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Cavs Usa, Inc v. Slep-Tone Entertainment Corporation D/B/A Sound Choice

March 21, 2013

CAVS USA, INC., PLAINTIFF,
v.
SLEP-TONE ENTERTAINMENT CORPORATION D/B/A SOUND CHOICE, A NORTH CAROLINA CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

O

ORDER DENYING MOTIONS FOR SUMMARY JUDGMENT [Dkt. Nos. 63 & 64]

Presently before the court are Plaintiff CAVS USA Inc.("CAVS")'s Motion for Partial Summary Judgment and Defendant Slep-Tone Entertainment Corporation d/b/a/ Sound Choice ("Slep-Tone" or "Sound Choice")'s Motion for Summary Judgment. Having considered the parties' submissions and heard oral argument, the court adopts the following order.

I. BACKGROUND

CAVS is a California corporation that designs, manufactures, and distributes hardware for karaoke music, including machines and players that use compression technology known as MP3 graphics ("MP3") file compression. (Han Decl. ¶ 2.) The MP3 format is a compressed data format that allows thousands of songs to be saved onto a medium. (Id.) Prior to the MP3 format, the primary karaoke media format was the compact disc graphics ("CD") format. (Id. ¶ 4.) CD had limited memory but could be uploaded onto the JB 99 CAVS karaoke machine ("JB-99"). Defendant Sound Choice sells karaoke content in the form of CD discs.

In June 2011, Sound Choice sent an email (the "Email") to fewer than 1,000 email addresses of people involved in the karaoke industry. (Slep Decl. ¶ 7.) The Email stated:

This is an OFFER OF AMNESTY from a lawsuit for the use of Sound Choice Karaoke Music on certain CAVS Machines or preloaded Karaoke hard drives.

You may be aware that Sound Choice is bringing lawsuits against the users of illegal karaoke CAVs and computer hard drive units (http://thekiaa.org/the-lawsuits.html.)

Sound Choice is willing to grant you amnesty from a lawsuit for your unauthorized use of Sound Choice content on an illegal karaoke hard drive or CAVS unit in exchange for information concerning your purchase, on the following two conditions:

1. The unit must have been purchased from one of the following websites: [list of seven websites] or from someone using one of the following ebay user names [list of three user names] or purchased from the store: Karaoke Kandy Store (aka Lightyear Music) [address]

2. AND the hard drive or CAVS unit was purchased by you and you did not receive any Sound Choice discs as part of your purchase, or the discs you did receive with Sound Choice songs were Super CDGs (possibly DVDs with thousands of songs).

If you meet these 2 conditions and will cooperate and provide us the information we need about your hard drive or CAVS purchase this is your chance to be granted amnesty against our lawsuits. [...]

If you know anyone who meets these conditions, please forward this email to them. [. . .] (Decl. Susan B. Meyer in Support of Plaintiff's Motion for Partial Summary Judgment, Exh. D.)

Plaintiff CAVS filed a First Amended Complaint alleging trade libel and unfair competition. CAVS now moves for summary judgment on all issues except for damages, and Sound ...


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