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WIPO Arbitration and Mediation Center

The Complainant is The Secure Digital Music Initiative Foundation a non profit organisation incorporated under the laws of Delaware, United States with its principal place of business located at 1330 Connecticut Avenue, NW, Suite 300, Washington DC 20036, United States of America.

The First Respondent is called "CRE21" who according to the NSI "WHOIS" database has an address at #203 719-19 Banpo-dong Seocho-gu, Seoul, se 137-040, Korea. The Second Respondent Mr Seokhwan Ko is also according to the NSI "WHOIS" database located at #203 719-19 Banpo-dong Seocho-gu, Seoul, 1370-040, Korea. For the reasons set out below the Respondents may be one and the same.

The domain names in dispute are as follows:-

<sdmi.net>

<sdmicertificate.com>

<sdmiplayers.com>

<sdmiradio.com>

<sdmiaudio.com>

<sdminetwork.com>

<dmatmusicshop.com>

<dmatplayer.com>

<dmatplayers.com>

<dmatshop.com>

The Registrar for the first domain name listed above <sdmi.net> is YesNic Co Limited of 143-39 Shinil Building, 2F, Samsung-dong, Kangnam-gu, Seoul, Korea. The Registrar of all other names listed above is Network Solutions Inc of 505 Huntmar Park Drive, Herndon, Virginia 20170, United States of America.

The Complaint in electronic form was submitted to the Center on November 7, 2000 and in hard copy form on November 9, 2000. Acknowledgement of receipt of the Complaint was despatched on November 15, 2000. A request for registrar verification for all the domain names in dispute was made to Network Solutions Inc. on

November 17, 2000 and to YesNic on November 28, 2000. Confirmation was received that the domain names, with the exception of sdmi.net were registered with Network Solutions Inc. Confirmation was received from YesNic Co Ltd that it was the Registrar of <sdmi.net>.

On December 18, 2000 notice of deficiency in the Complaint was given to the Complainant and an amended complaint received on December 28, 2000 in electronic form and on January 3, 2001 in hard copy form.

On 3 January 2001 notification of the Complaint and commencement of administrative proceedings was given to the First Respondent CRE21 in respect of the domain name sdmi.net and to the Second Respondent Mr Seokhwan Ko in respect of the remaining domain names. The Second respondent Mr Seokhwan Ko is also the administrative contact for the domain name sdmi.net and notice was also given to him by email, fax and by courier. No response has been received from either respondent. Notification of default was given on January 24, 2001. Subsequently an administrative panel consisting of sole panellist Clive Duncan Thorne was appointed on February 9, 2001. The Panel is satisfied that the Registrars and the Respondents have had notice of the Complaint.

An extension of time for the decision has been granted at the Panel’s request until March 5, 2001.

The domain names at issue in the Complaint are registered to two registrants who it is submitted by the Complainant are really one and the same entity. The domain name <sdmi.net> is registered according to the NSI "WHOIS" database in the name of CRE21. The address for "CRE21" is precisely the same as the address for

Mr Seokhwan Ko. Similarly Mr Ko is listed as the administrative contact for the <sdmi.net> domain name just as he is listed as the administrative contact for the other nine domain names at issue in the Complaint. In the absence of submissions from the Respondents the Panel accepts that all ten domain names at issue are registered and controlled by the same entity located at the same address ie Mr Ko acting on his own behalf and on behalf of CRE21.

The background to the Complainants use of the mark "sdmi" traces its roots to significant concerns in the music and electronics industries in particular with the unauthorised copying and distribution of music in digital form (including the distribution of music on compact disc and in the electronic form). During the summer of 1998 members of the Recording Industry Association of America, and other interested parties met to embark upon a project which in general terms would set new standards for and protect digital music from unauthorised copying. Details are set out in the affidavits of Mr Kevin Conroy, the Chief Marketing Officer and President of New Technology for BMG Entertainment which is annexed to the Complaint as Annex 5 and in the affidavit of Mr Peter Douma of Sony Electronics Inc. which is annexed to the Complaint as Annex 6. During the latter part of 1998 numerous discussions and meetings were held by the founding members of the association to set objective standards and goals. Ultimately this group became known as "Secure Digital Music Initiative" or "SDMI"". It was intended that SDMI would eventually be open to participation by technology based commercial companies that a significant direct activity in or effecting digital music security.

As part of their initial efforts the founding members decided to obtain and register a domain name for use by the new organisation. Accordingly they sought to establish a web site where members of SDMI and the general public could obtain information about the new organisation. On November 25, 1998 the domain name <sdmi.org> was registered on behalf of the organisation.

The SDMI project and technology standards quickly gained press attention. For example on December 11, 1998 the popular magazine the "Daily Variety" reported on the formation of the "Secure Digital Music Initiative" referring to the project also under the SDMI mark. Other national and international magazines and newspapers quickly followed suit and published articles heralding the new project under the SDMI name. These are listed at page 10 of the amended Complaint. On December 15, 1998 the Recording Industry along with representatives from BMG Entertainment, Warner Bros and Warner Music Group, Sony Music Entertainment, Universal Music Group and other recording labels held a press conference to announce the development of the SDMI technology standards and the formation of SDMI. A written press release was issued describing the new organisation. This is exhibited to Mr Douma’s affidavit.

As such SDMI represents a collaboration of more than 200 members of the recording software computer consumer electronics and other industries working together to set the technology specifications and standards for the secure distribution of digital music and other digital products. It is intended that the SDMI technology standards ultimately provide consumers with convenient access to music both on line and in new emerging digital distribution systems, enable copyright protection for artists works and promote the development of the new music related business technologies.

SDMI is open to participation by technology based commercial companies that have significant direct activity in, or affecting, digital music security. Member companies must express their commitment to SDMI by agreeing to abide by its terms of participation and paying a US$ 20,000 annual membership fee. A substantial number of the major players in the recording software computer consumer electronic and other industries (including Sony Electronics, Compaq Computer Corporation, IBM, Microsoft, Phillips Electronics, Samsung Electronics and Lucent Technologies) have already become members of SDMI. A full list is annexed at Annex 9 to the Complaint.

SDMI invested substantial resources in promoting its services under the SDMI name and mark through television, print media, internet web sites and the like. In particular SDMI maintains a web site at "www.sdmi.org" that includes detailed information about SDMI and the standards that it has promulgated under the SDMI mark. The Complainant asserts that thousands of users recording electronic software industries access this web site as a source of information about SDMI and the SDMI Technology standards.

The Complainant asserts that as a result of its activities it has developed substantial good will and reputation in the SDMI name and mark. It has moreover five applications in the United States for registration of the mark SDMI as a trade mark in classes 42 and 9. Copies of the applications for registration are annexed at Annexes 10 and 11 to the Complaint.

During the course of the summer of 1999 the Complainant sought to establish an additional name and trade mark that could be used in connection with those products that complied with the SDMI technology standards. In furtherance of this plan SDMI held frequent meetings and engaged in substantial correspondence regarding the effort. It also established working groups whose sole purpose was to work on the new mark for the SDMI compliant products. SDMI hired an independent consulting firm to assist in adopting this new mark, creating a design and logo for use of the mark with the object of developing an improved consumer message. Further details are set out in the affidavits of Messrs Kevin Conroy and Peter Douma.

Eventually in the summer of 1999 SDMI adopted "DMAT" an acronym for "Digital Music Access Technology" as the trade mark to be used prominently on products to signify that those products comply with the SDMI technology standards. Since the adoption of the mark DMAT SDMI has made significant use of the mark. In particular it prominently displays the DMAT mark and logo on the welcome page of its web site. The site specifically describes how the DMAT mark will be used. SDMI has also implemented a detailed licensing programme that will allow use of the "DMAT" mark by third parties that produce portable music hardware and software and which conforms to the SDMI technology standards and demonstrating inter operability with products from other conforming companies.

The Complainant asserts that through its prominent use of the mark DMAT SDMI has developed a substantial good will in the mark DMAT. It moreover adduces evidence that SDMI has filed applications for registration of the mark DMAT in the United States in classes 9, 38 and 42. Copies of the applications and for registration of the mark DMAT annexed at Annex 13 and 14 of the Complaint.

The Complainant submits that the Respondents are engaged in a pattern of misappropriating the marks SDMI and DMAT shortly after those marks were first publicised. Thus on 15 December 1998, the same day that the SDMI initiative and SDMI technology standards were announced and almost a month after the domain name "sdmi.org" was registered on behalf of SDMI and days after articles describing the SDMI project appeared the First Respondent registered <sdmi.net>. Subsequently the Second Respondent registered 15 other domain names including some form of the mark SDMI including the domain names which include the mark SDMI which are the subject of the complaint. Moreover in the summer of 1999 SDMI announced its plan to sue the DMAT mark to identify products that were SDMI compliant. Subsequently the Second Respondent registered at least five domain names that included some version of the mark DMAT including the DMAT domain names that are the subject of this complaint.

The Complainant also complains that the Respondents have in addition to registering domain names infringing the marks SDMI and DMAT are using the domain names in suit in a manner calculated to capitalise on SDMI’s reputation and goodwill. For example on its web sites the Respondents purport to sell products which are "SDMI compliant" when contrary to the fact there are not even any SDMI specifications for these products eg books, videos, movies and DVDs. In its complaint (pages 16 to 17) some of this use is listed.

Further in June 1999 the Respondents began transacting business in Seoul, Korea using the name <sdmi.net>. The Second Respondent issued a business plan which is annexed at Annex 15 to the Complaint in which it asserts that <sdmi.net> is a newly started internet based company which aims to provide digital multi media downloading service in nine languages under new SDMI specifications."

It goes on to refer to the Secure Digital Music Initiative and states that "located in Seoul, Korea with its branch office in London, United Kingdom, <sdmi.net> plans to undertake a global internet business in order to cater for net users from all over the world with the best digital multi media service".

It goes on to refer in a point which is taken by the Complainant that it "is generally accepted, regarding an ebusiness, it is not much to say that an advantageous domain name is the most important element to reach success <sdmi.net> had already taken scores of advantageous domain names."

On 15 March 2000 the Complainant through its attorney Mr Michael J Huppe sent a letter notifying the Respondent that its use of the marks SDMI and DMAT infringed the Complainants trade mark and service mark rights. A copy of Mr Huppe’s letter is annexed as Annex 17 to the Complaint. An email response was received from the Respondent Mr Seokhwan Ko on March 23, 2000. In his response Mr Ko appears to deny the complaint. He referred to commercialising his own business and asserted that "I am no domain trader but rather, I am one of those business men who are jockeying for position in the music on demand market." He also stated that "in case your part hope to have me transfer the above domain names to your part, logic dictates in my opinion that there should be proper compensation." A further letter was sent by

Mr Huppe on April 5, 2000 asking the Respondent to indicate what he meant by the phrase "proper compensation" and urging an assignment of the name. A final letter was sent by Mr Huppe on April 24, 2000. It appears that there was no further response from the Respondent and indeed Mr Huppe’s letter of April 24, 2000 was returned marked undeliverable.

In order to succeed in their complaints the Complainants have to show that in accordance with paragraph 4(a) of the Policy:

(i) The disputed domain name is identical or confusingly similar to a trade mark or service mark in which the Complainants have rights;

(ii) The Respondents have no rights or legitimate interest in respect of the disputed domain name; and

(iii) The disputed domain name is registered and is being used in bad faith.

The Panel will deal with each of these contentions in turn:

(i) The disputed domain name is identical or confusingly similar to a trade mark or service mark in which the Complainants have rights;

For the reasons set out above the Panel is satisfied that the Complainants have shown that they have a good will and reputation in the marks "SDMI" and "DMAT". In the event that the current trade mark applications for "SDMI" and "DMAT" proceed to registration the Complainant will also secure registered rights in respect of the marks "SDMI" and "DMAT".

In the Panel’s view there is no doubt that the rights that the Complainant has in the mark "SDMI" are confusingly similar to the domain name <sdmi.net>. In the case of the other domain names the marks "SDMI" and "DMAT" are being used in conjunction with subject matter including "players", "radio", "audio", "the music shop" which are directly relevant to the activities of the complainants.

The complainant also refers to an attempt by the Second Respondent to register the marks "SDMI", <sdmi.net>, <sdmirecord>, <sdmiradio> and <sdmiplayer> with the Korean Industrial Property Office. On June 26, 2000 the Korean Industrial Property Office refused to register the marks on the basis of finding that the mark "SDMI" was, confusingly similar or identical to "Secure Digital Music Initiative" and added that when the subject service mark (sdmi, sdmi.net, sdmirecord, sdmiradio) is used for designated services, "there may be a concern or misunderstanding or deception as to the quality of the services and contravention of the principle of good faith and fair and reliable public order or morality".

A copy of the decision of the Korean Industrial Property Office, translated into English, is annexed to the Complaint at Annex 16.

In all these circumstances the Panel is satisfied that the Complainant succeeds in showing that the disputed domain name is identical or confusingly similar to a trade mark or service mark in which the Complainant has rights.

(ii) The Respondents have no rights or legitimate interest in respect of the disputed domain name; and

The Complainant submits that the Respondents have no legitimate rights or interests in the domain names and points out that the Respondents are not licensees of SDMI nor have they sought permission to use the mark. The Complainant also relies upon the timing of the registration of the domain names by the Respondents which was "at the very time when SDMI was attracting significant attention in the press". The Complainant asserts that the Respondents deliberately chose the sdmi.net name in an effort to trade upon the publicity that SDMI had received. The Panel takes into account the evidence of the correspondence referred to above and the admission by Mr Ko that he intended to profit from the development of the SDMI technology standards.

In these circumstances the Panel accepts that the Respondents have no rights or legitimate interest in respect of the disputed domain name.

(iii) The disputed domain name is registered and is being used in bad faith.

The Complainant submits that bad faith is shown for the following reasons:

(a) That the Respondents have intentionally attempted to attract for commercial gain internet users to their web sites by creating a likelihood of confusion with the Complainant’s marks.

(b) The Respondents have no legitimate right to register and use the domain names.

(c) The Respondents "blatant conduct" in connection with the registration of the SDMI and DMAT domain names in particular it relies upon the fact that the domain name <sdmi.net> was registered on the very same day that the recording industry and other industry leaders announced the SDMI project.

(d) The fact that the Respondent, Mr Ko, clearly indicated in his business plan an intention to exploit the names for financial gain.

(e) The Respondent, Mr Ko’s, blatant attempt to sell the domain names for "proper compensation".

(f) The Respondents course of conduct in registering over 15 domain names including some form of the marks SDMI and DMAT.

(g) The Complainant relies upon the findings of the Korean Industrial Property Office quoted above.

The Panel accepts that these elements taken together show evidence of bad faith. The Panel also has in mind the exchange of correspondence with the Complainants representative and in particular the letter of 23 March 2000 which in the Panel’s view demonstrates bad faith on the part of the Respondents.

It follows that the Complainant has succeeded in its claim and that the domain names should be transferred from the Respondents to the Complainant

The decision of the Panel is that the following domain names:

<sdmi.net>

<sdmicertificate.com>

<sdmiplayers.com>

<sdmiradio.com>

<sdmiaudio.com>

<sdminetwork.com>

<dmatmusicshop.com>

<dmatplayer.com>

<dmatplayers.com>

<dmatshop.com>

should be transferred to the Complainant from the Respondents.

Clive Duncan Thorne
Sole Panelist

Dated: March 5, 2001