i l l be cons idered as a waiver o f a pa r ty ' s r i g h t to de novocons idera t ion o f th e fac tua l i ssues and w i l l co n s t i t u t e a waiver ofa pa r ty ' s r i g h t to appe l l a t e review o f the f indings o f f ac t in anorder or judgment en te red pursuan t to t h i s recommendat ion.

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DATED t h i s [S't day of September, 2013.

- FINDINGS & RECOMMENDATION

M. COFFINMagis t ra te Judge


slep-tone v. duffy's : 13-cv-00560

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