Slep-Tone Entertainment Corporation v. Daniel Roberto et al
Filing
109
MEMORANDUM Opinion and Order Signed by the Honorable John W. Darrah on 10/22/2013. (ao,)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
SLEP-TONE ENTERTAINMENT
CORPORATION,
Plaintiff,
v.
DANIEL ROBERTO, et al.,
Defendants.
)
)
)
)
)
)
)
)
)
Case No. 12-cv-5750
Judge John W. Darrah
MEMORANDUM OPINION AND ORDER
Plaintiff Slep-Tone Entertainment Corporation (“Slep-Tone”) has brought this action
against several Defendants, alleging, inter alia, infringement of Slep-Tone’s trademarked
karaoke discs. Defendants Gary DeLong, Arrowsound Entertainment (“Arrowsound”), and
D&R Catering Co., Corner Clubhouse Bar and Grill d/b/a Shanahan’s Pub, Inc.
(“D&R Catering”) moved to dismiss the Amended Complaint, pursuant to Fed. R. Civ. P.
12(b)(6), for failure to state a claim for relief. Alternatively, Defendants moved for severance
based on improper joinder. 1 After the Motions were filed and briefed, Slep-Tone dismissed
D&R Catering with prejudice. For the reasons presented below, DeLong and Arrowsound’s
Motion to Dismiss is denied, and the Motion to Sever is granted. Defendants DeLong and
Arrowsound are dismissed, for improper joinder, without prejudice.
BACKGROUND
Slep-Tone, a North Carolina corporation, is a manufacturer and distributor of karaoke
accompaniment tracks sold under the name “Sound Choice.” (Am. Compl. ¶¶ 16-17.) 2
Slep-Tone owns federal trademark registrations for the “Sound Choice” word and design marks
1
None of the Defendants has filed a reply brief in support of their Motions.
The following facts are taken from the Complaint, which are assumed to be true for the
purposes of a motion to dismiss. See Reger Dev., LLC v. Nat’l City Bank, 592 F.3d 759, 763 (7th
Cir. 2010).
2
(the “Sound Choice trademarks”). (Id. ¶¶ 53-56.) Slep-Tone alleges that its trademarked
karaoke recordings have been illegally copied, shared, distributed, sold by or to Defendants for
use without paying Slep-Tone and without Slep-Tone’s consent. When the Slep-Tone’s pirated
karaoke recordings are used to perform karaoke shows, the Sound Choice trademarks are
displayed on the video screen. (Id. ¶ 21.)
On July 23, 2012, Slep-Tone filed its initial Complaint against twenty separately named
defendants, including individual karaoke entertainers, associated corporate entities, and
restaurants providing karaoke entertainment. Slep-Tone subsequently dismissed various
Defendants and filed an Amended Complaint, which asserts claims for trademark and/or trade
dress infringement (Count I); unfair competition in violation of the Lanham Act, 15 U.S.C.
§ 1125(a) (Count II); and a state law claim under the Illinois Deceptive Trade Practices Act
(Count III). DeLong is a partner-owner of Arrowsound, and both are in the business of
providing karaoke entertainment. (Am. Compl. ¶ 9.) Slep-Tone has filed a number of similar
cases in other jurisdictions across the country.
LEGAL STANDARD
Federal Rule of Civil Procedure 8(a) requires that the plaintiff provide “a short and plain
statement of the claim showing that the pleader is entitled to relief.” Rule 8 “does not require
‘detailed factual allegations,’ but it demands more than an unadorned, the-defendant-unlawfullyharmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Under the Federal Rules, the defendant can assert
a defense that the plaintiff failed “to state a claim upon which relief can be granted.” Fed. R.
Civ. P. 12(b)(6). To defeat a motion to dismiss under Rule 12(b)(6), a plaintiff must plead
sufficient factual matter to state a claim for relief that is “plausible on its face.” Iqbal, 556 U.S.
at 578 (quoting Twombly, 550 U.S. at 570). To meet the plausibility standard, the plaintiff must
2
put forth enough “facts to raise a reasonable expectation that discovery will reveal evidence”
supporting the plaintiff’s allegations. Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009) (quoting
Twombly, 550 U.S. at 556). A 12(b)(6) motion does not evaluate “whether a plaintiff will
ultimately prevail” but instead whether the plaintiff is entitled to present evidence in support of
the claims. AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011) (internal quotation and
citation omitted).
ANALYSIS
To state a claim for trademark or trade dress infringement under the Lanham Act, a
plaintiff must allege that: (1) he owns a protectable trademark, and (2) the use of that mark by
the defendant is likely to cause confusion among consumers. Segal v. Geisha NYC LLC, 517
F.3d 501, 506 (7th Cir. 2008); see also Packman v. Chicago Tribune Co., 267 F.3d 628, 638 (7th
Cir. 2001). A service mark is “in use in commerce” when the mark “is used or displayed in the
sale or advertising of services and the services are rendered in commerce.” 15 U.S.C. § 1127.
Courts use the same analysis for deciding whether a plaintiff has stated a claim for unfair
competition. See, e.g., Flentye v. Kathrein, 485 F. Supp. 2d 903, 918 (N.D. Ill. 2007) (“To state
a claim of unfair competition under the Lanham Act, Plaintiffs must allege that (1) their mark is
protectable, and (2) Defendants’ use of the mark is likely to cause confusion among
consumers.”). Here, Defendants do not dispute that Slep-Tone has alleged ownership of a valid
and protectable mark. Rather, Defendants argue that Slep-Tone has failed to allege Defendants
used Slep-Tone’s trademark in a manner likely to cause confusion.
Slep-Tone has alleged that “Defendants’ use of the Sound Choice Marks, or of the Trade
Dress, or both is likely to cause confusion, or to cause mistake, or to deceive the Defendants’
customers and patrons into believing that the Defendants’ services are being provided with the
authorization of the Plaintiff and that the Defendants’ music libraries contain bona fide Sound
3
Choice accompaniment tracks.” (Compl. ¶ 92.) Slep-Tone has likewise alleged that
“Defendants display SLEP-TONE’s registered trademarks to their customers or potential
customers for purposes of advertising to their customers the quality and superiority that is
associated with SLEP-TONE products” and that “Defendants, both [Karaoke Jockeys] and
venues, directly benefit from the advertisement of SLEP-TONE’s registered trademarks.” (Id. ¶¶
34-35.) Construing all inferences in Slep-Tone’s favor, as is required on a motion to dismiss,
these allegations, taken in context with the other allegations of the Amended Complaint,
plausibly state a claim for trademark infringement. Likewise, Slep-Tone has stated a claim for
unfair competition under 15 U.S.C. § 1125(a). Slep-Tone has alleged that Defendants’ use of
counterfeit karaoke tapes with the Sound Choice trademarks is likely to cause confusion among
customers (see Am. Compl. ¶¶ 98-99, 104-05) and that this unfair competition has harmed SlepTone and Slep-Tone’s legitimate customers (id. ¶¶ 106-07).
For the same reasons, Slep-Tone has also stated a claim under the Illinois Uniform
Deceptive Trade Practices Act (“DTPA”), 815 ILCS 510/2. Among other things, the DTPA
provides that “[a] person engages in a deceptive trade practice when . . . the person : . . . causes
a likelihood of confusion or misunderstanding as to the source, sponsorship . . . . [etc.].”
815 ILCS 510/2(a)(2). Slep-Tone’s DTPA claim mirrors its Lanham Act claims; where factual
allegations underlying a Lanham Act claim also form the basis for a claim under the DTPA, the
DTPA claim “must rise or fall based on the Lanham Act claim.” MJ & Partners Rest. Ltd.
P'ship v. Zadikoff, 10 F.Supp.2d 922, 929 (N.D. Ill. 1998). Defendants’ Motion to Dismiss is
denied. 3
3
Defendants have put forth various other arguments that will not be addressed, as they
are inappropriate on a motion to dismiss.
4
Joinder
Under Federal Rule of Civil Procedure 20(a)(2), defendants “may be joined in one action
as defendants” if the following two conditions are met: (1) “any right to relief is asserted against
them jointly, severally, or in the alternative with respect to or arising out of the same transaction,
occurrence, or series of transactions or occurrences,” and (2) “any question of law or fact
common to all defendants will arise in the action.” Fed. R. Civ. P. 20(a)(2)(A)-(B). “On motion
or on its own, the court may at any time, on just terms, add or drop a party.” Fed. R. Civ. P. 21.
Defendants argue that they should be severed from this action because they have no
relationship with each other and were not involved in any of the same “transaction, occurrence,
or series of transactions or occurrences” with any of the other Defendants. Slep-Tone responds
that joinder is proper based primarily on its allegation that the infringement stems from its
allegedly pirated karaoke tapes.
Courts in this district have repeatedly recognized that similarity of claims between a
plaintiff and various defendants is not sufficient for joinder. See, e.g., McDowell v.
Morgan Stanley & Co., 645 F. Supp. 2d 690, 697 (N.D. Ill. 2009) (“One or more defendants’
similar conduct, without anything more, does not rise to a sufficient level that would justify
joining those defendants in a single action pursuant to Rule 20.”); SB Designs v. Reebok Int’l,
Ltd., 305 F. Supp. 2d 888, 892 (N.D. Ill. 2004) (“The fact that the defendants allegedly violated
the same trademark does not mean that plaintiffs’ claims against them arise out of the same
transaction or occurrence.”); Androphy v. Smith & Nephew, Inc., 31 F. Supp. 2d 620, 623 (N.D.
Ill. 1998) (holding that defendants in patent-infringement case who sold different products and
were competitors of one another were improperly joined); Pergo, Inc. v. Alloc, Inc., 262 F. Supp.
2d 122, 128 (S.D.N.Y. 2003) (“The fact that two parties may manufacture or sell similar
products, and that these sales or production may have infringed the identical patent owned by the
5
plaintiffs is not sufficient to join unrelated parties as defendants in the same lawsuit pursuant to
Rule 20(a).”). Indeed, courts in other districts addressing similar lawsuits by Slep-Tone have
held that Slep-Tone’s allegations of infringement are insufficient to join many defendants. See
Slep-Tone Entm’t Corp. v. Ellis Island Casino & Brewery, et al., No. 2:12-CV-239-KJD-NJK,
2013 WL 530905 (D. Nev. Feb. 11, 2013); Slep-Tone Entm’t Corp. v. Mainville, et al., No. 3:11cv-122, 2011 WL 4713230 (W.D.N.C. Oct. 6, 2011).
Here, there are no allegations that Defendants DeLong or Arrowsound were involved in
any “transaction, occurrence, or series of transactions or occurrences” with any of the other
Defendants. Likewise, Slep-Tone does not allege that it engaged in any transaction with any of
the Defendants; rather, it essentially admits that Defendants are virtual strangers to it and each
other and that the only commonality is that Defendants at some point in time allegedly infringed
on Slep-Tone’s trademark. Because Slep-Tone has failed to allege a basis for joinder, it is proper
to sever Defendants DeLong and Arrowsound from this matter. If Slep-Tone wishes to proceed
against those Defendants, Slep-Tone must file a new action, including paying a filing fee, against
DeLong and Arrowsound. If Slep-Tone so proceeds, Slep-Tone should indicate that any newly
filed case is related to this matter.
CONCLUSION
For the reasons stated above, Defendants DeLong and Arrowsound’s Motion [95] to
Dismiss is denied and the Motion to Sever is granted. Defendants DeLong and Arrowsound are
dismissed without prejudice. It is further ordered that if Slep-Tone wishes to proceed against
those severed Defendants, Slep-Tone must file a new action against DeLong and Arrowsound.
6
Defendant D&R Catering’s Motion [87] is denied as moot; D&R Catering is dismissed
with prejudice based on Slep-Tone’s voluntary dismissal.
Date: October 22, 2013
______________________________
JOHN W. DARRAH
United States District Court Judge
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?