Thursday, August 9, 2012

Does a Trademark Owner Need a Judgment Against a Direct Infringer Before Pursuing a Vicarious Infringer?

No.

Slep-Tone Entertainment Corp. owns a U.S. Trademark Registration for the mark Sound Choice in connection with karaoke products.  Slep-Tone sued a restaurant, which had hired one or more karaoke operators who allegedly were using Slep-Tone's trademark without Slep-Tone's authority.  Slep-Tone's claim against the restaurant is that the restaurant derives a benefit from the karaoke operators' use of the mark, and the restaurant knows the karaoke operators are not operated to use the trademark.

The restaurant sought dismissal, arguing that Slep-Tone must first establish that the karaoke operators are infringing the trademark.  The Court was not convinced.
Defendant’s argument lacks merit. As Plaintiff points out, this Court previously held in a related Slep-Tone case that to prevail on a contributory trademark infringement claim, a plaintiff must show that the defendant “intentionally induces another to infringe a trademark, or [ ] continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement....” Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 854, 102 S.Ct. 2182, 72 L.Ed.2d 606 (1982).
Vicarious liability for trademark infringement “requires a finding that the defendant and the infringer have an apparent or actual partnership, have authority to bind one another in transactions with third parties or exercise joint ownership or control over the infringing product.” RGS Labs Intern., Inc. v. The Sherwin-Williams Co., 2010 WL 317778, at *3 (S.D. Fla. Jan. 11, 2010) (citing Hard Rock CafĂ© Licensing Corp. v. Concession Servs., Inc., 955 F.2d 1143, 1150 (7th Cir. 1992)).
Here, with respect to all of the claims alleged in the complaint, it is immaterial whether the karaoke operators are named in the complaint. Plaintiff also does not need to achieve a judgment in its favor against the karaoke operators before it brings the instant action. Plaintiff’s allegations are sufficient because they include the facts that Defendant was aware of the karaoke operators’ unlawful activity and continued to utilize their services at its establishment. In other words, a finder of fact could determine that Defendant had the ability to control whether its karaoke providers/operators were performing using lawful, properly licensed accompaniment tracks.

Motion to dismiss denied.
Slep-Tone Entertainment Corp. v. Il Mio Sogno, LLC, Case No. 8:12-cv-1187 (M.D. Fla. Aug. 3, 2012) (J. Moody)


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