The Gordon & Rees intellectual property litigation team of Richard Sybert, Susan Meyer, Hazel Pangan, and Amanda Abeln, with assistance from Brian Maschler, Benni Amato, and Holly Heffner, secured a favorable settlement for their client, plaintiff CAVS USA, Inc., on the eve of trial in the U.S. District Court for the Central District of California in Los Angeles. Terms included payment to CAVS of nearly half a million dollars and a private injunction, including retraction of false accusations of "illegality," against defendant Slep-Tone Entertainment Corp. d/b/a Sound Choice.
CAVS is a leading manufacturer of karaoke equipment, including state-of-the-art players utilizing file compression technology, wireless technology, and popular consumer electronic devices such as tablets and cellular phones. Sound Choice is a well-known karaoke content provider and supplies karaoke music tracks on compact discs and other media. Sound Choice had targeted CAVS’ patented and innovative equipment that obviated the need for physical discs to store karaoke music, something Sound Choice saw as threatening to its business and that led to a campaign against karaoke venues and DJs, and false claims that CAVS machines were "illegal."
In this highly contested suit, the Gordon & Rees team asserted creative and successful theories of liability based on allegations including slander, trade libel, tortious interference with prospective economic advantage, unfair competition, and violations of the Racketeer Influenced and Corrupt Organizations Act for an alleged plan spanning the United States. Part of the theory advanced on behalf of CAVS involved the novel issue of standing to pursue trademark and copyright claims in karaoke music — an area of intellectual property law that is largely unsettled. Although the case began as a trade libel suit based on a mass email transmitted by Sound Choice, the team’s discovery efforts led to the uncovering of other key facts underlying CAVS’ additional claims, including statements made by Sound Choice about CAVS at karaoke industry events. Initially, Sound Choice denied any liability.
Gordon & Rees has a long record of success in music copyright cases, including obtaining the only ruling in the country -- against precedent in the Second and Ninth U.S. Circuit Courts of Appeals -- that synchronization licenses are not needed for karaoke players.