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Phoenix Entertainment Partners, LLC v. Star Music, Inc.

United States District Court, D. Minnesota

August 15, 2017

PHOENIX ENTERTAINMENT PARTNERS, LLC, Plaintiff,
v.
STAR MUSIC, INC., a Minnesota corporation d/b/a Star Music & The Singing Express; TRACY BROCK, a Minnesota individual d/b/a Star Music; RICH MANAGEMENT, INC., a Minnesota corporation d/b/a Bogart's/Apple Place Bowl; and FONG'S, INC., a Minnesota corporation d/b/a David Fong's Restaurant, Defendants.

          David R. Fairbairn, Jessica M.A. Thomas, and Andrew R. Swanson, KINNEY & LANGE, P.A., for plaintiff.

          Jonathan L.A. Phillips, SHAY PHILLIPS, LTD., for defendants Star Music, Inc. and Tracy Brock.

          Michael S. Sherrill, SHERRILL LAW OFFICES, PLLC, for defendants Rich Management, Inc. and Fong's, Inc.

          ORDER

          Patrick J. Schiltz United States District Judge

         Defendants Tracy Brock and Star Music, Inc. (“Star”) stage karaoke events at bars and other venues, including venues operated by defendants Rich Management, Inc. (“Rich”) and Fong's, Inc. (“Fong”). Plaintiff Phoenix Entertainment Partners, LLC (“Phoenix”) produces and distributes karaoke accompaniment tracks under the “Sound Choice” brand. Phoenix brings claims of trademark infringement, unfair competition, and deceptive trade practices under federal and state law arising from Star's and Brock's alleged use of Sound Choice-branded karaoke tracks at venues operated by Rich and Fong.

         This matter is before the Court on defendants' motions to dismiss. For the reasons that follow, the motions are granted with respect to Phoenix's federal claims, and those claims are dismissed with prejudice. The Court declines to exercise supplemental jurisdiction over Phoenix's state-law claims, and those claims are dismissed without prejudice.

         I. BACKGROUND

         Phoenix produces and distributes karaoke tracks under the “Sound Choice” brand.[1] Compl. ¶ 15. Each track is a short video that plays background music and that displays lyrics and cues to the singer. See Compl. ¶¶ 15, 19, 27, 40. Phoenix alleges that Sound Choice-branded karaoke tracks are “wildly popular” because they are particularly faithful to the sound of the original recordings and because they provide highly accurate singing cues. Compl. ¶¶ 17-19.

         Phoenix owns two registered trademarks-one for SOUND CHOICE and the other for a graphic displaying a musical staff with the words “Sound Choice” superimposed in a stylized font. Compl. ¶¶ 32, 34. Phoenix also owns two registered service marks-again, one for SOUND CHOICE and the other for the Sound Choice graphic. Compl. ¶¶ 33, 35. Phoenix alleges that it is also the owner of distinct and protectable trade dress, including the use of a particular typeface, style, and visual arrangement in displaying lyrics, and the use of a series of vanishing rectangles to indicate entry cues for singers. Compl. ¶ 40.

         Phoenix has released Sound Choice-branded karaoke tracks only on physical media-initially cassette tapes, and later compact discs. Compl. ¶ 20. Nonetheless, digital Sound Choice-branded karaoke tracks can be downloaded over the Internet or purchased on hard drives. Compl. ¶ 22. Phoenix alleges that the process required to enable the downloading of its tracks or their transfer onto hard drives involves certain format changes, and that these format changes degrade the quality of the tracks. Compl. ¶¶ 26-27. When these digital files are played, Phoenix contends, the Sound Choice marks and trade dress are displayed in connection with inferior sound and graphics, thus harming the brand. Compl. ¶ 54.

         Phoenix alleges that Star and Brock use digital copies of Phoenix's Sound Choice- branded karaoke tracks in their karaoke shows. Although much of Phoenix's complaint reads as though the mere existence of these digital copies is unlawful, Phoenix does not claim that it owns the copyright to the karaoke tracks. Instead, Phoenix claims that the display of its marks and trade dress during karaoke performances violates its trademark rights and constitutes deceptive trade practices and unfair competition.

         II. ANALYSIS

         A. Standard of Review .

         In reviewing a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6), a court must accept as true all of the factual allegations in the complaint and draw all reasonable inferences in the plaintiff's favor. Aten v. Scottsdale Ins. Co., 511 F.3d 818, 820 (8th Cir. 2008). Although the factual allegations need not be detailed, they must be sufficient to “raise a right to relief above the speculative level . . . .” Bell Atl. Corp. v. ...


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