United States District Court, C.D. Illinois
E. Shadid Chief United States District Judge.
matter is now before the Court on Defendant Jorgensen's
Motion to Dismiss Pursuant to Rule 12(b)(6). For the reasons
set forth below, the Motion to Dismiss  is DENIED.
Phoenix Entertainment Partners, LLC (“Phoenix”),
brought this action alleging that Defendant Jorgensen
infringed its federal trademarks and trade dress, engaged in
unfair competition in violation of 15 U.S.C. § 1125 and
state common law, and violated the Illinois Deceptive Trade
Practices Act, 810 ILCS 510/1. These allegations stem from
Jorgensen's providing karaoke services to the other
Defendants using files stored on his computer that had been
transferred from karaoke tracts originally created by
SLEP-TONE and which are marked with the SOUND CHOICE marks.
Tracts are transferred from their original CD or MP3 format
onto the user's hard drive, a process known as
media-shifting. The problem arises when users make more
copies of the original tracts than authorized under the
Slep-Tone 1:1 ratio media shifting policy. Phoenix is the
successor in interest to Slep-Tone Entertainment Corporation,
the original owner of the marks and creator of the
tracts' distinctive trade dress.
Jorgensen has moved to dismiss the Complaint for failure to
state a claim upon which relief can be granted, citing
Phoenix Entertainment Partners, LLC v. Rumsey, 829
F.3d 817 (7thCir. 2016). Phoenix has filed its
response, and this Order follows.
have traditionally held that a complaint should not be
dismissed unless it appears from the pleadings that the
plaintiff could prove no set of facts in support of her claim
which would entitle her to relief. See Conley v.
Gibson, 355 U.S. 41 (1957); Gould v. Artisoft,
Inc., 1 F.3d 544, 548 (7thCir. 1993). Rather,
a complaint should be construed broadly and liberally in
conformity with the mandate in Federal Rules of Civil
Procedure 8(f). More recently, the Supreme Court has phrased
this standard as requiring a showing sufficient “to
raise a right to relief beyond a speculative level.”
Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965
(2007). Furthermore, the claim for relief must be
“plausible on its face.” Id.;
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1953 (2009).
purposes of a motion to dismiss, the complaint is construed
in the light most favorable to the plaintiff; its
well-pleaded factual allegations are taken as true, and all
reasonably-drawn inferences are drawn in favor of the
plaintiff. See Albright v. Oliver, 510 U.S. 266, 268
(1994); Hishon v. King & Spalding, 467 U.S. 69
(1984); Lanigan v. Village of East Hazel Crest, 110
F.3d 467 (7th Cir. 1997); M.C.M. Partners,
Inc. V. Andrews-Bartlett & Assoc., Inc., 62 F.3d
967, 969 (7thCir. 1995); Early v. Bankers Life
& Cas. Co., 959 F.2d 75 (7th Cir. 1992).
support of its motion, Defendant cites the decision
Rumsey. In that case, Phoenix brought suit against a
pub and its owner for playing unauthorized digital copies of
its karaoke files (i.e, “bootleg” copies) instead
of properly authorized copies. 829 F.3d at 819-20. The
Complaint alleged trademark infringement and unfair
competition under the Lanham Act and was dismissed for
failure to show a likelihood of confusion among customers as
to the source of any tangible good containing the karaoke
tracts they were seeing and hearing. It is “consumer
confusion about the source of a tangible good that a
defendant sells in the marketplace that matters for purposes
of trademark infringement, ” and the defendants were
found to sell no tangible goods. Id., at 822-23.
Rather, what is seen and heard by patrons of the pub is the
intangible content of the tracts resulting from the
unauthorized copying that would likely warrant protection
under copyright law. Id., at 823-824.
Lanham Act provides a cause of action for the unauthorized
use of a trademark. 15 U.S.C. § 1114, et seq.
Section 43(a)(1) of the Act punishes unfair competition by
imposing liability on “[a]ny person who, or in
connection with any goods or services . . uses in commerce
any word, term, name, symbol, or device, or any combination
thereof, or any false designation of origin, . . . which -
(A) is likely to cause confusion, or to cause mistake, or to
deceive . . . as to the origin, sponsorship, or approval of
his or her goods, services, or commercial activities by
another person . . . .” 15 U.S.C. § 1125(a)(1)(A).
Rumsey, the Court of Appeals found it to be
significant that the defendants did not compete with
Slep-Tone “in that they do not sell karaoke products or
services to karaoke jockeys or other establishments”
like the pub. Rumsey, 829 F.3d at 823. Here,
however, Jorgensen is alleged to compete in the provision of
karaoke services to bars and other establishments and is also
alleged to have violated trademarks covering both goods and
services. Phoenix points out that Jorgensen is not a bar
owner providing free karaoke services for patrons like the
defendant in Rumsey; rather, he is alleged to be a
mobile entertainer who sells/rents karaoke equipment and
accompaniment tracks to establishments wanting to offer
karaoke to their patrons and is in effect competing with
Phoenix in the provision of these services. This seems to be
precisely the type of situation that the Seventh Circuit
distinguished from the holding in Rumsey, and
Phoenix's claims regarding its service mark registrations
survive the Motion to Dismiss. Whether the product mark
claims are viable is a much closer question, but given the
relatively undeveloped factual record, the Court finds that
this issue should be decided after discovery reveals the
precise nature of Jorgensen's activities.
reasons set forth above, the Defendants' Motion to
Dismiss  is DENIED. This matter is referred to the