Music Site Loses Bid to Shut Down Competitor

(CN) - A San Francisco federal judge declined to grant an injunction demanded by the creators of Groovera, an online music service specializing in "chill-out music," against the similarly sounding Guvera, which offers free music downloads.

Tim Quigley and Qaz Media bought a domain name in 2005 for Groovera, which describes itself as a "multichannel web radio station specializing only in chill-out music." They say Groovera is a combination of the word groove and vera, a Latin word meaning "true" and "pure."

Groovera's mark appears on groovera.com in lowercase, half in blue, half in white, with the tagline "share the love." The site is funded by private and listener contributions.

Quigley and Qaz sued Guvera, an online music service founded in Australia in August 2008 that has been gaining traction in the United States, for trademark infringement and unfair competition.

Guvera offers free music downloads to consumers, and advertisers pay licensing fees for the music. The operation currently offers over three million songs, and is adding 100,000 songs per week, in a wide range of genres.

Guvera's founders say their business model is revolutionary, and the name of their service, paired with a red star logo, is meant to loosely reference Che Guevara, the Argentine guerilla leader.

After Groovea's founders demanded an injunction, Guvera IP, an Australia corporation, and the Delaware-based Guvera USA cross-moved for dismissal or transfer.

U.S. District Judge Charles Breyer only agreed to dismiss the Australian entity, and he declined to enjoin Guvera's continued use of the allegedly confusingly similar trade name.

Guvera's parent company, also named Guvera, has raised $20 million from investors, which would be lost if the injunction were granted, Breyer found. The download service has also negotiated contracts with large recording companies, music licensing bodies and advertisers.

Breyer said Groovera's founders did not merit an injunction since they could not convince him that their case showed a likelihood of success.

He added that the Groovera mark is neither conceptually or commercially strong since "the word 'groove' is common in music, especially in reference to the 'chill-out' music available on the Groovera site."

Since the Guvera's 130,000 subscribers, including 60,000 in the U.S., know it by that name, and Guvera spent $2 million on advertising and promotion, it has demonstrated at least equal hardship to that argued by the Groovera plaintiffs, Breyer wrote.

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