Phoenix Entertainment Partners, LLC vs. Jorgensen et al.

Filing 38

ORDER entered by Chief Judge James E. Shadid on 12/2/2016. For the reasons set forth above, the Defendants' Motion to Dismiss 36 is DENIED. This matter is referred to the Magistrate Judge for further proceedings. See full written Order. (VH, ilcd)

E-FILED

Friday, 02 December, 2016 04:32:36 PM
Clerk, U.S. District Court, ILCD

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
PHOENIX ENTERTAINMENT PARTNERS,
LLC,

)
)
)
Plaintiff,
)
)
v.
)
)
JAIMIE JORGENSEN d/b/a MOST WANTED )
PRODUCTIONS, et. al,
)
)
Defendants.
)

Case No. 15-1258

ORDER
This matter is now before the Court on Defendant Jorgensen’s Motion to Dismiss Pursuant to
Rule 12(b)(6). For the reasons set forth below, the Motion to Dismiss [36] is DENIED.
BACKGROUND
Plaintiff, Phoenix Entertainment Partners, LLC (“Phoenix”), brought this action alleging that
Defendant Jorgensen infringed its federal trademarks and trade dress, engaged in unfair competition
in violation of 15 U.S.C. § 1125 and state common law, and violated the Illinois Deceptive Trade
Practices Act, 810 ILCS 510/1. These allegations stem from Jorgensen’s providing karaoke services
to the other Defendants using files stored on his computer that had been transferred from karaoke tracts
originally created by SLEP-TONE and which are marked with the SOUND CHOICE marks. Tracts are
transferred from their original CD or MP3 format onto the user’s hard drive, a process known as mediashifting. The problem arises when users make more copies of the original tracts than authorized under
the Slep-Tone 1:1 ratio media shifting policy. Phoenix is the successor in interest to Slep-Tone
Entertainment Corporation, the original owner of the marks and creator of the tracts’ distinctive trade
dress.

Defendant Jorgensen has moved to dismiss the Complaint for failure to state a claim upon
which relief can be granted, citing Phoenix Entertainment Partners, LLC v. Rumsey, 829 F.3d 817 (7th
Cir. 2016). Phoenix has filed its response, and this Order follows.
DISCUSSION
Courts have traditionally held that a complaint should not be dismissed unless it appears from
the pleadings that the plaintiff could prove no set of facts in support of her claim which would entitle
her to relief. See Conley v. Gibson, 355 U.S. 41 (1957); Gould v. Artisoft, Inc., 1 F.3d 544, 548 (7th
Cir. 1993). Rather, a complaint should be construed broadly and liberally in conformity with the
mandate in Federal Rules of Civil Procedure 8(f). More recently, the Supreme Court has phrased this
standard as requiring a showing sufficient “to raise a right to relief beyond a speculative level.” Bell
Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007). Furthermore, the claim for relief must be
“plausible on its face.” Id.; Ashcroft v. Iqbal, 129 S.Ct. 1937, 1953 (2009).
For purposes of a motion to dismiss, the complaint is construed in the light most favorable
to the plaintiff; its well-pleaded factual allegations are taken as true, and all reasonably-drawn
inferences are drawn in favor of the plaintiff. See Albright v. Oliver, 510 U.S. 266, 268 (1994);
Hishon v. King & Spalding, 467 U.S. 69 (1984); Lanigan v. Village of East Hazel Crest, 110 F.3d
467 (7th Cir. 1997); M.C.M. Partners, Inc. V. Andrews-Bartlett & Assoc., Inc., 62 F.3d 967, 969 (7th
Cir. 1995); Early v. Bankers Life & Cas. Co., 959 F.2d 75 (7th Cir. 1992).
In support of its motion, Defendant cites the decision Rumsey. In that case, Phoenix brought
suit against a pub and its owner for playing unauthorized digital copies of its karaoke files (i.e,
“bootleg” copies) instead of properly authorized copies. 829 F.3d at 819-20. The Complaint alleged
trademark infringement and unfair competition under the Lanham Act and was dismissed for failure
to show a likelihood of confusion among customers as to the source of any tangible good containing
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the karaoke tracts they were seeing and hearing. It is “consumer confusion about the source of a
tangible good that a defendant sells in the marketplace that matters for purposes of trademark
infringement,” and the defendants were found to sell no tangible goods. Id., at 822-23. Rather, what
is seen and heard by patrons of the pub is the intangible content of the tracts resulting from the
unauthorized copying that would likely warrant protection under copyright law. Id., at 823-824.
The Lanham Act provides a cause of action for the unauthorized use of a trademark. 15 U.S.C.
§ 1114, et seq. Section 43(a)(1) of the Act punishes unfair competition by imposing liability on “[a]ny
person who, or in connection with any goods or services . . uses in commerce any word, term, name,
symbol, or device, or any combination thereof, or any false designation of origin, . . . which — (A) is
likely to cause confusion, or to cause mistake, or to deceive . . . as to the origin, sponsorship, or
approval of his or her goods, services, or commercial activities by another person . . . .” 15 U.S.C. §
1125(a)(1)(A).
In Rumsey, the Court of Appeals found it to be significant that the defendants did not compete
with Slep-Tone “in that they do not sell karaoke products or services to karaoke jockeys or other
establishments” like the pub. Rumsey, 829 F.3d at 823. Here, however, Jorgensen is alleged to
compete in the provision of karaoke services to bars and other establishments and is also alleged to
have violated trademarks covering both goods and services. Phoenix points out that Jorgensen is not
a bar owner providing free karaoke services for patrons like the defendant in Rumsey; rather, he is
alleged to be a mobile entertainer who sells/rents karaoke equipment and accompaniment tracks to
establishments wanting to offer karaoke to their patrons and is in effect competing with Phoenix in the
provision of these services. This seems to be precisely the type of situation that the Seventh Circuit
distinguished from the holding in Rumsey, and Phoenix’s claims regarding its service mark registrations
survive the Motion to Dismiss. Whether the product mark claims are viable is a much closer question,

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but given the relatively undeveloped factual record, the Court finds that this issue should be decided
after discovery reveals the precise nature of Jorgensen’s activities.
CONCLUSION
For the reasons set forth above, the Defendants’ Motion to Dismiss [36] is DENIED. This
matter is referred to the Magistrate Judge for further proceedings.
ENTERED this 2nd day of December, 2016.
s/ James E. Shadid
James E. Shadid
Chief United States District Judge

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