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WIPO Arbitration and Mediation Center

In accordance with Paragraph 4(f) of the ICANN Uniform Domain Name Dispute Resolution Policy, the Panel has consolidated these proceedings for the purpose of rendering a decision.

Complainant is Lava Trademark Holding Company, LLC, a Delaware corporation with its principal place of business in New York, New York, USA.

Respondent Creative Labs, Inc. is a corporation located in California, USA.

Respondent Creative Technology Ltd. is a corporation located in Singapore.

Creative Labs, Inc., is a wholly-owned subsidiary of Creative Technology Ltd. Both are collective referred to here as "Respondent."

The domain names at issue are: <lava.com> and <lavamusic.com> (the "Domain Names")

The registrar is Network Solutions, Inc.

These actions were brought in accordance with the ICANN Uniform Domain Name Dispute Resolution Policy, approved on October 24, 1999 ("the Policy") and the ICANN Rules of Uniform Domain Name Dispute Resolution Policy, approved on October 24, 1999 ("the Rules").

The Complaints were submitted on August 4, 2001. The Responses were submitted on August 30, 2001.

The WIPO Arbitration and Mediation Center appointed Jordan Weinstein, G. Gervaise Davis, III, and Mark V. B. Partridge (Presiding) as Panelists.

On March 27, 1995, Complainant filed an intent-to-use application with the United States Patent and Trademark Office (USPTO) for the mark, LAVA, in connection with "prerecorded audio and video tapes, cassettes, phonograph records and discs featuring musical entertainment, comedic, poetic and dramatic works." (Complainant indicates that it began using the LAVA mark in connection with its products in 1995.) The LAVA mark was registered to the Complainant on July 29, 1997. Complainant also claims to have rights in the trade names, LAVA MUSIC and LAVA RECORDS although we find no evidence to support the claim for use of LAVA MUSIC.

In January of 1999, Respondent began using the mark LAVA! to identify its music animation software in demonstrations at trade shows throughout the United States. Respondent selected LAVA! as an acronym for "Live Audio Visual Animation". Respondent’s LAVA! software is designed to create a "real-time visual expression to Internet music on the PC desktop," by allowing songs to be accompanied by "customized 3D animation." Specifically, Respondent’s software "generates 3D animated visuals, which morph and change to the beat of an audio signal."

On March 1, 1999, Respondent filed an intent-to-use application with the USPTO for the mark LAVA! covering, computer hardware, computer peripherals, and computer software to enhance the audio-visual capabilities of multimedia applications, namely for the integration of text, audio, graphics, still images and moving pictures into a computer-controlled and interactive audio-visual delivery for use with a personal computer for multimedia applications and manuals sold as a unit.

This application has been suspended, pending disposition of applications for the marks LAVA and LOVALOGIC by third parties unrelated to this dispute. Complainant's registration was not cited against Respondent's application.

On July 29, 1999, Respondent registered the Domain Name, <lavamusic.com>, with Network Solutions, Inc. (NSI). In August of 1999, Respondent made the first commercial use of the mark LAVA! with the release of its software, LAVA! V1.0 for sale to the public at the Interactive Music Expo in New York. On or around the same time, Respondent launched the <lavamusic.com> website to offer the LAVA! software product for downloading by consumers and to provide an online forum for the software’s users. Respondent acquired and registered the <lava.com> domain name on October 20, 1999.

In November of 1999, Complainant learned that Respondent had registered the Domain Names with NSI, and on January 21, 2000, Complainant’s counsel sent a letter to Respondent’s counsel requesting that Respondent: cease and desist all use of the mark LAVA! and the Domain Names <lava.com> and <lavamusic.com>; voluntarily withdraw its application for federal registration of the LAVA! mark; and assign the domain name registrations for <lava.com> and <lavamusic.com> to Complainant.

In a letter dated February 4, 2000, Respondent’s counsel denied that Respondent’s use of the LAVA! mark, <lava.com> and <lavamusic.com> infringed on any rights of Complainant, but offered to negotiate a mutually agreeable solution to the dispute.

In a March 7, 2000, letter to Complainant, Respondent suggested that the two parties enter into a "co-marketing venture" regarding the LAVA mark. In a letter dated May 24, 2001, Respondent offered to sell only the <lavamusic.com> Domain Name registration to Complainant in exchange for actual expenses plus attorney’s fees associated with this dispute. In a letter of June 6, 2001, Complainant rejected Respondent’s offer and made a counter-offer to Respondent of $3,000 for the transfer of both the <lava.com> and <lavamusic.com> domain name registrations to the Complainant. Respondent did not respond to Complainant’s counter-offer before this dispute was filed.

Complaint contends that the Domain Names are confusingly similar to Complainant’s LAVA mark, which was registered with the USPTO prior to Respondent’s registration of the Domain Name.

Complainant also contends that Respondent has no rights or legitimate interest in the Domain Names because Respondent markets and sells goods in "the identical field in which Complainant uses its LAVA mark and name."

Finally, Complainant contends that Respondent’s proposal to enter into a "co-marketing venture" with Complainant, and its offer to sell the Domain Names to Complainant for Respondent’s actual expenses plus attorney’s fees associated with this dispute, are evidence that Respondent registered the Domain Names in bad faith.

Respondent contends that Complainant has not demonstrated any use or rights in the mark LAVA MUSIC and that the Domain Name, <lavamusic.com>, is not confusingly similar to Complainant’s registered mark, LAVA.

Respondent contends that it has a legitimate interest in the Domain Names because they were used in connection with a bona fide offering of goods and services before it received any notice of this dispute. Respondent also contends that any dispute Complainant may have over Respondent’s use of the Domain Names in conjunction for computer software is outside the jurisdiction of the Panel.

Finally, Respondent contends that the record is void of any evidence that it registered the Domain Names in bad faith. Respondent points to the fact that it has used the Domain Names in connection with a bona fide offering of goods and services, and denies that its effort to resolve this dispute is evidence of bad faith.

The claims presented here turn on three elements: (1) is the domain name confusingly similar to a trademark or service mark in which Complainant has rights; (2) does Respondent have a legitimate interest in the Domain Name; and (3) has the domain name been registered and used in bad faith? The Complainant has the burden of proof on each of these elements.

With respect to the second element, Paragraph 4(c)(i) of the Policy states that if the Panel finds that Respondent used or demonstrably prepared to use the domain name in connection with a bona fide offering of goods and services before it had notice of the dispute, then Respondent may be found to have a legitimate interest in the domain name.

Here, the evidence shows that Respondent was making use of the Domain Names in connection with an offering of goods and services in commerce prior to receiving any notice of objection from Complainant. As early as January 1999, Respondent adopted and began using the mark LAVA! to identify its music animation software in demonstrations at trade shows throughout the United States. That use served as the basis for registering and use of the Domain Name <lava.com>.

The Domain Name <lavamusic.com>, registered in July 1999, incorporates the acronym "LAVA," and the addition of the generic word "MUSIC." It is a logical selection for a website that markets and sells software that provides "real-time visual expression to Internet music on the PC desktop."

When Respondent released its software, LAVA! V1.0, in August 1999 for sale to the public at the Interactive Music Expo in New York, it launched the <lavamusic.com> website to offer the LAVA! software product for downloading by consumers and to provide an online forum for the software’s users.

The Complaint shows that Complainant did not object to Respondent’s use of the Domain Names until January of 2000, several months after Respondent had begun using the Domain Names in connection with the sales and marketing of its software over the Internet.

Although use in connection with the sale of goods or services prior to notice of Complainant’s objections is apparent, our inquiry must go further since not all such use qualifies as bona fide use. A deliberately infringing use, for example, should not be considered bona fide use. "To conclude otherwise would mean that a Respondent could rely on intentional infringement to demonstrate a legitimate interest, an interpretation that is obviously contrary to the intent of the Policy." Ciccone v. Parisi, Case No. D2000-0847 (WIPO 2000).

Here, it does not appear that Respondent adopted the Domain Name <lavamusic.com> as a deliberate infringement of Complainant's rights. As Respondent states in its Response, it selected the LAVA! mark for its software product as an acronym, and the selection of <lavamusic.com> as a Domain Name linking consumers to the software product is a logical extension when the software is designed to interact with music. Furthermore, there is no evidence presented in the record that Respondent selected the Domain Names for any other reason than to market its audio-visual software that it had previously named LAVA!, and Respondent did, in fact, use the Domain Name to market and sell the LAVA! software. Moreover, there is no evidence that Complainant has used LAVA MUSIC as a mark for its goods or services. There is at least a colorable argument that Respondent's use of the Domain Names for the sale of computer software is non-infringing, a conclusion supported by the fact that Complainant's trademark registration was not cited against Respondent's application. Therefore, we find that Respondent used the Domain Names in connection with a bona fide offering of goods and services.

Because Complainant obtained federal registration for the trademark LAVA in 1997 and has prior rights to the mark, Complainant asserts that Respondent had constructive knowledge of Complainant’s rights. While true as a matter of law, that fact does not preclude a finding of legitimate interest, especially where the marks and the goods and services are not identical. Although there may be a genuine dispute as to whether Respondent's use is an infringement of Complainant's prior rights, that dispute is beyond the scope of this proceeding. See, Bridgestone Firestone, Inc. et al. v. Jack Myers, Case No. D2000-0190 (WIPO 2000) (noting that Panel lacks jurisdiction to decide claims of trademark infringement, dilution, unfair competition or other salutatory or common law causes of action.) Our inquiry here is limited to the elements set forth in the Policy, and we find that Complainant has failed to prove the second necessary element of its claim, that Respondent lacks any right or legitimate interest in the Domain Names.

Given that finding, it is unnecessary for us to reach a decision on the other elements. However, because the parties have focused on the settlement negotiations as relevant to bad faith, we feel the need to note that Respondent's offer to transfer the Domain Names for payment of costs, including attorneys fees, does not in our view show bad faith. Under the circumstances of the case, that offer does not appear to exceed Respondent's legitimate out-of-pocket expenses. Moreover, when a party has a legitimate interest in a domain name, a settlement offer to transfer the domain name in exchange for payment of a premium may be totally appropriate.

Complainant has failed to prove a lack of right or legitimate interest in Respondent's Domain Names. Therefore, Complainant request for transfer of the Domain Names <lava.com> and <lavamusic.com> is denied.

Mark V. B. Partridge
Presiding Panelist

Jordan Weinstein
Panelist

G. Gervaise Davis III
Panelist

Dated: November 2, 2001