Panama 201 Judgment.pdf


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Case 5:11-cv-00032-RS-CJK Document 201 Filed 07/17/12 Page 2 of 15

allowed to submit proposed findings of fact and conclusions of law. (See Docs. 197, 198,
199, & 200). I have considered these proposals.

Findings of Fact
Plaintiff is a business involved in the distribution of prerecorded karaoke music
products on compact discs. Tr. 15. Plaintiff holds a valid registered trademark of the
term “Sound Choice.” (Pl. Ex. 1 & 3). The Sound Choice trademark had been renewed
several times and is current. (Pl. Ex. 2 & 4). The Sound Choice mark appears on all of
Plaintiff’s products including the discs themselves, the accompanying disc inserts, and
the video portion of the product that the end-user views. Tr. 19.
Plaintiff produces two types of products, Compact Discs plus graphics (“CD+G”)
and MP3 plus graphics (“MP3+G”), which contain the karaoke songs. Tr. 20-21. Each
song has a current retail value of seventy-five cents. In the past, each song had a retail
value of $1.50, but Plaintiff lowered the price to compete with pirated copies. Tr. 60.
Plaintiff sells its product only on disc and does not sell their product on computer hard
drives.

Tr. 20-21. However, many karaoke jockeys (“KJs”) and others have transferred

the content of their compact discs to hard drive because of the ease by which songs can
be played. Tr. 23. This process is called “media shifting.” Tr. 23.
In response to what was occurring in the marketplace, Plaintiff created a “media
shifting policy.” This policy contained several components. First, is the “one-to-one”
component which provides that for each song on a hard drive, the possessor must own,
have purchased, and still possess the original disc. Tr. 23. Second is the notification