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Phoenix Entertainment Partners, LLC v. Burke

United States District Court, M.D. Florida, Tampa Division

June 19, 2017

PHOENIX ENTERTAINMENT PARTNERS, LLC, Plaintiff,
v.
KEVIN BURKE, Defendant.

          ORDER

          JAMES S. MOODY. JR. UNITED STATES DISTRICT JUDGE

         THIS CAUSE comes before the Court upon Defendant Kevin Burke's Motion to Dismiss for Failure to State a Claim (Doc. 19) and Plaintiff Phoenix Entertainment Partners, LLC's Response in Opposition (Doc. 20). Upon review, the Court concludes that Defendant's motion should be granted.

         BACKGROUND

         For years, Phoenix Entertainment Partners, LLC (“PEP”) and its predecessor in interest, Slep-Tone Entertainment Corporation, have produced and sold karaoke accompaniment tracks under the trademark “Sound Choice.” The Sound Choice-branded tracks are “wildly popular” because they provide highly accurate singing cues and are faithful to the sound of the original recording artist.

         PEP sells its karaoke tracks exclusively in compact disc format. However, it is technologically possible to convert the tracks from the compact discs into digital files. Easy electronic duplication of these files has resulted in widespread copying and distribution of Sound Choice-branded tracks without corresponding purchases of the compact discs. As a result, PEP has lost revenue from the sale and licensing of its karaoke tracks.

         PEP has filed a number of lawsuits around the country against karaoke bars and karaoke disc jockeys (“DJs”) that it believes are playing pirated Sound Choice-branded tracks at karaoke shows. Of note, PEP alleges that these entities are infringing its trademarks[1] and not any copyrights it might have. In this action specifically, PEP sued Kevin Burke (“Burke”), a karaoke DJ, for trademark infringement and unfair competition in violation of the Lanham Act, as well as for related state law violations.

         PEP's theory of Lanham Act liability goes as follows. When Burke plays pirated Sound Choice-branded karaoke tracks during his karaoke sessions at bars, the bar patrons see the tracks' graphic component, which displays not only the tracks' song lyrics but also PEP's “Sound Choice” trademark and trade dress. Displaying PEP's trademark causes confusion regarding both the source of Burke's goods (i.e., the karaoke tracks) and services (i.e., his karaoke entertainment services). Bar patrons will think that the karaoke tracks Burke plays originated with PEP and not the person who copied the tracks into digital files. In addition, the bar patrons will mistakenly think that PEP has sponsored or approved of Burke's karaoke services.

         Burke responded to PEP's Complaint (Doc. 1) by filing the instant motion, arguing that PEP's federal claims should be dismissed in light of recent appellate decisions from the Seventh and Ninth Circuits. The courts in both cases held that, as a matter of law, conduct identical to Burke's did not constitute a violation of the Lanham Act.

         LEGAL STANDARD

         Federal Rule of Civil Procedure 12(b)(6) allows a court to dismiss a complaint when it fails to state a claim upon which relief can be granted. When reviewing a motion to dismiss, a court must accept all factual allegations contained in the complaint as true. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (internal citation omitted). It must also construe those factual allegations in the light most favorable to the plaintiff. Hunt v. Aimco Properties, L.P., 814 F.3d 1213, 1221 (11th Cir. 2016) (internal citation omitted).

         To withstand a motion to dismiss, the complaint must include “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has facial plausibility “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Pleadings that offer only “labels and conclusions, ” or a “formulaic recitation of the elements of a cause of action, ” will not do. Twombly, 550 U.S. at 555.

         DISCUSSION

         I. Lanham Act Claims

         The Lanham Act makes actionable “the deceptive and misleading use of [trade]marks” (i.e., the names or symbols used to identify a person's goods or services and to distinguish them from those sold by others). 15 U.S.C. § 1127; Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 28 (2003). PEP asserts claims under sections 32 and 43 of the Act. Section 32 creates liability for trademark infringement when a person “use[s] in commerce any reproduction . . . of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion . . . .” 15 U.S.C. § 114(a). Section 43 imposes liability for unfair competition on a “person who, on or in connection with any goods or services . . . uses in commerce any word, term, ...


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