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TSIOLIS v. INTERSCOPE RECORDS

November 7, 1996

KYRIAKOS TSIOLIS, Plaintiff,
v.
INTERSCOPE RECORDS, INC., AFTERMATH ENTERTAINMENT, and ANDRE YOUNG (a/k/a "Dr. Dre"), Defendants.



The opinion of the court was delivered by: NORGLE

 CHARLES R. NORGLE, SR., District Judge:

 May a band named "Aftermath" keep other musicians from using the word "Aftermath" for the name of an album or record label where the bandleader holds a registered trademark to the word "Aftermath"? Not at this early juncture. Plaintiff's motion for preliminary injunction is denied. All parties shall appear for trial on December 10, 1996 at 10:00 a.m.

 I.

 This is an action for unfair competition, federal and common law trademark infringement, deceptive trade practices and trademark dilution. It arises out of Defendants' present and threatened use of the name "Aftermath" in connection with their promotion and distribution of popular music works. Plaintiff Kyriakos Tsiolis' ("Tsiolis") Complaint includes the following counts and alleged causes of action: Count I, Federal Trademark Infringement in violation of 15 U.S.C. § 1114(l); Count II, Unfair Competition under § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); Count III, Common Law Trademark Infringement; Count IV, Deceptive Trade Practices in violation of the Illinois Consumer Fraud and Deceptive Trade Practices Act, 815 ILCS § 505/1; and Count V, Antidilution in violation of the Illinois Antidilution Statute, 765 ILCS § 110/1.

 A. Aftermath: The Band

 In 1991, Tsiolis applied for, and obtained, an Illinois Trade Name Registration for the name "Aftermath." In 1992, the United States Patent and Trademark Office ("USPTO") issued to Tsiolis Registration Number 1,692,053 for the Service Mark "Aftermath." The USPTO registered the mark for Tsiolis' use in connection with musical performances, audio recordings and productions.

 At its inception, the Band attempted to market itself as an "underground band," one which rejects mass appeal and prides itself on having a small, local following. However, with increased media exposure of the "Words That Echo Fear" demo tape, the Band received offers for recording contracts from several entertainment companies, also known as record labels, which produce and market various musical artists. The Band entered into a contract with Big Chief Records ("Big Chief") in New York City, which had distribution arrangements through Warner Brothers Records. Big Chief contracted to record, produce, and market an album named "Eyes of Tomorrow," with an option to similarly produce and market subsequent records. Unfortunately for the Band, Big Chief went bankrupt in 1991, prior to the completion of recording the album. Instead of attempting to sign with another record label, the Band chose to fund the completion of the album. The Band members spent approximately $ 4,500 of their own funds to buy the master of the recording for "Eyes of Tomorrow," and Tsiolis and his brother then formed their own record label, Zoid Recordings. Tsiolis then released the "Eyes of Tomorrow" compact disc ("CD") under the Zoid Recordings name in October 1994. Thereafter, Tsiolis and the Band entered into a distribution deal for the "Eyes of Tomorrow" album with a commercial distributor, Feedback Distribution, through its in-house label, Thermometer Sound Surface ("Feedback/Thermometer"). Feedback/Thermometer reissued "Eyes of Tomorrow" in both CD and cassette tape versions.

 A computer printout generated by Soundscan, Inc. ("Soundscan") shows that, as of October 13, 1996, retailers in this country sold 164 copies of the "Eyes of the Tomorrow" album, including 143 CDs and 21 cassette tapes. Of the total number of copies sold, 132 (or more than 80%) were sold in Chicago. Soundscan compiles its information based on an electronic reading of computer bar codes as sales are make in retail outlets. However, Tsiolis notes that the sale of albums in outlets not equipped with computer equipment, or not provided with Soundscan computer instruments, does not register on the printout. Tsiolis states that many of the retail stores selling the "Eyes of Tomorrow" CD are not Soundscan-equipped.

 In addition to the distribution of records under the name Aftermath, the Band has also given at least 33 live performances since its inception, or an average of three times per year, including three years at the Milwaukee Metal Fest, the largest annual festival featuring "metal" music. However, the Band has yet to perform live in 1996, and performed only three times in 1995. In connection with the promotion and sale of its CDs and cassette tapes, the band directly or through its distributors placed advertisements and prepared promotional items such as t-shirts, bumper stickers and posters on which the name Aftermath is prominently displayed. Through the sale of albums and promotional material, the band generated slightly less than $ 50,000, or an average of $ 5,000 per year. The Band's largest grossing musical performance earned it $ 600.

 Tsiolis and his brother testified that the band and its members spent their own money for the promotion of the band and its work, including $ 25,000 for musical instruments and equipment, a promotional trip to Europe that cost approximately $ 28,000 in costs and expenses, as well as other expenditures. However, Tsiolis failed to proffer receipts or any other evidence to support his testimony regarding these expenditures.

 Though the band has yet to reach mainstream fame, the band has attracted media attention. Its demo tapes were noted or discussed at least over forty times in various magazines directed to music fans (and at least once in the Chicago Tribune) as well as over 120 times in domestic and international "Fanzine" newsletters, which are both published and distributed by fans of the Band. Its "Eyes of Tomorrow" album received critique and review approximately seventy times in music magazines concentrating on the heavy metal music genre, as well as in the Chicago Sun-Times, the Chicago Tribune and the Chicago Reader and foreign publications. At the hearing, counsel for Defendants repeatedly objected on relevance grounds to evidence that Tsiolis is well-known outside of the United States. It is well-settled, however, that the Lanham Act reaches all commerce that Congress can regulate, and that Congress "has the power to prevent unfair trade practices in foreign commerce by citizens of the United States, although some of the acts are done outside the territorial limits." Scotch Whisky Ass'n v. Barton Distilling Co., 489 F.2d 809, 812 (7th Cir. 1973) (citing Steele v. Bulova Watch Co., 344 U.S. 280, 285-286, 97 L. Ed. 319, 73 S. Ct. 252 (1952)). The band also received 923 letters from virtually every state in the United States, as well as from over 1,100 letters from 36 other countries.

 The record makes clear that Tsiolis and his brother attempt to patrol the entertainment world for potential infringements of its mark. Whenever Tsiolis or his brother learned that other individuals or bands used the name "Aftermath," they wrote letters demanding that the infringing activity cease.

 Tsiolis has high expectations for the release of another album, which purportedly is "ready to go." However, Tsiolis refuses to release the new album until the instant controversy is settled. Still, Tsiolis seeks to use the "Aftermath" mark to obtain "global domination" for the Band. In the meantime, the court observes. Tsiolis continues his full-time employment with a distinct and unrelated company.

 B. The Alleged "Aftermath" Infringers

 Defendant Andre Young is a well-known musician and producer of popular music, including music fitting within the genres of rap, hip hop, and rhythm and blues ("R&B"). He is known in the music world as "Dr. Dre." Dr. Dre either produced or recorded over twenty albums, of which consumers purchased thirty million copies. Defendant Interscope Records, Inc. ("Interscope") is principally known for the production and distribution of CDs, audio cassette tapes and vinyl records of popular music by various performers and groups. The entertainment company MCA owns fifty-percent of Interscope. Among the record labels distributed by Interscope is Death Row Records, a company with which Dr. Dre associated less than a year ago.

 However, because of an apparent riff between Dr. Dre and other Death Row Records management, Dr. Dre chose to disassociate himself from Death Row Records and instead form his own label, the products of which would be distributed by Interscope along with those under the Death Row Records label. Dr. Dre contends that he chose to separate from Death Row Records because of its notoriety for criminal activity, negative musical themes, and the resulting gang-like turf battles between rappers living on West and East coasts of the continental United States. Indeed, Defendants' evidence shows that Tupac Shakur, a rapper associated with Death Row Records, was recently murdered in Las Vegas, Nevada. While not proven, some in the "rap music world" believe the murder to be a result of a feud between rap artists. Moreover, another rapper associated with Death Row Records, Snoop Doggy Dogg, is a former reputed gang member and convicted felon.

 The severance of Dr. Dre from Death Row Records received widespread media attention. For example, Dr. Dre's appearance on the cover of Vibe Magazine, a consumer oriented magazine for black/urban music like rap, was accompanied by the title "Free at Last, Dr. Dre is off Death Row and on a mission to rule the world." Likewise, BRE, an industry publication for black radio stations, put Dr. Dre on the cover of its September 1996 issue with the headline "Dr. Dre on his own." The article notes: "Considering the much-publicized goings-on at Dre's old home, the 'Aftermath' moniker alone is poetic." Moreover, the Los Angeles Times featured Dr. Dre on the cover of its "Sunday Calendar" section for October 13, 1996.

 Prior to investing time and money in promoting AE, Defendants had available to them a detailed Thomson & Thomson Trademark Report, which included information regarding Tsiolis and the Band. The attorney for Dr. Dre and AE telephoned Tsiolis in an attempt to gain his consent for the use of the mark. On various occasions, the attorney spoke with Tsiolis and Tsiolis' brother. The attorney offered five thousand dollars in return for the use of the name "Aftermath" for naming a "small R&B label." The attorney did not disclose to either Tsiolis or his brother the nature and scope of Defendants' proposed Aftermath venture or that the venture involved Dr. Dre. After Tsiolis refused to consent to the use of his registered mark, the attorney offered a recording contract worth approximately twenty thousand dollars which would involve the assignment of the mark to Defendants. Tsiolis perceived the offer as a "sham."

 But Defendants did not move on to a third choice for a label name. Instead, notwithstanding Tsiolis' persistent refusal to consent to Interscope's use of the word "Aftermath," Dr. Dre and Interscope moved forward with the establishment and promotion of AE. According to Defendants, AE will be involved in contracting with artists to produce, market and distribute new, up-and-coming artist's musical recordings. In a televised interview with a reporter for Music Television ("MTV"), Dr. Dre stated that, through AE, he intends to produce musical artists from a wide variety of music genres.

 The first album to be released on the new AE record label is named "Dr. Dre Presents . . . The Aftermath" ("the Album"), which will be released by AE on November 26, 1996. The Album includes a compilation of sixteen different musical "tracks," performed by fifteen solo artists (the artist Sharief performs both "The Intro" and "L.A.W"), including Dr. Dre himself, and two songs performed by multiple rappers and artists. Dr. Dre's desired musical shift is reflected in the first compilation album and his two singles from it. The title of the album captures the fact that this is a new musical period for the artist following his "release" for Death Row. "East Coast, West Coast Killa," the first single, preaches the need to overcome the divisions in rap music, and the video includes artists from both coasts, yet shows his fans he still has "an edge." The song begins by evoking the present hostilities and beckons listeners to move to the "aftermath" of this violent period of infighting, which threatens the viability of the rap genre:

 
Gentlemen, we have a problem that has the potential to become a very serious problem. The east coast and west coast separation is exactly the weapon our enemies need to destroy our empire. So what we need to do is bring together some of the biggest, strongest, and smartest forces in the millennium, and this will be the beginning of the Aftermath.
 
. . .
 
The mighty, mighty Aftermath has now set forth to rise. Indeed.

 To reinforce the messages of the video, the word "aftermath" and other terms evoking the themes of the videos appear scrawled on the background in some scenes.

 Defendants created a "promotion plan" to market the Album effectively. The preliminary marketing plan involves the use of promotional materials, including a music video already released to, and played by, MTV, a magazine advertisement placed on the back cover of Billboard Magazine, a poster for display at retail outlets, a bumper sticker, a t-shirt, a trade announcement, a press kit for various media, and a "sniping poster." The "sniping poster" is an adhesive poster with the words "Dr. Dre Presents . . ." at the top of the poster, and the words "The Aftermath" at the bottom of the poster. A large yellow, orange and red mushroom cloud, similar to the "aftermath" of a nuclear explosion, exists in the center of the poster. Tsiolis introduced evidence of such a sniping poster found on a telephone pole in the Wicker Park neighborhood in Chicago, Illinois.

 Defendants also intend to publicize the Album in music-oriented magazines and publications of general circulation, such as the Los Angeles Times, New York Times, U.S.A. Today, and Newsweek. At the current time, Dr. Dre's single, "Been There, Done That" and the song "East Coast/West Coast Killa" are being played on both R&B/urban radio stations and Top 40 stations, neither of which play heavy metal music.

 Defendants have already spent approximately $ 200,000 in the creation, production, and distribution of record covers and marketing materials. While the precise amount Defendants will spend to promote the Album and AE is uncertain, Interscope stipulated that it alone will invest "at least" ten million dollars in the venture and its promotions. Interscope expects to sell ...


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