WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Sonido, Inc. v. MU21C.COM Inc.
Case No. D2006-0685
1. The Parties
The Complainant is Sonido, Inc., New York, United States of America, represented by Law offices of Stuart A. Jackson, P.C., United States of America.
The Respondent is MU21C.COM Inc., Hempstead, New York, United States of America, represented by Irving Singer, P.C., Hempstead, New York, United States of America.
2. The Domain Name and Registrar
The disputed domain name <fania.com> is registered with Network Solutions, LLC.
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on June 1, 2006. On June 1, 2006, the Center transmitted by email to Network Solutions, LLC a request for registrar verification in connection with the domain name at issue. On June 2, 2006, Network Solutions, LLC transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative, billing, and technical contact. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (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”).
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on June 8, 2006. In accordance with the Rules, paragraph 5(a), the due date for Response was June 28, 2006.
On June 27, 2006, Respondent submitted to the Center a copy of a petition filed before the Supreme Court of the State of New York, requesting that Complainant be stayed from continuing or participating in the UDRP. On the same day, the Center transmitted that petition to the Complainant and asked for its comments.
On August 8, 2006, Complainant submitted a copy of a decision by the Supreme Court of the State of New York, denying the stay requested by the Respondent.
On August 14, 2006, the Center informed the parties that the administrative proceeding would continue and that “all time periods have been re-calculated from the date of this communication”. The Response was filed with the Center on August 21, 2006.
The Center appointed Richard Hill as the sole panelist in this matter on August 23, 2006. The Panel finds that it was properly constituted. 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.
4. Factual Background
Complainant is the owner of common law trademark rights for the name FANIA, which it uses to market recordings of salsa music.
Respondent is acting on behalf of an individual, Mark Haynes, who claims that he is due certain sums of money by Complainant. Respondent and that individual have the same address (which is the same address as Respondent’s counsel).
The Respondent registered the disputed domain name in order to pressure the Complainant to pay to the Respondent certain sums that the Respondent believes are due for work performed. The Respondent does not claim any other rights or legitimate interest in the contested domain name.
5. Parties’ Contentions
Complainant alleges that it is the foremost producer of Latin American or “salsa” music. It states that it was incorporated in 1986, by Jerry Masucci, a prominent figure in the Latin American music business since the 1970’s and has been using since 1986 the FANIA trademark in commerce in association with the sale of salsa music in the form of records, tapes, cassettes and disks.
According to Complainant, in 1996, Jerry Masucci became interested in modernizing Sonido, Inc.’s computer and telephone systems. Jerry Masucci hired an individual named Mark Hynes to perform computer repair and maintenance services and to create a computer program for its bookkeeping. On December 26, 1996, Mark Hynes registered the domain name <latinmusic.com> for Sonido, Inc. at the request of Jerry Masucci. Shortly thereafter, Jerry Masucci became displeased with Mark Hyne’s work and discontinued his services. Mark Hynes then claimed that based on an agreement with Sonido, Inc. dated February 10, 1997, he was entitled to 10% of all Internet sales made by Sonido, Inc. Sonido Inc. and Mark Hynes settled their dispute on September 26, 1997, when Mark Hynes signed a release of his claims against Sonido, Inc. related to the February 10, 1997 agreement (Complainant attaches a copy of said release, which appears to have been sworn before a Notary Public). Jerry Masucci died soon thereafter on December 2, 1997. After Jerry Masucci’s death, Mark Hynes claimed that his signature on the September 1997, release had been forged by Jerry Masucci and requested that Sonido, Inc. pay him 10% of the Internet sales made by Sonido Inc. through the website “www.latinmusic.com”. Sonido Inc. refused to pay anything to Mr. Hynes based on the September 1997 release of claims signed by him.
Further according to Complainant, on February 18, 1998, after Jerry Masucci’s death and after Sonido, Inc. refused to pay Mark Hynes any money based on his release of claims, Respondent MU21C.COM, INC. registered the disputed domain name <fania.com>. Respondent’s address, as it results from the domain name registration, appears to be identical to the address Mark Hynes indicated as his in 2001. Complainant believes that Mark Hynes caused Respondent to register the domain name <fania.com> with the sole purpose to pressure Sonido, Inc. to pay him monies to which he is not entitled. Complainant also believes Respondent registered the domain name <fania.com> to force Sonido, Inc. to buy it from Respondent at a price disproportionate with the costs of registration and maintenance of such domain name.
Complainant alleges that neither Respondent MU21C.COM, INC. nor Mark Hynes were ever granted any right into the trademark FANIA, which had been used by Sonido Inc. since its incorporation in 1986. At no point did Mark Hynes ever claim any ownership in the trade name “Fania”.
According to Complainant, it is Respondent’s intention to sell the Domain Name and request from Complainant an amount of money disproportionate with the costs of registration and maintenance of such domain name.
There is a legal action pending since 1999 between Mark Hynes and Sonido Inc. before the New York Supreme Court. In this action, Mark Hynes seeks a percentage of Sonido Inc.’s alleged internet sales made through the website “www.latinmusic.com”. In his Supreme Court complaint, Mark Hynes does not seek rights in the trademark FANIA nor ownership of the domain name <fania.com>. In connection with an attempt by the Complainant’s counsel to secure transfer of the domain name to Complainant, counsel for Mark Hynes, Mr. Irving Singer, verbally offered to transfer the disputed domain name back to Complainant Sonido, Inc. for $25,000.
Respondent alleges that the dispute between the parties is not one that the UDRP is concerned with. There is no dispute as to the ownership of the domain name <fania.com> or its registration. This dispute arises out of the inability of the owner of the name <fania.com> to access it because it did not pay its Internet services provider initially for the creation of a website and the registration of the name in 1998. The name and website have been registered pursuant to the authority of the owner and it has not been able to be accessed because Mark Hynes was never paid for the registration by Sonido Inc.
Respondent states that Mark Hynes had been working for Complainant since at least early 1997. When Sonido, Inc.’s principal Jerry Masucci died on December 21, 1997, Mark Hynes continued to create the Internet website for Sonido, Inc. and registered it in the year 1997 and displayed the website in the year 1997-1998. In the year 2000 he received a letter from Sonido, Inc. that he was to discontinue the work on the Internet project. He was never paid by Sonido, Inc. or Jerry Masucci for the creation of the website and placing <fania.com> on the Internet.
According to Respondent, as a result, Sonido, Inc. never used the website or the Internet for its sales that Mark Hynes had created. Mark Hynes continued to pay for the Internet registrations in order to protect his labor and Internet position for <fania.com> as he was aware of the fact that if Sonido, Inc. was to ever want to use <fania.com> on the Internet for Sonido, Inc., it would have to pay him for his labor.
According to Respondent, Mark Hynes has been advised by his counsel Irving Singer that he had a right to be paid for work labor and services under the common law. In the Internet era, the only way that a website provider or Internet services provider is [sic] “by registering on the Internet for the owner that which he is contracted for before the owner registers his own name. At that time both parties can resolve their interest in the name if the owner does not want to pay for the services provided by creating an Internet connection in that name. The common law lien is what Sonido wants to avoid paying. The domain name <fania.com> is owned by Sonido and has never been paid for by Sonido.”
Respondent alleges that it has a legitimate right with respect to the domain name and should not be interfered with as it presently exists. Sonido, Inc. has no right to cancel the prior registration without paying for the work labor and services of Mark Hynes. It recognizes common law rights but does not want to meet its obligations under the common law. The Respondent contends that there was no general release for services that could have been performed after September 1997 by the fraudulent General Release that was created by Sonido, Inc. That issue is still being litigated in the State of New York. The State of New York has not recognized the general release of Sonido, Inc.
6. Discussion and Findings
The Panel will first address the procedural issues related to the fact that the Response is late and that the Respondent requests the Panel to find that it has no jurisdiction to hear the case. The Panel will then analyze the evidence to determine whether the Complainant has proven, in accordance with Paragraph 4(a) of the Policy that:
- The disputed domain name is identical or confusingly similar to a trademark in which the complainant has rights, and
- The respondent has no rights or legitimates interests in the contested domain name, and
- The respondent registered and is using the disputed domain name in bad faith.
I. The Procedural Issues
A. Late Response
In accordance with 10(b) of the Rules, in all cases, the Panel shall ensure that the Parties are treated with equality and that each Party is given a fair opportunity to present its case.
The Panel exercises its discretion to admit the late Response, see Bd. of Governors of the Univ. of Alberta v. Katz, WIPO Case No. D2000-0378 and Talk City, Inc. v. Michael Robertson, WIPO Case No. D2000-0009 (finding that a panel may consider a response which was received before a panelist was appointed and any consideration made).
In the present case, it should be noted that on August 14, 2006, the Center informed the parties that “all time periods have been re-calculated from the date of this communication”. The Respondent may have interpreted that communication as indicating that the deadline for filing a response has been re-calculated as of August 14, 2006.
Respondent requests the Panel to find that it has no jurisdiction to hear the case because of pending litigation before the Supreme Court of the State of New York, and it submits to the Panel a request filed before that Court for a stay of the UDRP proceedings.
Complainant submits to the Panel the Court’s decision regarding that request, which was denied.
In accordance with 18(a) of the Rules, the Panel shall have the discretion to decide whether to suspend or terminate the administrative proceeding, or to proceed to a decision if there are any legal proceedings initiated prior to or during the domain name arbitration proceeding.
In Western Holdings, LLC v. JPC Enterprise, LLC d/b/a Cutting Edge Fitness and d/b/a Strivectin SD Sales & Distribution, WIPO Case No. D2004-0426 the panel stated:
“Other panels confronted with the question of proceeding in the face of a related court proceeding have frequently exercised the discretion provided under Paragraph 18 to issue a decision, recognizing that doing so does not prevent either party, if dissatisfied with the result, from continuing to seek relief in court. See Weber-Stephen Products Co. v. Armitage Hardware, WIPO Case No. D2000-0187; Cognigen Networks, Inc. v. Pharmaceutical Outcomes Research a/k/a Cognigen Corporation, WIPO Case No. D2001-1094; AB SKF and SKF Beaings India Limited v. Vikas Pagaria, WIPO Case No. D2001-0867; and Fadesa Inmobiliaria, S.A. v. Flemming Madsen, WIPO Case No. D2001-0570.
For similar reasons, the Panel has decided to exercise the discretion granted to the Panel under Paragraph 18 to proceed to decision under the Policy.”
The same applies in the present case. Indeed, in its Decision and Order of August 2, 2006, denying Respondent’s request for an order to stay the UDRP procceding, the New York Supreme Court states:
“… the petition to stay arbitration is denied and petitioner [Respondent] is directed to proceed to arbitration.”
Therefore, this Panel affirms that it has jurisdiction for the case and will proceed to consider the substantive issues.
II. The Substantive Issues
A. Identical or Confusingly Similar
The Complainant has submitted proof of its common law rights to FANIA. It is not disputed that the contested domain name is identical to Complainant’s mark FANIA. Complainant has established the first element of the UDRP.
B. Rights or Legitimate Interests
This case is very similar to Map Supply Inc. v. On-line Colour Graphics, Case no. FA 96332 (Nat. Arb. Forum). In that case, the panel stated:
“The Respondent has failed to persuade me that there is any chance that the law would permit it, without the consent of the client, to take control of a domain name, and then retain control as a security against payment for web-design work. And that is what happened here.”
The same applies in the present case. Indeed, in its Decision and Order of August 2, 2006, denying Respondent’s request for an order to stay the UDRP proceeding, the New York Supreme Court states:
“Petitioner’s [Respondent’s] claim of a common law lien right in the domain name is supported neither by evidentiary facts nor legal authority.”
The present case must be distinguished from cases such as Clinomics Biosciences, Inc. v. Simplicity Software, Inc., WIPO Case No. D2001-0823 and Jason Crouch and Virginia McNeill v. Clement Stein, WIPO Case No. D2005-1201 in which the panel found that the disputes involved complex factual and legal issues related to contract or tort law and that the Panel therefore could not determine who had rights or a legitimate interest in the disputed domain name.
The Panel holds that the Complainant has established that Respondent has no rights or legitimate interests—in the sense of the Policy— in the disputed domain name. This holding is, of course, without prejudice to what may be held by a national court on the basis of national law.
C. Registered and Used in Bad Faith
Paragraph 4(b) of the Policy lists certain circumstances which “in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith”. Those circumstances include:
(i) circumstances indicating that you have registered … the domain name primarily for the purpose of … transferring the domain name registration to the complainant who is the owner of the trademark or service mark … for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name;
(ii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor.
Either of these circumstances can be held to apply to the present case, in particular (i). The fact that they should apply to the case can be inferred from the fundamental purpose of the Policy, which is to make it easier for trademark owners to obtain the transfer of a domain name than it would be if they had to rely only on national courts to obtain the transfer the domain name. And this in particular noting the fact that those circumstances enumerated in the Policy are “in particular but without limitation”, that is, the Panel is free to find that other circumstances constitute bad faith in the sense of the Policy.
The closest equivalent to a legislative history for the Policy can be found in the April 30, 1999 Final Report of the WIPO Internet Domain Name Process, which formed the basis for the ICANN Policy (available online at: http://wipo2.wipo.int/process1/report/doc/report.doc). This report states at paragraph 148:
“While, as mentioned above, there is general agreement that the right to litigate a domain name dispute should be preserved, court litigation may have several limitations as a means of dealing with such disputes. In particular, because of the multi-jurisdictional character of many such disputes, court actions in several countries may be necessary in order to obtain an effective solution. In addition, in some countries, the court system suffers from dysfunction, with the consequence that decisions cannot be obtained within a period of time which is commensurate with the speed with which damage can be done by virtue of an infringing domain name. As indicated above, the cost of litigation stands in stark contrast to the cost of obtaining a domain name registration. Finally, there is a possibility that, with a number of different courts in several countries being involved with domain name disputes, inconsistent decisions may be given or inconsistent principles concerning the relationship between domain names and intellectual property rights may emerge from such decisions.”
The purposes of the Policy would be frustrated if any complaint were dismissed merely because a respondent had filed a case in national court claiming some sort of right to the disputed domain name.
As noted above, panels have (and rightly so) dismissed cases where the respective rights of the parties to the disputed domain name were not clear and where a national court was in the best position to determine those rights.
But this is not the situation in the present case.
In a statement attached to Respondent’s request for a stay of the UDRP proceeding filed before the New York Supreme Court Respondent’s counsel states:
- That he incorporated the Respondent, MU21C.COM Inc. for his neighbor Mark Hynes.
- That he will be paid 1/3 of the amounts claimed by Mark Hynes from Complainant.
- That he is counsel for Mark Hynes (as well as for Respondent).
- That the business address of Mark Hynes is the same as his own, and the same as Respondent’s.
The Respondent admits that it has registered the disputed domain name solely in order to pressure the Complainant to pay certain sums of money that may or may not be due to an individual (Mark Hynes) who is clearly closely connected to the Respondent and, further, Respondent admits that it is acting on behalf of this individual.
The Panel holds that this constitutes bad faith in the sense of the Policy. Thus, the Panel finds that the domain name was registered and used 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 name <fania.com> be transferred to the Complainant.
Dated: September 6, 2006