A rightsholder has standing to file a legal rights objection. The source and documentation of the existing legal rights the objector is claiming (which may include either registered or unregistered trademarks) are infringed by the applied-for gTLD must be included in the filing…”

Once the Objector has demonstrated standing, then Article 20(a) of the Procedure requires the Panel to “apply the standards that have been defined by ICANN” to the determination of the objection. Article 20(b) states that: “In addition, the Panel may refer to and base its findings upon the statements and documents submitted and any rules or principles that it determines to be applicable.” Article 20(c) states that: “The Objector bears the burden of proving that its Objection should be sustained in accordance with the applicable standards.”

The standards defined by ICANN referred to in Article 20(a) of the Procedure are set out in Section 3.5 (‘Dispute Resolution Principles (Standards)’) of Module 3 (‘Dispute Resolution Procedures’) of the Guidebook. The standards in relation to Legal Rights Objections appear in Section 3.5.2 which reads as follows (omitting the references to the names or acronyms of Intergovernmental Organizations that are not relevant in the present case):

“3.5.2 Legal Rights Objection
In interpreting and giving meaning to GNSO Recommendation 3 (“Strings must not infringe the existing legal rights of others that are recognized or enforceable under generally accepted and internationally recognized principles of law”), a DRSP panel of experts presiding over a legal rights objection will determine whether the potential use of the applied-for gTLD by the applicant takes unfair advantage of the distinctive character or the reputation of the objector’s registered or unregistered trademark or service mark…, or unjustifiably impairs the distinctive character or the reputation of the objector’s mark…., or otherwise creates an impermissible likelihood of confusion between the applied- for gTLD and the objector’s mark…..”

Section 3.5.2 then lists eight non-exclusive factors that the Panel must consider in making its determination in a case where the objection is based on trademark rights. Section 3.5 also states that the Panel may “refer to other relevant rules of international law in connection with the standards.”

The Panel’s duty is therefore to apply a multi-layered standard. At the highest level, GNSO Recommendation 3 establishes a mandatory rule that “[s]trings must not infringe the existing legal rights of others that are recognized or enforceable under generally accepted and internationally recognized principles of law”. Internationally recognized principles of law include the protection of trademark rights.

The second layer of the standard requires the Panel to determine whether the potential use of the applied-for gTLD falls within one (or more) of the three defined circumstances in Section 3.5.2. However, while the Panel is required to address these circumstances, Section 3.5.2 does not define the effect of the determination; rather the Panel must use this determination “in interpreting and giving meaning to GNSO Recommendation 3”; in other words, to guide an assessment as to whether the string in question infringes the existing legal rights of others that are recognized or enforceable under generally accepted and internationally recognized principles of law.

The third layer consists of eight non-exclusive factors that the Panel must address (“will consider”) when the objection is based on trademark rights. Although it is not expressly stated, the purposes of the Panel’s consideration of these factors is to enable it to make the determinations required in the second layer of the standard. These eight factors refer to a number of concepts that are familiar in international trademark law or in domain name dispute resolution under the Uniform Domain Name Dispute Resolution Policy (“UDRP”) Policy. The factors refer to the strength of the Objector’s trademark rights (factors 2, 3 & 4), the nature of the Applicant’s trademark rights (factors 3, 5, 6, & 7), the Applicant’s intentions and proposed use of the gTLD (factors 4, 5, 6, & 7); and the similarity and likelihood of confusion between the Objector’s trademark rights.

Finally, the Legal Rights Objection procedure does not require the Panel to make any abstract determination of the suitability of the applied for gTLD registry. The Public Interest and Community Objections procedures are available to address some broader concerns. The third layer factors demonstrate that the Legal Rights Objection procedure involves a determination of a ‘party specific’ and ‘application specific’ objection. There may be multiple applicants and multiple objectors in respect of the same gTLD string, and each must succeed or fail on its own merits.

C. Standing

The Objector relies on the LRO Trademarks set out above “as well as common law rights… relating to domain name registrations and domain-related business”. The LRO Trademarks are registered in the name of “Constantinos Roussos”, and not the name of the Objector. Further, the Objector has not provided evidence as to the registered ownership of the extensive list of domain name registrations relied upon and incorporating the term ‘music’ or ‘dotmusic’, but a WhoIs search of the first three domain names listed (<music.us>,<music.biz>, and <music.mobi>) reveals that the registered owner is CGR E-Commerce Ltd. with Mr. Roussos as the contact person. Mr. Roussos is the Objector’s designated representative in this LRO proceeding.

Section 3.2.2 of Module 3 of the New gTLD Applicant Guidebook requires the Objector to establish that it has standing to bring a legal rights objection. The Panel notes that this is a mandatory requirement (“Objectors must satisfy standing requirements to have their objections considered” (emphasis added)), and that the Panel is under an express duty to consider the question of standing (“all objections will be reviewed by a panel of experts…to determine whether the objector has standing to object” (emphasis added)). Accordingly, the Panel should consider standing, ex officio if necessary, before entering into a determination of infringement pursuant to the criteria in Section 3.5.2.

The rationale of the mandatory standing requirements is readily apparent. A successful Legal Rights Objection may well exclude an applicant from the new gTLD process. With such consequences it is reasonable to require that the objection is made by the rightsholder itself and that the rightsholder establishes its standing through the provision of the appropriate documentation (Section 3.2.2).

In the current case the Objector, DotMusic Ltd., does not own the LRO Trademarks, nor has evidence been provided to demonstrate its ownership of relevant domain names. There are indications that the Objector, Mr. Roussos, and CGR E-Commerce are all closely related, and they might well operate as a single entity. There may be a formal or informal licensing arrangement in place, but if there is it has not been produced. Alternatively, this Objection could have been made by the various rightsholders jointly, but this again has not been done. The business name of the Objector does not create rights to support an objection in circumstances where the LRO Trademarks and domain names through which it purports to do business are owned by others.

Accordingly, the Objector has non-existent or at best ambiguous rights in circumstance where Section 3.2.2 requires the Objector to satisfy the standing requirements. The Panel finds that the Objector has failed to meet the burden of proof in relation to standing and the Objection must be dismissed for this reason.

Nevertheless, and in deference to the Parties’ submissions, the Panel has considered whether the applied- for gTLD string would infringe the bundle of rights owned by the Objector and/or Mr. Roussos and/or and CGR E-Commerce Limited.

D. Alleged infringement of rights

There are five LRO Trademarks. The most important of the LRO Trademarks for the purposes of this proceeding are the .MUSIC and the DOTMUSIC trademarks. The other three trademarks, although related in their music theme and in their designs, are well removed from the applied-for <.music> gTLD string. The Panel notes that the .MUSIC and the DOTMUSIC trademarks are design marks with significant graphic elements. These graphic elements must be taken into account for the purposes of the consideration of visual similarity and likelihood of confusion required by the Section 3.5.2 factors.

The Objector also claims common law rights arising through its domain name registrations, business names and related activities. The most significant domain name registration appears to be “www.music.us”. The website at this address prominently features the .MUSIC design mark. The primary purpose of this website is to promote the <.music> gTLD and the Objector’s concept of this gTLD. This website relates primarily to the prospective business of the Objector in relation to the <.music> gTLD. Similarly the sponsorship and marketing relied upon in the LRO relate largely to the promotion by the Objector of its own concept for the <.music> gTLD. The result is that the Objector relies upon its own preparations for use of the <.music> gTLD string, including trademark registrations, domain names and sponsorship and branding in order to defeat a competitor’s application for the same string.

On the one hand, the Panel recognizes that there has been a real investment by the Objector and associated parties in the trademark registrations, domain name registrations, sponsorship and branding to create consumer recognition and goodwill entitled to protection. On the other hand, there is a circularity in the Objector’s position in that the rights upon which the Objector relies to defeat the application are to a certain extent conditional on the defeat of the Applicant and the Objector’s success in obtaining the <.music> gTLD string. There is therefore a tension between the existing rights of the Objector and its associated parties and the prospective rights it seeks, which the Panel must evaluate through consideration of the eight factors set out in Section 3.5.2 of the Guidebook.

The Panel now turns to these factors.

(i) Whether the applied-for gTLD is identical or similar, including in appearance, phonetic sound, or meaning, to the objector’s existing mark.

The Objector argues that the <.music> gTLD is identical in appearance, phonetic sound, or meaning to the .MUSIC mark (CTM No 008139792), and identical in phonetic sound and connotation to Objector’s existing DOTMUSIC mark (CTM No 008139834).

This case raises a question of whether the applied for gTLD string is properly described as <music> or <.music>.

There is no doubt that the overwhelming popular use, both verbally and written, is to include the dot.

This applied-for string in the present case is referred to in writing as “the <.music> gTLD” or orally as the “dotmusic string”, in the same way that the <com> gTLD is inevitably referred to as “<.com>” or “dotcom”. This is a convenient shorthand to indicate that the speaker or writer is referring to a TLD, in contradistinction either to a second-level domain or some other descriptive use of a common word.

In most circumstances whether the dot is included in the description of the top-level domain is irrelevant, and users can choose to include it or ignore it.

However, in this case the ‘dot’ forms a prominent element of the trademarks in which the Objector relies, so the Panel is forced to address the question of the role of the dot in the assessment of the Section 3.5.2 factors.

The Panel considers that the significance of the dot varies depending on the nature of the factor that the Panel is required to evaluate.

The ‘dot’ has the function of separating the top-level domain from the second-level of the domain. Although the dot always precedes the gTLD string, this Panel considers that it has an independent function in the domain name system, and therefore is not part of the top-level domain for the purposes of the comparison with a trademark for the purposes of the first factor of Section 3.5.2.

In the Panel’s view, the first factor requires a straightforward comparison of the actual gTLD string with the objector’s trademarks, without consideration of the likelihood of confusion through consumer understanding or popular use (which falls within the eighth factor).

On this basis, in terms of appearance, the prominent use of the word ‘music’ in the first two LRO Trademarks is the only point of similarity with the applied-for gTLD. These are design marks and the graphic elements are at least as prominent as the word ‘music’.

The Panel finds that there is limited similarity in appearance between the graphic .MUSIC and DOTMUSIC marks and the applied-for gTLD.

“Dotmusic” is an invented word, and different phonetically and in meaning from the generic and widely understood word “music”.

The Panel finds there is little similarity in terms of phonetic sound and meaning.

(ii) Whether the objector’s acquisition and use of rights in the mark has been bona fide.

The Objector submits that its application and use of its rights has been bona fide.

The Applicant alleges that the Objector has attempted to reserve trademark rights in order to subvert the new gTLD application process, and has made a blatant attempt to manufacture false grounds for objection, and this demonstrates extremely bad faith.

The evidence indicates that the primary use of the .MUSIC and DOTMUSIC trademarks as well as the “www.music.us” website has been to promote the claim to the <.music> gTLD.

It is true that the Objector is trying to use its rights (together with rights owned by Mr. Roussos and CGR E-Commerce Limited) to exclude a competitor from the new gTLD application process.

In the view of the Panel, such a strategy may be misconceived in respect of a gTLD string that is a generic word, but it does not as such constitute bad faith.

It is reasonable for an entrepreneur to prepare for a possible venture through the registration of trademarks and domain names and then to use those registrations to create brand awareness in anticipation of the launch of the venture. If a competitor infringes such rights then the entrepreneur is entitled to assert them. It must be remembered that the rights of the Objector/Mr. Roussos/CGR E-Commerce Limited are in the LRO Trademarks, and the goodwill associated with the various domain and business names, and there is no evidence to confirm that these rights have not been acquired and used in good faith.

It is another question entirely as to whether the rights of the Objector/Mr. Roussos/CGR E-Commerce Limited are infringed by the <.music> gTLD string, but the Panel considers these rights were acquired and have been used in good faith.

(iii) Whether and to what extent there is recognition in the relevant sector of the public of the sign corresponding to the gTLD, as the mark of the objector, of the applicant or of a third party.

The Panel considers that the sign ‘music’ is a generic word and there is no recognition of this word as the mark of the Objector, of the Applicant or of a third party.

(iv) Applicant’s intent in applying for the gTLD, including whether the applicant, at the time of application for the gTLD, had knowledge of the objector’s mark, or could not have reasonably been unaware of that mark, and including whether the applicant has engaged in a pattern of conduct whereby it applied for or operates TLDs or registrations in TLDs which are identical or confusingly similar to the marks of others.

The Applicant has applied for a gTLD consisting of a generic word.

The Applicant has not denied knowledge of the LRO Trademarks, but states that it is irrelevant.

The Panel finds that the Applicant was likely to be aware of the LRO Trademarks through their use to promote the <.music> gTLD string to the music community. However, it also accepts that the Applicant’s intent in applying for the <.music> gTLD string was the purposes set out in its answer to question 18 in the Application and not to take advantage of the trademark rights of the Objector/Mr. Roussos/CGR E-Commerce Limited. Further, there is no evidence to suggest that the Applicant has engaged in a pattern of conduct whereby it applied for or operates TLDs or registrations in TLDs which are identical or confusingly similar to the marks of others.

(v) Whether and to what extent the applicant has used, or has made demonstrable preparations to use, the sign corresponding to the gTLD in connection with a bona fide offering of goods or services or a bona fide provision of information in a way that does not interfere with the legitimate exercise by the objector of its mark rights.

The Applicant intends to use the sign corresponding to the gTLD for the purposes described in the Application, and with the rights protection mechanisms described in the application, which the Panel accepts are bona fide. The Applicant states that by using ‘music’ only in its generic sense it cannot interfere with the legitimate exercise by the Objector of its trademark rights. The question of possible interference with the rights of the Objector/Mr. Roussos/CGR E-Commerce Limited through the generic use of the word ‘music’ is further considered in respect of the eighth factor.

(vi) Whether the applicant has marks or other intellectual property rights in the sign corresponding to the gTLD, and, if so, whether any acquisition of such a right in the sign, and use of the sign, has been bona fide, and whether the purported or likely use of the gTLD by the applicant is consistent with such acquisition or use.

The Applicant acknowledges that it has no rights in the word ‘music’.

(vii) Whether and to what extent the applicant has been commonly known by the sign corresponding to the gTLD, and if so, whether any purported or likely use of the gTLD by the applicant is consistent therewith and bona fide.

The Applicant has not been commonly known as ‘music’.

(viii) Whether the applicant’s intended use of the gTLD would create a likelihood of confusion with the objector’s mark as to the source, sponsorship, affiliation, or endorsement of the gTLD.

The Objector provides information relating to the recognition and following of the LRO Trademarks in social media, and also its sponsorship and other branding initiatives in relation to the Internet and domain-related services. It makes claims of having “generated millions of dollars in revenues” through domain name related activities, but the evidence presented does not support these claims. The promotion, sponsorship and branding relied on by the Objector relates primarily to a prospective business that first requires the successful acquisition of the <.music> gTLD string.

The Panel accepts that the LRO Trademarks .MUSIC and DOTMUSIC, despite the fact that their distinctiveness as trademarks is based on graphics, are likely to be referred to by consumers and Internet users as “dotmusic”.

The <.music> gTLD string is also referred to as the “dotmusic” string.

No doubt some users will be sufficiently sophisticated to differentiate the trademarks, websites and business of Objector/Mr. Roussos/CGR E-Commerce Limited from the yet-to-be-allocated <.music> gTLD string.

Further, the Panel accepts the Applicant’s submission that the proliferation of trademarks and websites related to ‘music’ means that customers are accustomed to distinguishing between them and do not expect them to be associated with a single source.

Nevertheless, the Panel also considers that some consumers, at least initially, will be confused and consider that the business of the Objector/Mr. Roussos/CGR E- Commerce Limited is affiliated in some way with the <.music> gTLD string. This finding is not surprising as the intention of the Objector/Mr. Roussos/CGR E-Commerce Limited has been precisely to associate their intellectual property with the <.music> gTLD string that they hope to acquire.

In addition to these eight factors it is important in the current case that the Applicant proposes to use the <.music> gTLD string in relation to the promotion, sampling or purchase of music on the Internet. In other words <.music> gTLD will have a functional use to identify websites offering goods and services related to music. The Applicant therefore proposes to use the word ‘music’ in its generic sense in the <.music> gTLD string.

It is an established principle of trademark law that “a generic name is free for use by anyone when applied to the products it signifies … and can be used in its generic sense notwithstanding its registration for other products” and that “genericness is a defense to a trademark infringement action.” 1 Anne Gilson LaLonde, Gilson on Trademarks § 2.02[1] (Matthew Bender 2012). The rationales for this rule are, firstly, functional in that a generic name by definition does not distinguish the products of one supplier from another and therefore cannot act as a trademark; and secondly, economic in that “if a generic word could be trademarked by the producer of one brand of the product denoted by a word, and thus (upon proof of likely confusion) barred to use by producers of competing brands, the producer who trademarked it would have a competitive advantage that bore no relation to relative efficiency”

In his case the Objector has attempted to associate, perhaps not without some success, the LRO Trademarks and related domain name registrations with the <.music> gTLD string. One objective of the Objector has been to obtain precisely the type of competitive advantage (in this case in the application process for the <.music> gTLD string) that the doctrine of generic names is designed to prevent. However, as the Applicant proposes to use the <.music> gTLD string in a generic sense it is immune from this challenge.

The Panel now returns to address whether the potential use of the applied-for gTLD either takes unfair advantage of the distinctive character or the reputation of the registered or unregistered trademarks of the Objector/Mr. Roussos/CGR E-Commerce Limited, or unjustifiably impairs the distinctive character or the reputation of these trademarks, or whether there is an impermissible likelihood of confusion between the <.music> gTLD and these trademarks. The Panel concludes that the potential use of the applied-for gTLD in relation to the promotion, sampling or purchase of music on the Internet would not infringe the existing legal rights of the Objector/Mr. Roussos/CGR E-Commerce Limited on any these grounds.

The Panel decision is based on a consideration of all the evidence, and in particular on the following circumstances: (i) the applied-for gTLD is a common descriptive word, and the Applicant proposes to use it in its generic sense; (ii) the LRO Trademarks comprise substantial design elements and do not by themselves create any rights in word marks .MUSIC or DOT MUSIC; (iii) the Objector/Mr. Roussos/CGR E-Commerce Limited have consciously sought to associate their intellectual property rights with the applied- for gTLD string although they have no rights in that string; (iv) a trademark owner that deliberately associates its trademarks with a generic term must bear the risk of confusion resulting from the use of the term in its generic sense; (v) the risk of confusion is likely to be temporary if the Objector/Mr. Roussos/CGR E-Commerce Limited cease their efforts to associate their trademarks with the <.music> gTLD (should their efforts to obtain this string prove unsuccessful).

E. Conclusion

The Objector has not demonstrated standing to make a Legal Rights Objection.

In any event, the Panel finds the potential use of the applied-for gTLD by the Applicant would not infringe the existing legal rights of the Objector (and presumably associated parties) that are recognized or enforceable under generally accepted and internationally recognized principles of law, and in particular does not:

1. (i)  take unfair advantage of the distinctive character or the reputation of the Objector’s registered or unregistered trademarks or service marks (“marks”); or
2. (ii)  unjustifiably impair the distinctive character or the reputation of the Objector’s marks; or
3. (iii)  otherwise create an impermissible likelihood of confusion between the applied-for gTLD and the Objector’s marks.

7. Decision

For the foregoing reasons, the Panel rejects the Objection. [signed]

David J.A. Cairns