BeMusic, Inc. v. Music Trading On-Line
(BVI) Ltd. c/o Music Trading On-Line (HK) Ltd.
Claim Number: FA0309000193874
PARTIES
Complainant
is BeMusic, Inc., New York, NY
(“Complainant”) represented by Andrew J.
Wilson of Alston & Bird, LLP, 1201 West Peachtree Street, Atlanta,
GA 30309. Respondent is Music Trading
On-Line (BVI) Ltd. c/o Music Trading On-Line (HK) Ltd., Kwun
Tong, Hong Kong (“Respondent”) represented by Dominic Bray of Nicholson Graham & Jones, 110 Cannon Street, London, England EC4N
6AR.
REGISTRAR AND DISPUTED DOMAIN NAMES
The
domain names at issue are <cdwow.com>, <cd-wow.com>, <cdwow.net>, <cd-wow.net>, <cdwow.org> and <cd-wow.org> registered with Tucows, Inc.
PANEL
The
undersigned certify that they have acted independently and impartially and to
the best of their knowledge have no known conflict in serving as Panelist in
this proceeding.
Panelists
are Honorable James A. Carmody, Judge Daniel B. Banks, Jr. (Ret.) and Judge
Karl V. Fink (Ret.) as Chair.
PROCEDURAL HISTORY
Complainant
submitted a Complaint to the National Arbitration Forum (the “Forum”)
electronically on September 9, 2003; the Forum received a hard copy of the
Complaint on September 15, 2003.
On
September 9, 2003, Tucows, Inc., confirmed by e-mail to the Forum that the
domain names <cdwow.com>, <cd-wow.com>, <cdwow.net>, <cd-wow.net>, <cdwow.org> and <cd-wow.org> are registered with Tucows, Inc. and that
Respondent is the current registrant of the name. Tucows, Inc. has verified
that Respondent is bound by the Tucows, Inc. registration agreement and has
thereby agreed to resolve domain-name disputes brought by third parties in
accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the
“Policy”).
On
September 18, 2003, a Notification of Complaint and Commencement of
Administrative Proceeding (the “Commencement Notification”), setting a deadline
of October 8, 2003 by which Respondent could file a Response to the Complaint,
was transmitted to Respondent via e-mail, post and fax, to all entities and persons
listed on Respondent’s registration as technical, administrative and billing
contacts, and to postmaster@cdwow.com, postmaster@cd-wow.com, postmaster@cdwow.net,
postmaster@cd-wow.net, postmaster@cdwow.org and postmaster@cd-wow.org by
e-mail.
A
timely Response was received and determined to be complete on October 8, 2003.
Complainant’s
timely additional submission entitled “Reply Submission of Complainant BeMusic,
Inc.” was received on October 13, 2003 and was considered by the Panel.
Respondent’s
timely additional response was received on October 13, 2003 and was considered
by the Panel.
Complainant’s
timely second additional submission dated October 17, 2003 was considered by
the Panel.
Respondent’s
timely second additional submission dated October 20, 2003 was considered by
the Panel.
The
Panel received additional information which was not submitted in accordance
with the rules and the Panel did not consider that material.
On October 16, 2003, pursuant to Complainant’s request
to have the dispute decided by a three-member
Panel, the Forum appointed as Panelists
are: Honorable James A. Carmody, Judge
Daniel B. Banks, Jr. (Ret.), and Judge Karl V. Fink (Ret.) as Chair.
RELIEF SOUGHT
Complainant
requests that the domain names be transferred from Respondent to Complainant.
PARTIES’ CONTENTIONS
A.
Complainant
BeMusic
is a wholly owned subsidiary of Bertelsmann AG, a privately owned German media
corporation. BeMusic is one of the
largest music retailers in the world, operating both the online music retail
site <cdnow.com> and retail music club BGM Music Service. Between these enterprises, BeMusic is a
global leader in direct-to-customer music distribution.
BeMusic
launched <cdnow.com> in 1995. At
that time, <cdnow.com> was one of the Internet’s first online music
retail stores.
<cdnow.com>
has grown to become one of the largest and most recognized online retailers in
the world.
BeMusic
has engaged in substantial advertising to promote the goods and services it
offers under its CDNOW Mark, both in the United States and internationally.
In
recognition of the distinctiveness of the CDNOW Mark and BeMusic’s exclusive
ownership thereof, BeMusic had been awarded numerous registrations for its mark
around the world. These registrations
include Reg. No. 2,334,018 issued by the U.S. Patent and Trademark Office;
Registration No. B10910/99 issued by the United Kingdom Patent Office; and
Registration No. 2,256,638 issued by the Hong Kong Patent Office.
The
registrant of the domain names at issue, <cdwow.com>, <cd-wow.com>, <cdwow.net>, <cd-wow.net>, <cdwow.org> and <cd-wow.org> (the “Domain Names” or the “CDWOW websites”), is
Music Trading On-Line (BVI) Ltd. (“Respondent”). Respondent is using the Domain Names to host an online music
retailing business called “CD Wow!” that is directly competitive to BeMusic’s
CDNOW service.
BeMusic’s
Hong Kong counsel sent a cease and desist letter to Respondent on October 17,
2002. To date, Respondent continues to
conduct business using the Domain Names.
BeMusic
owns valid and enforceable rights in the CDNOW Mark, which BeMusic acquired
well prior to the date on which Respondent registered and began using the
Domain Names. Internet users who see
the Domain Names are certain to associate them with BeMusic because the Domain
Names are nearly identical in appearance, differing by only one letter. The mere fact that the word “Wow” is a
unique word in the English language does nothing to change the fact that the
Domain Names, taken as a whole, are confusingly similar to the CDNOW Mark.
Respondent’s
registration and use of a second-level domain that varies by only one letter
from BeMusic’s famous CDNOW Mark is an obvious attempt to trade on the goodwill
and fame of the CDNOW Mark. Respondent
has no connection or affiliation with BeMusic of any kind, and it has never
received license or consent, express or implied, from BeMusic to use the CDNOW
Mark in a domain name or in any other manner.
Respondent
was on notice of BeMusic’s exclusive rights in the CDNOW Mark as a result of
BeMusic’s prominent use and the federal and international registrations of its
mark.
In
light of the substantial fame of BeMusic’s mark, and the fact that Respondent
is operating in the same retail segment as BeMusic and using the Domain Names
to offer identical goods and service, it is inconceivable that Respondent could
have registered and used the Domain Names without knowledge of BeMusic’s right
in its CDNOW Mark.
Respondent
has also used the Domain Names in bad faith, as shown by the fact that Respondent
is using the Domain Names to host a website offering goods and online music
retail services of the same kind as BeMusic, and to the same customer base as
BeMusic.
By
using the Domain Names to host a website offering goods and online music retail
services identical to BeMusic’s, Respondent is using the Domain Names for its
own profit. Respondent is clearly
profiting from sales made at its <cdnow.com> website, and such use
constitutes bad faith commercialization of BeMusic’s famous mark.
B.
Respondent
The
domain name <cdwow.com> was registered on July18, 1997, before the
registration dates of any of Complainant’s trademarks. Complainant has failed to establish that it
had any common law rights in the CDNOW name at that date. No evidence or supporting documentation is
provided to support the contention that CDNOW was well known before 1997. It is denied that the award of trademark
registration is in itself an indication of the reputation or goodwill residing
in the mark CDNOW.
The
Domain Names are fundamental to Respondent’s legitimate and long-standing
business.
Complainant
asserts that it has high sales volumes and site traffic. There is no documentary evidence to support
this.
Although
CDNOW and CDNOW differ by only one letter this difference is still of
significance. While it is true that the
two marks are visually similar, they are not confusingly similar.
No
evidence of confusion has been supplied.
Complainant’s use of the mark and Respondent’s use of CDNOW have run in
parallel for at least 3 years. The
total failure of Complainant to provide even a single instance of actual
confusion on the part of the public during that time is a very strong
indication that Respondent’s contention that confusion has not and will not
occur is correct.
Respondent
via MTO (HK) has been using the Domain Names to operate a business under the
name CDWOW! since February 2000. The
business of MTO (HK) is commonly known by the name CDWOW.
Complainant
had no applicable rights at the relevant date.
Respondent did not knowingly select a name that was confusingly similar.
By
the date of Complainant’s letter before action, dated October17, 2002,
Respondent had been trading from the domain names in dispute for more than 2
years. Respondent had invested a considerable
sum in building up its business and established a substantial customer
base. Complainant then waited nearly 12
months more before making its Complaint, (9 months since the last
correspondence from Respondent and nearly a year since the last letter from
Complainant). In circumstances of such
delay it would be unconscionable for Complainant to be allowed to deprive
Respondent of the fount of its business, its domain names.
C.
Additional Submissions
There
can be little dispute that the Domain Names are confusingly similar to
BeMusic’s CDNOW Marks. The time that
Respondent registered the first contested domain name, 1997, the
<cdnow.com> website was one on the most well-known and trafficked websites
in the world.
By
April 1997, CDNOW.COM was averaging about one million hits at its website per
month, and was filling more than 1,000 online customer orders per day. It is virtually impossible that Respondent
was not familiar with CDNOW.COM, an industry leader in the very market that
Respondent allegedly intended to enter, by the time Respondent registered <cdwow.com>
in July 1997.
The
panel should consider the visual and phonetic similarity between the Domain
Names and the CDNOW Mark, as well as the substantial likelihood that Internet
users would be confused by this similarity.
There
is direct evidence that Respondent has deliberately selected its name to
capitalize upon the substantial fame that BeMusic has developed in the CDNOW
Mark. In its HTML code, Respondent
incorporates the CDNOW mark, as well as the famous mark of BeMusic’s strategy
partner AMAZON, as metatags imbedded within its code. This unauthorized use is in clear bad faith.
Due
to the international nature of the business, “WOW” meant the same in many
languages and was widely understood throughout the world. “WOW” was a word of exclamation and
amazement. We wanted people to think
“WOW! What a great website”. So far as
we were aware there was no other online business at the time (i.e. in 1997)
which had a similar name. The existence
of a company using the name CDNOW was utterly irrelevant to our choice of
trading name.
Since
its launch in February 2000, CDWOW! has been very successful. It has built up a substantial and loyal
customer base with a reputation for providing a quality product and service
which is widely recognized in many countries throughout the world.
The
visitor numbers in July 2003 to our website were approximately 745,000.
Details
of traffic for the <cdwow.com> domain name for the period June-September
2003 shows page impressions of around 14 million per month and unique visitors
ranging from 830,000 (August 2003) to just over 1 million (September 2003).
CDWOW!
has established an extensive and legitimate business operation operating under
the Domain Names and has achieved a considerable degree of recognition and
goodwill in the online market place.
At
the time that we launched our business, CDNOW was a relatively small internet
sale site offering services primarily aimed at the U.S. market. The offerings and the concept behind the two
businesses are very different.
CDWOW!
offers a highly focused selection of CDs targeting the buyer of contemporary
chart music.
CDNOW
no longer appears to be pushing its own brand.
All traffic to <cdnow.com> is diverted to Amazon, where CDNOW
branding is very peripheral and the offering is subsumed amongst the Amazon
look and feel.
An
unrelated third party registered the domain name <cdwow.com>. UPI purchased the domain name from that
third party in June 2000 and subsequently transferred ownership to Respondent.
The
only relevance of the dates is to the existence or otherwise of Complainant’s
right in the mark. Respondent submits
that the relevant date continues to be the date of registration of the domain name. If the registration was legitimate at the
registration date, then from that date the use, including the transfer of the
domain name to Respondent, was also legitimate.
This
is not a matter appropriate for arbitration but one that should be addressed at
a hearing that allows a full examination for the factual issues and
appropriated disclosure, pleadings and oral submissions.
Since
Complainant, by its own evidence, had no trademark registrations until March
1999 it is unclear how Complainant can make reference to such a mark being in
use since 1995. If by “trademark”
Complainant refers to the common law rights that may have accrued in the name
“CDNOW” then it is plain that the existence of such right, their extent and
their date of acquisition (if acquired) is in dispute.
Without
evidence of how the mark has been used in practice, no conclusion can safely be
drawn as to whether the goodwill in the business attaches to the mark.
Respondent
did not begin trading from <cdwow.com> until February 2000, although
Respondent did carry out a soft launch in November 1999 with test purchases
being conducted in November and December 1999.
<cdwow.com> was not registered until September 1999. Accordingly, there was no delay and it is
denied that Respondent “sat on” the domain name.
The
mere fact that Respondent was aware of the existence of a similar trading name
being used by a company that operated in the same field as Respondent does not
mean that Respondent acted in bad faith when it chose its domain name.
Respondent
has selected its name because it is a combination of a descriptive element “CD”
and a distinctive element “WOW”. There
is no basis for suggesting that Respondent has deliberately aimed to take
advantage of a misspelling.
Complainant
has still not provided evidence of a single instance of confusion despite more
than three years of contemporaneous trading.
Complainant’s
Complaint is ill-founded because it has not established that it had rights it
could rely upon at the relevant date (i.e. 1997). The delay on the part of Complainant is unconscionable and it
should not be allowed to deprive Respondent of the primary outlet for its goods
and services three years after the start of trading and six years after the
first registration of the <cdwow.com> domain name.
FINDINGS
For the reasons set forth below, the
Panel finds Complainant has not proven that the domain names should be
transferred.
DISCUSSION
Paragraph 15(a) of the Rules for Uniform Domain Name
Dispute Resolution Policy (the “Rules”) instructs this Panel to “decide a
complaint on the basis of the statements and documents submitted in accordance
with the Policy, these Rules and any rules and principles of law that it deems
applicable.”
Paragraph
4(a) of the Policy requires that the Complainant must prove each of the
following three elements to obtain an order that a domain name should be
cancelled or transferred:
(1)
the domain
name registered by the Respondent 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.
For
Complainant to prevail, it must prove all 3 elements. Because of the Panel’s rulings on the issues following, the Panel
makes no ruling on this issue.
Rights Or Legitimate Interests
Respondent
has been using the disputed domain names in relation to its online CD sales
business since February 2000, over 3 years before the Complaint was filed. The Panel finds that Respondent’s use of the
domain names represents a bona fide offering of goods or services under Policy
¶ 4(c)(i). See Modern Props, Inc. v. Wallis, FA 152458 (Nat. Arb. Forum
June 2, 2003) (finding that Respondent’s operation of a bona fide business of
online prop rentals for over two years was evidence that Respondent had rights
or legitimate interests in the disputed domain name); see also Verkaik v.
Crownonlinemedia.com, D2001-1502 (WIPO Mar. 19, 2002) (finding that
Respondent’s use of the disputed domain name to make a bona fide offering of
services bestowed rights and legitimate interests in the domain name).
Complainant
has not proven this element.
Registration and Use in Bad Faith
Respondent
registered <cdwow.com> over 2 years before the existence of the
UDRP. Respondent has been operating a
legitimate online CD sales business under the disputed domain names for several
years. The Panel finds that the domain names were neither registered nor used
in bad faith because the domain names were registered and used in connection
with a legitimate business. See Schering AG v. Metagen GmbH, D2000-0728
(WIPO Sept. 11, 2000) (finding that Respondent did not register or use the
domain name <metagen.com> in bad faith where Respondent registered the
domain name in connection with a fair business interest and no likelihood of
confusion was created); see also Mule Lighting, Inc. v. CPA, FA 95558
(Nat. Arb. Forum Oct. 17, 2000) (finding no bad faith where Respondent has an
active website that has been in use for two years and where there was no intent
to cause confusion with Complainant’s website and business).
Complainant
has not proven this element.
The
Panel additionally finds that Complainant’s delay in bringing its Complaint
could constitute laches and be a bar to any relief. Respondent’s business has grown during the years since it began
using the domain names. Substantial
hardship could result if it would be ordered to transfer those names. Such relief should only be granted after a
full court proceeding.
DECISION
Since
Complainant has not established all three elements required under the ICANN
Policy, it is ORDERED that Complainant’s request that the <cdwow.com>, <cd-wow.com>, <cdwow.net>, <cd-wow.net>, <cdwow.org> and <cd-wow.org> domain names be transferred is denied.
Honorable James A. Carmody, Panelist
Judge Daniel B. Banks, Jr. (Ret.),
Panelist
Judge Karl V. Fink (Ret.),Chair
Dated:
November 10, 2003
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