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Sharman License Holdings, Limited v. KazaaPlatinum.com [2004] GENDND 883 (20 July 2004)

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 KazaaPlatinum.com, Kiev, Ukraine, represented by Dmitry Chumak, Kiev, Ukraine.

2. The Domain Name and Registrar

The disputed domain name <kazaaplatinum.com> is registered with eNom.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on June 2, 2004. On June 2, 2004, the Center transmitted by email to eNom a request for registrar verification in connection with the domain name at issue. On June 2, 2004, eNom transmitted by email to the Center its verification response. 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 7, 2004. In accordance with the Rules, Paragraph 5(a), the due date for Response was June 27, 2004. The Response was filed with the Center on June 27, 2004.

The Center appointed Andrew Brown QC as the sole panelist in this matter on July 7, 2004. 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

The Complainant, Sharman License Holdings, Limited (“SLHL”) is an entity related to Sharman Networks Limited, the developer and distributor of the Kazaa Media Desk Top (“KMD”) peer-to-peer file sharing software using the trademark KAZAA. The Respondent has not questioned the relationship between the Complainant and Sharman Networks Limited and, for the purposes of this Complaint, the Panel will treat the two companies as the same entity to be referred to as the Complainant. KMD software is available from the Complainant’s website at “www.kazaa.com” in two forms. One form is available for free and is supported by advertising, the other must be purchased and is advertised as “ad free”.

The Complainant has applied for trademark registration of KAZAA either as a word or in a specific logo form in various jurisdictions as follows:

(a) In the USPTO, an application for registration in logo form was filed on September 2, 2003. This application is currently under examination. The Panel notes that this application was in fact made by an entity called SNL License Holdings Limited. No explanation or evidence has been put before the Panel regarding what connection, if any, this applicant has with the Complainant companies. The Respondent has not addressed this issue and, in the circumstances, the Panel is prepared to accept that the Complainant is intended to have the benefit of this application;

(b) An application was filed by SLHL with OHIM for a Community Trade Mark on August 21, 2000. An opposition to this application was filed by Speedware Software GmbH on December 3, 2001. The Panel understands that this opposition relates to the opponent’s CASA mark and is not related to the current dispute;

(c) An application was filed by SLHL with the Benelux Trade Mark Office on November 15, 2003. This application has been registered as trademark no. 0747624;

(d) An Australian trademark application was filed by SLHL on July 8, 2003. This application is currently under examination.

The Respondent seems to be based in Kiev, Ukraine. From the website operated from the disputed domain name, the Respondent provides subscribers with information about, and access to, several peer-to-peer file sharing utilities including peer-to-peer file sharing software that both parties accept is in some way derived from, or an adaptation of, the Complainant’s software. The exact nature and legality of the origin of the Respondent’s software is disputed. The Respondent charges a fee for membership to its services providing access to software and various support services.

5. Parties’ Contentions

A. Complainant

The Complainant alleges that in January 2002, it purchased various assets from a Dutch company, Kazaa BV, including:

(a) The user interface for KMD software; and

(b) The right to use the KAZAA trademark in relation to KMD software; and

(c) Various websites including “www.kazaa.com”; and

(d) A license to certain software modules within the KMD software not purchased outright;

The Complainant says it has used the mark since January 2002. The mark is used particularly in relation to the KMD software, which is claimed to be the most popular downloadable software in history. The Complainant claims that it has spent several hundreds of thousands of dollars (presumably US dollars although this is not specified), on promoting its software.

The Complainant submits that the domain name at issue is confusingly similar to its trademarks. This submission is based on the application of the US legal test for determining whether confusion exists between trade marks as set out in AMF Inc v. Sleekcraft Boats, [1979] USCA9 691; 599 F.2d 341 (9^th Circuit 1979). The Complainant emphasizes that:

(a) The mark is a fanciful, invented word strongly associated with its software;

(b) The Complainant and Respondent both offer the same type of products via the Internet;

(c) The Respondent’s product is an unlawful copy of the Complainant’s software;

(d) Appending the term “Platinum” to the KAZAA mark implies that the Respondent’s software is a “high end” version of the Complainant’s product;

(e) There is a “wide belief” that consumers exercise a low degree of care when purchasing goods over the Internet.

The Complainant concedes that no actual confusion can be shown but maintains that the use of the domain name is “likely to cause confusion among consumers as to the source of or Complainant’s perceived affiliation with, or sponsorship or approval of, Respondent’s infringing domain”.

In relation to the Respondent’s rights or interest in the domain name, the Complainant asserts that it knows of no evidence that the Respondent used or prepared to use the domain name in connection with a bona fide offering of goods prior to the Complaint being filed. It specifically alleges that the software offered by the Respondent, apparently known as “Kazaa Lite”, infringes the Complainant’s copyright in its KMD software.

The Complainant also notes that the Respondent is using the domain name for commercial gain by charging a fee for access to the software. The Complainant further claims that it offers its own software for download at no charge, and its efficacy and ease of use have resulted in nearly 350 million downloads of the software to date. It alleges that the Respondent’s offering of infringing software that is not licensed by Complainant, and charging a fee therefore, “tarnishes” the KAZAA mark. (This claim appears to be a little questionable as it is apparent from the Panel’s own inspection of “www.kazaa.com” that at least one version of the Complainant’s software is available only by payment of a fee.)

The Complainant alleges that given that the trademark KAZAA is an invented word, the Respondent would not have chosen to register it as part of a domain name unless it intended to create an impression or an association with the Complainant. It says also that the Respondent is disrupting the Complainant’s business by intentionally attracting Internet users to its site for commercial gain by creating a likelihood of confusion with the Complainant’s mark.

B. Respondent

The Respondent does not challenge many of the Complainant’s factual allegations.

It does seem to dispute the Complainant’s claim to rights in the KAZAA mark. The Respondent claims that the Complainant somehow has no such rights on the basis that the Complainant does not and cannot control the content provided through its KMD software, as it is a user-controlled file-sharing program.

The Respondent also asserts that its domain name is not confusingly similar to the Complainant’s mark. It says that the domain name is not a misspelling of any domain name owned by the Complainant. It says further that its website is not confusingly similar to the Complainant’s website as it has a different “look and feel”.

The Respondent notes that no evidence of actual confusion was adduced and alleges that consumers who must enter their credit card details in order to purchase a membership to the Respondent’s website are likely to exercise a high degree of care when doing so.

The Respondent implies that it has a legitimate interest in the domain name as it provides a “variant” of the Complainant’s software along with associated services on its website. It claims that these services are distinct from those of the Complainant. It submits that the provision of services relating to peer-to-peer file sharing software is in good faith and that the terms and conditions of purchase make it clear to purchasers what the Respondent is providing. The Respondent submits also that it makes no claim to affiliation with the Complainant. No evidence of these terms and conditions was supplied to the Panel however, a copy was obtained from the Respondent’s website.

The Respondent does not directly address the Complainant’s allegation that the “variant” of the software available from the Respondent infringes the Complainant’s copyright. It does however say generally that the services it provides do “not infringe any rights that the Complainant has”.

6. Discussion and Findings

A. Identical or Confusingly Similar

The Panel finds that the Complainant clearly has rights in the trademark KAZAA. It has obtained trademark registration in the Benelux countries and is prosecuting trademark applications in several other jurisdictions none of which has been finally determined. It has also shown a considerable degree of use and promotion of its mark.

The Panel notes that in Sharman License Holdings, Limited v. Gregg Smitherman, WIPO Case No. D2004-0375 (July 7, 2004) the Panel accepted that the Complainant had rights in the KAZAA mark, although the Respondent in that case did not file submissions.

The Respondent’s claim that the Complainant does not have control over the use made of its software has no bearing whatsoever on its rights to the trademark under which that software is distributed.

The mark KAZAA is a highly distinctive and invented word. The Panel accepts the Complainant’s allegation that the addition of the generic word “Platinum” to the mark does no more than connate a high-end variety of KAZAA goods or services. The Respondent claims that <kazaaplatinum.com> is not a misspelling of any domain name owned by the Complainant but the Panel notes that confusion, or a likelihood thereof, may arise in ways other than a simple misspelling of a domain name. As set out in Wal-Mart Stores, Inc v. Wallsucks & Walmarket Puerto Rico, WIPO No. D2000-0477 (July 20, 2000), “the addition of a common or generic term following a trademark does not create a new or different mark in which the Respondent has rights”. See also Parfums Christian Dior v. 1 Netpower, Inc., WIPO No. D2000-0022 (March 3 2000), Nintendo of America, Inc v. Gray West International, WIPO No. D2000-1219 (January 10, 2001) and Sharman License Holdings Limited v. Greg Smitherman, WIPO No. D2004-0375 (July 7, 2004).

The Complainant has submitted that purchasers of software over the Internet do so exercising only a low degree of care and therefore confusion is likely. The Respondent argues that when consumers are required to enter credit card details, a high degree of care is used lessening any likelihood of confusion. The Panel accepts that the Respondent’s view may well be correct. However, the Panel notes that the page on the Respondent’s website where a consumer may enter his or her credit card details is in fact prominently headed with the Complainant’s mark in logo form. There is nothing on that page to dispel the notion that consumers are dealing with an entity with the right to use the KAZAA mark.

In any case, it is accepted in many jurisdictions that a likelihood of initial interest confusion is sufficient to find a likelihood of confusion between marks. A consumer may enter the “www.kazaaplatinum.com” website thinking it is a website operated by the Complainant but realize upon closer inspection that the website is in fact operated by another party. The consumer may nevertheless continue to purchase the Respondent’s similar goods and services rather than continue to search for the Complainant’s own website. In this case, the Respondent is still profiting from its use of another’s mark even though the consumer’s initial confusion was cured.

The Panel therefore finds that the Complainant has satisfied Paragraph 4(a)(i) of the Policy and that the disputed domain name is confusingly similar to a trademark in which the Complainant has rights.

B. Rights or Legitimate Interests

The Respondent alleges it has a legitimate interest in the domain name as it provides a “variant” of the Complainant’s software and associated services. This seems to be a claim to a bona fide offering of goods or services as described in Paragraph 4(c)(i) of the Policy. In investigating this claim there are a number of factual issues to be discussed.

The Complainant claims that the Respondent distributes from its website a software program known as “Kazaa Lite. No evidence is put forward in support of this claim and the Panel has observed no material on the Respondent’s website (short of subscribing to the website) to indicate that any software distributed is known by this name. It is clear however that some form of software is distributed by the Respondent and the Respondent admits that this is a variant of the Complainant’s software.

The Complainant alleges that the Respondent’s software is substantially similar to and infringes the copyright in the Complainant’s KMD software. The Complainant believes that the Respondent’s software has been developed as a result of reverse engineering or “hacking” of the Complainant’s software. No evidence of these matters was put before the Panel.

For its part, the Respondent claims to offer information about, and access to, several peer-to-peer file sharing software utilities including a “Kazaa file sharing program, comprehensive reviews and user guides and support services”. The file-sharing program is described by the Respondent as a variant of the Complainant’s software “which does not contain Complainant’s intrusive advertising services”. Again, no evidence supporting these claims was put forward.

It is clear that the Respondent is distributing software somehow derived from that of the Complainant. It is not the function of the Panel, when deciding a UDRP Complaint, to investigate issues of software copyright infringement. However, the nature of the software offered by the Respondent may be seen as a relevant factor in this case. Arguably, if the Respondent was distributing genuine Kazaa software with the license of the Complainant, it would constitute a bona fide offering of goods of services for the purposes of the UDRP. Distribution of unauthorised, pirated software on the other hand would not constitute such a bona fide offering. No claim or evidence suggesting that the Respondent’s actions have been licensed or consented to by the Complainant have been put forward. The Respondent however candidly admits that its software does not contain the advertising included in the free version of the Complainant’s software. It would seem unlikely that the Complainant would consent to distribution of such an adaptation of its software. That said, there is equally no evidence that the Complainant has any copyright or similar rights in the software in question.

The Panel considers however that the precise origin and nature of the parties’ various software programs, and the Complainant’s copyright rights (if any) are not required to be determined to dispose of this Complaint.

In some circumstances, the offering of genuine goods, supplied directly by a Complainant to a Respondent can constitute bona fide offering within Paragraph 4(c)(i). This is particularly the case where no other goods or services are provided by the Respondent from the particular website and the Complainant/Supplier has approved or acquiesced in the use of its trademark as a domain name. See for example Draw-Tite, Inc v. Plattsburgh Spring Inc., WIPO Case No. D2000-0017 (March 14, 2000) and Adaptive Molecular Technologies, Inc. v. Priscilla Woodward et al, WIPO Case No. D2000-0006 (February 28, 2000). This is not the case in the current dispute. The Respondent admits that it provides services quite distinct from those of the Complainant, including access to several peer-to-peer file-sharing utilities only one of which is a “variant” of Kazaa software. All this is done through use of the Complainant’s trademark, attracting Internet users to the Respondent’s website and its various goods and services. It appears to the Panel that no attempt is made by the Respondent to differentiate itself from the Complainant. As well as using the domain name, the Complainant trades under the name KazaaPlatinum.com or Kazaa Platinum. On several pages of its website it uses the Complainant’s logo the subject of the US trademark application alongside the word Platinum. This cannot be considered a bona fide offering of goods or services.

The Panel considers that Paragraph 4(a)(ii) has been satisfied by the Complainant.

C. Registered and Used in Bad Faith

The Complainant alleges that the Respondent has “intentionally attempted to attract, for commercial gain, Internet users to its website, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of the Respondent’s site or of the product the Respondent offers on its site”. This is an obvious reference to Paragraph 4(b)(iv) of the Policy which sets out circumstances deemed to be evidence of registration and use of a domain name in bad faith.

The Panel finds that the Respondent has registered and used the domain name in such a manner. The use of the domain name as a trading name, and the use of the KAZAA logo (as described above) show an intention or attempt by the Respondent to attract Internet users to the website by creating confusion with the Complainant’s trademark. The website is using the disputed domain name to provide commercial gain to the Respondent by seeking payment for membership.

The Panel therefore finds that Paragraph 4(a)(iii) of the Policy is satisfied by the Complainant.

7. Decision

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 <kazaaplatinum.com>, be transferred to the Complainant.

Andrew Brown QC
Sole Panelist

Dated: July 20, 2004