Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-17229/USCOURTS-ca9-14-17229-0/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SLEP-TONE ENTERTAINMENT

CORPORATION; PHOENIX

ENTERTAINMENT PARTNERS,

LLC,

Plaintiffs-Appellants,

v.

WIRED FOR SOUND KARAOKE

AND DJ SERVICES, LLC;

ERNEST Z. MCCULLAR,

Defendants-Appellees.

No. 14-17229

D.C. No.

2:12-cv-02631-NVW

OPINION

Appeal from the United States District Court

for the District of Arizona

Neil V. Wake, District Judge, Presiding

Argued and Submitted December 12, 2016

San Francisco, California

Filed January 18, 2017

Before: Susan P. Graber and Andrew D. Hurwitz, Circuit

Judges, and Richard F. Boulware,* District Judge.

Per Curiam Opinion

* The Honorable Richard F. Boulware, United States District Judge

for the District of Nevada, sitting by designation.

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2 SLEP-TONE ENTM’T V. WIRED FOR SOUND

SUMMARY**

Lanham Act

The panel affirmed the district court’s dismissal of claims

for trademark infringement and unfair competition brought

under the Lanham Act by a producer of karaoke music tracks.

The plaintiff alleged that the defendants performed

karaoke shows using unauthorized “media-shifted” files

that had been copied onto computer hard drives from the

compact discs released by the plaintiff. Agreeing with the

Seventh Circuit, the panel held that the plaintiff did not state

a claim under the Lanham Act because there was no

likelihood of consumer confusion about the origin of a good

properly cognizable in a claim of trademark infringement.

In a concurrently filed memorandum disposition, the

panel reversed the district court’s summary judgment on a

claim for breach of a settlement agreement. Judge Hurwitz

concurred in part and dissented in part from the memorandum

disposition.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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SLEP-TONE ENTM’T V. WIRED FOR SOUND 3

COUNSEL

James M. Harrington (argued), Harrington Law P.C.,

Pineville, North Carolina, for Plaintiff-Appellant.

Lorraine Morey (argued), Morey Law PLLC, Phoenix,

Arizona, for Defendants-Appellees.

OPINION

PER CURIAM:

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.” OED Online (Dec. 2016),

http://www.oed.com/view/Entry/243613. PlaintiffSlep-Tone

Entertainment Corporation1produces karaoke music tracks. 

The tracks are marketed under the trademark “Sound

Choice.” Plaintiff releases them on compact discs encoded in

a format known as “CD-G,” which accompanies karaoke

music with graphics, lyrics, and singing cues when played on

compatible equipment.

Computer users are capable of copying the content of

these CD-Gs onto computer hard drives as digital files;

Plaintiff refers to this process as “media-shifting,” but it is

also popularly known as “ripping.” Plaintiff acknowledges

1 On appeal, the court has added Phoenix Entertainment Partners,

LLC, Slep-Tone’s successor-in-interest, as an additional party. We refer

to these entities collectively as "Plaintiff."

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the convenience of digital files for karaoke operators (who

need not use numerous CD-Gs during a performance), but

also reports that this widespread practice, when combined

with unauthorized file-sharing, “nearly drove [the company]

out of business.” In the past, Plaintiff “opposed all

commercial media-shifting.” Today, it allows the practice

within the confines of a four-point “media-shifting policy”

requiring that users make only one digital copy per source

CD-G; that the physical media used to create the digital files

are kept “on the shelf” unused; that users notify Plaintiff if

they intend to create media-shifted copies; and that users

submit to auditing for compliance with these conditions.

Defendants Ernest Z. McCullar and his business, Wired

for Sound Karaoke and DJ Services, LLC, operate a karaoke

business in the Phoenix area. As alleged in the complaint,

Defendants use Plaintiff’s Sound Choice tracks. In 2009,

Plaintiff learned that Defendants were using unauthorized

media-shifted files instead of Plaintiff’s original CD-Gs. 

Plaintiff filed a federal action against Defendants, alleging

trademark infringement. See Slep-Tone Entm’t Corp. v.

Gorrel, No. 2:09-cv-01462-HRH (D. Ariz. July 14, 2009). 

The parties entered a settlement agreement in 2010.

In the present action, Plaintiff once again claims that

Defendants are performing karaoke shows using unauthorized

media-shifted files. Plaintiff alleges, among other things,

trademark infringement under the Lanham Act. The district

court granted Defendants’ motion to dismiss as to the claims

for trademark infringement and unfair competition, holding

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SLEP-TONE ENTM’T V. WIRED FOR SOUND 5

that “[t]his attempt to stuff copyright claims into a trademark

container fails.” Plaintiff timely appeals.2

We “review de novo the grant of a motion to dismiss.” 

Schueneman v. Arena Pharm., Inc., 840 F.3d 698, 704 n.5

(9th Cir. 2016). We agree with the district court that Plaintiff

has not stated a claim under the Lanham Act, and we

therefore affirm that holding.

Plaintiff argues that, by“media-shifting” Plaintiff’s tracks

from physical CD-Gs to digital files and performing them

without authorization, Defendants have committed trademark

infringement and unfair competition under the Lanham Act,

15 U.S.C. §§ 1114, 1125. The Act creates a federal civil

cause of action for unauthorized use of a registered

trademark. The Lanham Act’s provision concerning ordinary

trademark infringement, known as section 32, defines

infringement in relevant part as follows:

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,

offering for sale, distribution, or advertising

of any goods or services on or in connection

with which such use is likely to cause

2 The district court also granted summary judgment to Defendants on

a claim for breach of the settlement agreement. In a concurrently filed

memorandumdisposition, we reverse that decision and remand for further

proceedings.

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confusion, or to cause mistake, or to deceive;

or

(b) reproduce, counterfeit, copy, or

colorably imitate a registered mark and apply

such reproduction, counterfeit, copy, or

colorable imitation to labels, signs, prints,

packages, wrappers, receptacles or

advertisements intended to be used in

commerce upon or in connection with the

sale, offering for sale, distribution, or

advertising of goods or services on or in

connection with which 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.

15 U.S.C. § 1114(1). The Lanham Act’s provision on unfair

competition, section 43, provides:

Any person who, on or in connection with

any goods or services, or any container for

goods, uses in commerce any word, term,

name, symbol, or device, or any combination

thereof, or any false designation of origin,

false or misleading description of fact, or false

or misleading representation of fact, which—

(A) is likely to cause confusion, or to

cause mistake, or to deceive as to the

affiliation, connection, or association of such

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SLEP-TONE ENTM’T V. WIRED FOR SOUND 7

person with another person, or as to the origin,

sponsorship, or approval of his or her goods,

services, or commercial activities by another

person, or

(B) in commercial advertising or

promotion, misrepresents the nature,

characteristics, qualities, or geographic origin

of his or her or another person’s goods,

services, or commercial activities,

shall be liable in a civil action by any person

who believes that he or she is or is likely to be

damaged by such act.

15 U.S.C. § 1125(a)(1). Both legal theories share a common

inquiry: “[w]hether we call the violation infringement, unfair

competition or false designation of origin, the test is

identical—is there a ‘likelihood of confusion?’” New W.

Corp. v. NYM Co. of Cal., 595 F.2d 1194, 1201 (9th Cir.

1979). Here, we conclude that there is not.

Plaintiff’s theory is that, because the media-shifted files

display Plaintiff’s trademarks and trade dress when

performed, consumers will be confused about their

origin—believing that the tracks originated with Plaintiff,

rather than with Defendants. But this theory does not involve

consumer confusion about the source of an appropriate

“good,” as that concept has been defined by the Supreme

Court. Instead, it alleges possible confusion over the source

of content. Analyzing the Lanham Act’s unfair competition

provision, 15 U.S.C. § 1125, the Supreme Court has held that

the statutory phrase “origin of goods” must “refer[] to the

producer of the tangible goods that are offered for sale, and

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not to the author of any idea, concept, or communication

embodied in those goods.” Dastar Corp. v. Twentieth

Century Fox Film Corp., 539 U.S. 23, 37 (2003). The

concept of origin is “incapable of connoting the person or

entity that originated the ideas or communications that

‘goods’ embody or contain.” Id. at 31–32. And, although the

Supreme Court was interpreting the “unfair competition”

provision in section 43 of the Lanham Act, “‘the same

standard’ applies to both registered and unregistered

trademarks.” See, e.g., GoTo.com, Inc. v. Walt Disney Co.,

202 F.3d 1199, 1204 n.3 (9th Cir. 2000) (explaining that

section 32 “covers onlyregistered marks,” whereas section 43

“protects against infringement of unregistered marks and

trade dress as well as registered marks”).

Perhaps in view of this limitation, Plaintiff frames the

dispute as concerning a new tangible good bearing its

trademark, describing the new digital files that Defendants

allegedly created from Plaintiff’s CD-Gs as the goods about

which consumers may be confused. But, although

Defendants may, in some sense, have created a new good by

copying Plaintiff’s CD-Gs to hard drives, it is still not a

relevant good under the Lanham Act. We agree with the

Seventh Circuit, which held, in addressing a similar claim by

this very Plaintiff against another karaoke operator, that “the

‘good’ whose ‘origin’ is material for purposes of a trademark

infringement claim is the ‘tangible product sold in the

marketplace’ rather than the creative content of that product.” 

Phx. Entm’t Partners v. Rumsey, 829 F.3d 817, 828 (7th Cir.

2016) (quoting Dastar, 539 U.S. at 31). Karaoke patrons who

see Defendants’ performances of Plaintiff’s karaoke tracks

will not be confused about “the source of the tangible good

sold in the marketplace.” Id. at 829. Consumers are not

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SLEP-TONE ENTM’T V. WIRED FOR SOUND 9

aware of the new, media-shifted digital files about which

Plaintiff asserts confusion.

When the claim is more accurately conceived of as

attacking unauthorized copying, Dastar requires us to avoid

recognizing a “species of mutant copyright law” by making

such claims cognizable under the Lanham Act. 539 U.S. at

34. Thus, the Seventh Circuit held that “the good that SlepTone alleges the defendants are improperly passing off as a

Slep-Tone product is the unauthorized digital copy of the . . .

track.” Rumsey, 829 F.3d at 828. But “[i]t [was] not alleged,

nor [did] the briefing suggest, that the patrons see the

physical good in question—the digital file that presumably

resides on the hard drive of the bar’s karaoke system.” Id. If

there is any confusion, it does not concern the source of the

goods, as the Lanham Act requires. Consumers never see the

digital files and Defendants neither sell them nor make

representations about their source medium. Accordingly,

Defendants do not use the Sound Choice marks “in

connection with the sale, offering for sale, distribution, or

advertising” of the files under 15 U.S.C. § 1114(1)(a) or “in

connection with” the files under § 1125(a)(1). Instead,

Defendants make allegedly unauthorized use of the content of

Plaintiff’s karaoke tracks, which Dastar precludes as a

trademark claim. As the Supreme Court explained, “[t]he

words of the Lanham Act should not be stretched to cover

matters that are typically of no consequence to purchasers.” 

Dastar, 539 U.S. at 32–33.

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Plaintiff does not plausibly allege consumer confusion

over the origin of a good properly cognizable in a claim of

trademark infringement. We affirm the district court’s

dismissal of Plaintiff’s trademark claims.

AFFIRMED in part; REVERSED in part and

REMANDED. The parties shall bear their own costs on

appeal.

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