Phoenix Entertainment Partners, LLC v. J-V Successors, Inc.
1:16-cv-09451
S.D.N.Y.Mar 31, 2018Background
- Phoenix Entertainment (successor to Slep-Tone) produces Sound Choice-branded karaoke accompaniment tracks (CD+G and MP3+G) and owns federal trademarks and service marks for those tracks and for conducting karaoke shows.
- Plaintiff alleges Keats Bar used copies of Sound Choice tracks (allegedly media-/format-shifted from CD+G to hard drives) bearing the Sound Choice marks, causing consumer confusion and constituting counterfeit goods and unfair competition.
- Plaintiff framed its claims under the Lanham Act (trademark infringement and unfair competition) because it does not own the copyrights in the underlying recordings.
- Defendant moved to dismiss for failure to state a claim; the court evaluated goods-mark and service-mark theories separately under Polaroid likelihood-of-confusion factors and Dastar-related precedent.
- The court dismissed claims based on the goods marks, adopting reasoning that trademark law cannot be used to police copying of underlying expressive content (avoiding a “mutant copyright law”).
- The court also dismissed the service-mark claims because Plaintiff failed to plausibly allege that the specific tracks used by Defendant were of diminished quality or that Plaintiff maintained and enforced quality-control procedures.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether use of Sound Choice goods marks to challenge media-shifted digital files states a Lanham Act claim | Phoenix: Marked digital copies bearing Sound Choice mark create consumer confusion as to origin/counterfeiting | Keats: Consumers don’t see/suspect the underlying digital goods; claim seeks to police copying of content (copyright-like) | Dismissed: Dastar bars using goods marks to police copying of expressive content; no confusion about producer of tangible goods |
| Whether service-mark use (karaoke shows) supports Lanham Act claim | Phoenix: Display of Sound Choice mark during shows causes consumers to believe Phoenix sponsors/approves services, creating confusion | Keats: Same Dastar reasoning and insufficient factual allegations of confusion or quality harm | Dismissed: Service-mark theory survives Dastar in principle, but Plaintiff failed to plausibly allege diminished quality or resulting confusion |
| Whether Plaintiff pleaded loss of quality-control and related injury | Phoenix: Media-shifting produces inferior copies and Phoenix lost ability to control quality of services/goods | Keats: Plaintiff offers only conclusory assertions; no factual showing of procedures or specific inferior tracks | Dismissed: Plaintiff did not allege existence/implementation of quality-control procedures or facts about the specific tracks played |
| Whether leave to amend or state-law claims alter outcome | Phoenix sought relief including injunction and damages; large number of related suits noted | Keats: Motion to dismiss challenges sufficiency of Lanham Act pleading | Court: Dismisses Lanham Act claims as described; no detailed ruling on state claims in text excerpt; leave to amend discussed but dismissal granted as to pleaded trademark/service-mark claims |
Key Cases Cited
- Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (explaining "origin of goods" means producer of tangible goods and cautioning against trademark use that would create a "mutant copyright law")
- Phoenix Entm’t Partners v. Rumsey, 829 F.3d 817 (7th Cir.) (applying Dastar to media-shifting claims and rejecting goods-mark theory)
- Slep-Tone Entm’t Corp. v. Wired for Sound Karaoke & DJ Servs., 845 F.3d 1246 (9th Cir.) (adopting Dastar-based analysis to reject trademark claims over copied karaoke files)
- Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 588 F.3d 97 (2d Cir.) (describing Lanham Act infringement/unfair competition analysis and Polaroid factors)
- Estee Lauder Inc. v. The Gap, Inc., 108 F.3d 1503 (2d Cir.) (stating elements for Lanham Act infringement)