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Skype Limited v. Xiaochu Li [2005] GENDND 1928 (18 November 2005)

World Intellectual Property Organization

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Skype Limited v. Xiaochu Li

Case No. D2005-0996

1. The Parties

The Complainant is Skype Limited, Dublin, Ireland, represented by Genga & Associates, P.C., United States of America.

The Respondent is Xiaochu Li, Nanjing Jiangsu, China.

2. The Domain Names and Registrars

The disputed domain names <hiskype.com> and <hiskype.net> are registered with HiChina Web Solutions Limited and Bizcn.com, Inc. respectively.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on September 17, 2005. On September 19, 2005, the Center transmitted by email to HiChina Web Solutions Limited and Bizcn.com, Inc. a request for registrar verification in connection with the domain names at issue. On September 20, 2005, Bizcn.com, Inc. transmitted by email to the Center its verification response confirming that the domain name <hiskype.net> is registered with them and the Respondent is listed as the registrant and the contact details for the administrative, billing, and technical contact were provided accordingly. On October 9, 2005, HiChina Web Solutions Limited transmitted by email to the Center its verification response confirming that the domain name <hiskype.com> is registered with them and the Respondent is listed as the registrant and the contact details for the administrative, billing, and technical contact were provided by the Registrar accordingly.

As the Registration Agreements for both domain names are in Chinese, the Complaint was filed in Chinese. 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 October 11, 2005. In accordance with the Rules, paragraph 5(a), the due date for Response was October 31, 2005. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on November 1, 2005 .

The Center appointed Susanna H.S. Leong as the sole panelist in this matter on November 10, 2005. 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 is Skype Limited, incorporated in Dublin, Ireland. It is a subsidiary of Skype Technologies S.A., which is based in Luxembourg and founded in Sweden. The Complainant is responsible for policing and enforcing the intellectual property rights of Skype Technologies S.A. throughout the world.

The parent company Skype Technologies S.A. has since 2003 started to use the trademark SKYPE in many markets throughout the world in respect of Internet communication services such as voice over Internet protocol peer-to-peer communications; file sharing; and instant messaging services over a global computer network. The SKYPE mark is a registered trademark in many jurisdictions including Australia, New Zealand, the United States of America, Switzerland, Finland, Israel, Liechtenstein, Korea, Taiwan and Hong Kong. Although the SKYPE mark has yet to obtain trademark registration in the People’s Republic of China (“China”), the application has already been filed with the Trade Mark Registry and a registration is to be expected soon. The SKYPE mark has been used extensively in China through the partnership with TOM Online Inc. as evidenced by the marketing and publicity campaigns in major cities such as Beijing, Shanghai and Guangzhou. The official website of Skype Technologies S.A. is “www.skype.com” and SKYPE’s telephony software has been downloaded more than 132 million times and there are up to 3 million simultaneous users at any time of the day.

The disputed domain names <hiskype.com> and <hiskype.net> were registered by the Respondent on January 6, 2005, and April 1, 2005, respectively. The website to which the domain name <hiskype.com> resolved advertises and sells SKYPE Internet communications service software and other related services.

5. Parties’ Contentions

A. Complainant

The Complainant’s main contentions are summarized as follows:

Firstly, the Complainant contends that the disputed domain names <hiskype.com> and <hiskype.net> are confusingly similar to the SKYPE trademark. The Complainant argues that although the SKYPE mark is not yet a registered trademark in China, the SKYPE mark has been extensively used in many regions in China through the partnership with TOM Online Inc. The extensive publicity campaigns carried out between SKYPE and TOM Online Inc. in the major cities such as Beijing, Shanghai and Guangzhou is evidence of such use. Consequently, the Complainant contends that the SKYPE mark is protected in China under Article 5 of “The Peoples’ Republic of China Unfair Competition Law” and that the Complainant has rights in the SKYPE mark in China. The Complainant asserts that the disputed domain names are confusingly similar to the SKYPE mark based on the following grounds:

a) The disputed domain names are a combination of the SKYPE mark in its entirety with the addition of a prefix “hi.” The Complainant argues that other than the prefix “hi,” the disputed domain names and the SKYPE mark are practically identical. The differences between the disputed domain names and the SKYPE mark are so insignificant that they could be ignored according to the de minimis principle.

b) The SKYPE mark is a coined word and is a strong distinctive trademark of the Internet communication services offered by the Complainant’s parent company.

c) The Complainant contends that the disputed domain names and the SKYPE mark are confusingly similar visually and aurally. The test is that of the relevant consumer who has only a partial recollection of the primary mark.

d) The Respondent provides identical Internet communication services on his website “hiSkype” and the mark SKYPE is used on this website in relation to the software such as “SkypeIn”, and “SkypeOut.” The “SkypeIn” and “SkypeOut” services are offered only on the official website of SKYPE i.e. “www.skype.com.” The Respondent has continued to provide these unauthorized services to many Internet users and the Complainant has received numerous complaints from users who have paid for the services but were unable to make the calls over the Internet.

e) The Respondent through the use of the disputed domain names seeks to distribute his services via the Internet. This distribution channel is also predominantly used by the Complainant. The similarity in the disputed domain names with the SKYPE mark coupled with the similarity in the distribution channels is another way in which the intended consumers of the Complainant’s services will be confused.

Secondly, the Complainant contends that the Respondent has no rights or legitimate interests in the disputed domain names. <hiskype.com> and <hiskype.net>. There is no evidence that prior to being informed of the present administrative proceeding, the Respondent has legitimately used or intended to use the disputed domain names in connection with a bona fide offering of goods or services to be provided by the Respondent. The Complainant contends that the Respondent has never been known by the SKYPE name. In fact, to the contrary, the Respondent only registered the disputed domain names <hiskype.com> and <hiskype.net> after the phenomenon success of the SKYPE telephony services which has made the SKYPE mark a well-known mark to many consumers throughout the world including China. The Complainant further contends that the Respondent has no connections or affiliation with the Complainant or its parent company Skype Techonologies S.A. and has not received any license or consent, express or implied, to use the SKYPE mark in a domain name or in any other manner. Under the SKYPE promotional scheme, third parties may join as members and help in the promotion and sale of SKYPE products and services. But, it is clear that under the terms of this promotional scheme, third parties are not allowed to register any trade name, trademarks, logos, domain names or any other names or signs similar to SKYPE’s intellectual property rights. Thus, the registration of the disputed domain names by the Respondent is without the consent of the Complainant and is illegal. Furthermore, the Complainant asserts that the Respondent is not a legitimate licensee of the SKYPE’s products and services and does not have the rights to use any mark which is identical or similar to the SKYPE trademark because under the licensing agreement, all intellectual property rights regarding the voice over Internet Protocol service are owned by SKYPE and remain the property of SKYPE.

Thirdly, the Complainant contends that the Respondent has registered and used the <hiskype.com> and <hiskype.net> domain names in bad faith. The Complainant asserts that the Respondent’s use of the disputed domain names will lead the public to a website purporting to sell SKYPE products and services (in this case, the Respondent does not have the Complainant’s consent to offer these products and services for sale.) and this constitutes an intentionally attempt to confuse Internet users as to the source, sponsorship, affiliation or endorsement by SKYPE of the Respondent’s website and its services. The Complainant has adduced evidence to show that the Respondent has advertised the sale of the domain name <hiskype.com> in the Internet for the price of USD 5,000. The Complainant asserts that these circumstances indicated that the Respondent has registered or acquired the domain names primarily for the purpose of selling or transferring the domain names to the Complainant or to a competitor of the Complainant, for valuable consideration in excess of the Respondent’s documented out-of-pocket costs directly related to the domain names. The Complainant also contends that the Respondent has registered the domain names primarily for the purpose of disrupting the business of the Complainant. This is evidenced by the fact that through the use of confusingly similar domain names, the Respondent has attempted to divert the bulk of Internet users seeking SKYPE’s products and services to his own website. To achieve this objective, the Respondent has employed many different tactics. For example, in the search results returned by the Baidu search engine, the Respondent has purchased for himself a sponsored or paid web link to his own website. In so doing, Internet users genuinely seeking the SKYPE products and services are diverted to the Respondent’s website purporting to offer genuine SKYPE products and services, when in truth, the Respondent has no authority to do so. This according to the Complainant is evidence of registration and use of the disputed domain names by the Respondent in bad faith. Furthermore, the Complainant argues that by using the disputed domain names which are confusingly similar to the SKYPE mark, the Respondent has intentionally attempted to attract, for commercial gain, Internet users to Respondent’s website, by creating a likelihood of confusion with the Complainant’s SKYPE mark as to the source, sponsorship, affiliation, or endorsement of Respondent’s website and his products and services. This is evidenced by the liberal use of the SKYPE trade marks on the Respondent’s website giving Internet users the impression that the “hiSkype” website is in one way or another associated or connected with the Complainant. The Complainant has also adduced other evidence of bad faith such as the use of the disclaimer clause by the Respondent after he has been served the notice not to continue with the use of the mark SKYPE on his website. The disclaimer clause does not distinguish the Respondent’s website or domain names from the Complainant’s SKYPE mark. In fact, it is evidenced that the Respondent is well aware of the existence of the Complainant’s rights and trade mark. Finally, the Complainant contends that given the fame of the SKYPE mark, which is inventive and distinctive, it is not a mark which a domain name registrant might legitimately adopt other than for the purpose of profiting from the reputation of the Complainant.

B. Respondent

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

6. Discussion and Findings

A. Language of the Proceedings

The language of both Registration Agreements for the disputed domain names is Chinese. Pursuant to Rules, paragraph 11, in the absence of an agreement between the parties, or specified otherwise in the registration agreement, the language of the administrative proceeding shall be the language of the registration agreement. Accordingly, the Complainant has submitted the Complaint in the Chinese language on September 17, 2005 to the Center. On the due date of the Response, the Respondent has defaulted and did not submit a Response to the Complainant’s Complaint.

The Panel is satisfied that the Complainant has taken all reasonable steps to bring the present proceeding to the attention of the Respondent. In particular, the Panel notes that the Complainant has submitted the Complaint in the Chinese language to the Center to initiate the present proceeding. The Respondent has then been notified of the Complaint and its contents in the Chinese language. However, the Respondent has failed to respond to the Complainant’s contentions. The Panel finds that the Respondent’s failure to respond to the Complaint might not be the result of the Respondent’s inability to understand the Complaint filed against him but an indication that he could not provide a satisfactory response to the allegations contained in the Complaint lodged by the Complainant.

Pursuant to the Rules, paragraph 11, the Panel has the discretion to determine the language of the present proceeding. After considering the circumstances of the present case, the Panel decides that the proceeding should be conducted in the English language and should proceed henceforth in the English language.

B. Substantive Elements of the Policy

In accordance with paragraph 4(a) of the Policy, in order to succeed in this proceeding and obtain the transfer of the disputed domain name, the Complainant must establish that each of the three following elements is satisfied:

1. the domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;

2. the Respondent has no rights or legitimate interests in respect of the domain name; and

3. the domain name has been registered and is being used in bad faith.

Paragraph 4(a) of the Policy clearly states that the burden of proof lies with the Complainant to establish that all these three elements are satisfied in this proceeding.

Furthermore, pursuant to paragraph 15(a) of the Rules, the Panel shall decide the Complaint on the basis of the statements and documents submitted and in accordance with the Policy, the Rules and any rules and principles of law that it deems applicable. Moreover, in accordance with paragraph 14(b) of the Rules, if a party, in the absence of exceptional circumstances, does not comply with any provision of, or requirement under, the Rules of any request from the Panel, the Panel shall draw such inferences therefrom, as it deems appropriate.

On the basis of the evidence introduced by the Complainant and in particular with regard to the content of the relevant provisions of the Policy, (paragraphs 4(a), (b), (c)), the Panel concludes as follows:

A. Identical or Confusingly Similar

The Complainant has produced substantial evidence to demonstrate that its parent company Skype Technologies S.A. has registered trademark rights in the mark SKYPE in many countries throughout the world. Although the SKYPE mark is not a registered trademark in China, a trademark application has already been filed with the Chinese Trademark Office. The Panel finds that although the SKYPE mark is not a registered trade in China, the Complainant nevertheless has rights in it. This is achieved through extensive usage of the SKYPE mark by the Complainant in several major cities in China and by the publicity and advertising campaigns conducted in partnership with TOM Online Inc. In fact, such unregistered marks are also protected under unfair competition laws in China. Several panels under the Policy have decided that the Policy affords protection not only to those having rights in registered trademarks but also to those having common law rights in their trade or service marks. See Bennett Coleman & Co. Ltd v. Steven S. Lafwani WIPO Case No. D2000-0014; Seek America Networks Inc. v. Tariq Masood WIPO Case No. D2000-0131; Cedar Trade Associates, Inc. v. Gregg Ricks NAF Case No. 93633; and Passion Group Inc. v Usearch Inc. AF-0250. As such, the Panel finds that the Complainant has rights in the SKYPE mark in China.

The disputed domain names comprise an exact reproduction of the Complainant’s trademark SKYPE with the prefix “hi.” In assessing the degree of similarity between the Complainant’s mark and the Respondent’s domain names, the Panel shall have regard to the degree of visual, aural or conceptual similarity between them and where appropriate, evaluate the importance to be attached to these different elements. The issue of degree of similarity between the Complainant’s mark and the Respondent’s domain names is to be considered from the perspective of the average consumer of the goods or services concerned and in this case, the average consumer is the Internet user seeking to purchase or download the Complainant’s telephony services. The SKYPE mark is a coined word with no descriptive significance to the services offered under it. It is a highly distinctive mark and it has been reproduced in its entirety in the Respondent’s domain names. The Panel finds that this is the most prominent part of the Respondent’s domain names which will attract consumers’ attention. The Panel finds that the addition of the “hi” prefix to the word SKYPE does not serve to distinguish it from the Complainant’s SKYPE mark.

Bearing in mind in particular the distinctive character of the SKPYE mark; the dominant component of the Respondent’s domain names; and the visual, aural and similarities between them, the Panel therefore finds that the disputed domain names <hiskype.com> and <hiskype.net> are confusingly similar to a trademark or service mark in which the Complainant has rights.

B. Rights or Legitimate Interests

According to paragraph 4(c) of the Policy, a respondent may establish its rights or legitimate interests in the domain name, among other circumstances, by showing any of the following elements:

(i) before any notice to you [Respondent] of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or

(ii) you [Respondent] (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or

(iii) you [Respondent] are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.

The Panel notes that the Respondent has not provided evidence of circumstances of the type specified in paragraph 4(c) of the Policy, or of any other circumstances giving rise to a right to or legitimate interest in the domain names. The Panel further notes that the Respondent has failed to submit a Response to the Complaint filed against him. In particular, the Respondent has failed to make submissions to demonstrate that he has rights or legitimate interests to the domain names. In accordance with the Rules paragraph 14, the Panel thus draws such inferences as she considers appropriate, which are that the Respondent is unable to adduce evidence of any rights or legitimate interests to the disputed domain names.

Based on the following reasons the Panel finds that the Respondent has no rights or legitimate interests in the disputed domain names:

(i) the Complainant’s trademark SKYPE is an coined word with no meaning or connection with the goods or services sold under it. Thus the Respondent could not be using the SKYPE mark in a descriptive sense.

Therefore, the Respondent must provide plausible explanations in his choice of the disputed domain names which are confusingly similar to SKYPE.

(ii) the Respondent has not provided evidence of a legitimate use of the domain names or reasons to justify the choice of the word “hiskype” in its business operations;

(iii) there was no evidence to show that the Complainant has licensed or otherwise permitted the Respondent to use its trademark or to apply for or use any domain name incorporating the trademark; and

(iv) the mark SKYPE enjoys a wide spread reputation with regard to telephony services throughout the world including China. Consequently, in the absence of contrary evidence from the Respondent, the SKYPE mark is not one that traders could legitimately adopt other than for the purpose of creating an impression of an association with the Complainant.

The Panel finds for the Complainant on the second part of the test.

C. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy sets out four circumstances which, without limitation, shall be evidence of the registration and use of a domain name in bad faith, namely:

(i) circumstances indicating that Respondent has registered or acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of the Respondent’s documented out-of-pocket costs directly related to the domain name; or

(ii) Respondent has registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that Respondent has engaged in a pattern of such conduct; or

(iii) Respondent has registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the domain name, Respondent has intentionally attempted to attract, for commercial gain, Internet users to Respondent’s website or other on-line location, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of Respondent’s website or location or of a product.

The Panel concludes based on the case file that the circumstances referred to in Paragraph 4(b)(i) and (iv) of the Policy are applicable to the present case and upon the evidence of these circumstances it is adequate to conclude that the Respondent has registered and used the disputed domain names in bad faith.

Firstly, the Complainant has adduced evidence that the Respondent has advertised in the Internet for the sale of one of the disputed domain names <hiskype.com> and the Complainant contends that this is evidence of the Respondent’s bad faith in accordance with paragraph 4(b)(i) of the Policy. The Panel finds that based on the evidence of the advertisement to sell the disputed domain name alone, without other substantiating evidence, the Complainant does not prove conclusively that the Respondent has registered or acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registrations to the Complainant or to a competitor of that the Complainant, for valuable consideration in excess of the Respondent’s documented out-of-pocket costs directly related to the domain name within paragraph 4(b)(i) of the Policy. However, when evidence has been adduced by the Complainant to show that the Respondent has no legitimate rights to the disputed domain names, it becomes imperative for the Respondent to submit explanations on the reasons why the disputed domain name was put on sale for the price of USD 5,000. In the absence of such reasons, the only reasonable conclusion that the Panel can arrive at is that the Respondent did not intend to use the registered domain name for the purpose of a bona fide offering of goods and services but instead, there were intentions to profit from the transfer of the disputed domain name to either the Complainant or to its competitors. Consequently, the Panel accepts the Complainant’s submission that the Respondent has registered and used the disputed domain names in bad faith.

The Panel further finds that the mark SKYPE enjoys a wide spread reputation with regard to telephony services throughout the world including China. Therefore, the Panel finds that it is not conceivable that the Respondent would not have had actual notice of the Complainant’s trademark rights at the time of the registration of the domain names. Therefore it would have been pertinent that the Respondent provides an explanation of its choice to register in the disputed domain names, failing which the Panel draws the conclusion that the disputed domain names were registered in bad faith with an intent to create an impression of an association with the Complainant and its parent company.

The Respondent’s website purports to sell SKYPE products and services and the SKYPE mark is used on the website. This gives an impression that the Respondent is an authorized licensee or sales representative of the Complainant’s products and services. However, the Complainant has denied the existence of such a legitimate business relationship between them. In fact, the Complainant asserts that the Respondent has no authority to sell the SKYPE products and services or to used the SKYPE trade mark. Given the Complainant’s allegations, it is pertinent for the Respondent to provide an explanation of his relationship with the Complainant and adduce evidence to show that he has authority to sell the SKYPE products and services and also to use the SKYPE trade mark on his website. However, the Respondent has failed to do so. The Panel finds that the Respondent by adopting the disputed domain names has created a likelihood of confusion with the Complainant’s SKYPE mark and this constitutes a misrepresentation to the public that his website is associated or connected with the Complainant. In the absence of evidence to the contrary and rebutted by the Respondent, the choice of the disputed domain names and the conduct of the Respondent as far as the website on to which the domain names resolve are indicative of usage of the disputed domain names in bad faith.

The Panel accepts the Complainant’s submission that this fact coupled with all the other evidence proves that the Respondent has registered and used the disputed domain names 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, <hiskype.com> and <hiskype.net> be transferred to the Complainant.

Susanna H.S. Leong
Sole Panelist

Date: November 18, 2005