Legal stance on Sound Choice and Stellar Records

[SteveD]

This post concerns a quote from a Yahoo Karaoke group I belong to in Kansas City.

The first is from Stellar Records (Pop Hits Monthly, and Top Hits Monthly) and the second is from Sound Choice. I would like to here some feedback from any Scottsdale or Phoenix Hoster users who have encountered any legal action from using Hoster.

I have CDG's for everything I have transferred to Hoster and I feel everything our company does is legal. It is rumored that they will hit the Kansas City area in 2 months with the same type of campaign. Any comments from Hoster or Arizona Hoster users would be greatly appreciated.

Here is the Quote from Stellar, the Sound Choice quote follows:

Stellar Records
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ANTI-PIRACY CAMPAIGN STATEMENT 12/28/06

Stellar Records in a collaborative effort with some of its clients,
customers, law enforcement agencies, and in some cases even its
competitors has stepped up its campaign against piracy. As part of
this campaign, Stellar will be directing much of its attention at the
venue level and soon will be taking steps to notify suspected venues
as to the potential risks and hazards involved when using
unauthorized copies of Stellar Records products.

Stellar Records, its customers, clients as well as several of its
legitimate competitors have been damaged considerably through the
illegal copying and distribution of their products, as well as other
acts of piracy, some of which pertain to the violation of trademarks
that are also the property of Stellar Records.

Prior to pursuing any further action, we do recognize the possibility
that at least some venues may not be aware of these violations and
may be engaging in these activities unknowingly. Hopefully this
communication will provide the information necessary in helping to
determine if the use of a Stellar Records product is authorized, or
in any way infringes on its copyrights and/or trademarks. At the very
least, we hope this will provide the impetus to seek legal advice on
these matters before continuing to engage in these practices.

To be more specific, it has been brought to our attention that there
are several venues in the Phoenix and Scottsdale area that have been
promoting karaoke shows which are using unauthorized copies of
karaoke products either directly through the use of in-house systems
or vicariously through the contracting or employment of KJ/DJ hosts
and/or hosting companies. Some of these products have been identified
as karaoke products containing the copyrights and/or trademarks of
Stellar Records including products bearing the trademarks "Pop Hits
Monthly", "Top Hits Monthly", or "Stellar Records". In addition it
has been suggested that there could be other products containing
Stellar Records' copyrights and/or trademarks being illegally
distributed, and an investigation is currently under way in an effort
to identify those products as well.

In order to assist those in determining what constitutes an
unauthorized use of Stellar Records' products, please be advised that
Stellar does not support nor does it have the authority to support
(due to contractual limitations in its licensing agreements with
various publishers) any device which stores, and/or plays karaoke
products from a hard drive or any device other than a device that
plays directly from a CD+G disc. For example products include but are
not limited to the CAVS JB199 as well as the RSQ-500 when play back
is not directly from a CD+G disc. There are a number of software
based products as well like MTU's Hoster, PCDJ, CompuHost,
TriceraSoft, Sax N Dotty Show Hoster, and Dart just to mention a few,
when play back is not directly from a CD+G disc.

Stellar Records does empathize with the concerns of some of its
customers who may want to make copies of their legally purchased
products for the purposes of making back-ups or to rip them onto a
hard drive in a more convenient format. However we do not have the
authority to grant anyone the right to do so. Most if not all of our
karaoke products contain the copyrights owned by parties other than
Stellar, namely the writers, authors and/or publishers of the work
(song) itself to which we must seek prior approval for use in
producing our final karaoke products. The licenses and/or approvals
that we secure from these publishers do not include the right to
distribute their works (songs) on a hard drive. As a result we can
not and/or do not encourage or otherwise promote either the copying
or format conversion of these products for any purpose whatsoever.

There are some who would contend that making back-up copies of these
works or converting these works to a format which can then be used by
some of the above mentioned products could be considered a "fair
use". However, legal counsel for Stellar Records believes this to be
in error, and does not agree. As such Stellar can not give permission
to any user of its products to make copies for any purpose including
for the purpose of making back-up copies, or to convert to another
format. Granting such permission could potentially expose Stellar to
a risk of "contributory" infringement.

While Stellar recognizes it has no standing with regard to its
competitor's products, it is worth noting that through conversations
with some of our competitors, it has been learned that many of these
products are being distributed against the behest of these companies
as well. Notice should also be taken of the fact that it is not
likely that the distribution of products offered in these formats is
authorized, and that at the very least a cursory inquiry as to the
legality of these products should be conducted by anyone using them.

On a final note, illegal copying, distribution as well as other forms
of piracy puts us all at a disadvantage. There are many hard working
DJ's/KJ's who have legally purchased their libraries and have a
considerable investment in karaoke products. It is grossly unfair for
these KJ's to have to compete with those who have obtained their
products illegally or in other "questionable" ways. It is also unfair
to force the many venues that refuse to allow these illegal products
in their facilities either directly or indirectly and likewise have
to compete with venues that are not willing to play by the rules.
Last but not least are the legitimate manufacturers or producers of
karaoke products. It takes a huge amount of effort and resources to
create these products (not to mention risk and investment), only to
have their products pirated, and in many cases even bootlegged by a
number of unscrupulous thieves who will stop at nothing to profit
from the hard work of others.

Stellar Records, Inc.

*****************************************************************
Sound Choice
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December 2006
Sound Choice has fought piracy for many years. All of you are aware
of the piracy of product, copyright infringement and trademark
infringement. Everyone suffers when this type of activity takes place
with lost revenue. Not just Sound Choice, but DJ's, KJ's and
retailers alike suffer trying to operate legal businesses with lost
revenue.

Sound Choice is taking a proactive stand stronger than in the past to
prosecute to the fullest extent of the law. Trademark infringement
suits will be filed in Phoenix, Scottsdale, and outlying areas.
Letters to cease and desist have already been, and will continue to
be, sent to any restaurants and clubs that offer Karaoke
entertainment that have allowed the DJ's and KJ's to commercially
perform in their establishment with any of the following: CD+Gs
illegally copied (burns), CD+Gs illegally copied on to hard drives,
karaoke music downloaded from the internet. As the owner or manager
of an establishment that uses Karaoke entertainment, they may not
understand how serious this offense may be and how it can affect
them. Karaoke hosts who use illegal copies of music also put the bar
and/or restaurant business at risk. One of the possible consequences
that not only the KJ, but also the bar/restaurant are facing includes
fines that have now been increased to $250,000.00 and six (6) months
possible jail time per occurrence. Per occurrence is per each time
each copied song is played. You do the math. Sound Choice will also
be working in cooperation with several manufacturers to be sure these
violators are prosecuted.

In addition, trademark infringement and dilution under the federal
Lanham Act provides remedies including, but not limited to,
injunctive relief, monetary damages, confiscation and destruction of
infringing articles and promotional materials and, in cases of
intentional infringement, attorney's fees and treble damages. Sound
Choice has never given anyone the permission or licenses to download
or copy any Sound Choice music to any type of hard-drives for
commercial use or any other type use because there is no licensing
available for hard-drives. The publishers will not extend licensing
for hard-drive products. It is illegal to copy music to a hard-drive
for commercial use. The Fair Use Act of 1992 provides for personal
use only not commercial.

In other words, if a DJ or KJ has five rigs operating commercially,
they should have five original sets of discs in use, not stored or on
file, to operate legally. We are hopeful that the restaurant and bar
owners and managers will voluntarily take a stand to keep their
establishments legal instead of facing the possible risk and costs
incurred of legal consequences.

Shelby Wood Business Affairs Director Sound Choice