Response from Sound Choice
Hello posters. This is Kurt Slep, CEO of SOUND CHOICE. I was recently made aware of this thread and while I didn’t have time to read the entire thing and don't intend to get embroiled in legal discourse here, I have read a lot of OPINIONS posted here and have to thank THUNDER for having a level head and making the most sense AND being the most legally correct in his postings. A few quick FACTS:
Sound Choice is suing for Trademark Infringement because it was simply easier than doing both copyright and trademark infringements and made our case easier to prove. We can (and if need be, will) also bring copyright into play to increase the penalties or to bolster our cases. If you are not versed in Intellectual Property (IP) law, then you might want to preface your writings with "in my opinion" or if you object to the laws, state, "I wish it were different, but...". For those reading such posts, I caution you not to make the mistake of taking what you might read in a chat forum as “law”. Unfortunately we are also aware of lawyers who have given EXTREMELY bad counsel to some defendants because they do not know IP law and are actually giving advice that can get their client into more hot water. For those who read DANDANTHETAXIMAN's rant, you might question where he learned his legal "skills". It was brought to our attention that he has had many run-ins with the law and an extensive arrest record. Therefore, I would also caution those considering taking legal advice from him.
IN ALL CASES, we have more evidence than is named or given in our complaints - but there is not a need to show our hand in our legal filings. The opposing party can ask to see that evidence during their depositions if they decide to fight. However, we cannot legally file without legitimate legal grounds and for those whose OPINION is that we don't, if you are named in a future suit, you can follow that tact at your own risk. We do not need to have all details on an individual before filing and/or serving someone - the clerk of court’s office has resources at its disposal for finding people when it comes time to serve them. If you are really interested in our methodology, we are trying to keep our costs low so that we can keep your settlement costs low. But we are following local laws in all of our actions, although we are filing in Federal court, since Trademark infringement is a Federal offense.
In the cases in Phoenix, we have NOW served papers on those who did not reach a settlement before we had to provide service. Sound Choice is not out to put anyone out of business, we are only trying to get paid for what we legally can and should get paid for. AND THERE ARE LAWS IN MOST COUNTRIES that protect our rights to do so. Plain and simple, if you have made a copy of any of our works without paying us or a legitimate reseller for it, you are a thief (or in the popular term of the common name for this specific crime, a pirate). Thus we generously have offered terms that are LESS THAN IF THE PERSON HAD ACTUALLY BOUGHT THE PRODUCT AT RETAIL. If they do not settle on those terms, then we serve the papers and it becomes a full lawsuit - and the cost goes up, naturally, as higher costs are incurred on our side.
We do not have the rights from the Music Publishers (who represent the song writers) to grant the transfer of our music from the CDG to a hard drive, that is why we have not licensed "hard drives" per se. HOWEVER, we are willing to not take action (although, nor indemnify) a KJ who chooses to do so for reasons of ease of operation PROVIDED THAT HE HAS A LEGALLY PURCHASED DISC FOR EACH AND EVERY SONG ON EACH AND EVERY HARD DRIVE (or CAVS type ) SYSTEM. That is what we (and KIAA) are referring to as "1:1".
As THUNDER mentioned somewhere in one of his postings, if the KJ legitimately has a full set of discs for each and every rig, then after we FILE and notify the KJ of our filing, all he has to do is prove that he has the discs (we will send someone to do a full audit under specified conditions) and then he will not be served and will be dropped from the suit. One of the conditions of the audit, however, is that since we have the right to represent the other manufacturers, the KJ might be audited for ALL the songs on his system. After all, if we are going to go to the expense and trouble of an audit, both parties should want it to be thorough, so that it only has to be done once and the KJ then won't have to worry about the other Karaoke producers if he is legitimate.
If any of you have followed recent court cases filed by the RIAA against file sharers, you have seen average settlements in the range of $80,000 PER SONG, which is still only about half the maximum for copyright infringement. Trademark is $200,000 per mark with that going up to $2,000,000 for willful infringement. And these cases were against home users; in our suits, there is commercial use of our IP, thus very few “personal” protections and higher penalties – there is no “fair use” provision for commercial use of federally protected intellectual property rights. While it can be argued that the recent RIAA settlement amounts are ridiculous, they are in fact legally allowed and it's the juries that have awarded such amounts, not the record labels asking for them. Our offered settlements are averaging under $1 per song - less than if you had bought the discs at full retail in the first place! So, we cannot be accused of being ridiculous or unfair. Simply stated, our position is that those that have been earning a living using our stolen property need to pay for that property. Many of the people we have been and will be filing against have been earning a living, sometimes for years, on stolen property. Amazingly, some of you get indignant at the filing of suits or of a producer’s defense of its IP rights, but you would be the first to get up in arms about someone stealing your cars and opening up a used car lot! THERE IS NO DIFFERENCE overall - only that it is easier to steal the music than a car. Would you allow me to come into your house, take your property and have a garage sale on your lawn and walk away with the money? Would you find that behavior to be totally acceptable? If not, then (those of you who have stolen our music to use in your shows and earn a living) how can you defend your actions and even get indignant if you are only being asked to pay for the property you have been using? Our actions (if the person settles before we actually have to serve them) are nearly analogous to a thief stealing a Mercedes, having the use of that car for months or years and then when finally caught, being allowed to “settle” by paying the used car value at the time he is caught. If they decide to fight even that deal (which we see as being really arrogant and foolish), then we have no choice but to follow though and naturally the cost to settle goes much higher.
For those who cry that we should go after the people who are selling the hard drives – those actions are already underway. And to underscore the increased level of infringement, we have the FBI involved in some cases. But if many of you had not bought from such sources, they wouldn't be in business. That is also true for anyone who bought a CAVS machine preloaded with songs - Sound Choice has never authorized nor been paid for any songs that have ever been included on a CAVS machine. No matter what you paid for it, it is illegal. If we sue you and you feel you were duped, take that issue up with the person who sold it to you - or let us know who they are and be willing to provide receipts and help us shut them down.
Regarding the issue of bars and their liability: YES, they can be brought into the suit as contributory infringers - if they are aware that the KJ is running an operation that is infringing an IP owner’s rights. We (and the KIAA) are beginning a general information campaign to make bar owners aware of this, so that they can avoid being enmeshed in a suit. Again, we are trying to cause the fewest “waves” for everyone yet still get paid for our property. But enjoining the bar is an option that we have available to us to protect our rights. Some of the KJs in Phoenix have complained that they lost their gig(s) because the bar didn’t want to get in trouble for harboring criminal activities. It’s no different than if drugs are being sold on the bar premises and they become aware – for many, they have too much to lose and are not tolerating it. On the flipside, some KJs who have legitimate systems have picked up those gigs or have been able to raise their prices by making the bars aware there is a price to pay by trying to cut corners and hire illegal hosts who will do a show for Fifty bucks and beer. For those KJs who used to command prices higher than you are getting now, you should be saying “Thank you Sound Choice”. As a matter of fact, we are hearing that more and more, from KJs around the country.
We have recently filed suits in NC and TN and will continue to investigate and file suits - both to protect our business and those of our loyal customers (like THUNDER) who have bought discs and are doing the "right thing" despite the temptation to clone their library to be able to compete with KJs who are running shows with illegally obtained music and undercutting the competition because they have no cost.
I have personally conducted investigations in about 7 states and of the shows that I have attended, at LEAST 60% of all songs played have been Sound Choice and in many cases it's been over 85% and even 100%, despite the fact that they advertise over 100,000 songs. So, most of you love our music quality as do your singers, but you might also notice that we have not produced many new songs in the last two years. Why? Because too many of you are STEALING it and we cannot generate enough sales to cover our costs. Every business would have very healthy profit margins if they didn't have any cost of doing business or cost of supplies. Do you steal many other things in your daily lives and think nothing of it? If so, then this response won't mean anything to you. For those who might feel a twinge (even the tiniest bit) at the things written here, if you want our music to continue to keep your business “healthy” - then start buying it! If you want to avoid the possibility of an investigation or to be sure you pass an audit with flying colors, pay for the songs you have on your systems BEFORE you are notified. We have a very good price on a library of songs and we are even offering some extended terms for multi-system operators.
Thank you for your time in reading this and hearing the “other side”. For those who want to rush off some indignant response, I just ask you to ponder everything I have written before responding. If you still feel you have a defensible position as to why you should be able to steal our music and run your business (and run others OUT OF BUSINESS), then I am not going to debate you here, because there is nothing I could write or that others could write to reach you. Nothing short of your life’s work or something of great value or your own livelihood being stolen is going to make you think differently. For those of you who remain our staunch supporters, I want to personally thank you for your support AND patience over the years. With your continued support, both by buying our products and reporting the thieves around you, we will do our utmost to prevail and produce the music and other opportunities that drives your business.
Sincerely, Kurt J. Slep CEO, Sound Choice