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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Phoenix Holdings International LLC v. Shareaza.com

Case No. D2009-0503

1. The Parties

The Complainant is Phoenix Holdings International LLC, Nevis, Saint Kitts and Nevis, represented by Locke Lord Bissell & Liddell LLP, United States of America.

The Respondent is Shareaza.com, Tallahassee, Florida, United States of America, represented by Meister Seelig & Fein LLP, United States of America.

2. The Domain Name and Registrar

The disputed domain name <shareaza.com> is registered with GoDaddy.com, Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on April 17, 2009. On April 20, 2009, the Center transmitted by email to GoDaddy.com, Inc. a request for registrar verification in connection with the disputed domain name. On April 20, 2009, GoDaddy.com, Inc. transmitted by email to the Center its verification response disclosing registrant and contact information for the disputed domain name which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on April 24, 2009 providing the registrant and contact information disclosed by the Registrar, and inviting the Complainant to submit an amendment to the Complaint. On April 28, 2009, the Complainant submitted a request to suspend the proceeding. On April 29, 2009, the proceeding was suspended pending termination on May 29, 2009 if no earlier request to reinstitute the proceedings was received from either party. The Complainant made such a request with its filing of an amended Complaint on May 28, 2009.

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 Respondent of the Complaint, and the proceedings commenced on June 4, 2009. In accordance with the Rules, paragraph 5(a), the due date for Response was June 24, 2009. The Response was filed with the Center on June 24, 2009.

The Center appointed James A. Barker as the sole panelist in this matter on June 29, 2009. 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. Due to unforeseen circumstances the Panel, extended the decision due date to July 29, 2009.

4. Factual Background

The Complainant`s business is not clearly described in the Complaint, but the Panel has inferred from the facts of this proceeding that the Complainant is engaged in offering services relating to the "SHAREAZA software program".

The Respondent`s business is likewise not clearly described in the Response. However the Panel has also inferred from the facts of this proceeding that the Respondent is engaged in services relating to, at least, peer-to-peer software.

Both parties accept that the Respondent became the registrant of the disputed domain name around mid-2004 (although each party identifies a slightly different date).

At the date of this decision, the disputed domain name reverts to a website which describes itself as "The official home of Shareaza", and offers "Shareaza" for free download. The website also carries the prominent statement "P2P file sharing that`s 100% legal".

5. Parties` Contentions

A. Complainant

The Complainant claims to be the assignee of intellectual property rights in the "SHAREAZA software program", originally created, named and released under an open source license in 2002 by the "Shareaza Development Team". The Complainant claims related common law trademark rights. The Complainant does not have registered trademark rights relating to that software.

The SHAREAZA trademark was first used by the Complainant, through its predecessor in interest, in connection with its peer-to-peer software application in 2002. Since that time, the Complainant has made continuous, extensive, and prominent use of the SHAREAZA mark and has distributed over 46,350,000 copies of the software program under this mark. As a result of the Complainant`s long and widespread use of the SHAREAZA mark, the mark is recognized both nationally and internationally as identifying the Complainant.

The <shareaza.com> domain name was first registered in or about June, 2002 by Mr. Michael Stokes. Mr. Stokes was the original developer and founding member of the "Shareaza Development Team". In 2004, Mr. Stokes left the Shareaza Development Team, and on July 27, 2004 transferred the domain name to the Respondent, to act solely as the administrative contact in an agency contract capacity at the direction of and on behalf of the Shareaza Development Team. At some point in early 2008, without informing the Complainant, and for unknown reasons, the Respondent amended the domain name registration to mask his identity, ceased acting as an agent for the Complainant thus terminating its agency contract and appears to have begun acting as an agent for a company known as Discordia Ltd.

Discordia Ltd. (or entities associated with Discordia Ltd.) distributes a competing software product branded as iMesh. Without permission from the Complainant, the Respondent began using the SHAREAZA brand to identify Discordia`s iMesh software. Thus, a consumer who now visits the "www.shareaza.com" website expecting to download the authentic SHAREAZA brand software, is being offered what appears to be SHAREAZA brand software to download, but is in fact the iMesh software.

The <shareaza.com> domain name is identical to the Complainant`s common law SHAREAZA trademark.

The Respondent has no right or legitimate interest in the domain name. The Respondent registered the domain name on behalf of the Complainant. The Respondent is no longer associated with the Complainant, has clearly ceased operating as an agent for the Complainant, and has no legal right to use the SHAREAZA domain name or trademark.

The <shareaza.com> domain name was usurped by the Respondent for the purpose of denying the Complainant the use of the domain name, disrupting the Complainant`s business, and distributing counterfeit copies of its software application all with the awareness of the goodwill and notoriety associated with the SHAREAZA mark. The Respondent`s registration of the <shareaza.com> domain name should be deemed to have been registered in bad faith. The transfer of the <shareaza.com> domain name to the Respondent lost any bona fides it previously had when it subsequently breached the agent contract terms upon which he was authorized to hold the domain name. UVA Solar GmbH & Co K.G. v. Mads Kragh, WIPO Case No. D2001-0373; see also Exel Oyj v. KH Trading, Inc., WIPO Case No. D2004-0433, among others.

The domain name is being used in bad faith as well. The Respondent has used the domain name to create a website that is very similar in content and style to the website that had been created by the Complainant. At the Respondent`s site, a software program labeled "Shareaza" can be downloaded by users. However, this counterfeit software program cannot be removed with its own "uninstall" program, and overwrites other Shareaza registry information, thus behaving as malware normally would. Furthermore, it stores a log of hashes, downloaded files and chat logs that are kept for an unknown use. In addition, unlike the authentic software, it is only free for the first month, so if people do not pay attention when they fill out the legal/billing information before download they might not realize they will be charged. Both McAfee and WOT (Web of Trust) have posted warnings advising users that attempts to download the software at shareaza.com can result in inadvertent and undesirable changes to one`s system settings.

B. Respondent

The Respondent denies the allegations against him in the Complaint. He claims that this is a dispute between former collaborators of an open source software program, which is unsuitable for resolution under the Policy.

The Respondent does not dispute that, for the purposes of the Policy, the disputed domain name is identical to the mark SHAREAZA. However, the Complainant has failed to demonstrate rights in such a mark. The Complainant has never been directly associated with that trademark or the domain name. The Complainant`s rights to such a mark must be based on a clearly established and well-documented chain of title leading from the project`s originator, Mr. Michael Stokes, to the Complainant. The Complainant has been unable to demonstrate this in any coherent or supportable way. The Complainant has failed to provide any details to support its claims to such trademark rights.

The Complainant has withheld from the Panel facts, including that the Respondent (Jonathan Nilson under the alias of "scorch") was one of the original members of the Shareaza team. (In support, the Respondent provides evidence of e.g. the "acknowledgment" page at the disputed domain name in 2004, 2006 and 2007.) In fact, the lists of those involved in the development of the Shareaza project continued to vary over the years. Consequently, there does not appear to have been a single, consistent group of core programmers, and the Complainant has failed to attempt to identify such a group with even minimal specificity or to demonstrate that any such group transferred any rights to the Complainant. In any event, the Respondent was and continued to be identified, during all times relevant to this dispute, as a member of the project team. The Complainant does not disclose that aspects of its evidence (such as print outs of websites), seeking to distance the Respondent from this project, do not make clear that such evidence was produced by the Complainant itself.

The Respondent claims that he has rights or legitimate interests in the disputed domain name. Mr. Michael Stokes, the founder of the Shareaza project, transferred the disputed domain name to the Respondent with the change of ownership being acknowledged by <buydomains.com> on June 15, 2004 (not, as stated by the Complainant, on July 27). However, the Complainant has provided absolutely no documentary evidence to support its self-serving statement that the Respondent was "to act solely as the administrative contact in a [sic] agency contract capacity at the direction of and on behalf of the Shareaza Development Team". The Respondent has legitimate rights and interests in respect of the disputed domain name, both because the domain name was transferred to him directly by the prior registrant and in the Respondent`s capacity as a member of the Shareaza Alpha Team.

The Complainant`s attempt to paint the Respondent`s subsequent change in the domain name registration information as evidence of bad faith omits another fact which points to a very different explanation as to the Respondent`s possible reasons for attempting to disassociate himself from the Shareaza project. In September 2007, the Respondent (Jonathan Nilson) was named personally as a party in a French court in a lawsuit alleging that Shareaza facilitates and encourages illegal peer-to-peer sharing of music and other copyrighted material. Mr. Nilson was "picked out" as the subject of such litigation because it was possible to identify him as the owner of the disputed domain name. In the face of this legal action, the Respondent was essentially abandoned by the other Shareaza Team members.

For somewhat similar reasons to those outlined above, the Respondent also denies having registered or used the disputed domain name in bad faith. Whatever the relationship was between the Respondent and the other participants in the Shareaza project, it was not an agency, master-servant or employer-employee relationship. Therefore the Complainant`s reliance on prior decisions under the Policy, relating to such relationships, is misguided. The Respondent did not have the requisite bad faith when he accepted transfer of the disputed domain name. The Complainant cannot prove bad faith by relying solely on quotes and evidence from its own website.

The Respondent requests the Panel to make a finding of reverse domain name hijacking.

6. Discussion and Findings

Under paragraph 4(a) of the Policy, to succeed the Complainant must prove that:

(i) the disputed domain name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and

(ii) the Respondent has no rights or legitimate interests in respect of the disputed domain name; and

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

For the reasons that follow, only the first of these elements is discussed.

A. Identical or Confusingly Similar

This is essentially a case that turns on strongly disputed facts, rather than a dispute about the proper application of the Policy per se.

Paragraph 4(a)(i) of the Policy requires, as a first step, that the Complainant establish that it "has rights" in a trademark. If the Complainant cannot establish those rights, its case cannot go forward. The Panel considers that the Complainant has not sufficiently established such rights for its case to proceed. The reasons are as follows.

Firstly, the facts supporting an inference of common law rights in SHAREAZA are not strong. What is required to demonstrate rights in an unregistered mark is outlined in the WIPO Overview of WIPO Panel Views. The consensus of prior panels is relevantly set out under the heading: "1.7 What needs to be shown for the complainant to successfully assert common-law or unregistered trademark rights?":

"Consensus view: The complainant must show that the name has become a distinctive identifier associated with the complainant or its goods and services. Relevant evidence of such "secondary meaning" includes length and amount of sales under the mark, the nature and extent of advertising, consumer surveys and media recognition…"

The Complainant states that the SHAREAZA mark has become distinctively associated with the Complainant as a mark. The Complainant points to e.g. figures of downloads of the Shareaza software, as well as an article in Wikipedia about the software. However, uncertainty arises from the Complainant`s failure to clearly identify the nature of its goods or services with which it claims the mark is associated. A common law mark is, fundamentally, a mark that is used in trade. But what is the Complainant`s "trade"? On the evidence of both the parties, the Shareaza software was developed on an open source platform. The Complainant`s evidence suggests that the software is downloaded for free under the "GNU General Public License". The Complainant`s evidence (a copy of an article on Wikipedia as at February 17, 2009) also states that the software is maintained "by volunteers". The same article, to which the Complainant points as evidence of its association with the mark, makes no mention at all of the Complainant, Phoenix Holdings International LLC. Rather, the article mentions only Mr. Michael Stokes in connection with the development of the software, and the "SHAREAZA Development Team" as apparent initiators of recent trademark opposition proceedings (not mentioned in the Complaint itself) against "The new owners of Shareaza.com, Discordia Ltd (iMesh, Inc.)". None of this clearly suggests that the SHAREAZA software or mark currently has a distinctive association with any particular legal entity.

Secondly, even if SHAREAZA were accepted as constituting a common law mark, the Complainant provides little evidence of when, how and from who it received an assignment of such rights. The Complainant asserts that it received such an assignment from the "Shareaza Development Team". The Complainant provides no real evidence for this assertion. Moreover, it is strongly contested by the Respondent, who claims that he was himself a member of that team. There is no evidence that that "team" was a separate legal entity to the individuals that comprised it. Assuming that this team was a collection of individuals who contributed to the development of the Shareaza software, the starting point in relation to ownership of any unregistered mark is that rights to it would ordinarily vest (collectively) in the individuals as members of that team. The Complainant does not identify those individuals, or provide supporting evidence of how the purported assignment was effected. The Complainant states that the members of that team unanimously voted to transfer those rights after the Respondent`s "takeover" of the disputed domain name. But it is not clear whether the Complainant claims that such a vote itself transferred rights in the mark or the formal transfer was effected by some other means.

Both parties appear to identify the Respondent`s registration of the disputed domain name as having occurred in mid 2004. However, if this is the date shortly after which the Complainant claims to have obtained rights in the mark, it does not sit easily with other evidence presented by the Complainant. This includes the February 2009 Wikipedia article (mentioned above) which makes no mention of the Complainant as having any interests in relation to the software (including in trademark opposition proceedings relating to the mark). To add to the confusion, the Respondent provides evidence of the "www.shareaza.com" website as at May 2004, in which copyright appears to be asserted by "Shareaza Pty Ltd". Neither party refers to that company however, and the Panel is left in the dark as to its role.

Thirdly, the Respondent strongly disputes many of the facts presented by the Complainant. In particular, the Respondent states that he (Jonathan Nilson, as the individual behind the named Respondent, "shareaza.com") was himself a member of the Shareaza Development Team and, as such, the Complainant is incorrect in stating that there was a unanimous vote of the Shareaza Team to transfer intellectual property to the Complainant.

Fourthly, the Complainant`s argument also rests on establishing that the Respondent was acting, when he acquired the disputed domain name in 2004, only as an agent of the Shareaza Development Team. This argument is also unsupported by evidence. The Complainant does not explain why the domain name registration would have been transferred to the Respondent to act as the administrative contact, rather than retaining that registration within the Shareaza Development Team itself. This argument is also weakened by the lack of explanation as to the identity of the "Shareaza Development Team". As noted above, there is no evidence that that team was itself a legal entity. If it was not a legal entity, the Respondent cannot have legally acted as its agent. It may be that the Complainant meant to say the Respondent was acting as the agent of all the members of that team collectively. But the Complainant does not say so and, again, no relevant evidence is provided. The absence of supporting evidence means that the Complainant`s case has, at best, no stronger force than the Respondent`s denials.

Ultimately, these weaknesses in the evidence mean that the Complainant does not present a convincing claim to having relevant rights in SHAREAZA as a mark.

B. Rights or Legitimate Interests; Registered and Used in Bad Faith

Because of the Panel`s finding above, it is not necessary to address in detail the Complainant`s claims in relation to either paragraph 4(a)(ii) or (iii) of the Policy. However, the Panel notes that, in relation to both those paragraphs, the Complainant`s case suffers from much the same problems as its case relating to paragraph 4(a)(i). Unless it is established that the Complainant has rights in a mark, and that the Respondent acted in breach of an agency relationship vis a vis the Complainant (or its predecessor), the Complainant cannot properly establish its case.

C. Reverse Domain Name Hijacking

A panel may (at its discretion) make a finding of reverse domain name hijacking where, as the Respondent notes, a complainant "knew or should have known" that it could not establish its case under paragraph 4(a) of the Policy. The Respondent requests such a finding because of the facts he sets out above, including his claims that the Complainant has misstated or withheld facts from the Panel.

While the Complainant has not made out a sufficient case, the Panel does not make such a finding. As the Respondent notes, this appears to be a complicated dispute in which many of the crucial facts are hotly contested. As such, it is more difficult for the Panel to judge whether the Complainant should have known it could not succeed. In addition, the Complainant makes some claims, not disputed by the Respondent, that the Respondent has used the disputed domain name to disrupt the Complainant`s business, including by offering competing software. Whether or not that is the case, it may be that the Complainant felt it was legitimately aggrieved (in a general sense) by the Respondent`s conduct. The Panel therefore considers that the Complainant should be given the benefit of the doubt on this point.

7. Decision

For all the foregoing reasons, the Complaint is denied.

James A. Barker
Sole Panelist

Date: July 29, 2009