Sybersound Records, Inc. v. Uav Corporation

I. Factual Background

A. Copyright Compliance Statements

Sybersound and the Corporation Defendants are competi- tors that produce and sell karaoke records. They primarily sell to a group of distributors and retailers that resell these records to the public. This purchasing group (collectively, Customers) includes Anderson Merchandising, Handleman Entertainment Resources, Alliance Entertainment Corporation, Wal*Mart, KMart, Best Buy, Toys “R” Us, and Fry’s Electronics. SYBERSOUND RECORDS v. UAV CORP. 1679 According to Sybersound, to reproduce and distribute karaoke records, karaoke record producers must obtain karaoke synchronization licenses from each copyright holder with an interest in each song included on the record. The Cus- tomers require that the karaoke records they buy be 100% licensed. To comply with the Customers’ policies, sellers of karaoke records must obtain copyright licenses from and pay fees and full royalties to each of the copyright owners. Some Customers have instituted measures to ensure compliance with their licensing requirements. For example, in 2003, Handleman required its vendors to sign an indemnification agreement in which each…