WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Sharman License Holdings Limited v. Mandel Enterprises Ltd.
Case No. D2004-0841
1. The Parties
The Complainant is Sharman License Holdings Limited, Port Vila, Vanuatu, represented by Genga & Associates, P.C., United States of America.
The Respondent is Mandel Enterprises Ltd., Belmopan, Belize.
2. The Domain Names and Registrar
The disputed domain names<cazalite.com>
(the “Domain Names”) are registered with Intercosmos Media Group d/b/a directNIC.com of New Orleans, Louisiana, USA (the “Registrar”).
3. Procedural History
The Complaint was received by the WIPO Arbitration and Mediation Center (the “Center”) in hard copy on October 13, 2004, and by email on October 19, 2004. The Center transmitted its request for registrar verification by email to the Registrar on October 15, 2004. The Registrar replied on the same date confirming that it had received a copy of the Complaint, that it was the Registrar of all of the Domain Names, that the Respondent was listed in its database as the registrant of the Domain Names, that the Domain Names would remain locked during this proceeding, that the Uniform Domain Name Dispute Resolution Policy (the “Policy”) applied to the registrations, and that for each of the domain names the registration agreement was in English and contained a submission to the jurisdiction of the Courts of New Orleans, Louisiana (which is the location of the principal office of the Registrar). The Registrar also provided the contact details listed on its Whois database in respect of the registrations.
The Center verified that the Complaint satisfied the formal requirements of the Policy, the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).
The Center formally notified the Respondent of the Complaint in accordance with the Rules, paragraphs 2(a) and 4(a), on October 21, 2004. The notification was transmitted by email to the contact email address for the Respondent on the Registrar’s Whois database and to postmaster@ the respective Domain Names. It was also sent by courier to the postal address of the Respondent on the Registrar’s Whois database. With the exception of the transmission to postmaster@ one of the Domain Names, the copies appear to have been delivered successfully. The proceedings therefore commenced on October 21, 2004, and, in accordance with the Rules, paragraph 5(a), the due date for Response was November 10, 2004. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on November 15, 2004.
The Center appointed Jonathan Turner as the sole panelist in this matter on November 17, 2004. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
Having reviewed the file, the Panel is satisfied that the Complaint complied with applicable formal requirements, was duly notified to the Respondent and has been submitted to a properly constituted Panel in accordance with the Policy, the Rules and the Supplemental Rules.
4. Factual Background
The mark KAZAA has been used on a very large scale in relation to software which enables peer-to-peer communications over the Internet. As at April 2004, the software had been downloaded over 350 million times. The software was previously supplied by a Dutch company, Kazaa BV. That company assigned the right to use the mark KAZAA in relation to the software to Sharman Networks Limited (“SNL”) in January 2002. By an assignment and licence taking effect on June 6, 2003, ownership of the mark KAZAA was assigned by SNL to the Complainant and licensed back to SNL.
The Complainant has registered the mark KAZAA in the Benelux countries and its applications for registration are under examination in various other trade mark registries. Its application was rejected by the EU trade mark office (OHIM) in relation to classes 9 and 42 on the opposition of the proprietor of the German registered mark “Casa”, but is proceeding in relation to classes 35, 38 and 41.
The Respondent registered the Domain Names at various dates between October 2002, and May 2004, and is using them for a website which provides links through which internet users can obtain file-sharing software not supplied by the Complainant or its licensee or predecessors.
5. Parties’ Contentions
The Complainant contends that it has registered and unregistered rights in the trade mark KAZAA and that the Domain Names are confusingly similar to this mark. The Complainant points out that the Domain Names comprise the mark or its phonetic equivalent followed by a common, descriptive indication. The Complainant further contends that the Respondent does not have any rights or legitimate interests in respect of the Domain Names and that they were registered and are being used in bad faith, in particular to disrupt the Complainant’s business and to attract internet users to the Respondent’s website by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation or endorsement of that site or the products offered on it. The Complainant requests a decision that the Domain Names be transferred to itself.
As noted above, the Respondent did not submit a response.
6. Discussion and Findings
In accordance with the Policy, paragraph 4(a), to succeed in this proceeding, the Complainant must prove (a) that the Domain Names are identical or confusingly similar to a trade mark in which it has rights, (b) that the Respondent has no rights or legitimate interests in respect of the Domain Names, and (c) that the Domain Names were registered and are being used in bad faith. These requirements will be considered in turn.
A. Identical or Confusingly Similar to Mark in which Complainant has Rights
The Complaint is not very clear as to what rights in the mark were transferred by Kazaa BV to SNL in January 2002. However, the assignment and licence between SNL and the Complainant of June 2003 recited that SNL was the legal and beneficial owner of this trade mark prior to this transaction. In any case, the evidence is that SNL has used and promoted KAZAA as a trade mark on a very extensive scale in relation to its peer-to-peer communication software in succession to Kazaa BV since January 2002. This use would in itself be capable of establishing rights in the mark which SNL could transfer to the Complainant in June 2003 and thereafter maintain for the Complainant by use as its licensee. The Complainant also has registered rights in the trade mark in the Benelux countries. In these circumstances, the Panel considers that the Complainant has provided sufficient evidence of its title to the trade mark KAZAA.
It is well known that the software supplied under the mark KAZAA is widely used to make infringing copies of copyright works. In many legal systems, trade marks are not entitled to protection if their use is illegal or contrary to public policy. However, the fact that the software is often used illegally does not mean that its supply by the Complainant’s licensee or predecessors has been illegal: see Metro-Goldwyn-Mayer Studios & others v Grokster & others (9th Cir., August 19, 2004) and CBS Songs v Amstrad Consumer Electronics  RPC 567. Moreover, even if the supply of the software had been illegal, it would not follow that the trade mark is itself objectionable: see the distinction drawn in the classic English case, Ford v Foster (1870) 7 Ch App 611 between misrepresentations forming part of the mark and other misrepresentations made by the proprietor. In this case, the trade mark, KAZAA, does not itself contain any misrepresentation or other matter contrary to public policy. Futhermore, the Complainant’s registration of the trade mark in the Benelux countries may be presumed valid.
The Panel is therefore satisfied that the Complainant has rights in the trade mark KAZAA, despite the objections which may be made to the business which has been carried on under it.
Nine of the Domain Names start with the mark, KAZAA. The other two start with phonetic equivalents of the mark, in one case (<kkazaalite.com>) in a form which could readily result from mistyping. In the case of each of the Domain Names, this is followed by one or more common descriptive indications (“lite”, “gold”, “VIP”, “revolution”) and/or a mis-spelling of “resurrection”, which could well be taken to refer to the reorganization of the business at the beginning of 2002. As the Complainant rightly points out, KAZAA is an inherently distinctive mark, and the additions would indicate to many internet users a variant, new or restored version of the “Kazaa” software or business, and not an independent product or business.
The Panel concludes that each of the Domain Names is confusingly similar to the Complainant’s trade mark and that the first requirement of the Policy is met.
B. Rights or Legitimate Interests
The Domain Names have been used solely in relation to the Respondent’s website promoting software for peer-to-peer communications which is not supplied by or with the consent of the Complainant or its licensee or predecessors. Such use has been liable to mislead and does not constitute a bona fide offering of goods or services of a kind which could give rise to a right or legitimate interest: see e.g. Mentor ADI Recruitment Ltd (trading as Mentor Group) v. Teaching Driving Ltd, WIPO Case No. D2003-0654 <letsdrive.com>. The Panel is satisfied that the Respondent has no rights or legitimate interests in respect of the Domain Names.
C. Registered and Used in Bad Faith
KAZAA is a distinctive mark and was already very well known when the Respondent registered the first of the Domain Names. The Respondent must have been aware of the mark and the Panel infers that it chose the Domain Names on account of their similarity to the mark, with a view to exploiting its reputation.
The Respondent has since used the Domain Names to promote alternative peer-to-peer communication software. The Panel infers that the Respondent intends to divert internet users seeking “Kazaa” software to competing offerings by using the Domain Names to create a likelihood of confusion with the mark KAZAA. Although there is no specific evidence that the Respondent gains commercially from this diversion, it may be inferred from common practice that it obtains commissions in respect of internet users who are diverted into downloading the competing software.
In these circumstances, the Panel concludes that the Respondent registered and is using the Domain Names in bad faith.
For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain names
be transferred to the Complainant.
Date: November 29, 2004