WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Rhapsody International Inc. v. Ryan Lester and Napster.fm, LLC

Case No. DFM2014-0001

1. The Parties

The Complainant is Rhapsody International Inc. of San Francisco, California, United States of America (“US”), represented by Kilpatrick Townsend & Stockton LLP, US.

The Respondents are Ryan Lester and Napster.fm, LLC of Vienna, Virginia, US, represented by Brundidge & Stanger, P.C., US.

2. The Disputed Domain Name and Registrar

The Disputed Domain Name <napster.fm> is registered with Key-Systems GmbH dba domaindiscount24.com (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on July 3, 2014. On July 4, 2014, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On July 4, 2014, the Registrar transmitted by email to the Center its verification response confirming that the Respondents are listed as the registrant and providing the contact details. The Complainant filed an amended Complaint on July 15, 2014.

The Center verified that the Complaint together with the amended Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”), 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 Respondents of the Complaint, and the proceedings commenced on July 16, 2014. In accordance with the Rules, paragraph 5(a), the due date for Response was August 5, 2014. The Response was filed with the Center on August 5, 2014.

The Center appointed Richard W. Page as the sole panelist in this matter on August 12, 2014. 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.

On August 5, 2014, Respondents filed an additional submission entitled Response to Complaint and Request for Termination or Suspension of this Proceeding. The Panel has accepted this submission as part of the file, despite its untimely filing.

4. Factual Background

Complainant Rhapsody International Inc. (“Rhapsody”) is the longest tenured provider of subscription streaming music services in the United States and the owner of the NAPSTER trademark. After its early years in the peer-to-peer file sharing business, the Napster brand was acquired and put to use as the face of a fully-licensed subscription music service. Napster’s then-owners invested millions of dollars and considerable energy growing and protecting the Napster brand as a legitimate force in the music industry. The investment paid off, and over the next several years Napster accumulated hundreds of thousands of loyal subscribers.

In 2011, Rhapsody acquired the Napster business, NAPSTER trademark and associated goodwill to integrate with its own paid music subscription service. Rhapsody and it predecessors have been offering “all-you-can-eat” on-demand music services for over a decade. Rhapsody secures licenses and pays substantial royalties to the hundred of record labels and music publishers in order to offer its catalog of nearly twenty million songs to over one million subscribers. In addition to its operation of the revitalized Napster service and <napster.com>, Rhapsody also operates its own Rhapsody-branded music service. Rhapsody takes pride in operating licensed music services that respect the intellectual property rights of artists, publishers and record labels.

Rhapsody is the exclusive owner of the distinctive, fanciful and famous NAPSTER trademark and NAPSTER formative trademarks (collectively referred to herein as the “NAPSTER Mark”). Rhapsody has continued its use of the NAPSTER Mark and owns a number of United States federal trademark registrations for the NAPSTER Mark, including several that have become incontestable. Rhapsody maintains its U.S. registrations of the NAPSTER Mark, all of which are valid, subsisting and have been in continuous use since on or before their first-use dates.

Rhapsody has licensed certain uses of the NAPSTER Mark, evaluating every request to incorporate the NAPSTER Mark into various works including television shows, books, and other education materials. Rhapsody has actively policed unlicensed uses of the NAPSTER Mark and has diligently enforced its rights through cease–and-desist letters and takedown requests. Rhapsody offers a wider range of products and services under the NAPSTER Mark, including computer software for the steaming transmission of audio, video, graphics, text and data over communication networks; providing databases and directories in the fields of music, video, graphics, text and other multimedia content in the fields of music, video, radio, news, games, cultural events, entertainment, and arts and leisure via communication networks; and licensing of intellectual property, computer services, namely providing customized web pages featuring user-defined information, which includes search engines and online web links to news, weather, current events, reference materials, and customized email messages, all in a wide range of user defined fields.

Respondents use verbatim reproductions of NAPSTER and other aspects of the NAPSTER Mark in the Disputed Domain Name. In or about April 2013, Rhapsody became aware that Respondent Lester has launched a website at “www.napster.fm”. The Napster.fm website advertised its services as “Napster reimagined for the modern Web” and points out “a few feature that make Napster.fm better than Napster OG[original gangsta].

On April 14, 2013, the Napster.fm website was featured in an article on the prominent technology blog TechCrunch<http://techcrucn.com>, a site which regularly follows developments in the digital music business. The article included NAPSTER and an image of Rhapsody’s registered NAPSTER Cat Head Logo at the bottom of the article.

A follow-up article on Tech Crunch dated April 21, 2013, stated, “The name alone got our attention and after using it, there were a few features that were reminiscent of its predecessor, which made it even cooler.” In an interview included in this article, Lester stated that he had over 100,000 visitors to the site and expressed the belief that “quite a few people” use his service “out of nostalgia for the old Napster days.”

Within days of becoming aware of the infringing service, Rhapsody sent a cease-and-desist letter to Respondent to demand that he stop using <napster.f>m as a domain name, name or trademark. In the letter, Rhapsody explained its ownership rights in the NAPSTER Mark and included copies of its federal trademark registrations. Mr. Lester responded by email that Rhapsody’s terms “sound[ed] fair and that “[a]ccordingly, I have publicly rebranded my service from Napster.fm to Peer.fm and will cease any further claim to the former name/mark: Lester further noted that the copyright notice appearing on the website still read Napser.fm “as that is still technically the name of my company,” but offered to update Rhapsody’s counsel “once this has been amend by the state.”

In a later interview, Mr. Lester was asked whether he regretted naming the project after Napster. He responded “Definitly don’t rgret it at all/ I don’ think there’s any way it would have grabbed the same level of initial attention without the Napster association.”

As part of Mr. Lester’s original agreement to rebrand his service and change domain name, he indicated that the website at “www.napster.fm” was redirecting web traffic to “www.peer.fm” and he would like to continue that practice for another month to ease the transition before potentially selling the domain name to Rhapsody. In appreciation for Mr. Lester’s prompt rebranding, Rhapsody replied that it was amenable to the short-term use of the <napster.fam> redirect. Rhapsody, however, was not interested in paying a significant amount to buy the domain name (since Rhapsody was already the owner of <napter.com> and dozens of similar iterations), and only offered to reimburse Mr. Lester for the expenses in registering the domain and in the impending name change of the company.

Mr. Lester’s counsel responded by letter dated August 22, 2013. The letter stated that counsel “have discussed this matter with our client, Mr. Ryan Lester” and proposed that “Mr. Lester [would] transfer his rights in the NAPSTER.FM domain to Rhapsody International Inc. for a purchase of $775,000 plus attorneys fees and other associated fees.” In return, Mr. Lester would agree to “change his company name; immediately stop using Napster.fm as a domain name, name or mark; permanently refrain from us [sic] any domain name, name or mark that incorporates NAPSTER or any confusingly similar variation thereof including by not limited to any and all use of NAPSTER.FM.” The demand was sent by counsel purporting to act on behalf of Lester and referred to Napster.fm LLC as [Lester’s] company. Thus Respondents offered to transfer, sell or otherwise assign the infringing domain name to Rhapsody for financial gain.

On September 19, 2013, Mr. Lester filed Trademark Application Serial No. 86/069,735 for NAPSTER.FM in Class 38. On January 7, 2014, the U.S. Patent and Trademark Office issued and Office Action with regard to Lester’s trademark application, refusing to register NAPSTER.FM based on the likelihood of confusion with Rhapsody’s registration under the NAPSTER mark.

On September 25, 2013 – despite the fact the Rhapsody’s use and registration of the NAPSTER Mark preceded his use of Napster.fm – Mr. Lester filed an opposition to Rhapsody’s Trade Mark Application Serial No. 85/804,778 for the Napster Mark. The opposition proceeding, which was filed by Mr. Lester acting individually, is now pending at the Trademark Trial and Appeal Board (Opp. No. 9122665). In his Notice of Opposition, Mr. Lester alleged that he was the owner of the NAPSTER.FM trademark and that Rhapsody’s use of its famous NAPSTER Mark will confuse customers about his mark, stating: “[Rhapsody’s] NAPSTER mark so resembles [Lester’s] NAPSTER.FM mark the goods/services thereof as to the likely [sic], when used in connection with the services set forth in [Rhapsody’s] Application, to cause confusion or to cause mistake or to deceive.

Most recently, in direct contradiction to his promise and without warning or discussion, Mr. Lester re-launched his infringing Napster.fm service at “www.napster.fm”.

On March 25, 2012, Respondent purchased the Disputed Domain Name a domain name “located” in the Federated States of Micronesia designated by the Top-Level domain country code name of “.fm.”

On April 15, 2013, Rhapsody sent Respondents a cease-and-desist order. Settlement negotiations stalled and Rhapsody filed an action in the United Stated District Court for the Northern District of California Case No 3:13-cv-05489 –CRB alleging cybersquatting.

5. Parties’ Contentions

A. Complainant

Rhapsody contends that the Disputed Domain Name <napster.fm> consists of a verbatim reproduction of Rhapsody’s NAPSTER Mark, followed by the additional generic country code Top-Level Domain “.fm.” Given Respondents’ exact reproduction of Rhapsody’s NAPSTER Mark in the Disputed Domain Name and RHAPSODY’s extensive and long-standing use of the NAPSTER Mark, consumers will experience confusion as to the source of the Disputed Domain Name. This confusion is enhanced by the fact that Rhapsody and Respondents both participate in music streaming commercial activities.

Rhapsody contends that the Respondents have no rights or legitimate interests in the Disputed Domain Name. Rhapsody never authorized Respondents to use the NAPSTER Mark.

Rhapsody contends that Respondents do not use the Disputed Domain Name for any bona fide offering of goods or services. Any use of the Disputed Domain Name was to divert customers seeking Rhapsody’s website to Respondents’ own website for the purpose of illicit pecuniary gain.

Rhapsody contends that Respondents’ use of the Disputed Domain Name is not “legitimate, noncommercial, fair use.” Instead Respondents’ use was to improperly divert Rhapsody customers to Respondents’ website for financial gain.

Rhapsody contends that Respondent Lester was quoted several times in articles as acknowledging that he was trading off the public recognition of NAPSTER to benefit his Disputed Domain Name and the website to which it resolved. Thus, demonstrating Respondents’ bad faith.

B. Respondent

Respondents contend that the Disputed Domain Name is not identical or confusingly similar to the NAPSTER Mark. The full name of Respondent’s company is Napster FM LLC. Typical internet users would assume that this is the name of an online radio service not an online music subscription service.

Respondents contend that they have rights and legitimate interests in the Disputed Domain Name, because it is the name of the limited liability corporation known as Napster FM LLC. The Disputed Domain Name resolves to an active website lawfully “located” in the Federated States of Micronesia. Respondent has been using the name continuously since March 26, 2012.

Respondents contend that before receiving any notice of this dispute, Respondents used and made demonstrable preparations to use, the Disputed Doman Name in connection with a bona fide offering of goods or services.

Respondents contend that none of the indicia of bad faith in the registration and use of the Disputed Domain Name is present in these facts: (1) the Disputed Domain Name was not acquired primarily for the purpose of selling the Disputed Domain Name to Rhapsody, (2) the Disputed Domain Name was not registered in order to prevent Rhapsody from reflecting the NAPSTER Mark in a corresponding domain name, (3) the Disputed Domain Name was not registered primarily to disrupt Rhapsody’s business, and (4) the Disputed Domain Name was not used to attract for commercial gain, Internet users to Respondents’ website by creating a likelihood of confusion with the NAPSTER Mark.

6. Discussion and Findings

Paragraph 15(a) of the Rules instructs the Panel as to the principles the Panel is to use in determining the dispute: “A Panel shall 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 directs that the Complainant must prove each of the following:

i) that the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and,

ii) that the Respondent has no legitimate interests in respect of the domain name; and,

iii) that the domain name has been registered and is being used in bad faith.

A. Identical or Confusingly Similar

Rhapsody contends that it purchased the Napster business from the original Napster peer-to-peer free music company. These assets included the NAPSTER trademark and the associated goodwill. The NAPSTER Mark includes numerous U.S. registrations.

UDRP panel decisions have held that registration of a mark is prima facie evidence of validity, which creates a rebuttable presumption that the mark is inherently distinctive. Respondent has the burden of refuting this assumption. See, e.g., EAuto, L.L.C. v. Triple S. Auto Parts d/b/a Kung Fu Yea Enterprises, Inc., WIPO Case No. D2000-0047. Respondents have not contested the validity of the NAPSTER Mark. Therefore, for purposes of this proceeding, Rhapsody has enforceable rights in the NAPSTER Mark.

Rhapsody further contends that the Disputed Domain Name <napster.fm> consists of a verbatim reproduction of Rhapsody’s NAPSTER Mark, followed by the additional generic country code top-level domain “.fm.” (the Federated States of Micronesia). Rhapsody further contends that given Respondents’ exact reproduction of Rhapsody’s NAPSTER Mark in the Disputed Domain Name and the extensive and long-standing use of the NAPSTER Mark, consumers will experience confusion as to the source of the Disputed Domain Name. This confusion is enhanced by the fact that Rhapsody and Respondents both participate in music streaming commercial activities.

As numerous courts and prior UDRP panels have recognized, the incorporation of a trademark in its entirety is sufficient to establish that a domain name is identical or confusingly similar to the complainant’s registered mark. See Paccar Inc. v. Telescan Technologies, L.L.C., 115 F. Supp. 772 (E.D. Mich. 2000) (finding that <peterbuilttrucks.com>, <kenworthtrucks.com> and similar domain names are not appreciably different from the trademarks PETERBUILT and KENWORTH); Quixar Investments Inc. v. Dennis Hoffman, WIPO Case No. D2000-0253 (finding that QUIXTAR and <quixtarmortgage.com> arelegally identical). The addition of other terms in the domain name does not affect a finding that the domain name is identical or confusingly similar to the complainant’s registered trademark.

Therefore, the Panel finds that the Disputed Domain Name is confusingly similar to the NAPSTER Mark pursuant to the Policy paragraph 4(a)(i).

B. Rights or Legitimate Interests

Paragraph 4(a)(ii) requires the Complainant to prove that the Respondent has no rights to or legitimate interests in the Disputed Domain Name.

The Policy paragraph 4(c) allows three nonexclusive methods for the Panel to conclude that Respondent has rights or a legitimate interest in the Disputed Domain Name:

(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.

Paragraph 2.1 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”) states that once a complainant makes a prima facie case in respect of the lack of rights or legitimate interests of a respondent, the respondent carries the burden of demonstrating it has rights or legitimate interests in the domain name. Where the respondent fails to do so, a complainant is deemed to have satisfied paragraph 4(a)(ii) of the Policy.

Rhapsody contends that the Respondents have no rights or legitimate interests in the Disputed Domain Name. Rhapsody never authorized Respondents to use the NAPSTER Mark and that Respondents have never been known by the name “Napster.”

Rhapsody contends that Respondents do not use the Disputed Domain Name for any bona fide offering of goods or services, other than those which trade on the goodwill of the NAPSTER Mark. Any use of the Disputed Domain Name was to divert customers seeking Rhapsody’s website to Respondents’ own website for the purpose of illicit pecuniary gain.

Rhapsody contends that Respondents’ use of the Disputed Domain Name is not “legitimate, noncommercial, fair use.” Instead Respondents’ use was to improperly divert Rhapsody customers to Respondents’ website for financial gain.

Rhapsody has come forth with sufficient evidence to make a prima facie showing under paragraph (4)(a)(ii). The burden now shifts to the Respondents to demonstrate by a preponderance of the evidence that they do have the required rights and interests.

Respondents contend that they have rights and legitimate interests in the Disputed Domain Name, because the name of the limited liability corporation known they use is Napster FM LLC. The Disputed Domain Name resolves to an active website lawfully “located” in the Federated States of Micronesia. Respondents have been using the name continuously since March 26, 2012.

Respondents contend that before receiving any notice of this dispute, Respondents used and made demonstrable preparations to use, the Disputed Doman Name in connection with a bona fide offering of goods or services by offering on line streaming of their online music service.

The Panel finds that the name NAPSTER has been in common use since as early as 2003 and that certain NAPSTER Mark registrations were issued in 2004. Respondents’ choosing of the name Napster FM LLC in 2012 does not confer upon them any rights or interest in the NAPSTER Mark nor does the Panel find that the choice of such a name is a legitimate defence under paragraph 4(c)(ii) of the Policy in the overall circumstances of this case.

The fact that the Disputed Domain Name resolves to a website lawfully “located” in the Federated States of Micronesia does not confer upon Respondents any rights or interest in the NAPSTER Mark.

Therefore, the Panel finds that Respondents have no rights or legitimate interest in the Disputed Domain Name pursuant to the Policy paragraph 4(a)(ii).

C. Registered and Used in Bad Faith

Complainant contends that Respondent registered and is using the Disputed Domain Name in bad faith in violation of the Policy paragraph 4(a)(iii).

The Policy paragraph 4(b) sets forth four nonexclusive criteria for Complainant to show bad faith registration and use of domain names:

(i) circumstances indicating that you have registered or you have 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 your documented out-of-pocket costs directly related to the domain name; or

(ii) you have 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 you have engaged in a pattern of such conduct; or

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

(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site 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 your web site or location or of a product

Rhapsody contends that Respondent Lester was quoted several times in articles as acknowledging that he was trading off the public recognition of NAPSTER to benefit his Disputed Domain Name and the website to which it resolved.

The Panel can conceive of no other credible reason why Respondents in 2012 would choose the name “NAPSTER” for their LLC or Disputed Domain Name except to create a likelihood of confusion with the NAPSTER Mark for Respondents’ financial gain.

Based upon this evidence, the Panel finds that Rhapsody has shown sufficient facts to support a finding of the existence of the criteria in the Policy paragraph 4(b)(iv) and that Respondents registered and used the Disputed Domain Name in bad faith pursuant to the Policy paragraph 4(a)(iii).

7. Decision

For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the Disputed Domain Name <napster.fm> be transferred to the Complainant.

Richard W. Page
Sole Panelist
Date: August 30, 2014