Phx. Entm't Partners, LLC v. Sports Legends, LLC
Phx. Entm't Partners, LLC v. Sports Legends, LLC
Opinion of the Court
Phoenix Entertainment Partners, LLC ("Phoenix") brings this action against three eating and drinking establishments-Sports Legends LLC ("Sports"), doing business as the Blarney Stone Sports Bar & Grill; Kann Inc. ("Kann"), doing business as KT's Smokehouse Saloon; and Borgettis Bar & Grill, Inc. ("Borgettis)-and an individual, Anthony Utz ("Utz"), owner of Mo' Karaoke & DJ Service, alleging the four defendants are liable under §§ 32 and 43(a) of the Lanham Act,
Utz, Sports and Borgettis, and Kann all move to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim.
Background
"SOUND CHOICE" and "SOUND CHOICE & Design" are two federal service mark registrations owned by Phoenix. (Am. Compl. ¶ 27 and App'x A, ECF No. 18.) SOUND CHOICE is "a leading brand of karaoke accompaniment tracks ... particularly well known to commercial karaoke operations." (Id. ¶ 19.) These tracks are re-recorded and released on CD+G ("compact discs plus graphics") or MP3+G ("MPS3 plus graphics") formats. (Id. ¶ 21.) "Separately from the communicative content of the karaoke accompaniment tracks (i.e., the sound recording and the synchronized lyric and cueing displays), SOUND CHOICE-branded karaoke accompaniment tracks are marked with an identifying logo that appears at the beginning and end." (Id. ¶ 22.) The "tracks are wildly popular among karaoke entertainment providers, patrons, and home consumers." (Id. ¶ 23.) "According to some estimates ... more than half of all accompaniment tracks played at karaoke shows in the United States originated from [Phoenix's] recordings." (Id. ¶ 24.) This popularity is attributed to the tracks *1114usually being "the most faithful to the sound of the original recording artist and as providing the most accurate singing cues as part of the video display." (Id. ¶ 25.) Similarly, the association of the SOUND CHOICE brand with a karaoke operator's business or an establishment's karaoke shows "confers on the operator and venue a perception in the marketplace-and among karaoke patrons-of legitimacy and professionalism." (Id. ¶ 26.)
Sports, Kann, and Borgettis all contract with Utz to put on karaoke shows at their establishments. (Id. ¶ 32-33.) These shows are advertised as being, and are held, at specific times. (Id. ¶ 34.) Utz provides the sound equipment over which the tracks are played and "control[s] the organization and flow of the performances." (Id. ¶ 35.) He acts as the emcee of the show and encourages the establishments' "patrons to purchase food and/or beverages and tip their servers." (Id. )
Utz, Sports, Kann, and Borgettis (hereinafter collectively referred to as "Defendants") cause or permit the SOUND CHOICE marks to be displayed "repeatedly and frequently" during the karaoke shows. (Id. ¶ 36.) The display of the marks "in connection with the services, regardless of the particular song being played, acts as a general advertisement for the services as well as an indicator of the quality of the services being provided." (Id. ¶ 40.) None, however, have a "license, permission, authorization, or acquiescence from Phoenix" for playing the SOUND CHOICE tracks. (Id. ¶ 43.) Moreover, Utz copied the tracks "from an illicit source." (Id. ¶ 37.)
Phoenix alleges that "the frequent, repeated display of the Sound Choice Marks across numerous instances of widely disparate songs" "likely" causes patrons to "view the display of the Sound Choice Marks as an indicator of the affiliation, connection, or association of the Defendants with Phoenix, or of Phoenix's sponsorship or approval of the services and related commercial activities, rather than merely as indicating Phoenix as the creator of the underlying communicative content of any particular song being performed." (Id. ¶ 41.) Thus, the patrons are "likely to be confused regarding the origin or sponsorship of the services being supplied regarding the affiliation or connection of [Defendants] with Phoenix, based on their mistaken belief that the services being provided are provided with Phoenix's knowledge and approval." (Id. ¶ 44.) Defendants profit from the display of the Sound Choice marks during karaoke shows, but Phoenix is damaged by it. (Id. ¶ 45-48.) Defendants also profit from infringing "numerous other producers' intellectual property rights." (Id. ¶ 66-67.)
For its damage, Phoenix seeks to hold Utz directly liable and Sports, Kann, and Borgettis (hereinafter collectively referred to as the "Venue Defendants") secondarily liable. Phoenix also seeks equitable relief from Utz and injunctive relief against all Defendants. Defendants seek the dismissal of this action. The Court will first address Utz's motion.
Discussion
Rule 12(b)(6) Standard."To survive a 12(b)(6) motion to dismiss, 'a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.' " McShane Constr. Co. v. Gotham Ins. Co.,
Count I: Trademark Infringement."Karaoke is a form of entertainment, originating in Japan, in which a person sings the vocal line of a popular song to the accompaniment of a pre-recorded backing tape, and the voice is electronically amplified through the loudspeaker system for the audience." Slep-Tone Entm't Corp. v. Wired for Sound Karaoke and DJ Servs. LLC,
At issue in Count I, titled "Trademark Infringement under
"A 'trademark' is any word, name, symbol, or device, or any combination thereof-used by a person ... to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods ...." Lovely Skin, Inc. v. Ishtar Skin Prods., LLC ,
Utz argues the infringement claims against him should be dismissed because Phoenix is presenting a copyright claim in trademark infringement clothing and such a tactic is foreclosed by the Supreme Court's holding in Dastar Corp. v. Twentieth Century Fox Film Corp.,
*1116Utz's Dastar argument is not unfamiliar to courts resolving Phoenix's claims of infringement of its registered SOUND CHOICE marks. See e.g. Wired for Sound,
Citing Dastar, courts have concluded that claims of an unauthorized use of the content of Phoenix's karaoke accompaniment tracks are essentially of unauthorized copying and are not cognizable under the Lanham Act. See Wired for Sound,
Correctly noting that the foregoing cases dealt only with infringement of tangible goods, Phoenix argues that its infringement claims are focused on the "unauthorized use of its SOUND CHOICE marks and the quality of the services to which those marks are attached, not to the creative content." (Pl.'s Resp. at 5, ECF No. 24.) Specifically, Utz's failure to remove the SOUND CHOICE marks from his unauthorized copies of the Sound *1117Choice karaoke accompaniment tracks-copies which lack the quality of the originals-was done "so to appear as legitimate as [Phoenix's] authorized licensees"; to falsely indicate the quality of the karaoke services he provides; and to use the marks "as a general advertisement for the services." (Id. at 3.)
Absent the word "services" and explicit reliance on its two registered service marks, Phoenix has presented similar allegations regarding unauthorized copying by karaoke jockeys of its tracks, a resulting deterioration in quality, and the use of the inferior copies in karaoke shows in the context of claims of infringement of its registered marks for goods. See e.g. Rumsey,
The question of trademark infringement, and of unfair competition, is whether there is a likelihood of confusion. See Wired for Sound,
There is little or no similarity or competition between Phoenix's services and Utz's. In Boyte,
[i]t is theoretically possible that a display of Phoenix's marks and trade dress during a particular karaoke show could lead to confusion over the origin, sponsorship, or approval of the show itself, if, say, every single track played by [defendants] at a show displayed Phoenix's marks and trade dress-and if [defendants] also used Phoenix's marks and trade dress in advertising the show-then it is conceivable that a patron could be misled into believing that Phoenix had something to do with the show. But Phoenix's single generalized allegation about the frequency with which its tracks are played at karaoke shows in the United States is insufficient to state a plausible claim against [defendants].
In the instant case, as in Star Music, Phoenix describes the popularity of its SOUND CHOICE karaoke accompaniment tracks in the United States without any reference to how frequently Utz employs them, weakening any inference of intent on the part of Utz to confuse venue patrons. Not only does Phoenix fail to define how often Defendants play its tracks, it also alleges that the Defendants are similarly violating "numerous other producer's intellectual property rights." (Am. Comp. ¶ 66.)
Phoenix further alleges that its service marks are used "in connection with the advertising of [Defendants' karaoke entertainment] services." (Am. Compl. ¶ 72.) This vague reference is more specifically described in the background portion of the Amended Complaint when Phoenix alleges that Defendants' display of the Sound Choice marks "acts as a general advertisement for the services." (Id. ¶ 39.)
As observed in 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 19.84 (4th ed. 2017), the Lanham Act does not define what constitutes a 'service.' " The Trademark Manual of Examining Procedure does, however, *1119and lists three criteria that must be satisfied for an activity to qualify as a registerable "service":
(1) a service must be a real activity;
(2) a service must be performed to the order of, or for the benefit of, someone other than the applicant; and
(3) the activity performed must be qualitatively different from anything necessarily done in connection with the sale of the applicant's goods or the performance of another service.
For the foregoing reasons, Phoenix's § 32 claims against Utz will be dismissed. See KP Permanent Make-Up Inc. v. Lasting Impression I, Inc.,
Count II: Unfair Competition. Phoenix alleges that the use of its Sound Choice marks in the advertising and performance of Defendants' karaoke entertainment services denies it revenues from the sale or licensing of authorized services and deprives it of control over those marks, in violation of § 43(a) of the Lanham Act,
Count III: Violation of Mo.Rev.Stat. § 417.061. Section 417.061 provides for injunctive relief against a defendant using a counterfeit mark. " 'the gravamen of a dilution complaint [under § 417.061 ] is that the [defendant's] continuing use of a mark similar to the plaintiff's mark will inexorably have an adverse effect upon the value of the plaintiff's mark, and that ... the plaintiff's mark will eventually be deprived of all distinctiveness.' " St. Louis Univ. v. Meyer,
Count IV: Common Law Unfair Competition. Phoenix's common law claims of unfair competition mirror those presented in Count II. "Missouri law is well settled that the same facts which support a suit for *1120trademark infringement support a suit for unfair competition and common law infringement." Comty. of Christ Copyright Corp.,
Venue Defendants' Motions to Dismiss. In their motion to dismiss Sports Legends and Borgettis raise the same arguments as raised by Kann in its motion to dismiss
As noted by the court in Boyte,
Because Phoenix has failed to state a claim against Utz on any of its four counts, its claims against the Venue Defendants also fail. See Star Music , at *3 (dismissing claims of vicarious and contributory liability against two venue defendants after finding Phoenix had failed to allege plausible Lanham Act claims against two operators of karaoke entertainment services). Cf. Coach, Inc. v. Goodfellow,
The Venue Defendants' two motions to dismiss shall be granted.
Counterclaims. Utz has filed a six-count counterclaim, seeking a judgment holding the two registered service marks invalid and abandoned and a declaration that it has not infringed such marks. Sports Legends and Borgettis have filed a four-count counterclaim, asking for much the same relief. Having found Phoenix has failed to state a claim against Defendants, the counter-claimants shall be ordered to show cause why their counterclaims should not be dismissed as moot. See Slep-Tone Entm't Corp. v. Basket Case Pub, Inc.,
Conclusion
The claims of Phoenix Entertainment against Defendants all arise from the appearance of SOUND CHOICE marks on karaoke accompaniment tracks allegedly used by Utz in the karaoke entertainment services he provides at the three Venue Defendants' establishments. Phoenix has failed to sufficiently allege that that use infringes its service marks.
Accordingly,
IT IS HEREBY ORDERED that the motion of Anthony Utz to dismiss the original complaint and the separate motion to dismiss of Sports Legends, LLC, and Borgettis Bar & Grill, Inc., are each DENIED as moot. [ECF Nos. 13, 14]
IT IS FURTHER ORDERED that the motion of Anthony Utz to dismiss the amended complaint, the motion of Sports Legends, LLC, and Borgettis Bar & Grill, Inc., to dismiss the amended complaint, and the motion of Kann, Inc., to dismiss the amended complaint are each GRANTED. [ECF Nos. 19, 20, and 29]
IT IS FINALLY ORDERED that Anthony Utz and Sports Legends, LLC, and Borgettis Bar & Grill, Inc., are to show cause on or before February 12, 2018 why their respective counterclaims should not be dismissed as moot.
An Order of Partial Dismissal shall accompany this Memorandum and Order.
Utz earlier filed a motion to dismiss the seminal complaint, as did Sports and Borgettis. These motions will be denied as moot. See Pure Country, Inc. v. Sigma Chi Fraternity ,
Section 32 of the Lanham Act,
Any person who shall, without the consent of the registrant-(a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, distribution, or advertising of any goods or services on or in connection with such use is likely to cause confusion, or to cause mistake, or to deceive ... shall be liable in a civil action by the registrant for the remedies hereinafter provided.
Section 43 of the Lanham Act,
[a]ny person who, on or in connection with any goods or services, ... uses in commerce any word, term, name, symbol, or device, or any combination thereof, ... which-
(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person ...
Phoenix's claims of infringement under § 43 are discussed below.
Citing Slep-Tone Entm't Corp. v. Johnson,
There are two other factors which are not at issue. One is "the strength of the trademark owner's mark" and the other is "evidence of actual confusion." Comty. of Christ Copyright Corp.,
Phoenix cites Phoenix Entm't Partners, LLC v. Jorgensen,
Additionally, the Court notes that the court in Phoenix Entm't Partners, LLC v. Milligan, Inc.,
Phoenix does allege that it is the "sole member of Sound Choice Entertainment, LLC, a Texas limited liability company ... that is directly engaged in the business of providing karaoke entertainment services to venues in various locations around the United States." (Am. Compl. ¶ 29.) At issue, however, are the three venues in which Utz provides karaoke entertainment services. The amended complaint is silent as to those venues.
See note 3, supra.
Kann is the only defendant to seek dismissal of the state law claims against it on the grounds the underlying infringement claims fail. Utz, Sports Legends, and Borgettis argue the Court should decline to exercise its supplemental jurisdiction over the state law claims and dismiss them without prejudice. Phoenix also alleged, however, this Court had diversity jurisdiction over its state law claims.
The Court notes that the same firms representing the opposing parties in Basket Case Pub represent the opposing parties, with the exception of Kann, in this case. The Court further notes that the question of the dismissal of the counterclaims was not reached on appeal.
Reference
- Full Case Name
- PHOENIX ENTERTAINMENT PARTNERS, LLC v. SPORTS LEGENDS, LLC
- Cited By
- 4 cases
- Status
- Published