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10 28 11 Motion reconsideration .pdf



Original filename: 10-28-11-Motion reconsideration.pdf
Title: Microsoft Word - Pl's Mot for Recon of Order Granting SJ JAD.doc
Author: Wayne Porter

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
SLEP-TONE ENTERTAINMENT
CORPORATION
v.

Plaintiff,

KARAOKE KANDY STORE, INC., et al.

Defendants.

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CIVIL ACTION NO.: 1:10-CV-00990-DCN
JUDGE DONALD C. NUGENT
PLAINTIFF’S MOTION FOR
RECONSIDERATION AND ORDER
VACATING SUMMARY
JUDGMENT IN FAVOR OF
DEFENDANTS

----------------------------------------------------------Plaintiff Slep-Tone Entertainment Corporation (“Slep-Tone” or “Plaintiff”) hereby moves
this Honorable Court to reconsider and vacate its Order granting summary judgment in favor of
Defendants (Dkt. # 77). The reasons that support the granting of the present motion are set
forth in the accompanying memorandum.
MEMORANDUM IN SUPPORT OF PLAINTIFF’S MOTION FOR RECONSIDERATION
AND ORDER VACATING SUMMARY JUDGMENT IN FAVOR OF DEFENDANTS
A.

Facts
The essential basis for the Court’s Order (Dkt. # 76) granting summary judgment in favor

of Defendants was that Slep-Tone failed to present facts that showed that Defendants had
engaged in infringing activity. As stated by the Court: “ . . . the Court has found no evidence of
any unauthorized use of the SOUND CHOICE marks that originated with Defendants . . ..”
Opn., at p. 9.,
In analyzing this matter, the Court commented on a portion of paragraph 11 of the
Declaration of Jeff DeLeva and a portion of the expert report and deposition transcript of David
Sems. That portion of DeLeva’s testimony examined by the Court concerned whether
Defendants’ ripping and copying work was authorized by karaoke recording manufacturers and
was rejected by the Court for lack of a proper foundation. Id., p. 7-8. Sems’ testimony was

cited by the Court to show that Sems had not analyzed the numerous SOUND CHOICE songs
on the CAVS machine he examined as to whether they were authorized or unauthorized copies
of SOUND CHOICE recordings. Id., p. 8. The Court also stated that the evidence did not prove
that the equipment studied by Sems was sold by Kandy Store. Id. Finally, the Court concluded
that Slep-Tone had not produced any evidence that showed unauthorized use of the SOUND
CHOICE marks by Defendants. Id., p. 8-9.
The Court did not discuss the testimony of Robert Shumaker (Ex. 2 to Pl’s Response
Brief). Shumaker was a Kandy Store employee who was supervised by Polidori. Shumaker
personally made counterfeit copies of SOUND CHOICE recordings onto electronic devices that
were sold by Kandy Store and/or Polidori. The copying and sales were made without the
authorization of Slep-Tone.
Here are pertinent portions of Shumaker’s declaration testimony:
“1.
I was employed by Karaoke Kandy Store, Inc. (“Kandy Store”) from 2005
to August 2010. I have personal knowledge of the facts set forth in this
declaration.
2.
Charles Polidori (“Polidori”) was the President and principal owner of
Kandy Store while I was employed by Kandy Store.
3.

Polidori was in complete control of Kandy Store. * * *.

4.
During my employment I was a computer technician for Kandy Store. (All
other company names associated with as well). My job duties included loading
digital content on to equipment sold by Kandy Store to its customers. While
employed by Kandy Store, I reported directly to Polidori.
5.
One of my primary job duties at Kandy Store was loading thousands
of karaoke recordings from major manufacturers such as Sound Choice to
CAVS machines, RSQ machines, laptops and other forms of digital hard
drives. Drives that were distributed were made by the Kandy Store, by copying
them to one or more master hard drives. Over time the master hard drives
contained thousands of karaoke recordings. There [were] two most common
song packages offered to customers – the basic package that included over
10,000 songs, and the “elite” package that included over 13,000 songs. There
was a separate master hard drive for each of these packages.
6.
The master hard drives were used to copy the recordings onto karaoke
machines or hard drives, which were then sold to customers. During the time I
was employed, I personally copied the content of the master hard drives to
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hundreds of digital units sold by Kandy Store. The ripping and copying work
was done by me in the basement of the 5361 Pearl Road office at the direction of
Polidori. One of the methods was to use “ghost” software to copy the entire
content of the master hard drives to the target unit.
7.
To my knowledge, no customers who purchased preloaded devices
such as CAVS machines were ever provided with copies of the original
CDGs from which the recordings were ripper or copied. To my current
knowledge, none of the ripping and copying work was authorized by the
manufacturers of the recordings that were ripped or copied.” (emphasis
added).
The Court did not discuss the testimony of Jeff DeLeva as regards Defendants’ sales of
electronic devices containing SOUND CHOICE recordings (Ex. 3 to Plaintiff’s Response Brief).
Here are pertinent portions of DeLeva’s testimony:
1.
I was employed by Karaoke Kandy Store, Inc. (“Kandy Store”) from 2003
to February 2008. I have personal knowledge of the facts set forth in this
declaration.
5.
During my employment I was first in the rental department, then started
doing sales after my brother Randy stopped working for the store. My job duties
consisted of working with customers to understand their needs and to
provide them with suitable product offerings.
7.
I am very knowledgeable about Kandy Store’s business and how it
was operated. Units such as CAVS JB-99s, JB-199s, USB karaoke
machines were sold loaded with music from what appears to be just about
every karaoke manufacturer. Due to being the primary salesperson, there
were hundreds of sales of loaded units that I can without a doubt tell you
that never had ANY disc supplied with them. This should be supported by
any customer that you would speak to that purchased such items.
8.
One of Kandy Store’s principal activities was advertising and selling over
the internet CAVS machines, RSQ machines and other forms of digital hard
drives that were preloaded with thousands of karaoke recordings that stored
many of the manufacturer’s content. There were two common song packages
offered to customers – the basic package that included over 10,000 songs, and
the “elite” package that included over 13,000 songs.
9.
The units were sold to the customer, then most every time, an order was
placed for an empty unit from the manufacturer, then the units were worked on at
5361 Pearl Rd and then shipped or given to the customer loaded with music
and no discs. This work was done by the technical staff at the direction of either
Chuck or Joe Polidori.
10.
To my knowledge, no customers who purchased preloaded devices
such as CAVS machines were ever provided with copies of the original
CDGs. Due to things learned since my time at the store, it is now my
-3-

understanding that none of the ripping and copying work was authorized by the
manufacturers of the recordings that were ripped or copied.” (emphasis added).
The Court also did not discuss the testimony of Slep-Tone’s CEO, Kurt Slep, concerning
the issue of unauthorized use and sales of SOUND CHOICE recordings by Defendants (Ex. 1 to
Pl’s Response Brief).
Here are pertinent portions of Slep’s declaration testimony:
“1.
I am one of the founders, and the current CEO, of plaintiff Slep-Tone
Entertainment Corporation (“Slep-Tone”). I have personal knowledge of the facts
set forth in this declaration.
8.
Slep-Tone only sells its recordings in CD+G and MP3+G format on
compact disk. With restrictions, Slep-Tone permits the owner of a genuine
SOUND CHOICE CD+G recording to transfer it to a single computer or karaoke
recording player, provided that the customer keeps the original copy of the CD+G
in his possession as an archival copy that is not used.
9. . . . Kandy Store and its president, Polidori, have obtained copies of
trademarked SOUND CHOICE karaoke recordings manufactured by Slep-Tone
and, without authorization from Slep-Tone, have copied the karaoke
recordings to computer hard drives, CAVS machines and other electronic
devices and media. Without authorization from Slep-Tone, Defendants have
sold hard drives, super CDGs and other electronic devices and media that
contain copies of Slep-Tone’s recordings.
10. When Slep-Tone’s counterfeit recordings are played during the course of a
karaoke show, the SOUND CHOICE marks are displayed on the screen. Such
display falsely leads the participants (and conceivably the KJ, if he/she is not
aware of the source of the recording) to believe that the recordings are being
used with the authorization of Slep-Tone.
11. Defendants have offered their counterfeit products for sale over the internet.
One website operated by defendants is www.CheapKaraoke.com. Others are
www.LightYearMusic.com and www.CheapProAudio.com. Defendants also
frequently post their counterfeit products for sale on EBay.
12. By virtue of their unauthorized copying of Slep-Tone’s karaoke recordings,
defendants have been able to offer for sale counterfeit copies of Slep-Tone’s
recordings at prices far below the cost incurred by Slep-Tone to make its CD+Gs.
Defendants’ activities have caused serious harm to Slep-Tone. Indeed, Kandy
Store (through a retail store and web sites operated by it and/or Polidori and/or
other, related entities) is believed to have been or currently is one of the largest
karaoke counterfeiters in the United States. (emphasis added).

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B.

Analysis
1.

The Court Did Not Consider the Most Important
Evidence Concerning Infringement

By discussing none of Shumaker’s testimony and only one sentence from one paragraph
of DeLeva’s testimony, the Court failed to consider the most important evidence concerning
infringement. In addition, the Court did not address Slep’s testimony concerning the
authorization issue.
The testimony of Robert Shumaker establishes that Kandy Store, under the control of

Polidori, loaded thousands of karaoke recordings from major manufacturers such as
Sound Choice, i.e. Slep-Tone, onto CAVS machines and other electronic devices that
were sold to customers. Shumaker’s testimony also establishes that Kandy Store’s
customers who received preloaded electronic devices did not receive copies of the
original CDGs from which the songs were ripped or copied. Shumaker’s testimony also
establishes that the ripping and copying work was not authorized by the manufacturers
of the recordings that were ripped or copied, which perforce included Slep-Tone.
The testimony of Jeff DeLeva establishes that Defendants sold electronic devices
preloaded with thousands of karaoke recordings from “just about every major karaoke
manufacturer.” DeLeva also testified that no customers who purchased preloaded devices

such as CAVS machines were ever provided with copies of the original CDGs.
Short of a confession or admission by Defendants or surveillance videotape of infringing
acts being performed, Shumaker’s and DeLeva’s testimony is the best evidence that possibly
could be obtained. The testimony in question is by the actual Kandy Store employee who
copied recordings from manufacturers such as Slep-Tone onto electronic devices and by a
Kandy Store employee who personally sold Kandy Store’s electronic devices to customers. This
testimony is even more probative of Defendants’ infringement than that which might be obtained
-5-

from Kandy Store’s customers because such customers would have no knowledge of the origin
of the recordings on their electronic devices and whether such recordings were authorized or
unauthorized by the manufacturer of the recordings.
In addition to the testimony of Shumaker, Slep’s testimony proves that Defendants’
copying of SOUND CHOICE recordings and the subsequent sale of electronic devices
containing such recordings were unauthorized by Slep-Tone. Since Slep-Tone is the
manufacturer of SOUND CHOICE recordings, Slep-Tone is uniquely positioned to know
whether it has authorized particular customers or competitors to copy its recordings. The
testimony of Slep-Tone’s CEO is the best evidence available on that subject. Slep’s testimony
also establishes that Defendants have offered unauthorized SOUND CHOICE products for sale
in commerce and that Slep-Tone has been damaged by Defendants’ sales.
Slep’s testimony establishes a prima facie case that Defendants’ copying and sales of
SOUND CHOICE recordings were not authorized. Slep’s testimony shifts the burden to
Defendants to produce evidence of authorization such as a license agreement or business
records showing that an original SOUND CHOICE CDG accompanied every sale of a preloaded
electronic device that contained SOUND CHOICE recordings. Defendants have produced no
such evidence (in fact, they have destroyed or concealed it), thereby leaving unrefuted SlepTone’s allegations on the authorization issue.
At a minimum, the testimony of Shumaker, DeLeva and Slep demonstrates that material
facts are in genuine dispute. By failing to discuss Shumaker’s and Slep’s testimony and by
failing to discuss the most relevant portions of DeLeva’s testimony, the Court failed to consider
the most important evidence concerning infringement.
2.

Slep-Tone’s Evidence is Admissible

Pursuant to Rule 56(c)(4), “[a]n affidavit or declaration used to support or oppose a
motion must be made on personal knowledge, set out facts that would be admissible in
evidence, and show that the affiant or declarant is competent to testify on the matters stated.”
-6-

All of the declarations in question were made on personal knowledge by people
competent to testify on the matters at issue. Shumaker was the technician who personally
made the infringing goods and DeLeva was the salesman who personally sold them. Slep is the
CEO of Slep-Tone and is in a position to know whether Slep-Tone authorized Defendants’
copying and sales activities. All of the facts testified to by these witness would be admissible in
evidence because the facts testified to are relevant and are not objectionable for other reasons
such as hearsay.
3.

Admissible Evidence Offered by Slep-Tone Must be Accepted as
True and Inferences Must be Drawn in Slep-Tone’s Favor

As the Court pointed out in its Opinion, the Court must draw all reasonable inferences in
the light most favorable to the nonmoving party, here Slep-Tone. Opn., p. 4, citing Vaughn v.
Lawrenceburg Power Sys., 269 F. 3d 703, 710 (6th Cir. 2001). In addition, the Court is required
to accept as true all admissible evidence offered by Slep-Tone. Oak Rubber Co. v. Bank One,
N.A., 214 F.Supp.2d 820, 825 (N.D. Ohio 2002). (“In deciding a motion for summary judgment,
the court views the factual evidence and draws all reasonable inferences in favor of the nonmoving party.”); Anderson v. Liberty Lobby, Inc., 477 U.S. 242,248 (1986) (“The evidence of the
non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.”). The
Sixth Circuit has long recognized that trial judge “should be slow in disposing of a case of any
complexity on a motion for summary judgment …” S.J. Groves & Sons Co. v. Ohio Turnpike
Comm’n, 315 F.2d 235, 237 (6th Cir), cert. denied, 375 U.S. 824 (1963). Summary judgment
“must be used only with extreme caution for it operates to deny a litigant his day in court.”
Smith v. Hudson, 600 F.2d 60, 63 (6th Cir. 1979).
When the admissible evidence offered by Slep-Tone is accepted as true and when all
reasonable inferences are drawn in favor of Slep-Tone, the evidence establishes that
Defendants, without the authorization of Slep-Tone, copied SOUND CHOICE recordings onto
electronic devices and sold such devices to customers. The evidence, when construed in Slep-7-

Tone’s favor, establishes that Defendants did not provide their customers with copies of
SOUND CHOICE CDGs from which Slep-Tone’s songs had been ripped or copied in violation of
Slep-Tone’s format shifting policy. The admissible evidence before the Court, when construed
in Slep-Tone’s favor, is sufficient for a reasonable jury to rely on in reaching a verdict for SlepTone.
4.

The Court Cannot Make Credibility Determinations
Concerning Slep-Tone’s Witnesses on Summary Judgment

At the summary judgment stage of the proceedings, a Court is not permitted to make
credibility determinations of a party’s witnesses. Adams v. Metiva, 31 F.3d 375, 378 (6th Cir.
1994); In re Atlas Concrete Pipe, Inc., 668 F.2d 905 (6th Cir. 1989); Anderson, 477 U.S. at 249.
Credibility determinations are the domain of the fact-finder, which in this case is a jury.
The Court is required to accept as true “direct evidence refuting the moving party’s
motion for summary judgment ….” Adams, 31 F.3d at 381. The factual testimony set forth in the
properly supported affidavits of Shumaker, DeLeva and Slep plainly refutes Defendants’ motion
for summary judgment. Even if the Court would be inclined to reject the testimony of DeLeva,
Shumaker, or Slep for reasons that have not been articulated, the factual testimony of these
witnesses, supported by a proper foundation, must be accepted as true for purposes of
summary judgment proceedings.
D.

Conclusion
The Court apparently did not consider the most cogent evidence proving Defendants’

rampant trademark infringement. When that evidence is considered together with the other
evidence that was presented by Slep-Tone, and when all of the evidence is construed in a light
most favorable to Slep-Tone, there is no question that Slep-Tone has presented facts upon
which a reasonable jury could find in its favor. Granting summary judgment under such
circumstances is reversible error. This is particularly so in light of Defendants’ pervasive
destruction and concealment of evidence, which the Court’s Order unfortunately rewards.
-8-

In view of the foregoing, Slep-Tone requests that the Court reconsider and vacate its
Order granting Defendants’ motion for summary judgment. This matter should proceed to trial.
Respectfully submitted,
Dated: October 28, 2011

s/Wayne D. Porter, Jr.
Wayne D. Porter, Jr. (#0009242)
Law Offices of Wayne D. Porter, Jr.
1370 Ontario Street, Suite 600
Cleveland, Ohio 44113
Tel:
(216) 373-5545
Fax: (216) 373-9289
E-Mail: porter@porterpatentlaw.com
James A. DeRoche (#0055613)
Seaman Garson LLC
614 West Superior Avenue
16th Floor, Rockefeller Building
Cleveland, Ohio 44113
Tel: (216) 696-9330
Fax: (216) 696-8558
E-Mail: jdroche@garson.com
Attorneys for Plaintiff
CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing PLAINTIFF’S MOTION FOR
RECONSIDERATION AND ORDER VACATING SUMMARY JUDGMENT IN FAVOR OF
DEFENDANTS was filed electronically on this 28th day of October, 2011. Notice of this filing will
be sent to all parties by operation of the Court’s electronic filing system. All other parties will be
served by regular U.S. mail. Parties may access this filing through the Court’s system.
s/Wayne D. Porter, Jr.
Wayne D. Porter, Jr.

-9-


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