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Slep-Tone Entertainment Corp. v. Coyne

United States District Court, N.D. Illinois, Eastern Division

May 8, 2014

SLEP-TONE ENTERTAINMENT CORPORATION, Plaintiff,
v.
JOHN COYNE d/b/a EXTREME KARAOKE and ABSOLUTE DISC JOCKEYS, MITCH PALMER, ALLEN MANDO, TONY GONZALEZ, TIM THOMAS, RACHEL YACKLEY, ANGIE ONTHENIC, PETER GARCIA, and KENNY SEIDMAN d/b/a DJ KENNY B, Defendants

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[Copyrighted Material Omitted]

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For Slep-Tone Entertainment Corporation, Plaintiff: Vivek Jayaram, LEAD ATTORNEY, Jayaram Law Group, Chicago, IL.

For John Coyne, doing business as Extreme Karaoke, doing business as Absolute Disc Jockeys, Allen Mando, Rachel Yackley, Peter Garcia, Kenny Seidman, doing business as DJ Kenny B, Defendants: Matthew M. Saffar, LEAD ATTORNEY, Law Offices Of Matthew M. Saffar, Palatine, IL.

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MEMORANDUM OPINION AND ORDER

Gary Feinerman, United States District Judge.

Slep-Tone Entertainment Corporation alleges in this suit that John Coyne, Mitch Palmer, Allen Mando, Tony Gonzalez, Tim Thomas, Rachel Yackley, Angie Onthenic, Peter Garcia, and Kenny Seidmam engaged in the unauthorized use and display of Slep-Tone's product bearing its Sound Choice trademark, in violation of § § 32 and 43 of the Lanham Act, 15 U.S.C. § § 1114, 1125, and the Illinois Deceptive Trade Practices Act (" IDTPA" ), 815 ILCS 510/1 et seq. Doc. 1. The claims against Thomas, Gonzalez, Palmer, and Onthenic have been voluntarily dismissed. Docs. 7, 34. Coyne, Mando, Garcia, Yackley, and Seidman (collectively, " Defendants" ) have moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6). Docs. 15, 24, 31. The motion is denied.

Background

In considering the motion to dismiss, the court assumes the truth of the complaint's factual allegations, though not its legal conclusions. See Munson v. Gaetz, 673 F.3d 630, 632 (7th Cir. 2012). The court must consider " documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice," along with additional facts set forth in Slep-Tone's brief opposing dismissal, so long as those facts " are consistent with the pleadings." Geinosky v. City of Chicago, 675 F.3d 743, 745 n.1 (7th Cir. 2012). The following facts are stated as favorably to Slep-Tone as these materials allow. See Gomez v. Randle, 680 F.3d 859, 864 (7th Cir. 2012).

Slep-Tone is a leading manufacturer of karaoke accompaniment tracks, which guide karaoke participants as they sing along to songs. Doc. 1 at ¶ ¶ 16, 19. Slep-Tone produces its accompaniment tracks by re-recording popular songs, omitting or fading out the lead vocals, and adding lyrics and visual cues that allow the karaoke participant to know when and what to sing. Id. at ¶ 17. Since the company's founding twenty-eight years ago, Slep-Tone has sold its accompaniment tracks under the name " Sound Choice," which is presented in slanted font against the backdrop of the five lines of a music staff. Id. at 1, ¶ ¶ 50-51. Slep-Tone owns U.S. Trademark Registrations No. 1,923,448 and No. 4,099,045 for the Sound Choice name, and U.S. Trademark Registrations No. 2,000,725 and No. 4,099,052 for the Sound Choice mark. Ibid. Slep-Tone pays royalties to the copyright owners of the underlying musical works in the accompaniment tracks. Id. at ¶ 38. Slep-Tone's accompaniment tracks have become " the staple of almost every karaoke show in the country." Id. at 1.

Accompaniment tracks are recorded in one of two encoded formats: compact disks plus graphics (CD), or MP3s plus

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graphics (MP3G). Id. at ¶ 18. The graphics portion of the recording consists of contemporaneous video display of the lyrics synchronized to the song. Id. at ¶ 20. Slep-Tone's graphical display is distinctive in its presentation and includes " (a) the use of a particular typeface, style, and visual arrangement in displaying the lyrics; (b) the use of particular colors to display lyrics, namely white lyrics changing to violet lyrics, set against a black background; and (c) the use of a particular style in displaying entry cues for singers, namely a series of vanishing rectangles to indicate the cue." Id. at ¶ 53. The display, used for more than twenty years, has become another way for the public to identify Slep-Tone as the producer of the accompaniment track. Id. at ¶ ¶ 54-56.

Slep-Tone's accompaniment tracks are sold to entertainers, known as karaoke jockeys, who are hired by bars and restaurants. Id. at ¶ 22. Karaoke jockeys are paid to provide karaoke music and equipment, warm up the crowd, set the order of karaoke performances, and operate the karaoke equipment. Ibid. They usually provide participants with a catalog of songs available for performance as well. Id. at ¶ 23. Karaoke jockeys must purchase or license the music they offer in the form of CDs containing accompaniment tracks. Id. at ¶ 24.

Some karaoke jockeys engage in " media-shifting," in which they copy the contents of the CD to their computer hard drive or other media. Id. at ¶ 26. They may also engage in " format-shifting," which involves copying the files on the CD and then converting them into a different format, such as from CD to MP3G. Id. at ¶ 27. Slep-Tone does not authorize or tolerate media-shifting or format-shifting of its accompaniment tracks for any commercial purpose, unless it occurs under the following conditions:

(a) ... each media-shifted or format-shifted track must have originated from an original, authentic compact disc; (b) ... the tracks from the original, authentic compact disc [must] be shifted to one, and only one, alternative medium at a time; (c) if a track is shifted to another medium, the entire track must be shifted (i.e. no " chopping" ); (d) ... the [karaoke jockey must] maintain ownership and possession of the original, authentic compact disc for the entire time that the media-shifted or format-shifted tracks are in existence; (e) ... the original, authentic compact disc [must] not be used for any commercial purpose while its content has been shifted; (f) if the karaoke host discontinues possession of either the authorized original medium or the alternative medium, the associated tracks must be removed from the alternative medium; and (g) ... the [karaoke jockey must] notify SLEP-TONE that he or she intends to conduct or has conducted a media-shift or format-shift, and submits to a verification of adherence to SLEP-TONE's policy.

Id. at ¶ 30.

Defendants are karaoke jockeys in the business of providing karaoke entertainment. Id. at ¶ ¶ 7-15. Defendants are affiliated, either as members or close associates, with a karaoke entertainment company known as " Extreme Karaoke" and " Absolute Disc Jockeys," which is owned by Coyne. Id. at ¶ 6. After attending one or more public karaoke shows performed by Defendants and conducting an extensive investigation of their karaoke operations, Slep-Tone found that they possess unauthorized media-shifted and format-shifted copies of karaoke accompaniment tracks, all of which bear Slep-Tone's Sound Choice trademarks. Id. at ¶ 32.

Defendants have displayed Slep-Tone's Sound Choice trademark ...


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