I just finished reading the decision for the UDRP involving Vertical Axis Inc (VA) vs. , The University of Texas System. Very good decision. Vertical Axis Inc wins the decision.
I enjoyed reading this so much, I posted a copy of the complete decision below.
NATIONAL ARBITRATION FORUM
DECISION
Board of Regents, The University of Texas System v. Vertical Axis Inc.
Claim Number: FA1004001322040
PARTIES
Complainant is Board of Regents, The University of Texas System (“Complainant”), represented by William G. Barber, Texas, USA. Respondent is Vertical Axis Inc. (“Respondent”), represented by Ari Goldberger, New Jersey, USA.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is (the “Domain Name”), registered with Nameview Inc.
PANEL
The undersigned certify that each has acted independently and impartially and to the best of his knowledge has no known conflict in serving as Panelist in this proceeding.
Tyrus R. Atkinson, Jr., and Hon. Neil Brown, QC, as Panelists; Christopher Gibson as Presiding Panelist.
PROCEDURAL HISTORY
Complainant submitted a Complaint to the National Arbitration Forum electronically on April 29, 2010.
On May 4, 2010, Nameview Inc. confirmed by e-mail to the National Arbitration Forum that the Domain Name is registered with Nameview Inc. and that the Respondent is the current registrant of the name. Nameview Inc. has verified that Respondent is bound by the Nameview Inc. registration agreement and has thereby agreed to resolve domain name disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).
On May 6, 2010, the Forum served the Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of May 26, 2010 by which Respondent could file a Response to the Complaint, via e-mail to all entities and persons listed on Respondent’s registration as technical, administrative, and billing contacts, and to postmaster@texassports.org. Also on May 6, 2010, the Written Notice of the Complaint, notifying Respondent of the email addresses served and the deadline for a Response was transmitted to Respondent via post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts.
A timely Response was received and determined to be complete on May 26, 2010.
Complainant submitted an Additional Submission on June 1, 2010 that was deemed timely and in compliance with Supplemental Rule 7. On June 8, 2010, an additional submission of Respondent was forwarded to the panel, which had been received by the Forum in a timely manner in accordance with Supplemental Rule 7.
On June 7, 2010, pursuant to Complainant’s request to have the dispute decided by a three-member panel, the National Arbitration Forum appointed Tyrus R. Atkinson, Jr. and Hon. Neil Brown, QC as Panelists, and Christopher Gibson as the Presiding Panelist.
RELIEF SOUGHT
Complainant requests that the Domain Name be transferred from Respondent to Complainant.
PARTIES’ CONTENTIONS
A. Complainant
Complainant alleges that the Domain Name is identical or confusingly similar to Complainant’s trademarks, as well as to its website address for athletics at .
Complainant and its flagship institution, The University of Texas at Austin (“UT”), use the marks TEXAS, UNIVERSITY OF TEXAS, TEXAS LONGHORNS, LONGHORNS, and others that include these terms extensively in connection with UT’s sports teams. Complainant asserts rights in the TEXAS marks through its registrations with the United States Patent and Trademark Office (“USPTO”) (e.g., Reg. No. 1,426,639 registered on January 27, 1987). Complainant states, in particular, that the mark TEXAS (e.g., Reg. No. 1,231,407) is an incontestable registration for “Entertainment Services-Namely, Providing College Athletic and Sporting Events.” All of these registrations are on the Principal Register of the United States Patent and Trademark Office and, except for Complainant’s TEXAS LONGHORNS registrations, all are incontestable.
Complainant further explains that UT’s licensing program is highly successful. Fans of UT and its athletics programs can purchase a wide variety of licensed products adorned with Complainant’s trademarks. UT’s athletics programs have been highly successful over the years, and the name TEXAS LONGHORNS has become one of the best-known names in the world of college sports. UT holds the record for the most collegiate licensing royalties earned in a single year, and has been the top U.S. university in terms of sales of licensed products for the past four years. These products are sold throughout the United States – via retail stores, websites, and catalogs – by more than 500 licensees. Complainant highlights that FORBES recently valued UT’s football program at $119 million, ranking it as the nation’s most valuable.
Complainant states that UT uses the domain name as the primary website for its sports teams. The website at enjoys high traffic levels, averaging over 300,000 visits per month over the last year.
Complainant contends that the Domain Name is identical or confusingly similar to Complainant’s UT marks and to its athletics website address. The Domain Name incorporates UT’s TEXAS mark in its entirety, merely tacking on the term “sports,” a generic or descriptive term likely to be associated with UT and its sports teams. Complainant argues that this is particularly true considering that UT uses and heavily promotes its website at . Internet users looking for UT’s athletics page are likely to be confused if they mistakenly employ the wrong generic top-level domain (“gTLD”) (“.org” instead of “.com”) and arrive at Respondent’s website.
Complainant contends that Respondent has no rights or legitimate interests in the Domain Name. Respondent is not commonly known by the Domain Name, nor is Respondent making a legitimate noncommercial or fair use of the Domain Name. Respondent has not used, nor made any demonstrable preparations to use, the Domain Name in connection with a bona fide offering of goods or services. The Domain Name is used in connection with a parking page displaying links with titles likely to be associated with Complainant or its products and services, such as “Texas Football,” “Texas Sports,” and “College basketball,” among others. Clicking on these links diverts users to third-party websites that appear to relate to UT but are not affiliated with Complainant. For example, clicking on the link “Texas football” leads to a monetized parking page with links titled, “Texas Longhorn Football” and “Texas Longhorns Football Tickets.” These links lead to advertisers not affiliated with, and often competitive with, UT.
Complainant asserts that Respondent registered the Domain Name in bad faith. Respondent presumably is paid a fee or commission when Internet users visit the website at , click on the various links likely to be associated with Complainant, and are diverted to third-party websites. Thus, Respondent has intentionally attempted to attract, for commercial gain, Internet users to its website by creating a likelihood of confusion with the UT Marks as to the source, sponsorship, affiliation, or endorsement of Respondent’s website and/or the links displayed on Respondent’s website. Complainant contends that Respondent’s attempt to capture Internet users seeking the Complainant, who employ the wrong gTLD (“.org” instead of “.com”), is evidence of use and registration in bad faith.
UT’s attorneys sent Respondent a cease-and-desist letter on February 11, 2010. The attorney for Respondent responded, refusing to transfer the Domain Name. Complainant’s attorneys responded on April 9, 2010, refuting Respondent’s position, and again requested transfer of the Domain Name. However, Respondent’s attorney did not respond to the second letter. Instead, Complainant states that Respondent has continued its infringing activity despite being given notice of UT’s trademark rights. Not only is the Domain Name itself highly likely to cause confusion, but Respondent also displays link titles on its website and linked monetized pages that are clear references to UT and its goods and services.
Complainant states that Respondent has also engaged in a pattern of bad faith registration and use of others’ trademarks as Domain Names. Complainant cites fifteen prior UDRP decisions against Respondent and claims that these decisions show Respondent has registered domain names incorporating others’ well-known marks, in bad faith.
Respondent’s bad faith is thus evidenced by the fact that it owns no trademark or other intellectual property rights in the Domain Name; the Domain Name does not consist of the legal name of or a name commonly used to identify Respondent; Respondent has not used the Domain Name in connection with the bona fide offering of any goods or services; Respondent has made no bona fide noncommercial or fair use of Complainant’s marks in a site accessible under the Domain Name; and Respondent’s Domain Name wholly incorporates the Complainant’s TEXAS mark.
B. Respondent
Respondent argues that there is no basis for transferring the Domain Name to Complainant. Respondent emphasizes that the Complaint should be denied, firstly, because Complainant’s trademarks – none of which are for the term “texas sports” – are not identical or confusingly similar to the Domain Name. Complainant’s geographically descriptive mark for TEXAS does not give Complainant a monopoly on all terms incorporating “Texas,” the name of a U.S. state, regardless of whether the term contains a word for a good or service alleged to be covered by Complainant’s mark. Complainant’s suggestion that it has a right to the Domain Name containing the word “sports,” because its trademark covers the provision of “sporting events,” is overreaching. Complainant is essentially claiming that it is the only party entitled to use the name of the State of Texas in connection with sports or together with the word “sports.” Respondent asserts that Complainant is wrong on this. Everyone is lawfully permitted to use the name of the State of Texas in a descriptive manner, and such permitted use extends to domain names. In any event, Respondent argues that there is no confusing similarity between TEXAS and the Domain Name , based on the weakness of Complainant’s geographically descriptive mark and the narrow ambit of protection afforded as a result of that weakness. Generally, where a trademark incorporates a descriptive term, as in the present case, minor differences are sufficient to eliminate a finding of confusing similarity.
Moreover, Respondent contends that its registration of the Domain Name was in good faith and establishes its legitimate interest because “texas sports” is a geographically descriptive term, and such terms can be registered in a domain name on a first come, first-served basis. Respondent states that it registered the Domain Name because it was a geographically descriptive term to which it believed no party could claim exclusive rights. The Domain Name incorporates the descriptive term “texas sports,” which is composed of the two generic words “Texas” and “sports.” Complainant does not have a registered trademark for the term TEXAS SPORTS, but only has trademarks for the word TEXAS and other marks incorporating TEXAS.
Respondent states that it registered the Domain Name based solely on it being geographically descriptive (and not because of Complainant’s trademark), a position which is corroborated by the more than 60 other geographically descriptive domain names Respondent has registered which incorporate the name of the State of Texas, such as , , , , and . Such a pattern of registration supports Respondent’s legitimate interest.
Respondent also claims that it uses the Domain Name in a descriptive manner, hosting it with , a service which displays related pay-per-click (“PPC”) on the page such as “Texas Sports;” “Texas Football;” “Baseball schedule;” “Austin, Texas;” “Houston, Texas;” and “High School Sports.” As such, Complainant is incorrect in its allegation that such use does not constitute a bona fide offering of goods and services. The use of a domain name to post related PPC links has been found to establish a respondent’s legitimate interest under the Policy on numerous occasions, including with respect to such use of a domain name by the Respondent in this case.
Respondent further contends that it has not engaged in bad faith registration or use. Respondent affirmatively states that it registered the Domain Name because it incorporated a common descriptive term, and that Respondent had no knowledge of Complainant’s TEXAS mark when it registered the Domain Name. According to Respondent, there is absolutely no evidence Respondent registered the Domain Name with Complainant’s trademark in mind, or that it had even heard of Complainant or its trademark when it registered the Domain Name. Respondent emphasizes that Complainant has never had a registered trademark for TEXAS SPORTS. Had Respondent conducted a search at the web site of the USPTO, it would have found many trademarks incorporating the name of the State of Texas. There are currently 1,941 registered and pending U.S. trademarks which incorporate “Texas.” Respondent would have also found compelling support for its right to register the Domain Name based on its geographic descriptiveness. For example, the USPTO database identifies a trademark for TEXAS SPORTS on the Supplemental Register, which was abandoned in 1988. The fact the trademark was on the Supplemental Register is evidence that the term TEXAS SPORTS is descriptive, as only marks refused registration on descriptiveness grounds are eligible for registration on the Supplemental Register. More recently, in 2008, there was an attempt to register TEXAS SPORTS TS. The USPTO examiner again deemed the term TEXAS SPORTS to be geographically descriptive, and required the applicant to disclaim the exclusive right to use “Texas Sports.” Presently, the mark TEXAS SPORTS MAGAZINE is registered on the Supplemental Register, with “sports magazine” disclaimed. The USPTO also refused a trademark application for TEXAS SPORTS SANDS, on the grounds that the mark was geographically descriptive. Further evidence of the descriptiveness of the term TEXAS is that each of Complainant’s trademarks incorporating the word TEXAS were registered pursuant to Section 2(F) of the Trademark Act. This means TEXAS is not inherently distinctive, but Complainant’s marks were permitted because secondary meaning was alleged. The fact remains, regardless of Complainant’s trademark rights, that the term Texas as used by Respondent is the descriptive name of a U.S. state and Complainant, thus, cannot interfere with that use.
Respondent argues that Complainant does not have the exclusive right to use the term TEXAS in connection with sports, and it does not have the exclusive right to use TEXAS SPORTS, for which it has no trademark. In addition to TEXAS SPORTS MAGAZINE, there are other trademarks for the word TEXAS for goods and services related to sports, such as TEXAS BOWL and TEXAS STATE. Further evidence of Complainant’s lack of exclusive rights to TEXAS SPORTS comes from the 1.5 million third-party uses of the term evidenced by Google search results, including “Texas Sports Builder,” “Texas Sports Writers Association,” “Texas Sports Reach,” and “Texas Sports Hall of Fame.”
Respondent asserts its registration of the Domain Name was entirely in good faith. Respondent registered the Domain Name on March 4, 2006 – more than 4 years ago. Respondent urges that Complainant’s long delay in initiating this UDRP action raises the inference that Complainant did not believe Respondent had engaged in bad faith registration or use. There is no evidence that Respondent has used the Domain Name in bad faith. All links that have appeared on are auto-generated by the parking service, which utilizes a Yahoo! sponsored search feed. All of the links on the web site are related to the contextual meaning of the words in the domain name, i.e., “Texas” and “sports.” Links related to Complainant’s TEXAS LONGHORN trademark were unintended and, in any event, do not constitute a violation of Complainant’s trademarks. Links displayed for “Texan Long Horns” or “Long Horns” would naturally be expected on a web site referred to as , since the Texas Longhorns play a sport in Texas. While Respondent was not legally obligated to do so, following receipt of a cease-and-desist letter from Complainant, Respondent instructed to remove links containing the keyword “Longhorns.” This does not constitute an admission of wrongdoing under the Policy but, rather, an attempt to avoid a dispute with a trademark owner. In any event, the links were removed before initiation of these proceedings.
Respondent finally contends that it has not violated the Policy and that Complainant’s allegations constitute an abuse of the proceedings. Complainant is essentially arguing that it is the only party entitled to use the word “sports” with the word “Texas,” despite the fact that Complainant does not possess a trademark for the term TEXAS SPORTS. Complainant has used tactics that overreach the limited protection to which it is afforded in connection with its weak, geographically descriptive TEXAS mark. The fact that Complainant is located in Texas makes a finding of geographic descriptiveness irrefutable. According to Respondent, it is well-established under the UDRP that geographically descriptive trademarks do not entitle their owner to domain names containing identical or similar geographical terms. In fact, the mere registration of a geographically descriptive term, ipso facto, resolves the issues of bad faith registration and legitimate interest in Respondent’s favor. Accordingly, Respondent contends that in addition to denying the Complaint, the Panel should issue a decision finding that Complainant has engaged in Reverse Domain Name Hijacking because there is absolutely no basis for this claim and Complainant should have so known.
C. Additional Submissions
In its Additional Submission, the Complainant presses its case by reiterating the arguments presented in the Complaint and responding to Respondent’s assertions. Complainant emphasizes that the Domain Name is confusingly similar to its TEXAS trademark and that Respondent has no rights or legitimate interests in the Domain Name, which is being used to this day in connection with a search directory page displaying links with titles likely to be associated with Complainant. Complainant further stresses that, despite Respondent’s knowledge of the Complainant’s trademark rights, Respondent continues to intentionally attract, for commercial gain, Internet users to its website by creating a likelihood of confusion with the UT marks as to the source, sponsorship, affiliation, or endorsement of Respondent’s website and/or the links displayed on Respondent’s website. Finally, Complainant argues that, although Respondent contends there can be no bad faith without proof that the Domain Name was registered to profit from Complainant’s trademark rights, in this case Respondent has continued its infringing activity despite being given notice of those rights. As the owner of the infringing Domain Name, Respondent is ultimately responsible for the content on the related website and could have easily removed offending pages, but has not done so.
Respondent, in its Additional Submission, seeks to refute Complainant’s allegations. Regarding Complainant’s arguments about confusing similarity, Respondent asserts that, without an additional modifier, consumers seeing the mark TEXAS will not think only about Complainant or its mark, but will think of the State of Texas. If the word “sports” is combined with the word Texas, consumers are not likely see the term as designating Complainant’s sports. Instead, they will see it as designating sports generally in connection with the State of Texas. In this regard, Respondent emphasizes that Complainant has referred to confusingly similarity with Complainant’s domain name , but Complainant has provided no evidence of common law rights or secondary meaning in that domain name, and any such argument would be frivolous because consumers do not associate Complainant exclusively with the term “Texas Sports.” Respondent reiterates that Complainant has never filed a trademark application for TEXAS SPORTS, and the USPTO has denied other attempts to register “TEXAS SPORTS” as a trademark due to geographic descriptiveness.
Moreover, Respondent states that it has not intended for its web site to display sponsored results related to Complainant’s services. The display of the links are controlled by Yahoo!’s technology, the advertisers bidding on keyword terms, and the particular search queries conducted by users. The results shown on Respondent’s web site are the same results that are displayed across the Yahoo! network when TEXAS FOOTBALL or TEXAS SPORTS is searched for, including on Complainant’s own web page. Accordingly, Respondent’s use of the Domain Name to display PPC links related to the descriptive meaning of the Domain Name constitutes use of it in connection with the bona fide offering of goods and services, thus establishing Respondent’s rights and legitimate interest. Finally, Respondent states that it did in fact remove links to “Long Horns” and “Texas Long Horns” from its web site after it received the cease and desist letter from Complainant. Respondent concludes that it did not target Complainant’s trademarks, and the key to this case is that the Domain Name is a geographically descriptive term to which Complainant does not possess a mark that is identical or confusingly similar.
FINDINGS
Complainant is the Texas State Board established for the purpose of governing The University of Texas System, which consists of highly regarded institutions of higher education and health institutions throughout the State of Texas.
The University of Texas at Austin is the Complainant’s flagship educational institution. In addition to providing educational services, UT actively participates in many collegiate sports, including football, baseball, basketball, cross-country, golf, rowing, soccer, softball, swimming and diving, tennis, track and field, and volleyball. UT’s sports teams have been referred to as the LONGHORNS since the adoption of UT’s mascot in 1916.
Complainant owns a number of trademark registrations, including the following:
• TEXAS: U.S. Reg. Nos. 1,231,407; 1,428,420; 1,426,639; 1,421,130; 1,424,077; 1,446,255; and 1,439,917.
• UNIVERSITY OF TEXAS: U.S. Reg. No. 1,340,787.
• THE UNIVERSITY OF TEXAS: U.S. Reg. No. 1,351,805.
• LONGHORNS: U.S. Reg. Nos. 1,231,408; 1,342,737; 1,450,737; 1,452,071; 1,454,864; and 1,456,574.
• TEXAS LONGHORNS: U.S. Reg. Nos. 3,665,961 and 3,665,962.
UT uses the marks TEXAS, UNIVERSITY OF TEXAS, TEXAS LONGHORNS, LONGHORNS, and other marks that include these terms in connection with its sports teams.
UT operates a website for its athletics programs at .
The Domain Name was registered by Respondent on March 4, 2006.
DISCUSSION
Paragraph 15(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) instructs this Panel to “decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”
Paragraph 4(a) of the Policy requires that the Complainant must prove each of the following three elements to obtain an order that a domain name should be transferred:
(1) the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights;
(2) the Respondent has no rights or legitimate interests in respect of the domain name; and
(3) the domain name has been registered and is being used in bad faith.
In this case, however, the Panel considers that it need only address two of these points to reach its decision.
Identical and/or Confusingly Similar
Paragraph 4(a)(i) of the Policy is satisfied when a complainant is able to prove two necessary elements: first, that the complainant has rights in a trademark or service mark, and second, that the domain name in dispute is identical or confusingly similar to the trademark or service mark on which the complainant relies.
Here, the Panel finds that Complainant has established rights in several registered trademarks including TEXAS, TEXAS LONGHORNS, THE UNIVERSITY OF TEXAS, and LONGHORNS. However, Complainant has not specifically asserted, nor is there any evidence to suggest, that it has common law or registered trademark rights in the term “Texas Sports” or in its domain name, which is used in support of UT’s primary website for athletic activities. While the Domain Name, except for its top-level domain extension, is identical to Complainant’s domain name, the Panel finds that the Domain Name is neither identical nor confusingly similar to the trademarks on which Complainant relies in this case.
The Domain Name contains two words, “Texas” and “sports,” along with the top-level extension “.org.” Although TEXAS has been registered as a mark by Complainant, it is also a geographically descriptive term referring to the State of Texas and can be used in association with many other terms, some of which may lend a descriptive or distinctive element. For example, when combining “Texas” with the word “cities” as in “Texas cities,” the reference might be general – to the large urban centers located in the State of Texas. However, when using the term “Texas” with the word “Longhorns” as is “Texas Longhorns,” by contrast, the reference is quite specific: to Complainant’s athletic teams and their mascot. The Domain Name in this case does not contain the terms “University” or “Longhorns,” which comprise more distinctive element in Complainant’s marks and would restrict the possible reference to the Complainant. Instead, by joining the word “Texas” with the descriptive term “sports,” the impression is much closer to that created by “Texas cities.” That is, “Texas sports” refers to virtually any athletic activities regularly taking place in the State of Texas, not just to activities sponsored by Complainant. Complainant has not suggested that it has developed any secondary meaning in the phrase “Texas sports.” The Panel agrees with Respondent’s view that Internet users, upon seeing the word “Texas” in Respondent’s Domain Name in combination with the word “sports,” will read it as referencing sports generally in connection with the State of Texas, not as a term identifying Complainant or its athletic teams.
The Panel finds that where a trademark is comprised of a descriptive term, as in the present case where Complainant’s TEXAS mark also refers to the State of Texas, even small differences in the domain name might be sufficient to eliminate a finding of confusing similarity. Respondent has cited Tire Discounters, Inc. v. TireDiscounter.com, FA 679485 (Nat. Arb. Forum June 14, 2006), in which the complainant’s mark TIRE DISCOUNTERS differed by only one letter from the disputed domain name . Because the complainant’s mark was descriptive, the mark was deemed not confusingly similar to the domain name. In dismissing the complaint, the three-member panel stated: “Because the mark is merely descriptive, small differences matter. In the Internet context, consumers are aware that domain names for different websites are often quite similar and that small differences matter.” See Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1147 (9th Cir. 2002). The omission of the letter “s” from the mark is one of those small differences that matters in this context.
Here, the difference is not just a single letter, but the addition of the descriptive word “sports,” which serves to distinguish the Domain Name from Complainant’s TEXAS and other trademarks. Similarly, in Deer Valley Resort Company v. Intermountain Lodging and Reservation Center, FA 474344 (Nat. Arb. Forum June 27, 2005), the Panel determined that the complainant’s DEER VALLEY trademark was not confusingly similar to the disputed domain name, . The panel held that the respondent’s addition of the term “lodging” to the complainant’s DEER VALLEY mark in the domain name was sufficient to distinguish the domain name from the mark pursuant to Policy ¶ 4(a)(i). The Deer Valley panel also emphasized that it was guided by the principal that “the use of geographic terms as such in domain names or otherwise by third parties is generally possible despite a trademark registration,” citing Neusiedler Aktiengesellschaft v. Kulkarni, D2000-1769 (WIPO Feb. 5, 2001).
In sum, the Panel considers that consumers and Internet users understand that “Texas Sports” is a descriptive term referring to sports in Texas, and will not necessarily assume that refers to Complainant simply because Complainant owns a TEXAS mark, which covers the presentation of sporting events.
Registration and Use in Bad Faith
The Panel’s decision regarding lack of confusing similarity is further bolstered by the Panel’s finding that the Complainant failed to meet the burden of proof of bad faith registration and use under Policy ¶ 4(a)(iii).
The Panel agrees with Respondent that there is no sufficient evidence that Respondent registered the Domain Name while targeting Complainant’s trademark. The Panel is persuaded that Respondent registered the Domain Name as part of its wide-spread effort to register many geographically related domain names. The fact that Respondent continued using the Domain Name after receiving notice of Complainant’s trademark rights is not evidence of bad faith, if Respondent was entitled to use the Domain Name in the first place and used it in a manner that was not abusive, which is the case here. Because the Domain Name is comprised of common descriptive terms, the Respondent was free to register and use them, so long as Respondent did not target the Complainant or its trademarks. See, e.g., Zero Int’l Holding v. Beyonet Servs., D2000-0161 (WIPO May 12, 2000) (“Common words and descriptive terms are legitimately subject to registration as domain names on a ‘first-come, first-served’ basis.”).
Reverse Domain Name Hijacking
Respondent contends that, in addition to denying the Complaint, the Panel should issue a decision finding that Complainant has engaged in Reverse Domain Name Hijacking because there is no basis for the Complainant’s claim and Complainant should have known this.
Paragraph 15(e) of the Rules requires the Panel to declare that the Complaint was brought in bad faith and as an abuse of the administrative proceeding if it finds that the Complaint was brought in bad faith, for example in an attempt at Reverse Domain Name Hijacking or primarily to harass the domain name holder.
Thus, the Panel is required to form an opinion on the motivation of the Complainant in bringing the Complaint.
In the opinion of the Panel, the Complainant, at the time it filed the Complaint, was entitled to have regard to the fact that it had trademark rights in the term TEXAS, which comprised part of the Domain Name, covering college athletic and sporting events.
In addition, as the Complainant focused its case on Respondent’s use of the Domain Name in connection with a pay-per-click landing page site, it was entitled to have regard to the fact that there are numerous UDRP decisions in which such use by a respondent has been found to constitute bad faith use, particularly when the complainant has a distinctive trademark and has been targeted by the respondent.
The other factor that must be taken into account is that sometimes, in such cases, there is information in the possession of the respondent and it is not until the Complaint is filed and the respondent puts in its submission that the panel finds that the respondent has a clear-cut defence and finds in its favour, as the panel has found in the present case.
Accordingly, having regard to all the circumstances in the present case, although the Panel has found that the Domain Name is not confusingly similar to Complainant’s trademarks and that the domain name was not registered and used in bad faith, the Panel finds that this is not a case of Reverse Domain Name Hijacking.
DECISION
For all the above reasons, and having failed to establish all three elements required under the ICANN Policy, the Panel concludes that relief shall be DENIED.
Christopher S. Gibson, Panel Chair
Neil Anthony Brown, Honorable Tyrus R. Atkinson, Jr., Esq., Panelists
Dated: June 25, 2010
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Nat Cohen is a long time domainer who specializes in generic domains. This post, which Nat prepared, is one that is important to all domain owners.
About Nat – He has built up many of his Properties including OceanCity.com and Maryland.com. He lives with his wife and family in Washington DC. Nat is a longtime friend.
A Problem at the Core of the Internet
Those who care about the development of the Internet should pay attention to a problem festering at its core. Domain names, the building blocks of the Internet, are governed by such a flimsy, easily-abused set of rules that ownership rights in domain names are not secure. This problem affects both those within and outside the domain industry.
“Going Rogue”
Domains are the only asset class where owners are required to subject their ownership rights to cancellation by an arbitration panel. The poorly paid, loosely accredited arbiters who decide these cases are guided by a vague set of rules, the Uniform Dispute Resolution Policy or “UDRP”. There is no procedure for reviewing the decisions of the arbiters to ensure that the decisions comply with the guidelines. Arbiters enjoy free rein in interpreting the rules as they see fit and can act with impunity.
Most arbiters are sincere, fair-minded, hard-working, distinguished legal professionals who make a genuine effort to carefully and faithfully apply the UDRP rules. Yet their good work is undermined by weak procedural safeguards that allow a minority of arbiters to mishandle the power entrusted to them to order the cancellation of a registrant’s rights to a domain name and the transfer of that domain name to a new owner for the flimsiest of reasons.
Individuals and small businesses are losing their long-held domains in arbitration to covetous newcomers who are not entitled to them. Last year a Korean dentist lost opendental.com to a company that did not exist at the time he initially registered the domain. A technology enthusiast recently lost parvi.org to the City of Paris in spite of the arbiter finding that there was no evidence that he registered the domain in bad faith and despite of his clear legitimate use of the domain to promote new software he was developing.
‘Fox Guarding the Henhouse’
Arbiters are selected by providers of arbitration services, primarily WIPO and NAF, and the arbitration venue is in turn selected by the Complainant. WIPO and NAF are competing in the marketplace to offer services to their customers. The customers they are catering to are people or businesses who want domains transferred to them.
WIPO and NAF offer seminars on how to succeed at a UDRP. They offer pre-written complaints where the arguments are made for the complainant and all the complainant has to do is fill in the blanks. They develop supplemental policies heavily tilted in favor of the complainant governing the timing and admissibility of initial and follow-up submissions. A new entrant, the Czech Arbitration Court, has offered to aggressively lower the cost of a complaint to attract Complainants raising the question as to the quality of the panelists willing to work on an assembly line system churning out mass produced decisions at the lowest cost. One of the original arbitration providers, eResolution, stopped offering arbitration services after complaining that WIPO created a perception in the marketplace that Complainants were more likely to win cases at WIPO than at eResolution which led to a steep drop in the number of Complainants who selected eResolution as an arbitration venue. The NAF has been found to be biased in favor of credit card companies and has been banned from deciding credit card disputes, yet ICANN still empowers them to decide domain name arbitrations. Competitive pressures will increasingly push the arbitration venues to lower standards and to adopt ever more pro-Complainant policies, or see themselves shut out of the market.
These problems are not new. The ‘systematic unfairness in the ICANN UDRP’ was detailed in a thoroughly researched paper by Professor Michael Geist published in — 2001. One promising idea to reduce bias is to randomly assign cases to the different arbitration bodies. Yet no concerted effort has been made to correct the problem of bias and now, ten years after the introduction of the UDRP, the problem is as bad as it has ever been.
Mission Creep
The UDRP was intended to deal with clear cases of cybersquatting. Over time, due to panels willing to accommodate aggressive complainants, the standard is moving closer to ‘use it or lose it’ where panelists will order the transfer of a domain to whom they believe to be the “more deserving” party. Arbiters are issuing decisions stating to the Respondent, in essence, ‘you knew that the Complainant had a good use for the domain and you weren’t using it, so your continuing to hold and renew the domain is evidence of bad faith’. This line of reasoning was used in ordering the transfer of OpenDental.com, as mentioned above, and DKB.com, where one bank had stopped using a domain that another bank wanted.
The NAF acknowledged this broadening of the scope of the UDRP in a comment letter:
Panelists have taken the opportunity, over time, to agree with those complainants and broaden the scope of the UDRP, but it started out as a mechanism only for clear cut cases of cybersquatting.
The erosion of the original UDRP protections are decried by panelist Diane Cabell in a dissent:
Today, many panels will find proof of all three of the Policy’s elements simply from the existence of a mark of any kind with arguments that any mark is by definition identical or confusingly similar, that any use by any party other than a mark owner can only be illegitimate, and that bad faith necessarily exists if there is no legitimate interest.
That takes us back to the beginning, which I find disheartening.
The combination of the broader scope of the UDRP and arbiters who freely reinterpret the UDRP guidelines are putting at risk generic domains that were registered with no bad faith intent. The levees have been breached and many previously protected domains will be washed away in a flood of speculative UDRP complaints.
Bad Faith
Absent a finding of bad faith, a panelist may not order the transfer of a domain name. Most UDRP disputes turn on whether the registrant exhibited bad faith in her registration and use of the disputed domain. Bad faith is a question of intent. To determine bad faith requires looking into the soul of the person who registered the domain to determine her intention at the time of registration – which may have occurred a decade prior to the UDRP proceeding. UDRP proceedings are particularly ill suited for determining ‘bad faith’ as the evidentiary record is so slight. There is no opportunity for discovery, to examine witnesses under oath, or similar fact finding powers that are available in a court trial.
Often the only evidence supporting a finding of bad faith are ad links provided by a third party to whom the domain has been licensed. Arbiters will rely on the existence of these links to make the ‘reasonable inference’ that the original intention of the domain owner in registering a valuable generic domain years earlier was primarily to profit from such links, even though the links may have first appeared years after the original registration. On such reasoning valuable generic domains that have been held for years without problem are suddenly lost.
Anything.com has one of the best generic portfolios in the world. They have been registering generic domains since at least 1997 and registered flamingo.com in 1998 before monetization of domains through pay-per-click advertising had gotten off the ground. Four years later in 2002, the Flamingo Hotel in Las Vegas filed a UDRP objecting to links on the parking page at flamingo.com. In spite of Anything.com’s arguments that they registered flamingo.com simply because it was a generic domain, and in spite of one panelist’s dissent that the links did not prove that the domain was registered in bad faith four years earlier, the other panelists determined the links “to more than adequately support an inference regarding Respondent’s intention on registering the disputed domain name”. The Flamingo Hotel won.
In a more recent example, Bigfoot Ventures, a company with far-flung media interests, purchased several three-letter dot-com domains from BuyDomains in May 2008. BuyDomains had owned many of these domain for several years prior to the sale. At the end of May 2008, the same month that Bigfoot had acquired the domains and before it had even switched the hosting for the domains, Bigfoot was hit by a UDRP Complaint. The Complainant was a Mexican Airline known by the initials VTP and the domain the airline wanted was vtp.com. The arbiter found that the presence of advertising links on the webpage that predated Bigfoot’s purchase of the domain was evidence of Bigfoot’s bad faith. Shortly after Bigfoot spent $40,000 to acquire vtp.com, the panelist ordered its rights to the domain canceled and the domain transferred to the Mexican airline.
Cases like these show how valuable generic domains can be lost due to dubious reasoning resting on the slimmest of evidence.
‘Punishment fit the crime’
The only remedy available through the UDRP is draconian – the cancellation of all rights to the domain, usually combined with the order to transfer the domain to the complaining entity. There is no option available to allow the domain owner to cure any problem, no option to pay a monetary penalty, no temporary loss of use. The only penalty, no matter how minor the injury done, or even when there is no injury, is the utter loss of rights in the domain.
A thought experiment using a brick and mortar example may help clarify the situation. Imagine a longtime lot owner whose landscaping company plants a sign on her property that might violate the Home Owner Association (HOA) rules of her community. Then imagine that when the neighbor living in the house adjacent to the lot complains, the HOA transfers ownership of the lot to the neighbor with no compensation due to the lot owner. Far fetched? Similar outcomes are occurring regularly under the UDRP.
Admittedly this example is not that accurate. To make it more accurate the neighbor would choose the person deciding whether the sign violated the HOA rules from several people each of whom promotes himself as being more Complainant friendly than the previous one. Further, the HOA would make no effort to police the arbiters to ensure that they are actually deciding cases according to the HOA rules. Now you have a more accurate model of how the UDRP operates.
Would you want to live and invest in this neighborhood? Of course not. This would be the last place you would want to put your money.
The Morality of Speculation
Certain panelists appear to view investment in domain names as inherently bad faith. Their perspective appears to be that any value associated from an undeveloped domain must be due to a parasitic attempt to profit from the legitimate development activity of others. Therefore in a dispute where the Complainant is actively making use of a term while the Respondent is merely parking a domain similar to that term, then the inference is drawn that the parking activity is a bad faith attempt to profit from the Complainant’s business activities. The panelists who hold this view do not appear to give credence to the possibility that domains have inherent value due to their generic meaning, or that these generic domains will attract direct navigation traffic.
This view is articulated in the dissent in the Geometric.com case (in which I was the Respondent). In the panelist’s words:
Respondent engages in the business strategy of choosing words or phrases commonly used in commerce…
The majority opinion concludes that the Respondent did not have actual knowledge of this specific Complainant at the time Respondent registered the Disputed Domain Name and that any subsequent actions of Respondent are irrelevant. No consideration has been given to the artful strategy underlying Respondent’s activities.
Unfortunately, I cannot join my distinguished colleagues in approving Respondent’s actions without an analysis focusing on the underlying strategy.
I understand this panelist’s position to be that if the underlying strategy is to speculatively register domains with the intent to profit – in general – from the value created by others, then the strategy employed is illegitimate and the registration is fundamentally in bad faith – irrespective of the specific facts of the particular case. Should the registration be challenged in a UDRP by a company making commercial use of the term on which the disputed domain is based then the domain registration must be canceled – not because the registration targeted the particular Complainant in bad faith, but because the strategy of speculative registration is itself evidence of bad faith.
This view undermines the entire industry that has been built around investment in domain names. If domain names are not viewed as having inherent value, then any speculative registration must be an attempt to profit from value created by others. In this view, every speculative registration is in bad faith and must be canceled by any party who meets the test of having a common law or registered trademark that is similar to the domain name.
This position has a moralistic tone. Speculation is evil is the underlying moral principle. This view allows panelists to cast themselves as modern-day Robin Hoods, wresting a domain from the clutches of greedy speculators to deliver it safely into the hands of an upstanding business that can put the domain to honest, productive use.
Speculation draws criticism wherever it occurs whether the market is foreign currency, stocks or domain names. Speculation serves a purpose in keeping the markets for oil, gold, pork bellies and other commodities fluid and in setting prices so that farmers and natural resource companies can sell on the futures market goods that don’t yet exist and thereby obtain a steady, predictable income while transferring all the risk to the speculators.
The critics overlook that investment and speculation are often the first stage of development. Before a city exists someone has to own the land. Someone has to take their hard earned cash and speculate that the raw land will someday be worth something. Then someone else will speculate that people will want to live in that location and will buy the land, subdivide it, clear the land, and put in roads and utilities. Then builders may come to build homes ‘on spec’ – on speculation – and build a house with no guaranty of a sale in the hopes that someone will want to live there. The city that eventually grows on what was once raw land would never have existed if it hadn’t been for speculative activity at every stage of development.
In the early days of the Internet, speculators depleted their savings to spend tens or hundreds of thousands of dollars on new-fangled intangible things called domain names that most people thought were worthless. They paid millions of dollars to the domain registry and registrars who in turn used that money to strengthen the infrastructure of the Internet and to market the benefit of domain ownership and to promote the advantages of doing business online. To meet the demand created by the early investors, tools were developed to simplify web site building and to ease the transition of commerce to the Internet. The critical mass of domain ownership made possible by the purchases of speculators jump started the Internet economy. The speculators that risked their life savings because of their faith in the future of the Internet are now losing what they risked so much to acquire due to certain arbiters who view speculation as illegitimate.
Conclusion
The entire system, from the lack of oversight from ICANN, to the pro-Complainant bias exhibited by WIPO, NAF and the other arbitration providers, to panelists who substitute their personal views for the agreed language of the UDRP, fails to protect the domain owner and leads to loss of confidence in ownership rights on the Internet. The combined actions, and inaction, of these groups are like termites eating away at the foundation of a house. If left uncorrected, the house will collapse. The growth of the domain industry requires stronger protection of domain name registration rights.
Acknowledgements
This article is largely based on original research and revealing articles by Andrew Allemann at DomainNameWire.com and Mike Berkens at TheDomains.com. The ideas in this articles are not original and have been stated in one form or another by many different people, in a variety of venues, over many years. Jeremiah Johnson and Phil Corwin at the ICA are battling huge odds to protect the interest of domain owners. Several lawyers are on the front lines representing domain owners in UDRP disputes, among them Ari Goldberger, John Berryhill, Paul Keating, Brett Lewis, Stevan Lieberman, and Zak Muscovitch. Thanks to Larry Fischer for the opportunity to post here. A big thank you to the dedicated panelists who do their best to maintain the integrity of the UDRP process and who deliver fair, well-reasoned decisions.