SAN FRANCISCO (CN) - Sybersound Records, a company that makes karaoke records for retailers such as Wal-Mart and Best Buy, cannot sue its competitors for allegedly failing to acquire the necessary copyrights for their records because Sybersound lacks standing to bring a copyright infringement claim, the 9th Circuit ruled.
Sybersound complained that the defendant companies - including Keynote Karaoke, Singing Machine Co. and Karaoke Bay - competed unfairly by falsely telling customers that their karaoke records are 100 percent licensed and that all applicable royalties have been paid, when they hold only compulsory licenses, licenses from only some of the copyright holders, or no licenses at all.
Sybersound filed a complaint alleging violations of the Lanham Act, the Racketeer Influenced and Corrupt Organizations Act and state unfair competition law.
The three-judge panel unanimously held that the successful prosecution of Sybersound's claims required the litigation of the underlying infringement claim, for which Sybersound lacks standing under federal copyright law.
"Were we to permit Sybersound's claims based on incidences of copyright infringement to proceed, Sybersound would be litigating a third-party copyright infringement claim under the guise of state law," Judge Milan wrote.