Slep-Tone Entertainment Corpor v. Karaoke Kandy Store, Inc., et al

Filing

OPINION filed : REVERSED, decision not for publication. Alice M. Batchelder, Chief Circuit Judge; Damon J. Keith, Circuit Judge and Boyce F. Martin , Jr., Authoring Circuit Judge.

Case: 11-4258

Document: 006111613785

Filed: 03/07/2013

Page: 1

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0239n.06
No. 11-4258
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT

FILED

SLEP-TONE ENTERTAINMENT COPORATION,

Mar 07, 2013
Plaintiff-Appellant,

DEBORAH S. HUNT, Clerk

v.
ON APPEAL FROM THE
UNITED STATES DISTRICT
COURT FOR THE NORTHERN
DISTRICT OF OHIO

KARAOKE KANDY STORE, INC.;
CHARLES M. POLIDORI,
Defendants-Appellees.

/
Before: BATCHELDER, Chief Circuit Judge, KEITH, and MARTIN, Circuit Judges.
BOYCE F. MARTIN, JR., Circuit Judge. This case is about the alleged unauthorized display
of registered trademarks. Slep-Tone Entertainment Corp. owns the “Sound Choice” trademark and
an accompanying display mark. Slep-Tone encodes these marks onto karaoke discs which it sells
under the trade name Sound Choice. When played in a karaoke machine, these discs display the
Sound Choice marks on the screen. Slep-Tone alleges that Karaoke Kandy Store and its owner,
Charles Polidori, have copied Slep-Tone’s discs, without permission, onto hard drives and MP3
players which they have then sold to customers who use these devices to sing karaoke. When the
customers sing karaoke, Slep-Tone alleges, they will see the Sound Choice marks on the screen and
believe that the Sound Choice brand is somehow aligned with Polidori and Karaoke Candy Store.
Slep-Tone sued Polidori and Karaoke Candy Store for trademark infringement and unfair business
practice under the Lanham Act and Ohio state law. The district court granted summary judgment

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to Karaoke Kandy Store and Polidori. Slep-Tone appeals. For the reasons that follow, we
REVERSE.
Slep-Tone makes and distributes karaoke songs on compact disc, in one of two flavors: either
as a “CD+G” (compact disc plus graphics) or as an MP3+G (MP3 plus graphics). Under the trade
name “Sound Choice,” Slep-Tone then sells these karaoke discs through its website and through
retail outlets. Slep-Tone labels these karaoke discs with a stylized display trademark, which contains
the words “SOUND CHOICE” superimposed on a graphic that looks like a truncated guitar
fretboard. Slep-Tone has owned, since the mid-1990s, two different trademarks for these labels: (1)
the mark “SOUND CHOICE” as used in conjunction with pre-recorded magnetic audio cassette
tapes and compact discs containing musical compositions and compact discs containing video related
to musical compositions,” (U.S. Trademark Registration No. 1,923,448); and (2) the stylized
SOUND CHOICE display mark, as used in conjunction with the same goods (U.S. Trademark
Registration No. 2,000,725). Slep-Tone also encodes the graphics portion of its discs with the
SOUND CHOICE mark so that it appears on a video display while the karaoke song is playing.
Charles Polidori is a businessman in the karaoke industry, providing karaoke music,
equipment and related services. Polidori incorporated Karaoke Kandy Store, Inc., in 1995, and it has
since bought Slep-Tone’s karaoke discs.
Slep-Tone sued Karaoke Kandy Store and Polidori in the United States District Court for the
Northern District of Ohio, alleging that the defendants had infringed upon their trademarks in
violation of the Lanham Act (specifically 15 U.S.C. sections 1114 and 1125). Slep-Tone also
alleged that Karaoke Kandy Store and Polidori had engaged in deceptive trade practices, in violation

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of Ohio Revised Code section 4165.02, and had engaged in trademark infringement in derogation
of Ohio common law. Specifically, Slep-Tone alleged that the Karaoke Kandy Store and Polidori
copied, without permission, its discs onto hard drives that the Karaoke Kandy Store then sold to its
customers.
The Karaoke Kandy Store and Polidori moved for summary judgment. In opposition to its
motion, Slep-Tone produced the affidavits of three people, two of whom–Robert Shumaker and Jeff
DeLeva–were former Karaoke Kandy Store employees who declared that they knew that Karaoke
Kandy Store had copied the contents of Slep-Tone CDs onto hard drives which they sold to
customers.
The district court granted Karaoke Kandy Store’s motion for summary judgment. The court
held that Slep-Tone had failed to direct its attention to any evidence tending to show that either
Polidori or Karaoke Kandy Store had used Slep-Tone’s trademarks without permission. The court
found the affidavits of Robert Shumaker, Jeff DeLeva, and Kurt Slep did not establish that Polidori
or Karaoke Kandy Store copied and sold Slep-Tone’s karaoke recordings which display its
trademarks. Rather, the affidavits provided, according to the court, “vague and conclusory
statements without foundation[,]” which were “not specific facts as are required to overcome
summary judgment.”
We review a district court’s grant of summary judgment de novo. Salling v. Budget Rent-ACar Sys., Inc., 672 F.3d 442, 443 (6th Cir. 2012). A grant of summary judgment is proper if the
materials in the record show that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law. Id. at 443-44 (citing Fed. R. Civ. P. 56(a)). In deciding

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a motion for summary judgment, we must view the factual evidence and draw all reasonable
inferences in favor of the nonmoving party. Id. at 444 (citing Banks v. Wolfe Cnty. Bd. of Educ., 330
F.3d 888, 892 (6th Cir.2003)) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986)).
To establish its claims under the Lanham Act and Ohio law, Slep-Tone must prove three
elements: (1) it has valid marks entitled to protection; (2) that Karaoke Kandy Store and Polidori
committed unauthorized actions with respect to those marks that are (3) likely to result in consumer
confusion. 15 U.S.C. §§ 1114(1), 1125(a); Ohio Rev. Code Ann. § 4165.02 (West 2013). Ohio
common law trademark infringement claims and Ohio Deceptive Trade Practices Act claims mirror
trademark infringement claims brought under the Lanham Act. Daddy’s Junky Music Stores, Inc.
v. Big Daddy’s Family Music Ctr., 109 F.3d 275, 288 (6th Cir. 1997).
Here, as to the first element, Karaoke Kandy Store does not dispute that Slep-Tone’s marks,
which are registered with the United States Patent and Trademark Office, are valid and entitled to
protection. See 15 U.S.C. § 1115(a).
Therefore, to survive summary judgment, Slep-Tone needs to show, in part, that there is a
genuine dispute of material fact about the second element, whether Karaoke Kandy Store committed
unauthorized actions with respect to those marks.
In opposition to the summary judgment motion, Slep-Tone produced the affidavits of three
people: Kurt Slep, the current CEO of Slep-Tone; and Jeff DeLeva and Robert Shumaker, both
former Karaoke Kandy Store employees.

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Karaoke Kandy Store and Polidori argue that Shumaker’s declaration “is devoid of any basis
for his personal knowledge regarding authorization” to copy Slep-Tone’s discs. We disagree. We
believe that a reasonable jury could infer, based upon Shumaker’s affidavit, that Karaoke Kandy
Store and Polidori committed unauthorized actions with respect to Slep-Tone’s marks.
In his affidavit, Shumaker recounts an anecdote in which Polidori personally asked him if
it was possible to remove the Sound Choice name and logo from the digital karaoke recordings that
were part of the music libraries that were loaded onto machines sold by Karaoke Kandy Store.
Shumaker replied that he “did not have the ability to do that,” and stated that he was curious as to
why Polidori had asked him such a question. Polidori responded by showing Shumaker a copy of
Slep-Tone’s complaint. These facts would be admissible in evidence
Therefore, based upon Shumaker’s declaration, we conclude that a reasonable jury could
infer that Polidori’s actions and statements show that Polidori knew that at least some of the karaoke
tracks contained within the music libraries loaded onto the machines sold by Karaoke Kandy Store
were Slep-Tone tracks, that this use was not authorized by Slep-Tone, and that the inclusion of the
Slep-Tone marks on the video portion of the karaoke tracks was not authorized.
In a trademark case, we would next consider whether this unauthorized use would create a
likelihood of consumer confusion. See Frisch’s Rests., Inc. v. Elby’s Big Boy, Inc., 670 F.2d 642,
648 (6th Cir. 1982). But, because discovery in this case was minimal, because the record is not
developed, and because the district court made no factual findings as to the Frisch factors we
consider in such an inquiry, we are unable to draw any conclusions about likely consumer confusion.
For all of these reasons, we REVERSE.