Karaoke is growing in popularity, with many bars and other entertainment venues offering it alongside trivia contests on one or many nights a week. But this kind of group crooning may prove a costly and legally problematic pastime, if the music on the karaoke discs and programs is unlicensed. Sony/ATV Music Publishing claims statutory damages of at least $1.3 billion for such alleged infringement. KTS Karaoke has responded by suing Sony for declaratory relief of copyright noninfringement, or, in the alternative, a reduction of the damages amount at issue.
Sony is a major music publisher and its kingdom of copyrights in this area is broad and diverse. The late Michael Jackson famously purchased ATV in 1985 for $46.5 million, thereby acquiring the rights to the Beatles’ music catalog. KTS is one of the nation’s largest karaoke distributors, marketing software and hardware for personal and commercial use.
Eriq Gardner of The Hollywood Reporter reports that in correspondence sent to KTS, Sony claims at least 6,715 acts of copyright infringement. The music publisher asserts these occurred in the sale of discs and software containing unlicensed tunes for which it holds copyrights. According to Gardner, Sony further says those 6,715 acts resulted in damages of $1.3 billion, an assuredly steep valuation.
The KTS response hinges on when Sony claims it learned of these actions and steps the company may have failed to take within the three-year statute of limitations. In his analysis of the case, Milord A. Keshishian reports that KTS argues that Sony is beyond the statute of limitations and that it failed to stop infringement at the source. In its complaint, KTS further states that Sony/ATV has engaged “in copyright misuse by seeking to secure multiple license fees from the same allegedly infringing work by suing each link of the distribution chain, by demanding license fees for licensed goods and by attempting to obtain more than one statutory damage award for the continuing infringement (i.e., downstream distributions of the infringing work) of a SINGLE WORK.”
If the court does see it Sony’s way, KTS also wants any damages lowered, as Sony’s claim rests on consideration of each song in each instance as a separate award. Under an unfair competition claim, KTS claims that Sony permitted karaoke discs with infringing material to be sold just so it could turn around and try to extract damages from each party in the distribution chain, rather than stopping the infringement at its source.
However the court rules, its decision could have ripple effects for distributors, karaoke companies and bars, restaurants and other fun spots where both celebratory crowds and lonely tipplers love to howl their favorite melodies.