## Facts

- Slep–Tone Entertainment Corp. (and its successor, Phoenix Entertainment Partners, LLC) produced karaoke accompaniment tracks marketed under the **Sound Choice** trademark and related on-screen trade dress.
- The karaoke product combined (1) an audio track (popular song without lead vocals) and (2) synchronized on-screen graphics showing lyrics and visual timing cues.
- Karaoke operators often “media-shifted” content from CD+G discs to computer hard drives; the Sound Choice mark and graphics could still appear during performances even when the files were unauthorized copies.
- A Peoria, Illinois bar (Basket Case Pub) and its owner allegedly used unauthorized digital copies of Sound Choice karaoke tracks during live karaoke shows.
- The alleged misconduct involved performance/display of the marked tracks in the bar, not sale or distribution of discs or other tangible media bearing the mark.
- Plaintiffs asserted Lanham Act trademark infringement and related “passing off” theories based on the public display of Sound Choice marks during performances using unauthorized copies.

## Issues

1. Whether a Lanham Act passing off/trademark infringement claim is plausibly stated when the alleged conduct is playing unauthorized karaoke tracks in a bar, rather than selling tangible goods bearing the mark.
2. Whether the complaint plausibly alleged a likelihood of consumer confusion as to the source of any tangible good sold in the marketplace.

## Decision

- The Seventh Circuit affirmed the Rule 12(b)(6) dismissal.
- The court held plaintiffs did not plausibly allege consumer confusion as to the source of any tangible good sold in the marketplace.
- The court treated the allegations as describing unauthorized copying and performance, which did not fit the Lanham Act injury theory asserted.

## Legal Principles

- Lanham Act trademark infringement requires a plausible likelihood of confusion regarding the source, sponsorship, or affiliation of a good or service in commerce.
- In Seventh Circuit passing off and reverse passing off cases, actionable confusion typically concerns the source of a **tangible product sold in the marketplace**, not mere internal use of marked content.
- Trademark law cannot be used to recast a claim whose gravamen is unauthorized copying/performance into a substitute for copyright protection.
- At the pleading stage, a complaint must identify a cognizable source-confusion theory tied to goods or services as trademark law recognizes them.

## Conclusion

The Seventh Circuit held that alleging a bar performed karaoke using unauthorized copies that displayed the plaintiff’s marks did not plausibly plead Lanham Act confusion about the source of a tangible good sold to consumers, so dismissal for failure to state a claim was proper.


Phoenix Ent. Partners, LLC v. Rumsey, 829 F.3d 817 (7th Cir. 2016)