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Sharman License Holdings, Limited v. Gregg Smitherman [2004] GENDND 931 (7 July 2004)

1. The Parties

The Complainant is Sharman License Holdings Limited, Port Vila, of Vanuatu, represented by Genga & Associates, P.C., United States of America.

The Respondent is Gregg Smitherman, Cut Bank, Montana, of United States of America.

2. The Domain Names and Registrar

The disputed domain names <kazaaliteplus.net>, <kazaalite.tv>, <shazaa.com>, <zazzer.com> are registered with Go Daddy Software.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on May 22, 2004. On May 24, 2004, the Center transmitted by email to Go Daddy Software a request for registrar verification in connection with the domain names at issue. On May 24, 2004, Go Daddy Software transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant, also 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 then formally notified the Respondent of the Complaint, and the proceedings commenced on May 25, 2004, and under paragraph 5(a) the due date for Response was June 14, 2004. The Respondent did not submit any response. Accordingly, the Center recorded the Respondent’s default on June 15, 2004.

The Center appointed Jacques A. Léger Q.C. as the sole panelist in this matter on June 21, 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. The Panel finds that it was properly constituted.

4. Factual Background

The following alleged and uncontested facts appear from the Complaint and the supporting documents submitted therewith:

- The Complainant owns the common law mark “KaZaa” (here and after “Kazaa mark”) through an acquisition of the mark by a related entity, Sharman Networks Limited (“SNL”).

- The Complainant owns numerous Internet domain names that include the variant of the Kazaa mark.

- The Complainant operates its Web site at the domain address “www.kazaa.com”, which provide a user interface for Kazaa Media Desktop (“KMD”) and software that enables peer-to-peer (“P2P”) communication over the Internet.

- The Respondent, through his Web sites “www.kazaaliteplus.net”, “www.kazaalite.tv”, provides a user interface for Kazaa Lite Plus and Kazaa Lite K+ + , respectively, and a P2P application.

- The Respondent, also provides, through his Web sites “www.shazza.com” and “www.zazzer.com”, the latter Web site redirected to the former, a search engine which refer to Kazaa Lite in the Top ten searches sections of the frontal web page.

- The Domain name, <kazaaliteplus.net>, was registered on April 12, 2004, by the Respondent (see the Complaint Annex A).

- The Domain name, <kazaalite.tv>, was registered on March 10, 2004, by the Respondent (see the Complaint Annex A).

- The Domain name, <shazaa.com>, was registered on April 9, 2003, by the Respondent (see the Complaint Annex A).

- The Domain name, <zazzer.com>, was registered on December 16, 2002, by the Respondent (see the Complaint Annex A).

5. Parties’ Contentions

A. Complainant

Over and above factual background noted above, it has been contended by the Complainant, that:

- It owns the Kazaa mark and has used it continually throughout the world since January 2002, even thought it has not been registered.

- It purchased the following assets: (i) the user interface for the KMD and the P2P application; (ii) the right to use the Kazaa mark when identifying and marketing KMD; and (iii) The Kazaa.com website and related websites (including “desktop.kazaa.com”), which are used in connection with the KMD application for advertising and other purposes.

- According to “www.download.com”, on May 21, 2004, Kazaa Media Desktop is the most popular downloadable software application in Internet history. It has been downloaded nearly 350 million times. (see the Complaint, Annex C)

- Millions of users make multiple millions of files available to each other with KMD. (see Complaint, Annex D)

- It released several versions of its software, each launch being supported by extensive advertising.

- It spent in 2003, nearly $600,000 on a consumer ad campaign, the “Kazaa Revolution”, largely in print media and on merchandise and followed up such campaign with Internet advertising in early 2004 that will cost approximately another $100,000. (see the Complaint, Annex E)

- The Complainant also has filed for registration the Kazaa mark in the United States, Australia, the European Union and the Benelux countries.

- The extreme and unprecedented popularity of KMD, and Complainant’s active and continued promotion of it and of the Kazaa brand, have established strong secondary meaning in the form of a ready association among hundreds of millions of consumers world-wide between the Kazaa mark and the source of a specific and powerful P2P application.

- The Respondent is not affiliated with the Complainant, is not a licensee of the Complainant, nor is it authorized by the Complainant to use any of the Complainant’s marks as a domain name or otherwise.

- The Respondent’s application is substantially similar and infringing of Complainant’s application, apparently the result of illegal reverse engineering or hacking into computers using the KMD software.

- The Respondent currently offers the same types of products in the same market and channel of distribution.

- The Respondent’s use of Complainant’s mark, in each of the domains at issue, that it is likely to cause confusion among consumers as to the source of Complainant’s perceived affiliation with, or sponsorship or approval of, Respondents’ infringing domains.

- The Complainant knows of no evidence that the Respondent has commonly been known by the domain names.

- The Respondent is not making a legitimate non-commercial or fair use of the Domain Names.

- The Domain Names are identical or confusingly similar to a service mark in which the Complainant has rights.

- The Respondent has neither right nor legitimate interest in incorporating the Complainant’s well-known Kazaa mark into his domain names.

- The Respondent has neither rights nor legitimate interests in respect of the domain names that are the subject of this Complaint.

- The Domain Names were registered and used in bad faith.

B. Respondent

The Respondent did not reply to the Complainant’s contentions.

6. Discussion and Findings

Under Paragraph 4(a) of the Policy, the Complainant has the burden of proving each of the three following elements:

(i) that the Domain Name is identical or confusingly similar to a trademark or service mark in which the Complainant holds rights; and

(ii) that the Respondent has no rights or legitimate interests in the Domain Name; and

(iii) that the Domain Name has been registered and is being used in bad faith by the Respondent.

The Complainant must meet these cumulative requirements, for each of the Domain Names, despite Respondent’s default, on a balance of probabilities.

These three elements are considered below.

A. Identical or Confusingly Similar

The Panel finds that the Domain Names, <kazaaliteplus.net> and <kazaalite.tv>, are confusingly similar to the Kazaa mark, even though their are each followed by a suffix, as the presence of a suffix does not prevent similarity, see Yahoo!Inc. v. Jorge O. Kirovshy, WIPO Case No. D2000-0428. Furthermore, the addition of the generic domains “biz”, “tv” or “net” does nothing to deflect the impact on the viewer of the Kazaa mark. See J.D. Edwards & Company v. Nadeem Bedar, WIPO Case No. D2002-0693.

As for the Domain Name <shazaa.com>, while not identical it is nevertheless confusingly similar. The test of confusion in comparing the words or marks at issue is from the standpoint of the average unwary consumer, looking at the marks in their totality, having an imperfect recollection of the former. In addition, “Shazaa.com” has a strong phonetical similarity to the KaZaa mark. Confusing similarity turns on the similarity in sound, appearance and idea suggested by the mark and the domain name among other factors. See Altavista Company v. Geoffrey Fairbairn, WIPO Case No. D2000-0849. Therefore, the domain name “Shazaa” is confusingly similar to the Complainant’s KaZaa mark

However with respect to <zazzer.com>, the Panel finds it neither identical or confusingly similar with the KAZAA mark, when considered strictly as Domain Name. Indeed, the Domain Name <zazzer.com> itself has no phonetic similarity nor any visual appearance to the Complainant’s marks, even though the content is identical to that of Domain Name <shazaa.com>. The Complaint therefore raises the question as to whether or not a cache or metatag can be said to be an infringement of Complainant’s rights within the confine or limitations of the Policy. The Respondent redirects <zazzer.com> to <shazaa.com> which itself was found to be similar. Taking under consideration all of the circumstances relating to the technique by which <zazzer.com> is redirected to <shazaa.com>, as in the present case, Complainant is trying to assert that to a certain extent <zazzer.com> is indirectly confusing; yet assuming for one moment that <zazzer.com> was to be transferred to the Complainant, then without the redirecting technique, <zazzer.com> would no longer be confusingly similar. The Panel concludes that it lacks jurisdiction to address that issue within the limited scope of the Policy and consequently will not address this question, reserving the rights of the Complainant to deal this matter in another jurisdiction, if it so elects.

Consequently, with respect to the Domain Name <zazzer.com>, the Panel will refrain for commenting the other elements.

B. Rights or Legitimate Interests

Paragraph 4(a)(ii) of the Policy inquires as to whether or not the Respondent has any rights or legitimate interests vested in the domain dame. Paragraph 4(c) provides examples of circumstances that can demonstrate the existence of such rights or legitimate interests: (i) use of, or preparations to use, the domain name in connection with a bona fide offering of goods or services; (ii) the fact that the Respondent has been commonly known by the Domain Name; and (iii) legitimate non-commercial or fair use of the Domain Name.

The Panel agrees with Complainant’s contention that Respondent has no rights or legitimate interests with respect of the Domain Names, <kazaalite.tv>, <kazaaliteplus.net> and <shazaa.com>.

In the present case, there is no relationship between the parties giving rise to any license, permission, or other right by which Respondent could own or use any domain names incorporating the Kazaa mark.

There is no justification as to why the Respondent needed to include “Kazaa” mark in some Domain Names, as <kazaalite.tv> and <kazaaliteplus.net>, in order to carry out his business. Furthermore, the Respondent had no justification to include the Kazaa logo in the content of the Domains of <shazaa.com>, <kazalite.tv> and <kazaaliteplus.net>. (see Volvo Trademark Holding AB v. e-motordealer ltd., WIPO Case No. D2002-0036)

The Respondent has not attempted to explain or argue that he used or is prepared to use the Domain Names in connection with a bona fide offering of goods or services. Specifically, the Respondent did not offer the Kazaa software, and has no license from the Complainant to do so. Further, the Respondent offers dubbed software that incorporates the logo of the “Kazaa” mark. Intentionally trading on the fame of a mark cannot constitute bona fide offering of goods or services. (see Madonna Ciccone, p/k/a Madonna v. Dan Parisi and "Madonna.com", WIPO Case No. D2000-0847)

In addition, there is no evidence that the Respondent is or was commonly known by the Domain Names and is thus making a legitimate non-commercial or fair use of the Domain Names.

While the obligation to demonstrate that the Respondent has no rights or legitimate interests squarely rest upon the Complainant, once prima facie evidence has been adduced, it is a recognised principle, under certain circumstances, that it may then be incumbent upon the Respondent to demonstrate otherwise, and failing to do so may enable the Panel to draw a negative inference. In the present case, the Panel adopts the findings enunciated in Six Continents Hotels Inc. v. Patrick Ory, WIPO Case No. D2003-0098, Fortuneo v. Johann Guinebert, WIPO Case No. D2001-0781 and Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003, and the Respondent having failed to answer to the Complaint or at least explain any legitimate rights or interests it might have had in the Domain Names before the due date, the Panel does draw a negative inference, therefrom.

Consequently, the Panel concludes that, on a balance of probabilities, the Complainant has discharged its burden as required by paragraph 4(a)(ii) of the Policy to show that the Respondent has no rights or legitimate interests in the Domain Names, <kazaalite.tv>, <kazaaliteplus.net> and <shazaa.com>.

C. Registered and Used in Bad Faith

Usually, it is quite difficult to actually prove bad faith, while good faith is to be presumed. However, once the Complainant as brought forward credible evidence pointing to bad faith, then it is incumbent upon the Respondent to reply and explain as to why its conduct may not amount to bad faith. In the present case, the Complainant having done so, and Respondent having failed to timely submit a reasonable explanation, the Panel does draw negative inference. (see Six Continents Hotels Inc. v. Patrick Ory, WIPO Case No. D2003-0098 and Hebdomag Inc. v. Illuminaty Marketing, WIPO Case No. D2001-0206)

Considering the failure of the Respondent to respond, the Panel took upon itself to visit the following web sites: “www.kazaalite.tv”, “www.kazaaliteplus.net”, “www.shazaa.com” and “www.zazzer.com”, if only to insure that due process was being followed.

The Panel refers to the findings of and Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003 and Union Electrica Fenosa v. Sydey Hussain, WIPO Case No. D2000-0893 and concludes that the mark “KAZAA” is a non-generic and fictitious term, which has acquired some fame and might explain why the Respondent choose this word as a Domain Name, which is a ground for a registration in bad faith, unless otherwise justified or explain, which Respondent failed to do.

The Panel also finds that Respondent does use the Domain names to intentionally attempt to attract, for commercial gain, Internet users to its web site, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation or endorsement.

For all of these reasons, the Panel concludes that the Domain Names, <kazaalite.tv>, <kazaaliteplus.net> and <shazaa.com> were registered and used by the Respondent in bad faith.

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 names, <kazaalite.tv>, <kazaaliteplus.net> and <shazaa.com> be transferred to the Complainant, by Go Daddy Software, forthwith.

However, as for the Domain Name <zazzer.com>, the Complainant did not meet the requirements on a balance of probabilities for the confusing similarity of the Domain Name, and therefore the Complaint relating to <zazzer.com> is denied.

Jacques A. Léger Q.C.
Sole Panelist

Dated: July 7, 2004