North Carolina-based maker of karaoke tracks Phoenix Entertainment Partners has filed suit against a Carol Stream-based DJ and karaoke business Echo Entertainment and the owner of Schaumburg sports bar MT Barrels, alleging the suburban DJ company has improperly used PEP’s trademarked karaoke tracks, which include accompanying graphics, when providing karaoke entertainment services at various establishments throughout the Chicago area, including at MT Barrels, which PEP alleges continued to utilize Echo’s services even after it was warned by PEP of Echo’s potential infringement.
Phoenix Entertainment introduced its complaint in federal court in Chicago on April 23.
The complaint demands potentially more than $2 million in damages for the alleged infringement, as well as destruction of all the devices used by the DJ company to store and play the karaoke tracks PEP alleges infringe on its trademark.
The case centers on Echo’s alleged acts of copying and using karaoke tracks created under the Sound Choice brand, which is owned by PEP, without obtaining authorization to do so under PEP’s media sharing policy.
According to the complaint, since 2009, PEP has authorized users to copy its karaoke tracks, which include graphics and the Sound Choice trademark, onto hard drives and other devices for their own use, provided the users also own a physical disc which includes the tracks copied onto the other drive.
According to the complaint, the policy further stipulates the ratio of disc-to-drive remain at 1:1, meaning the user not copy one disc onto more than one other drive.
Under the policy, the disc is then to be kept by the user for as long as they continue to use the karaoke tracks.
However, PEP said it has become common in recent years for users to simply copy tracks from device to device, replacing the original discs altogether, and destroying the business of those who, like PEP, produce the tracks or hold the rights to the tracks and their reproduction.
In its complaint, PEP has alleged Echo Entertainment has used a drive containing a number of those trademarked tracks without authorization at MT Barrels and other Chicago area venues.
PEP has asserted it has photographs and videos demonstrating the use of those tracks by Echo at the Schaumburg establishment.
PEP asserts in its complaint Echo’s actions allow it to compete unfairly against other “legitimate PEP customers” who don’t engage in “piracy,” “helping to crowd higher cost but legitimate operators out of the market.”
This, in turn, discourages other operators from “investing in legitimate Sound Choice-branded products.”
PEP said it informed MT Barrels’ owners, NDC Management Inc., of the allegedly infringing activity, and offered the establishment the chance to enter a “safe harbor” program sheltering it from litigation arising from the actions of DJs and others it hires to provide entertainment for patrons.
However, PEP said NDC declined to take part in the safe harbor program, or end its relationship with Echo Entertainment, while continuing “to receive a financial benefit from the provision of infringing karaoke services at their establishment by (Echo), through the attraction of paying patrons to their establishment.”
PEP’s eight-count complaint asks the court to award damages of “up to $2 million per mark infringed, per defendant,” or no less than $25,000 per karaoke system the defendants operate and no less than $50,000 per establishment in which the infringing tracks were played; $100,000 from NDC for “acts of willful infringement;” and for the ordered destruction of all devices and media owned by Echo containing the trademarked tracks.
PEP is represented in the action by attorney Vivek Jayaram, of the Jayaram Law Group, of Chicago.