Slep-Tone Answers Brophy Counterclaim

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ANSWER OF SLEP-TONE ENTERTAINMENT CORPORATION TO COUNTERCLAIMS
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James M. Harrington, pro hac vice
jharrington@harringtonlawpc.com
HARRINGTON LAW, P.C.
12245 Nations Ford Rd Ste 506
Pineville, NC 28134-8444
Tel.: (704) 315-5800
Attorney for Plaintiff
Slep-Tone Entertainment Corporation

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

Slep-Tone Entertainment,
Plaintiff,

v.

Steven C. Brophy et al.,
Defendants.

Case No.: CV-12-02684-PHX-SRB

ANSWER OF SLEP-TONE
ENTERTAINMENT
CORPORATION TO
COUNTERCLAIMS

Steven C. Brophy,
Counterclaim-Plaintiff,

v.

Slep-Tone Entertainment Corporation;
Kurt Slep; and James M. Harrington,
Counterclaim-Defendants.

Counterclaim-Defendant Slep-Tone Entertainment Corporation (Slep-
Tone), by its undersigned counsel, hereby answers the counterclaims (Doc. 43) of
Counterclaim-Plaintiff Steven C. Brophy in like-numbered paragraphs.
1. Upon information and belief, admitted.
2. Slep-Tone admits that it is a North Carolina corporation, but denies
that its principal place of business is in Charlotte, North Carolina. (Slep-Tones
principal place of business is in Pineville, North Carolina.)
3. Admitted.
4. Denied.
Case 2:12-cv-02684-SRB Document 46 Filed 07/21/14 Page 1 of 8

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5. Slep-Tone admits that the Court has jurisdiction over the subject
matter of this action.
6. Slep-Tone admits that it is subject to personal jurisdiction as to the
pending counterclaim because it has subjected itself to the jurisdiction of the Court
as to the principal claim and because the counterclaim is related to the claim by
common facts. Slep-Tone declines to answer as to personal jurisdiction over the
other counterclaim-defendants.
7. Slep-Tone admits that it is subject to personal jurisdiction as to the
pending counterclaim because it has subjected itself to the jurisdiction of the Court
as to the principal claim and because the counterclaim is related to the claim by
common facts. Slep-Tone declines to answer as to personal jurisdiction over the
other counterclaim-defendants.
8. Slep-Tone admits that venue is proper in this Court as to the pending
counterclaim against it. Slep-Tone declines to answer as to the propriety of venue
with respect to the other counterclaim-defendants.
9. Slep-Tone admits that it is a manufacturer and distributor of karaoke
accompaniment tracks.
10. Slep-Tone admits that Kurt Slep contacted Brophy to request that
Brophy conduct investigations in April 2010. Otherwise, denied.
11. Admitted.
12. Admitted.
13. Denied.
14. Slep-Tone admits that Harrington had drafted settlement agreements
for trademark infringement claims in which he was counsel and that Harrington
received a portion of settlements in which he served as counsel. Otherwise, Slep-
Tone is without sufficient information to admit or deny the allegations, and they
are therefore provisionally denied.

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15. Slep-Tone is without sufficient information to admit or deny the
allegations of this paragraph, which are therefore provisionally denied.
16. Slep-Tone is without sufficient information to admit or deny the
allegations of this paragraph, which are therefore provisionally denied.
17. Denied.
18. Slep-Tone admits that Slep stated to Brophy that Slep-Tone had never
given permission for any KJs to make copies of Slep-Tones karaoke
accompaniment tracks or to use unauthorized copies to run karaoke shows from
their computers. Slep-Tone admits that Slep represented to Brophy that Slep-
Tones trademark infringement claims against the KJ infringers were valid and
enforceable. Slep-Tone admits that Slep represented to Brophy that the claims that
had proceeded to litigation by April 21, 2010, had been successful. Slep-Tone
admits that Slep represented to Brophy that Slep-Tone had taken all steps
necessary to comply with applicable trademark laws to establish and preserve its
trademark rights. Slep-Tone also admits that Brophy did not know at the time
these representations were made that the representations were false nor did he have
any reason to believe that they were false because those representations were and
remain true.
19. Slep-Tone admits that Slep represented to Brophy that Slep-Tone was
selling karaoke tracks and that its business remained viable and solvent. Slep-Tone
also admits that Brophy did not know that these representations were false and did
not have any reason to believe they were false because those representations were
and remain true.
20. Denied.
21. Slep-Tone admits that the referenced Agreement was executed by
Slep-Tone and by Associated Protective Services, L.L.C., by their respective
officers. To the extent that the paragraph implies that Brophy, not Associated
Protective Services, L.L.C., was the party to the Agreement, that implication is

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denied. Otherwise, the Agreement speaks for itself, and to the extent that the
paragraphs characterization of the Agreement contradicts the Agreement, the
allegations of the paragraph are denied.
22. The Agreement speaks for itself, and to the extent that the paragraphs
characterization of the Agreement contradicts the Agreement, the allegations of the
paragraph are denied.
23. Slep-Tone is without sufficient information to determine the truth or
falsity of the allegations of the paragraph, which are therefore provisionally denied.
paragraph are denied. Slep-Tone is without sufficient information to determine
Brophys state of mind, and the allegations of the paragraph are additionally
provisionally denied on that basis.
paragraph are denied. Slep-Tone is without sufficient information to determine
Brophys state of mind, and the allegations of the paragraph are additionally
provisionally denied on that basis.
26. Denied.
27. Slep-Tone admits that it provided a sample complaint for trademark
infringement for use as an example by attorneys engaged to prosecute claims.
Denied. The allegations that the representations in the sample complaint were or
are false is specifically denied.
28. Denied. Slep-Tone has been engaged continuously in the sale and
distribution of karaoke accompaniment tracks since 1987, and those sales and
distribution activities continue to the present day, even apart from sales and
distributions related to settlement of claims.
29. Admitted as to Sleps representations.

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30. Slep-Tone is without sufficient information to admit or deny the date
on which Brophy obtained a copy of the letter in question, and Slep-Tone therefore
leaves Brophy to his proof as to that point. The letter in question, which is
attached hereto as Exhibit A, speaks for itself, but Slep-Tone specifically denies
that it constitutes an authorization for the use of media-shifted and format-shifted
karaoke tracks without notification or verification. The letter, which is directed to
bar and club owners (and not to karaoke operators), specifically notes the
requirement that operators prove the purchase of the original manufacturers
content in support of each and every hard drive they use in a commercial
application to perform karaoke shows.
31. Slep-Tone admits that this was and is its position.
32. Denied. Additionally, Slep-Tone has no way of knowing what action
Brophy would have undertaken if a true statement had instead been false. Slep-
Tone agrees generally with the premise that investigation would be extremely
difficult if Slep-Tone had given a blanket authorization as Brophy suggests, but
denies that such an authorization was ever given.
33. Admitted.
34. Denied, on the basis that the statement was not a misrepresentation.
35. Denied.
36. Slep-Tone admits that it requested that APS include in its
investigations those persons who were illegally duplicating trademarked tracks and
selling computers and computer hard drives containing those tracks. Slep-Tone
denies that such investigations are outside the scope of the Agreement, that APS or
Brophy was entitled to extra compensation for such investigations, and that Slep-
Tone agreed to such extra compensation. To the extent not addressed above,
denied.
37. Slep-Tone is without sufficient information to admit or deny that
Brophy conducted the referenced Pirate Investigations. Slep-Tone admits that it

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has refused to pay any amounts for pirate investigations, because those
investigations are within the scope of the Agreement and therefore were to be at
APSs expense.
38. Denied.
39. Slep-Tone admits that it has refused to pay any amounts for extra
investigations, because no such investigations were requested.
40. Denied. Slep-Tone specifically denies that such activities stand
outside the normal duties under the Agreement (which is denominated an
Investigative Collection Services Contract and which specifically requires that
APS conduct collection activities).
41. Slep-Tone admits that it has refused to pay any amounts for so-called
collection duties, because those duties are within the scope of the Agreement and
therefore were to be at APSs expense.
42. Slep-Tone admits that it has refused to pay any amounts for travel
and miscellaneous expenses, such expenses, if incurred, being chargeable to APS,
not Slep-Tone.
43. Denied.
44. Slep-Tone admits that it made the notification in question and that
Brophy so responded. Slep-Tone denies that the notification was wrongful.
45. Slep-Tone admits that it notified defendants with existing settlement
agreements to make their future payments directly to Slep-Tone as a measure to
attempt to recoup monies wrongfully withheld by APS. Slep-Tone denies that the
notification was wrongful.
46. Denied.
47. Slep-Tone admits that it has requested that Brophy turn over the
referenced files. Otherwise, denied.
48. Denied.
49. Denied.

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50. Denied.
51. Denied.
52. Denied.
53. Slep-Tone admits that it instructed three defendants who had been
making payments to APS to make their payments to Slep-Tone instead. The
remainder of the allegations of this paragraph are denied. Moreover, because the
contract in question was with APS, not Brophy, Slep-Tone specifically denies that
Brophy has suffered any pecuniary loss whatsoever as to these diverted payments.
54. Denied.
55. Denied.
56. Denied.
57. Denied.
58. Denied.
59. Denied.
60. Denied.
61. Denied.
62. Denied.

WHEREFORE, Slep-Tone prays that judgment be entered in its favor upon
the Counterclaims and that Brophy have and take nothing thereon.

Respectfully submitted this the 21st day of July, 2014.

HARRINGTON LAW, P.C.

By: /s/
James M. Harrington
12245 Nations Ford Road, Suite 506
Pineville, NC 28134-8444
(704) 315-5800

Attorney for the Plaintiff

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CERTIFICATE OF SERVICE

The undersigned hereby certifies that the foregoing paper is being filed using
the Clerks CM/ECF system, which will send a Notice of Electronic Filing to
counsel of record.

CM/ECF non-participants are being served on the date indicated below by
depositing a copy of this paper as First Class Mail, postage prepaid, addressed as
follows:

STEVEN C. BROPHY
ASSOCIATED PROTECTIVE SERVICES, L.L.C.
3120 W CAREFREE HWY STE 1-301
PHOENIX AZ 85086-3202

Date: 7/21/2014 /s/ James M. Harrington
James M. Harrington
EXHIBIT A
Case 2:12-cv-02684-SRB Document 46-1 Filed 07/21/14 Page 1 of 1

Slep-Tone Answers Brophy Counterclaim

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