DECISION
Computer Nerds International, Inc. v.
Ultimate Search
Claim Number: FA0304000155179
PARTIES
Complainant
is Computer Nerds International, Inc.,
North Miami Beach, FL, USA (“Complainant”) represented by Adam Kriegstein Esq.
of New York, USA.
Respondent
is Ultimate Search, Central, Hong
Kong, CHINA (“Respondent”) represented by John B. Berryhill of Dann Dorfmann
Herrell & Skillman PC, Philadelphia, USA.
REGISTRAR AND DISPUTED DOMAIN NAME
The
domain name at issue is <thenerds.com>
registered with Melbourne It, Ltd. d/b/a Internet Names Worldwide, the "Domain Name".
PANEL
The
undersigned certifies that he or she has acted independently and impartially
and to the best of his or her knowledge has no known conflict in serving as
Panelists in this proceeding.
Clive
Elliott (Chair), Honorable Carolyn Johnson and David Sorkin as the Panelists.
PROCEDURAL HISTORY
Complainant
submitted a Complaint to the National Arbitration Forum (the “Forum”)
electronically on April 21, 2003; the Forum received a hard copy of the
Complaint on April 22, 2003.
On
April 30, 2003, Melbourne It, Ltd. d/b/a Internet Names Worldwide confirmed by
e-mail to the Forum that the Domain Name
is registered with Melbourne It, Ltd. d/b/a Internet Names Worldwide and
that the Respondent is the current registrant of the name. Melbourne It, Ltd.
d/b/a Internet Names Worldwide has verified that Respondent is bound by the Melbourne
It, Ltd. d/b/a Internet Names Worldwide 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
April 30, 2003, a Notification of Complaint and Commencement of Administrative
Proceeding (the “Commencement Notification”), setting a deadline of May 20,
2003 by which Respondent could file a Response to the Complaint, was
transmitted to Respondent via e-mail, post and fax, to all entities and persons
listed on Respondent’s registration as technical, administrative and billing
contacts, and to postmaster@thenerds.com by e-mail.
A
timely Response was received and determined to be complete on May 20, 2003.
An
Additional Submission from Complainant was received on May 25, 2003. It was
complete and timely.
Respondent
submitted a complete and timely Additional Submission on May 29, 2003.
On June 10,2003 pursuant to Complainant’s request to
have the dispute decided by a three-member
Panel, the Forum appointed Clive
Elliott (Chair), Honorable Carolyn Johnson and David Sorkin as the Panelists.
RELIEF SOUGHT
Complainant
requests that the Domain Name be transferred from Respondent to Complainant.
PARTIES’ CONTENTIONS
A.
Complainant
Complainant
is in the business of computer online retail and presently has two pending
trademark applications with the United States Patent and Trademark Office.
Complainant
submits that they have secured a common law trademark in the name “the nerds”
in connection with computer hardware, software and electronics.
Complainant
contends that it has common law rights in the THE NERDS mark because of its
continued use since 1998, industry reputation, sales volume and advertising
expenditures.
Complainant
has utilized the name “the nerds” since July 24, 2000 and presently, the
website, <www.thenerds.net>, receives approximately 500,000 unique
visitors per month. Sales at <www.thenerds.net> have continued since
2000. In 2002 Complainant’s gross sales
are said to have exceeded Twenty-five Million dollars and Complainant expects
to reach Thirty-five Million dollars in 2003.
Complainant
purchases its computer hardware, software and electronics from various vendors
throughout the world. As sales have
continued to grow, Complainant’s have developed well-established relationships
with many of largest companies in the industry.
Complainant
argues that Respondent’s <thenerds.com>
domain name is identical to Complainant’s THE NERDS mark because the
disputed domain name incorporates Complainant’s entire mark and simply adds the
generic top-level domain (gTLD) “.com” to the end of the mark.
Complainant
maintains that Respondent has no rights to or legitimate interests in the Domain
Name because it was registered and is being used intentionally to divert
Internet users seeking Complianant’s goods and services to Complainant’s
competitors.
Moreover,
Complainant argues that Respondent has never been commonly known by THE NERDS
or <thenerds.com>.
Complainant
asserts that Respondent’s registration and use of the Domain Name constitutes
bad faith because Respondent offers goods and services in competition with
Complainant’s.
B. Respondent
The
Respondent engages in registering common terms and phrases as domain names.
Respondent claims that it does not merely warehouse domain names, nor
does it offer domain names for sale. The Respondent states it registers
abandoned and expiring domain names on the presumption that such domain names
are no longer wanted by the prior registrant, and that any dispute over the
domain name would have been addressed during the term of prior registration.
Respondent states that upon registering abandoned domain names, which
often are made available in batches, the Respondent initially points the domain
names to a page of general-interest links. As time permits, the Respondent
subsequently configures a database used to actively generate each search page
and to associate the search terms thereof with the semantic content of the
domain name. In this instance, the Complainant is absolutely correct that upon
registration of <thenerds.com>, it was pointed to a general links page, and
subsequently configured to return search results in accordance with the term
“computers” because of the semantic association between the concepts of “nerds”
and “computers”. The Respondent denies that this action was taken on the basis
of any knowledge or intent based upon the Complainant’s business.
The Respondent derives revenue from its business model and contends it
has a legitimate expectation interest in the continuation of such revenue. The
general links, and the customised search results, are provided to the
Respondent under contract with a pay-for-placement advertising consolidator.
What the Respondent has done is to observe that the Domain Name which had been registered to a computer
service company since 1995 was due to expire. Upon expiration of the domain
name, presumably due to a cessation of operations of the prior registrant, the
Respondent re-registered the domain name and subsequently configured the domain
name to return revenue-producing links to content that is relevant both to the
domain name and to the subject matter with which the prior registrant was
concerned. It asserts that there is
nothing illegitimate about such activity.
The Respondent claims that the Complainant does not state when it
acquired the alleged categorical distinctiveness in connection with a term that
is commonly associated with technical subject matter. The phrase “the nerds” is
likely more synonymous among consumers with the 1984 motion picture “The
Revenge of the Nerds”. For the reasons discussed below, the Respondent suggests
that the complaint is something more than exaggerated in its claim to
distinctiveness in the term at issue, and certainly something less than candid.
Respondent further observes that while the Complainant seems to assert a
blanket right to the phrase “the nerds”, the Complainant chose, in its block
letter registration application, to attempt registration of
“THENERDS.NET”. While it is customary
to ignore the top-level domain designation in analyses of trademark rights in
domain names, the Complainant deliberately chose to include “.NET” in the mark
as a whole sought to be registered.
It is argued that the reason for the Complainant’s selection of “.net”
instead of “.com” is that the Complainant knew full well at the time it
registered the domain name <thenerds.net> that the “.com” version of the
domain name was already registered and in use by a senior party in connection
with computers. It notes that,
originally registered in 1995 until its expiration in August 2002, the domain
name “thenerds.com” was used by Computer Nerds Inc. of Schaumburg, Illinois.
This senior party is no relation to the Complainant, and apparently provided
consulting services in the area of computers, as indicated by its vestigial
inclusion in a directory of Chicago area computer consultants
It is pointed out that in the short time period available for the
Response, the Respondent has not yet had an opportunity to review the extent,
if any, to which the Complainant may have relied on this as a point of
distinction in overcoming the initial refusal of its application to register
“THENERDS.NET”.
Such prior registrations are said to include “THE NERDS GROUP” for
computer services, “NERDZ!” for computer hardware, and “COMPUTER NERDZ” for
computer hardware. It is suggested that
given these prior registrations, the Complainant’s claim to pre-eminence in the
use of the phrase “the nerds” can be viewed in its proper perspective.
Respondent
thus contends that Complainant has failed to establish rights in the THE NERDS
mark.
Respondent
also contends that it has rights to and legitimate interests in the Domain Name
because its business consists of the registration of abandoned and expiring
domain names, such as the subject domain name.
C. Additional Submissions
Both
parties filed additional submissions.
The Complainant
Complainant
says that it began its operation as a “brick and mortar” retail store in 1998.
In 1999, Complainant purchased, and commenced building and developing the
<thenerds.net> business. In early
2000, Complainant launched the site. It
states that the 1998 date was used for no other reason than to represent the
date on which the company started its operations in the retail computer
hardware and software industry. It thus
submits Respondent’s claim that Complainant utilized this date for other
fraudulent reasons is baseless and unsupported by evidence.
Complainant
disputes Respondent’s so called theories on why Complainant had included the
“.net” suffix and states they are based on assumptions that are not true.
Complainant
claims it did not have a problem with the previous registrant because the
previous registrant never utilized the domain name in a manner that would be
construed as infringing upon the alleged rights of the Complainant.
Finally,
it is noted that in further describing its business model, Respondent claims to
have configured <thenerds.com>
to return search results in accordance with term “computers” because of the
semantic association between the concepts of “nerds” and “computers.” Complainant contends that Respondent’s only
use comes by way of infringement upon the rights of a trademark holder and that
the term “the nerds” is a not generic, but rather a term that is unquestionably
capable of gaining trademark protection, which the Complainant has done.
The Respondent
Respondent in turn submits that in an
admission relative to the “first use” and “use in commerce” dates for its
trademark applications, the Complainant's assertions are not true.
The Respondent states that it has had no
intention of diverting the Complainant’s customers, and remains willing to
address issues of use of the Domain Name in good faith, provided an opportunity
to do so.
Finally, it suggests that even if there
is unintentional infringement of a common law trademark, the Complainant’s
failure to provide notice and to assess the results thereof is, at best,
premature. Unintentional infringement
of an unregistered trademark in the absence of notice does not rise to the
level of intentional bad faith.
FINDINGS
It is found that the Complainant has
failed to make out the grounds under paragraph 4(a) of the Policy and
accordingly the Complaint is denied.
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
cancelled or 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.
Respondent
contends that Complainant has failed to establish rights in THE NERDS mark.
Respondent proffers evidence that it filed a Request for Extension of Time to
File a Notice of Opposition to allow Respondent to gather evidence to proceed
with an opposition of Complainant’s application to the USPTO. Complainant’s pending trademark applications
do not establish its rights in the mark pursuant to Policy ¶ 4(a)(i). See Amsec Ent. v. McCall, D2001-0083
(WIPO Apr. 3, 2001) (finding that Complainant’s pending trademark applications
do not establish any enforceable rights to the mark until a trademark
registration is issued); see also Mpower
Communications Corp. v. Park Lodge Hotel, D2000-0078 (WIPO Apr. 3, 2000)
(finding that it was not clear what rights the Complainant had in its pending
U.S. trademark application, given the large number of other granted and pending
applications). Nor is the Panel
persuaded that the Complainant possesses common-law trademark rights in “the
nerds.”
We
find that Complainant has failed to show a right to the mark or name sufficient
to meet the requirements of this ground and accordingly that the ground is not
made out.
Respondent
contends that it has rights to and legitimate interests in the Domain Name
because its business consists of the registration of abandoned and expiring
domain names, such as the Domain Name.
In view of the
Panel’s dispositive finding as to the existence of trademark rights, the Panel
declines to reach a finding as to Respondent’s rights or legitimate interests. In
so doing, the Panel does not find that Respondent has established rights or
legitimate interests in the Domain Name.
Respondent
proffers evidence of prior UDRP proceedings against it where the Panel found in
its favor for the proposition that Respondent’s registration and use of the <thenerds.com> domain name does
not amount to bad faith. See Mutineer
Restaurant v. Ultimate Search, Inc., FA 114434 (Nat. Arb. Forum Aug. 23,
2002) (finding Respondent’s business practice “has not been found to be bad
faith registration or use under the UDRP unless the selection of the domain
name and the manner in which it is used are related to its correspondence to
Complainant's trademark”). In this case
the Panel is of the view that the underlying motivation for Respondent’s
registration and use of the disputed domain name is entirely unrelated to
Complainant and its claimed marks, precluding a finding of bad faith.
We
find that Complainant has failed to show the
Domain Name has been registered and is being used in bad faith, in a manner
sufficient to meet the onus under this ground. Accordingly, we find that the
ground is not made out but again the Panel does not find that Respondent has
necessarily established any lawful entitlement to the Domain Name.
In
conclusion, we find that, on balance, Complainant has failed to establish its
case, rather than that Respondent had affirmatively proved its defense.
DECISION
Having
not established all three elements required under ICANN Policy, the Panel
concludes that relief shall be DENIED.
Dated: 23 June 2003
Clive Elliott, Panelist
Honorable Carolyn Johnson, Panelist
David Sorkin, Panelist
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