Slep-Tone v. Wired for Sound Karaoke, 1/18/17, 9C
Slep-Tone produces karaoke tracks that include both audio and visual elements. The tracks are sold on CDs under the trademark “Sound Choice.” Karaoke operators purchase the CDs, and then transfer the tracks to computer for ease of use during karaoke events. Slep previously opposed these transfers but now allows them under a strict set of contractual requirements to prevent illegal file sharing (e.g., agreeing to make only one copy and submitting to auditing by Slep). Slep sued Wired for unauthorized copying, and Wired settled by agreeing to the stricter transfer protocol. When Wired allegedly breached the protocol, Slep sued again claiming that Wired violated the Lanham Act. The trial court granted Wired’s 12(b)(6) motion with respect to the Lanham Act claims. Held: Affirmed.
Generally, the Lanham Act provides two separate causes of action: 1) claims for infringing a registered mark (called a section 32 claim); and, 2) broadly speaking, claims for unfair competition, like misstating the origin of goods, whether a mark is registered or unregistered (called a section 43 claim). Both claims turn on whether there is a likelihood of consumer confusion.
Slep argued that consumers listening to the karaoke tracks played by Wired were likely to be misled about the origin of the karaoke track, since their marks are displayed when the tracks are played. According to 9C, Slep’s theory fails at a fundamental level: Section 43 unfair competition claims require confusion of the source of tangible goods that are offered for sale, not confusion about the source of content.
Moreover, Slep’s argument is factually lame. Consumers of karaoke don’t see the digital file and nothing is offered for sale; they also don’t attend an event to purchase a product and will have the same sensory experience when the tracks are played from a hard drive. This case is about unauthorized copying, not trademark.