On our motion, the Central District of Illinois dismissed a suit brought by Slep-Tone and Phoenix Entertainment Partners on August 4, 2015. Attorneys Bathke and Phillips filed a motion to dismiss at the outset of the suit, seeking a prompt and efficient resolution of the dispute. The Order granted that motion to dismiss. It concluded that Slep-Tone and Phoenix had not, and could not, adequately state their case. Importantly, the Court rejected the Plaintiffs media shifting theory.
Our client was accused of “media shifting," or copying CD based sound tracks onto alternative media such as computer hard drives. Slep-Tone/Phoenix claimed it created and applied a contractual clause permitting this process, under specified guidelines.
The Order stated that because Defendants do not sell or otherwise distribute the Slep-Tone product, and Slep-Tone offered no proof of sale, the Lanham Act, to which these are necessary elements, does not apply. In fact, Slep-Tone actually made the case for the Defendant that the showing of Sound Choice at the end of the tracks in question would give due credit to Sound Choice/Slep-Tone, and thus not infringe on their trademark. The Order stated that “in short, these allegations [regarding the Sound Choice mark] undermine any notion that the Defendants are trying to pass off the karaoke tracks as originating from anyone other than Plaintiffs.”
The discussion of media shifted tracks existing as a “new good” was discussed at length. But the Order stated that again, the Defendant was not accused of selling the “media shifted” copies, and thus there was nothing actionable under the Lanham Act. The Order continued to state
…the idea that a new good has been created merely by shifting the tracks from a disk to a hard drive is deeply flawed.
On August 26, 2015, Slep-Tone and Phoenix filed their notice of appeal in the Seventh Circuit Court of Appeals. The parties have fully briefed their positions and oral argument is in February.
Update: Shay Phillips, Ltd.'s victory over Phoenix Entertainment Partners LLC and Slep-Tone was affirmed by the Seventh Circuit Court of Appeals on July 21, 2016. A full blog article on the same can be found here.
We defend Phoenix Entertainment suits
Shay Phillips Ltd. defends allegations of media shifting, trademark and copyright infringement, and PEP cases. For consultation, contact us.