On Tuesday, Law360 reported Judge Lee H. Rosenthal of the U.S. District Court for the Southern District of Texas partially dismissed a trademark suit brought by karaoke music publisher Phoenix Entertainment Partners LLC against several bars in the Houston area. The suit originated from the Houston bars playing several karaoke tracks while displaying the Sound Choice brand of karaoke tracks during the performance. Judge Rosenthal ruled that the suit should have been brought as a copyright claim, rather than a trademark claim, which follows several recent appellate-level decisions. This decision follows a similar January ruling in the Ninth Circuit.
Sound Choice is an entertainment company that has provided karaoke music for over thirty years and has a partnership agreement with Phoenix Entertainment. Phoenix Entertainment argued that the defendants have copied the Sound Choice tracks to a personal hard drive, played the copied tracks without paying for the license, and displayed the Sound Choice logo during performances without paying for a license to do so. Phoenix Entertainment decided to bring a trademark suit rather than a copyright suit because they argued consumers are confused by the source of the song. Rather than understanding they are getting a song from a computer's hard drive at the bar, consumers believe they are getting the songs from Phoenix Entertainment and Sound Choice.
This argument would have been much stronger if appellate courts had not recently held otherwise. In addition to the recent Ninth Circuit's decision in January, the Seventh Circuit ruled last year that Phoenix Entertainment could not bring a similar suit under the Lanham Act because that suit did not deal with "actual market goods" and instead dealt with "intangible expressive content." In similar fashion, Judge Rosenthal ruled consumers could not be confused because they do not see the actual files that play the songs, only the performance. However, this ruling did not extend to the display of Sound Choice's name and logo during a song's performance. This aspect of the case was allowed to continue.