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Computer Nerds International, Inc. v. Ultimate Search [2003] GENDND 645 (23 June 2003)


National Arbitration Forum

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.

Identical and/or Confusingly Similar

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.

Rights or Legitimate Interests

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.

Registration and Use in Bad Faith

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


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