United States District Court, D. Colorado
PHOENIX ENTERTAINMENT PARTNERS, LLC, a North Carolina LLC, Plaintiff,
MICHAEL T. SULLIVAN; and MTS PRODUCTIONS INC., a Colorado corporation; Defendants.
ORDER ON MOTION TO DISMISS
Y. DANIEL, SENIOR UNITED STATES DISTRICT JUDGE.
MATTER is before the Court on Defendants Michael T.
Sullivan's and MTS Productions, Inc.'s Motion to
Dismiss Under Federal Rules of Civil Procedure 12(b)(6) (ECF
No. 17), filed September 7, 2017. Plaintiff Phoenix
Entertainment Partners, LLC filed a Response (ECF No. 20) on
September 28, 2017, and Defendants Sullivan and MTS
Productions Inc. filed a Reply (ECF No. 23) on October 11,
2017. Since the filing of Defendants' Motion to Dismiss,
Plaintiff has filed two Notices of Voluntary Dismissal of
Party (ECF Nos. 30 and 33), filed on February 13, 2018 and
February 28, 2018, respectively. Thus, Defendants Broadways,
Inc., and J.A.C.K. GONSKA INC., have been dismissed from this
action. (See Orders of Dismissal, ECF Nos. 31 and
Phoenix Entertainment Partners, LLC (“Phoenix”),
brings claims of trademark infringement, unfair competition,
and copyright infringement, against Defendants MTS
Productions, Inc. (“MTS”), and Michael T.
Sullivan (“Sullivan”), stemming from a regular
series of karaoke shows hosted by Defendants MTS Productions
and Sullivan. Phoenix alleges that MTS and Sullivan engaged
in copyright infringement by making copies of and
distributing karaoke accompaniment tracks, which are subject
to copyrights owned by Phoenix. Compl. ¶ 1.
Additionally, Plaintiff alleges that Defendants engaged in
trademark infringement by using Phoenix's federally
registered trademarks and service marks without authorization
in the course of providing commercial karaoke entertainment
services and related ancillary services, all without
authorization. Id. Phoenix is a North Carolina
limited liability company having its principal place of
business in Pineville, North Carolina. See ECF No.
1, Compl. ¶ 7. Defendant MTS Productions Inc., is a
Colorado corporation that operates a mobile entertainment
business, which provides karaoke-related services. Compl.
¶ 8. Defendant Michael T. Sullivan, a Colorado resident,
owns and operates MTS, and personally participates in
MTS's mobile entertainment business. Compl. ¶ 9.
allegations of the Complaint center on karaoke shows
facilitated by Defendants. According to Plaintiff,
“[t]he basic premise of a karaoke show is that the
venue hosting the show provides patrons with access to a
sound system and specially prepared karaoke accompaniment
tracks, so that individual patrons may perform for the
crowd.” Id. at ¶ 15. A “karaoke
accompaniment track” is an audiovisual work comprising
a re-recorded version of a popular song without the lead
vocals synchronized to a graphical component containing a
lyric display, cueing information, and other information.
Id. at ¶ 16. Plaintiff provides that
“when a karaoke accompaniment track is publicly
performed, the graphical component is displayed to both the
patron who is performing and may be displayed to the crowd as
well.” Id. at ¶ 17. Plaintiff alleges
that venues offer karaoke entertainment in exchange for
patronage of their establishment and the purchase of food and
beverages. Id. at ¶ 18. Mobile entertainment
operators, including MTS and Sullivan, are hired by venues to
make karaoke tracks available for patrons' use and to
provide karaoke entertainment services on the venues'
behalf. Id. at ¶ 20.
Phoenix is the owner of SOUND CHOICE® (“Sound
Choice”), a federally registered trademark. Phoenix
alleges that it licenses and distributes karaoke tracks and,
“primarily through licensees, provides karaoke
entertainment services.” Id. at ¶ 21.
Similarly, Phoenix owns CHARTBUSTER KARAOKE®
(“Chartbuster”), a federally registered
trademark, in connection with which Phoenix distributes
karaoke tracks. Id. at ¶ 28. Phoenix is also
the owner of the Sound Choice federal service mark
registration, acquired by from Slep-Tone, Plaintiff's
predecessor-in-interest, on February 15, 2015. Id.
at ¶ 42; see Annex B. Phoenix is also the owner
of the Chartbuster federal service mark, by virtue of an
assignment instrument from Piracy Recovery, LLC, dated
November 10, 2015. Id. at ¶¶ 52-54;
see Annex C.
is also the sole owner of Sound Choice Entertainment, LLC, a
Texas limited liability company (“SCE”),
“that is engaged in the business of providing karaoke
entertainment services to venues in various locations around
the United States, and which is preparing to enter the
Colorado market.” Id. at ¶ 51. Phoenix
does not allege that they do, or have begun to, provide such
karaoke entertainment services in Colorado.
is in the business of licensing the Sound Choice marks for
karaoke entertainment services. Id. at ¶ 46.
Phoenix further alleges that karaoke operators are required
to acquire a license from Phoenix for the right to display
the Sound Choice mark in connection with their commercial
karaoke shows. Id. at ¶ 47.
alleges that more than 70% of all accompaniment tracks played
at commercial karaoke shows in the United States are either
Sound Choice or Chartbuster Karaoke branded tracks.
Id. at ¶ 30. Phoenix alleges that Sound Choice
branded tracks, alone, exceed 50% of the market share.
Id. Plaintiff maintains that Sound Choice's
popularity derives from the quality of the sound and its
highly accurate singing cues. Id. at ¶¶
31, 32. Thus, Plaintiff's claim that the association of
the Sound Choice brand with a mobile entertainment
operator's karaoke business provides them a perception of
legitimacy and professionalism in the marketplace.
Id. at ¶ 33.
claims that Sound Choice and Chartbuster tracks are
frequently and illicitly duplicated and shared among karaoke
professionals, and that this distribution allows operators to
gain the benefits of the Sound Choice and Chartbuster brands
without paying for the right to use them. Id. at
alleges that Defendants MTS and Sullivan repeatedly display
the Sound Choice Marks in connection with supplying their
karaoke entertainment services, “often dozens of times
over the course of a typical four-hour karaoke show.”
Id. at ¶ 57. Phoenix further alleges that
because of the “well-known association of the Sound
Choice Marks with karaoke entertainment services, the display
of the Sound Choice Marks in connection with the services,
regardless of the particular song being played, acts as a
general advertisement for the services as well as an
indicator of the quality of the services being
provided.” Id. at ¶ 58. Plaintiff asserts
that the frequent, repeated display of the Sound Choice Marks
during Defendants' shows is likely to confuse patrons of
Phoenix's sponsorship or approval of their services.
Id. at ¶¶ 59-64. As a result of
Defendants' actions, Phoenix alleges that it has been
damaged through the loss of revenues through the sale or
licensing of its services, in addition to Phoenix's
inability to control the quality of services provided with
the Sound Choice Marks. Id. at ¶ 65.
respect to Plaintiff's copyright claims, Plaintiff claims
that Defendants infringed on its Sound Choice copyright when
they copied the audiovisual works. Phoenix is the copyright
owner of the audiovisual works listed in Annex A of the
Complaint, by virtue of assignment from Piracy Recovery, LLC.
Id. at ¶ 38. Annex A shows a copyright
registration of the sound recording, “Blue” by
artist LeeAnn Rimes, registration number SR0000367547.
Phoenix alleges that its ownership of this copyright grants
it the exclusive rights to reproduce and distribute the work
to the public by sale or other transfer of ownership, i.e.,
rental or lease. Id. at ¶ 39. This copyright
was registered with the United States Copyright Office prior
to the commencement of this action, and prior to
Defendants' alleged acts of copyright infringement.
Id. at ¶ 40. Phoenix notes that “[t]he
audiovisual works are the subject of a separate copyright
from the copyright in the underlying musical compositions
they embody.” Id. at ¶ 41.
Standard of Review
considering a motion to dismiss under Rule 12(b)(6), a court
must determine whether the plaintiff has stated a claim upon
which relief may be granted. “To survive a motion to
dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.' ” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
“[T]he mere metaphysical possibility that some
plaintiff could prove some set of facts in support
of the pleaded claims is insufficient; the complaint must
give the court reason to believe that this plaintiff