Plaintiff Slep-Tone Entertainment Corporation produces 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 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.
Plaintiff claimed 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 that “this attempt to stuff copyright claims into a trademark container fails.”
Plaintiff argued 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. The Act creates a federal civil cause of action for unauthorized use of a registered trademark.
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.
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 not to the author of any idea, concept, or communication embodied in those goods.” The concept of origin is “incapable of connoting the person or entity that originated the ideas or communications that ‘goods’ embody or contain.”
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.
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.” Consumers are not aware of the new, media-shifted digital files about which Plaintiff asserts confusion.
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. As the Supreme Court explained, “the words of the Lanham Act should not be stretched to cover matters that are typically of no consequence to purchasers.”
Plaintiff did not plausibly allege consumer confusion over the origin of a good properly cognizable in a claim of trademark infringement.