WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
The Vanguard Group, Inc. v. Emilio Sa
Case No. D2001-1453
1. The Parties
1.1 The Complainant in this administrative proceeding is The Vanguard Group, Inc. ("Vanguard"), a corporation organized and existing under the laws of Pennsylvania having a place of business at 100 Vanguard Boulevard, Malvern, PA 19355, U.S.A.
1.2 The Respondent in this administrative proceeding is, according to the WHOIS database for Register.com, Inc., Emilio Sa, Fuente de Medusa #30, Tecamachalco, Naucalpan, Edo. de Mexico, 53950.
2. The Domain Names and Registrar
2.1 The Domain Names, the subject of this dispute, are <vanguardfund.com>, <vanguardfund.net>, <vanguardfunds.net>.
2.2 The Domain Names are registered with Register.com, Inc., 575 Eighth Ave., 11th Floor, New York, NY 10018, U.S.A.
3. Procedural History
3.1 The Complaint was filed electronically on December 27, 2001 and in hard copy on December 13, 2001.
3.2 The Complainant elected to have the dispute decided by a single-member Administrative Panel.
3.3 No legal proceedings have been initiated, as yet. (Rules for Uniform Domain Name Dispute Resolution Policy ("Rules"), paragraph 3(b) (xi)).
3.4 As required by the Rules and the WIPO Supplemental Rules, payment in the amount of USD 1,500.00 has been made, payable to World Intellectual Property Organization.
3.5 The Complainant agreed that its claim and remedies concerning the registration of the Domain Name, the dispute, or the disputeís resolution shall be solely against the Domain Name holder and waives all such claims and remedies against (a) the WIPO Arbitration and Mediation Center and Panelists, except in the case of deliberate wrongdoing, (b) the concerned Registrar, (c) the Registry Administrator, (d) the Internet Corporation for Assigned Names and Numbers, as well as their directors, officers, employees and agents.
3.6 On December 21, 2001, the WIPO Arbitration and Mediation Center ("the Center") transmitted via e-mail to, a request for registrar verification in connection with this case and on December 21, 2001, the Center received a verification response confirming that the domain names are registered with Register.com, Inc., and that the Registrant for the domain name is the Respondent.
3.7 The Respondent sent the Response by e-mail on February 7, 2002, and by hardcopy on February 12, 2002.
3.8 The single Panel member, Cecil O.D. Branson, Q.C., submitted a Statement of Acceptance and Declaration of Impartiality and Independence and was duly appointed on February 25, 2002, in accordance with paragraph 15 of the Rules. The Panel was required to forward its decision to the Center by March 11, 2002, however this had to be extended due to procedural matters dealt with below.
3.9 The Panel finds that it was properly constituted and appointed in accordance with the Rules and the Supplemental Rules.
4. Factual Background
4.1 The Complainant in this administrative proceeding has made the assertions, without challenge, that it is a mutual fund company that has for many years been engaged in providing financial investment and financial advisory services, and finance and investment-related products and services ancillary thereto, and has built a large business in connection therewith. It says that it currently manages a portfolio of over $550 billion in assets and is one of the leading investment companies in the United States and the largest no-load mutual fund company in the world.
4.2 The Respondent in this proceeding is Emilio Sa, of Fuente de Medusa #30, Tecamachalco, Naucalpan, Edo. de Mexico, 53950.
4.3 Vanguard has used since at least as early as 1974, and is currently using, "VANGUARD" as a mark and as a component of marks for a variety of financial products and services (collectively " 'VANGUARD' Marks", unless otherwise indicated). The "VANGUARD" mark is registered on the Principal Register in the United States Patent and Trademark Office for "fund investment services" as Registration No. 1,784,435 issued July 27, 1993. In addition, Vanguard is the owner of marks relating to its various mutual funds for fund investment services: U.S. Registration Nos. 1,814,036 for "VANGUARD FUND EXPRESS"; 1,997,410 for "VANGUARD TAX-MANAGED FUNDS"; 2,048,188 for "VANGUARD HORIZON FUNDS" and 2,133,582 for "VANGUARD ADMIRAL FUNDS." Copies of U.S. Registration Nos. 1,784,435; 1,814,036; 1,997,410; 2,048,188 and 2,133,582 were attached as annexes to the Complaint.
5. Partiesí Contentions
(In its own words)
5.1 For many years, Vanguard has maintained and continues to maintain and operate a website featuring financial investment and financial advisory services with the domain address of <www.vanguard.com>. Vanguardís website provides access to financial services to its institutional and individual investors in addition to financial and business information to the non-investor public at large. The Vanguard.com website contains a section called "Vanguard Funds" which provides investment information on over 100 of Vanguardís mutual funds. The Vanguard.com website won top honors in Forbes' 2000 "Best of the Web" issue. Accordingly, the Vanguard.com website generates a tremendous amount of visitor traffic. Copies of printouts from the Vanguard.com website are attached to the Complaint.
5.2 The Complainant asserts that in light of its business, "VANGUARDFUNDS.NET" is an intuitively likely way to reach a website operated by Vanguard. Vanguard recently discovered that if users typed in "Vanguardfunds.net" as an Internet domain name, they would be informed that a website was "COMING SOON!" Copies of printouts from the VANGUARDFUNDS.NET website were attached to the Complaint.
5.3 Complainant obtained the contact information for the owner of the VANGUARDFUNDS.NET domain name registration from the WHOIS database of Register.com, Inc. and sent a letter to the owner of the domain name registration (the Respondent in this action) via electronic mail on November 5, 2001. The communication informed Respondent that his registration of the VANGUARDFUNDS.NET domain name violated Complainantís rights in its "VANGUARD" trademark under United States law. Complainant demanded that Respondent promptly transfer the VANGUARDFUNDS.NET domain name registration to Complainant. The series of electronic mail communications exchanged between Complainant and Respondent regarding the possible transfer of ownership of the domain name are as follows:
- On November 5, 2001, Complainant received an electronic mail response to its letter from Respondent. Respondent stated "I did register Vanguard over a year ago because I like the name. I leave [sic] in Mexico and I did not have any idea of your funds and I am not interested in causing problems. I have already paid for 2 years for this name and I will gladly transfer it to you if your company is willing to pay for them."
- On November 6, 2001, Complainant responded that it would reimburse Respondent for out of pocket costs, namely, the two years of registration fees paid to Register.com, Inc. (US$70). Respondent responded the same day stating that he wanted "to sell the name but at a price of US$2,500.00."
- On November 16, 2001, Complainant responded, stating that Respondentís offer to sell the VANGUARDFUNDS.NET domain name for US$2,500 was excessive and offered US$250 in an effort to resolve the dispute without filing a complaint with ICANN under the UDRP. Later that day, Respondent replied that "I know my rights because I have not used the Vanguard names, I could not have misused them, so I know where I am standing. I am not trying to take any advantage but I feel the name is worth what I am asking for (US$2,500.00)."
- On November 19, 2001, Complainant increased its offer to purchase the VANGUARDFUNDS.NET domain name to US$500.
- On November 21, 2001, Respondent stated that he was willing to reduce the price of the domain name to US$1,950 and "[y]ou know that using lawyers will cost you more than what I am asking for the name, and I can assure you that it will be very difficult for your company to win this case, because as I told you before I have NOT used or misused your name and that is a key point to this matter." Later that day, Complainant acknowledged its appreciation of Respondentís willingness to negotiate and requested that Respondent significantly reduce his price for the VANGUARDFUNDS.NET domain name. Otherwise, the matter would be turned over to Complainantís outside counsel and an ICANN complaint would be prepared and filed. A few hours later, Respondent stated that he would accept US$1,500 as his final offer in exchange for the VANGUARDFUNDS.NET domain name.
- On November 29, 2001, Complainant doubled its previous offer to Respondent and stated it would pay US$1,000. Later that day, Respondent stated that his last offer remained at US$1,500.
- On November 30, 2001, Complainant accepted Respondentís offer to sell the VANGUARDFUNDS.NET domain name for US$1,500 and commenced the transaction using the transfer and payment services available through Escrow.com.
- Minutes later, the Respondent (as the Complainant puts it) "quite conveniently" revealed to Vanguard that he was also the owner of two other domain name registrations that may be of interest to Vanguard: VANGUARDFUND.COM and VANGUARDFUND.NET. This was the first mention of Respondentís ownership of the two other domain names to Vanguard and he offered to sell the VANGUARDFUND.NET domain name for an additional US$1,500 and the VANGUARDFUND.COM domain name for an additional US$3,000.
- On December 4, 2001, Respondent informed Vanguard that he needed to know whether it was interested in purchasing the domain names because another party offered him US$10,000 for all three of the VANGUARDFUNDS.NET, VANGUARDFUND.NET and VANGUARDFUND.COM domain names.
- On December 5, 2001, Vanguard stated to the Respondent that it was under the impression that an agreement was reached regarding the transfer of the VANGUARDFUNDS.NET domain name and that it was no longer subject to negotiation. Accordingly, Vanguard requested confirmation of Respondentís intent to transfer the VANGUARDFUNDS.NET domain name to Vanguard in exchange for US$1,500. A few hours later, Respondent replied that the offer from the other party was for all three domain names and Respondent was willing to sell the domain names to Vanguard instead. That same day, in an attempt to clarify its request, Vanguard reiterated that it wanted to confirm that there was an agreement with respect to the transfer of the VANGUARDFUNDS.NET domain name only. Respondent immediately responded that he would honor the agreement only if Vanguard purchased all three domain names.
- On December 7, 2001, Vanguard terminated its transaction to purchase the VANGUARDFUNDS.NET domain name through Escrow.com. Later that day, Respondent stated that he assumed Vanguard was not interested in the domain names and indicated that he was going forward in selling all three domain names to another party.
5.4 Copies of the electronic mail correspondence referred to above were attached to the Complaint.
5.5 The Domain Names are Confusingly Similar to the "VANGUARD" Trademark
Complainant asserts that Respondentís <vanguardfunds.net>, <vanguardfund.net> and <domain names> incorporates Vanguardís "VANGUARD" mark in its entirety. The generic terms "FUND" and "FUNDS" do not operate to indicate source. See Maruti Udyog Limited v. Maruti Software Private Limited, ICANN Case No. D2000-1038. Accordingly, the domain names are confusingly similar to Vanguardís several registered marks as noted herein.
5.6 Respondent Has No Legitimate Interest in <vanguardfunds.net>, <vanguardfund.net> and <vanguardfund.com>
Respondent has no legitimate interest in or business purpose for the domain names <vanguardfunds.net>, <vanguardfund.net> and <vanguardfund.com>. Respondent has no trademark rights in "VANGUARD". Respondent parked the domain names, so that the Infringing Domain Names do not resolve to any content besides a message that a website is coming soon. People who may access the Infringing Domain Names in an attempt to reach Vanguardís site may incorrectly believe that Vanguardís website is not functioning.
5.7 <vanguardfunds.net>, <vanguardfund.net> and <vanguardfund.com> Have Been Registered and Used in Bad Faith
The <vanguardfunds.net>, <vanguardfund.net> and <vanguardfund.com> domain names should be considered as having been registered and used in bad faith for the following reasons:
Respondent had constructive notice under 15 U.S.C. ß 1072 that the "VANGUARD" mark and the other marks relied on by Complainant were registered marks.
By registering <vanguardfunds.net>, <vanguardfund.net> and <vanguardfund.com>, Respondent has precluded Vanguard from using its mark in the corresponding domain names.
Vanguard has not agreed or consented to Respondentís use or registration of domain names containing its mark. Respondent does not have the authority or license to use the "VANGUARD" mark from Vanguard.
Respondent is not using the domain names in a non-commercial "fair-use" manner.
Respondent has offered to sell the Infringing Domain Names to Vanguard at prices that well exceed the costs incurred in the registration of the Infringing Domain Names. Following U.S. case law and UDRP precedents, Respondentís offer to sell the domain names constitutes use of the domain names in commerce and meets the use requirement of the UDRP. See Panavision International, L.P. v. Dennis Toeppen, et al., 141 F.3d 1316 (9th Cir. 1998); World Wrestling Federation Entertainment, Inc. v. Michael Bosman (WIPO Case No. D1999-0001); Educational Testing Serv. v. TOEFL, (WIPO Case No. D2000-0044); Jordan Grand Prix Ltd. v. Gerry Sweeney, (WIPO Case No. D2000-0233); Capcom Co. Ltd. and Capcom U.S.A. Inc. v. Dan Walker, (WIPO Case No. D2000-0200).
Respondentís failure to use the domain names weigh in favor of finding bad faith, as does Respondentís refusal to transfer or cancel the domain names in the face of Vanguardís clear objection. Administrative panels have previously indicated that the Policy does not permit speculative registration of a domain name that is the trademark of another without a demonstrable plan for bona fide use of the domain name, J. Crew Int'l, Inc. v. crew.com, ICANN Case No. D2000-0054, ß 6, and inactivity by a registrant can amount to bad faith use of a domain name. See Telstra Corp. v. Nuclear Marshmallows, ICANN Case No. D2000-0003, ß 7.9. see also Do The Hustle, LLC v. Donald Wilson, ICANN Case No. D2000-0627; Ingersoll-Rand v. Frank Gully, d/b/a Advcomren, ICANN Case No. D2000-0021; Guerlain, S.A. v. Peikang, ICANN Case No. D2000-0055; Compaq Computer Corp. v. Boris Beric, ICANN Case No. D2000-0042; Association of British Travel Agents Ltd. v. Sterling Hotel Group Ltd., ICANN Case No. D2000-0086; Sanrio Co. Ltd. and Sanrio, Inc. v. Lau, ICANN Case No. D2000-0172; 3636275 Canada, dba eResolution v. eResolution.com, ICANN Case No. D2000-0110; Marconi Data Systems, Inc. v. IRG Coins and Ink Source, Inc., ICANN Case No. D2000-0090; Stralfors AB v. P D S AB, WIPO Case No. D2000-0112; InfoSpace.com, Inc. v. Ofer, ICANN Case No. D2000-0075.
5.8 In sum, the VANGUARDFUNDS.NET, VANGUARDFUND.NET and VANGUARDFUND.COM domain names complained of herein are confusingly similar to the "VANGUARD" marks in which Vanguard has rights. Respondent has no rights or legitimate interests in the VANGUARDFUNDS.NET, VANGUARDFUND.NET, VANGUARDFUND.COM domain names. Vanguard has not agreed or consented to Respondentís use or registration of domain names comprising its mark. The domain names were registered and have been used in bad faith. Vanguard has satisfied its burden under the Policy in establishing bad faith use and registration of VANGUARDFUNDS.NET, VANGUARDFUND.NET and VANGUARDFUND.COM and is accordingly entitled to the relief requested.
5.9 The remedy requested by the Complainant was that the Administrative Panel appointed in this administrative proceeding issue a decision that the contested Domain Names be transferred to the Complainant.
(In its own words)
5.10 Complainant Has No Legitimate Interest
The disputed domain names VANGUARDFUND.COM, VANGUARDFUND.NET and VANGUARDFUNDS.NET, are compound words composed by the conjunction of two element words: VANGUARD and FUND or its plural FUNDS. Both elements are common words that are not meant to be covered by the Policy, since they are generic and referable to businesses or projects of different nature than the Complainantís, and consequently are excluded from protection by trademark laws, and were specifically registered by Respondent as compound words functioning as single words.
On the other hand, the marks registered by Complainant on the Principal Register in the United States Patent and Trademark Office, under U.S. Registration Nos. 1,814,036; 1,997,410; 2,048,188 and 2,133,582, that covers the marks "VANGUARD FUND EXPRESS", "VANGUARD TAX-MANAGED FUNDS", "VANGUARD HORIZON FUNDS" and "VANGUARD ADMIRAL FUNDS", are simply irrelevant to the matter discussed, since all of them comprise the common words VANGUARD and FUND or its plural FUNDS, that are used separately by Complainant and not as compound words.
As a result, Respondentís registered domain names are compound words (just one word) and Complainantís registered marks are separate words (different words).
To accept any other criteria would simply mean to accept the protection of marks or domain names comprised of any other combination of separate words that the Complainant uses, such as Fund Express, Admiral Express, Tax-managed Funds, etc.
Furthermore, Complainant fails to prove the existence of any registered mark named VANGUARDFUND or VANGUARDFUNDS, as a compound word, which leads to the conclusion that Complainantís only allegedly legitimate interest is the existence of a section in its web site called "Vanguard Funds", composed of separate words simply used as a describing section and not as a domain name in itself.
Thus, the term Vanguard Funds used by Complainant to describe its section is just generic and does not function as a mark and therefore is not protectable (See http://www.wipo.int/amc/en/domains/decisions/html/2000/d2000-0407.html), since it is not even a registered domain name.
5.11 Respondent Has Not Used The Disputed Domain Names In Bad Faith
Complainant provides no evidence at all to back up his assertion that VANGUARDFUNDS.NET is "a intuitively likely way to reach" Complainantís web site, which is totally false and is proven by the very first electronic mail communication of Respondent to Complainant on November 5, 2001, where he states "ÖI did not have any idea of your funds and I am not interested in causing problems."
As well, it is important to mention that Complainant does not operate in Mexico and is totally unknown there, nor does it have any direct subsidiary or branch in the country where Respondent resides, nor has Complainant proven that owns [sic] a registered company or mark in that country. Consequently Respondent has a complete and legitimate right to operate any Mexican company or to register in its favor any company or mark with a name comprising the generic words VANGUARD, FUND or FUNDS, as compound words, since that register and/or operation does not violate any commercial or financial interest of Complainant.
Thus, if Respondent did not even know of the existence of a company named Vanguard or the nature of the businesses conducted by Complainant, and Complainant does not have any kind of operation in Mexico, it is evident that Respondent registered the disputed domain names without the intention to sell them to Complainant or to make an illegitimate profit with them.
Furthermore, Respondent never communicated to Complainant any offer for the disputed domain names, but two years after registration by Respondent, it was Complainant who contacted Respondent to first demand the transfer of the domain names and after that, entered into a bargain process with Respondent for such transfer.
- Respondent did not register the disputed domain names with the primary intention to sell them to Complainant, since Respondent was not even aware of the existence of Complainant.
- Even accepting that Respondent and Complainant entered into a commercial transaction to transfer disputed domain names by a sum exceeding the out-of-pocket costs of Respondent, such circumstance is not to be qualified as cybersquating since it has to be simultaneously proved that Respondent registered the domain names with the primary intention to sell them, which is not the case, as stated.
- The bargain process conducted between Respondent and Complainant for the transfer of the disputed domain names constitutes a acknowledgment by Complainant of Respondentís rights over the domain names, so the filing of the complaint by itself constitutes a violation of Complainant to the general principle of law "nemo auditur turpitudinem allegans" (the own faults cannot be alleged in own benefit).
Since Respondent did not know of the existence of Complainant, it is impossible that Respondent attempted to disrupt the business of Complainant or that he intentionally tried to attract Internet users for the purpose of commercial gain.
a. Although the disputed domain names share with the marks registered by Complainant some generic words, Respondentís domain names are compound words functioning as single words, while Complainantís marks uses them as separate words. Consequently, Complainant does not have rights over the generic words Vanguard nor Funds and hence is not satisfied the requirement established in Policy, Paragraph 4(a) (i).
b. As well, Complainant does not have any registered mark or domain name identified as "Vanguardfund", "Vanguardfunds" "Vanguard Fund", etc, failing to prove a legitimate right over those names. So Complainant has not satisfied the formal conditions stated in Policy, Paragraph 4(a) (i) and (b) (iv).
c. Respondent was not aware of the existence of Complainant until Complainant contacted him for the transfer of the disputed domain names, and until that time (nor even now) Respondent had not found any obstacle to his rights over the disputed domain names, resulting that in Respondentís consideration he has a bona fide legitimate interest over them (Policy, Paragraph 4(a) (ii) and (iii)).
d. As stated, Complainant does not have a company, branch or subsidiary in Mexico, where Respondent resides, and Complainant is not even known in that country, so Respondent cannot harm in any way the commercial or financial interests of Complainant (Policy, Paragraph 4(a) (iii) and (b) (i), (ii), (iii)).
e. Respondent never attempted to communicate with Complainant to sell him the disputed domain names but is was after Complainant demand to Respondent, that both entered into a bargain process for the transfer of the domain names. With such attitude Complainant recognizes the rights Respondent has over the disputed domain names, and therefore the bargain process is not to be qualified as cybersquatting and hence as contrary to bad faith (Policy, Paragraph 4(a) (iii) and (b) (i), (ii), (iii))
f. Above all the said statements, it is most relevant to the matter discussed that Respondent has never used the disputed domain names. Therefore, upon a basis that bad faith must be established by an positive attitude of Respondent towards the misuse of the disputed domain names, and that attitude was never followed by Respondent, there is any base to conclude that Respondent used the domain names in bad faith.
g. As a result, the non use of the domain names cannot be considered in any circumstance as bad faith.
h. Hence, Complainant fails to establish that the three formal conditions stated in Policy, Paragraph 4 (a) were completely satisfied.
6. Procedural Issue
6.1 This Administrative Panel received, along with the Complaint and the Response, an unsolicited supplemental pleading that it identified as a "REPLY". No previous request by the Complainant for an order providing for this pleading was sought. The document commences as follows:
This responds to Respondentís communication of February 7, 2002, to WIPO. Complainant respectfully requests that this brief communication, which addresses certain statements contained in Respondentís communication dated February 7, 2002, be considered by the Panel.
6.2 It has been said that if a Party wishes to submit a supplemental submission, the appropriate practice would be to first seek consent from the Panel, with an explanation of why a supplemental submission is warranted. Appropriate reasons may include the existence of new, pertinent facts that did not arise until after the submission of the Complaint, or the desire to bring new, relevant legal authority to the attention of the Panel. See Pet Warehouse v. Pets.Com, Inc., WIPO Case No. D2000-0105. Where the Complainant has not contended that it has discovered evidence not reasonably available to it at the time of its Complaint, nor does the Response appear to have raised arguments that the Complainant could not reasonably have anticipated, and there being no other exceptional circumstances that would justify admission of a Reply, Panels have stated that they do not need any further submissions. See The Toronto-Dominion Bank v. Boris Karpachev, WIPO Case No. D2000-1571. This Panel repeats and agrees with the dicta by the Panel in Rollerblade, Inc. v. CBNO and Ray Redican Jr., WIPO Case No. D2000-0427, which denied Complainantís request to file a reply, stating: The Policy and Rules demonstrate a strong preference for single submissions by the parties absent extraordinary circumstances. We believe this is a wise procedure given the nature of these proceedings.
6.3 As there are none of the exceptional circumstances as described above the unsolicited "Reply" is not accepted by this Panel.
7. Discussion and Findings
7.1 The Complaint was submitted on the basis of the provisions of the Registration Agreement in effect between the Respondent and Register.com, Inc. which incorporates, by reference, the Policy in effect at the time of the dispute. The Policy requires that Domain Name Registrants such as Respondent submit to a mandatory Administrative Proceeding regarding third-party allegations of abusive Domain Name registration (Policy, paragraph 4(a)).
7.2 Such Administrative Proceedings are conducted by ICANN-approved dispute resolution service providers such as WIPO. The Policy provides an administrative means for resolving disputes concerning allegations of abusive Domain Name registration, subject to referral of the dispute to a court of competent jurisdiction for independent resolution (Policy, paragraph 4 (k)).
7.3 The Policy, and the Rules, establish procedures intended to assure that Respondents are given adequate notice of proceedings commenced against them, and a reasonable opportunity to respond (see, e.g., paragraph 2 (a), Rules).
7.4 Paragraph 15 (a) of the Rules addresses the principles to be used in rendering a decision:
"A Panel shall decide a complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable."
In order to obtain the relief requested under the Policy, Complainant must prove in the Administrative Proceeding that each of the three elements of paragraph 4 (a) are present:
(i) that the Domain Name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; and
(ii) that the Respondent has no rights or legitimate interests in respect of the Domain Name; and
(iii) that the Domain Name has been registered and is being used in bad faith.
7.5 (i) that the Domain Name registered by the Respondent is identical or confusingly similar to a trademark or service mark in which the Complainant has rights
Proof of this element is obtained through a two-part test. The first part is whether the Complainant has rights in a relevant mark. In this case the Complainant has demonstrated, and no objection has been made thereto that the Complainant has the "VANGUARD" mark registered on the Principal Register in the United States Patent and Trademark Office for "fund investment services" as Registration No. 1,784,435 issued July 27, 1993. In addition, Complainant is the owner of marks relating to its various mutual funds for fund investment services: U.S. Registration Nos. 1,814,036 for "VANGUARD FUND EXPRESS"; 1,997,410 for "VANGUARD TAX-MANAGED FUNDS"; 2,048,188 for "VANGUARD HORIZON FUNDS" and 2,133,582 for "VANGUARD ADMIRAL FUNDS."
As the Domain Names <vanguardfund.com> and <vanguardfund.net> are not identical to the registered marks, it is necessary to examine whether they are confusingly similar. It is not necessary under the Policy that the Complainant have trademark rights in any particular country, so long as the Complainant has some trademark rights. See Toronto-Dominion Bank v. Boris Karpacev, WIPO Case No. D2000-1571. Complainant conducts its trading operations, advertisements and promotions under the name "VANGUARD" and has a registration for the mark "VANGUARD" in the United States. Its primary Internet address is <www.vanguard.com> . ICANN Panels have recognized, that the incorporation of a trademark in its entirety is sufficient to establish that a Domain Name is identical or confusingly similar to the Complainantís registered mark. See e.g. Quixtar Investments, Inc. v. Dennis Hoffman, WIPO Case No. D2000-0253; Nikon, Inc. and Nikon Corporation v. Technilab, Inc. WIPO Case No. D2000-1774, NCAA v. Randy Pitkin, et al, WIPO Case No. D2000-0903.
This Panel accordingly finds that the Domain Names, <vanguardfund.net>, <vanguardfunds.net> and <vanguardfund.com> are confusingly similar to a mark in which the Complainant has rights.
7.6 (ii) Respondent has no rights or legitimate interests in respect of the domain name
The Complainantís submission concerning this element is set out above.
7.7 In opposition, the Respondent fails to address this issue in his Response other than, as per para.5.12 c above where he says that he considered that he had a bona fide interest in the names merely because he hadnít found any obstacle to their use by him.
7.8 Whilst the overall onus of proof rests on the Complainant, nevertheless failure by a Respondent to demonstrate that he comes within para.4 (a) (iii) dealing with demonstrated rights or interests in the Domain Name can assist the Panel in deciding whether on consideration of all the evidence a Complainant has discharged the onus of proof. See 3636275 Canada, dba eResolution v. eResolution.com WIPO Case No. D2000-0110. In this case, where the Respondent has filed a Response in which he chose not to contest the assertions of the Complainant in support of this element of the Policy, this Panel is prepared to find that the Complainant has satisfied the onus of proof in respect of it.
This Panel finds that the Respondent has no rights or legitimate interests in the Domain Names <vanguardfund.com>, <vanguardfund.net> and <vanguardfunds.net>.
7.9 (iii) The domain name has been registered and is being used in bad faith
The Complainantís case focuses on the actions of the Respondent in offering to sell the alleged infringing Domain Names to the Complainant "at prices that well exceed the costs incurred in the registration of the infringing Domain Names."
We also know that the three domain names in question were available for sale, as the Respondent offered them to the Complainant and in his e-mail of December 4, 2001 says that another person had offered US $10,000 for all three of the subject names.
The Parties to this case entered into a series of e-mail communications initiated in the first instance by the Complainant on November 5, 2001 by sending a "cease and desist" communication demanding that Respondent promptly transfer the <vanguardfunds.net> Domain Name registration to Vanguard. Despite the Complainant initially taking the position that it would only reimburse Respondent for its out-of-pocket costs, namely the two years of registration fees paid to Register.com, Inc. which amounted to US $ 70,00 it ended up on November 30, 2001 accepting an offer to sell by Respondent for US $1,500.00 an amount significantly in excess of Respondentís out-of-pocket costs.
The Complainant relies on the communications between it and the Respondent to show bad faith in that the latter offered to sell the Domain Names to the Complainant at prices that well exceed the costs incurred in the registration of the names. This raises the issue of whether the partiesí communications following the "cease and desist" letter are subject to the common law "without prejudice" rule which makes them privileged and therefore not usable as evidence. With the substantial use of such communications in UDRP cases this issue arises frequently but with diverse views being expressed by Panels. In the circumstances this Panel made a Procedural Order asking for further submissions. That Order is annexed to this decision. Both parties filed submissions, which helped this Panel to focus better on this issue.
It has been said by one Panelist "[t]hat the term ĎWithout Prejudiceí is much misused and often misunderstood by persons outside the legal profession". This may also be said about some within the legal profession, as there is no universally accepted rule. While application of the concept can result in the content of communications being inadmissible as being privileged under common law regimes, such a result would not obtain under the civil law, although the residual effect of such evidence may in the end be similar if not the same.
The dominant policy interest behind the making of Ďwithout prejudiceí communications privileged is that it encourages parties to resolve their private disputes outside of litigation. Most would agree that this is as or more important now than ever before.
While sending a cease and desist letter on behalf of a prospective Complainant to a putative Respondent has become the norm under the Policy, there have not been many attempts at examining the application of the Ďwithout prejudiceí concept on a principled basis: see Alfred Dunhill Limited v. Websitebrokers And Lynn Trotter, WIPO Case No. D2001-0364 and Alcoholics Anonymous World Services, Inc. v. Friends of Bill W and Jimmy K, WIPO Case No. D2001-1124. Some Panels have felt obligated to apply Rule 408 of the U.S. Federal Rules of Evidence, which states:
Evidence of (1) furnishing or offering or promising to furnish, or (2) accepting or offering or promising to accept, a valuable consideration in compromising or attempting to compromise a claim which was disputed as to either validity or amount, is not admissible to prove liability for or invalidity of the claim or its amount. Evidence of conduct or statements made in compromise negotiations is likewise not admissible. This rule does not require the exclusion of any evidence otherwise discoverable merely because it is presented in the course of compromise negotiations. This rule also does not require exclusion when the evidence is offered for another purpose, such as proving bias or prejudice of a witness, negativing a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution. See also Uniform Rules 52 and 53; California Evidence Code ß 1152, 1154; Kansas Code of Civil Procedure ßß 60-452, 60-453; New Jersey Evidence Rules 52 and 53. [italics added]
Some Panels which apply Rule 408 give the policy interest behind the Rule, which is to encourage parties to settle their disputes amicably (see: Motorola, Inc. v. NewGate Internet, Inc., WIPO Case No. D2000-0079, while others give more pragmatic ones (see: Motorola, Inc. v. NewGate Internet, Inc., WIPO Case No. D2000-0079), such as there may be many reasons why one would offer to settle a claim and that allowing Complainants to offer such evidence encourages mark-holders to bait Domain Name registrants (who may not also be trademark holders) into "negotiations" aimed primarily at conjuring up evidence to be used in a UDRP (or other) proceeding (see: Netvault Ltd. v. SV Computers and Sunil Walia a/k/a Baldev S. Ahluwalia, WIPO Case No. D2000-0095 dissenting Panelist)
The majority of decisions which have addressed this issue have, by far, come down against the application of privilege to Ďwithout prejudiceí communications. The reasons given are numerous, examples of which are as follows:
1. No power to award damages or costs (see: Advance Magazine Publishers Inc. v. Marcellod Russo, WIPO Case No. D2001-1049)
2. The party is not precluded from litigating the same disputes, where the Ďwithout prejudiceí rule would apply. (see: Advance Magazine Publishers Inc. v. Marcellod Russo, WIPO Case No. D2001-1049)
3. An offer to sell the name may go to the heart of the issue, which the Panel must decide, therefore the efficacy of the Policy would otherwise be severely undermined. (see: Advance Magazine Publishers Inc. v. Marcellod Russo, WIPO Case No. D2001-1049)
4. There is a vast scope for disagreement amongst Panels as to the manner of application of the Rule. (see: Advance Magazine Publishers Inc. v. Marcellod Russo, WIPO Case No. D2001-1049)
5. The Rule may be completely foreign to the jurisdiction of some Panelists, leading to chaos. (see: Advance Magazine Publishers Inc. v. Marcellod Russo, WIPO Case No. D2001-1049)
6. As registrants must be aware of the issue of offering the name for sale at an excessive price, they cannot sensibly object to Panels looking at all potentially relevant evidence and whether or not it emerges, Ďwithout prejudiceí correspondence. (see: Advance Magazine Publishers Inc. v. Marcellod Russo, WIPO Case No. D2001-1049)
7. The registrant is protected from the effect of a Panel looking at this evidence if he has a right or legitimate interest in the name. (see: Advance Magazine Publishers Inc. v. Marcellod Russo, WIPO Case No. D2001-1049; Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson, Sr. WIPO Case No. D2000-1525)
8. Where a Respondent fails to object to the inclusion of such evidence by failing to file a Response. (see: Hang Seng Data Services Ltd. v. Power M Investment Ltd. WIPO Case No. D2000-0653)
9. Where the communication was not between the parties to the ICANN dispute, but rather between the Respondent and a third party. (see: Nabor B.V. Stanhome S.P.A. v. Organization Francisco Vicente, WIPO Case No. D2000-0757)
10. Where the communications are between parties to the dispute, but precede the dispute arising.(see: British Broadcasting Corp. v. Bodyline Beauty Clinic (Mrs. Caroline Fell), WIPO Case No. D2001-0389)
11. Where an offer to sell the Domain Name for valuable consideration in excess of the documented out-of-pocket costs directly related to the Domain Name is not only evidence of, but conclusively establishes that the Domain Name has been registered and is being used in bad faith; (see: CBS Broadcasting Inc. v. Gaddoor Saidi, WIPO Case No. D2000-0243)
12. Where the application of such a Rule could have a material effect on the ability of Complainants to prove bad faith registration and use. (see: Spirit Airlines, Inc. v. Spirit Airlines Pty. Ltd. WIPO Case No. D2001-0748)
13. Where the Policyís goal of preventing cyber-squatting would not be furthered by excluding such evidence. (see: Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson, Sr. WIPO Case No. D2000-1525)
14. An offer to settle does not automatically mandate a finding of bad faith as the Panel is still obligated to review the entire record to determine if bad faith exists, but the history leading up to the adoption of the Policy suggests that an offer to sell, absent a legitimate interest and absent contrasting evidence of good faith, is so likely to be evidence of bad faith and use that its exclusion is likely to result in injustice. (see: Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson, Sr. WIPO Case No. D2000-1525)
15. Rule 408 covers an enormous range of situations, and reflects a policy judgment that, on average an offer to compromise is not reliable evidence of responsibility or intent. (see: Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson, Sr. WIPO Case No. D2000-1525)
16. Parties in federal court litigations have other tools, including discovery and cross-examination, to help bring the true facts to the surface, thus making submission of settlement offers less important; UDRP Panels, in contrast, can rely only on a truncated paper record. (see: Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson, Sr. WIPO Case No. D2000-1525)
17. Panels are fully capable of assessing whether an offer of sale reflects a good faith effort to compromise or part of a bad faith effort to extort. (see: Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson, Sr. WIPO Case No. D2000-1525)
The rule, which forbids the admission of such communications as evidence, does not depend wholly on either party involved using the words "without prejudice". It may apply where they are not used, and may not apply when they are used. For the rule to operate the adjudicative body must find that the communication in question was written for the dominant purpose of attempting to reach a settlement of the dispute. Thus, the intention of the parties is a material fact. Common law courts have applied a test directed to the intent of the person who seeks the privilege. A recent case in the English Court of Appeal involving the Domain Name WHSmith.com confirms this. The well-known British booksellers W.H. Smith and a London restaurant owner, Mr. Colman, were in dispute over the rights to the Domain in question, in the course of which Mr. Colman had written a letter with the words "without prejudice" to a director of W.H. Smith in which he claimed to have transferred the name to a "William Howard Smith". Not believing this, W.H.Smith applied to the Court for summary judgment and sought to introduce the letter. The motions judge permitted the letterís use but this ruling was overturned by the Court of Appeal (see: W.H. Smith Limited v. Peter Colman,  FSR 9, March 20, 2000). Their Lordships said that:
To fall outside the protection of the "without prejudice" rule, [a] communication had to disclose "unambiguous impropriety". The protection was not to be set aside simply because the party making the communication appeared to be putting forward an implausible or inconsistent case or to be facing an uphill struggle if the litigation continued; [italics added]
In the absence of evidence of unambiguous impropriety, the defendant had to be given the doubt in negotiations, which were directed towards a possible compromise.
This dicta was adopted by an Independent Expert under the Nominet UK Policy and Procedure. (see: Nokia Corp. v. Just Phones Ltd., Nominet UK DRS0058) He said:
It is desirable that any Dispute Resolution Service should be operated in a manner, which encourages the parties to settle between themselves if possible. In particular, in a case like this one, where the Complainant had the option of pursuing legal proceedings as an alternative to using the Nominet DRS, it cannot be equitable for a Respondent to be potentially subject to two distinct privilege regimes - on the one hand, if the Complainant opts for Court action, a Respondent can expect to have a settlement offer considered "without prejudice", whereas on the other, if the Complainant opts to use the DRS, a Respondent can only be confident that a settlement offer will not be used against him if he waits for proceedings to reach the "Informal Mediation" stage. Such inconsistency cannot assist in promoting early resolution of a dispute.
It would be incorrect to lay down a rule, which is absolute in its effect. The qualifying language in both Rule 408 ("This rule also does not require exclusion when the evidence is offered for another purpose.") and the English Court of Appeal ("unambiguous impropriety") make it clear that under the common law, the principle applies only where the intent of the communication is to make a bona fide attempt to compromise a disputed claim and not where made to advance nefarious schemes.
This Panel, approaching the matter on the principled basis discussed above finds that the intention of the Respondent in its intercourse with the Complainant was clearly to enter into bad faith negotiations with the Complainant in anticipation that the Complainant would be duped into having to acquire the three domain names in question at prices that well exceed the costs incurred in the registration of the Infringing names.
This Panel, moreover, finds that the evidence mentioned above, particularly that of the Respondentís communication of November 30, 2001, is sufficient to prove both bad faith registration and use.
8. What is the Effect of the Evidence relating to a Possible Agreement by the Respondent to Transfer the Domain Name <vanguardfunds.net> to the Complainant
8.1 The Complainant asserts in its response to the Procedural Order that neither party contends that an agreement to transfer the <vanguardfunds.net> name was reached and says that even if there were an agreement, the Panelís concern that it does not have jurisdiction to decide this case is misplaced. The Panel agrees with this and finds support in the case Pomellato S.p.A. v. Richard Tonetti, WIPO Case No. D2000-0493 which found that the Policy applied where a Respondent had promised to transfer a Domain Name but had failed to do so. This Panel concludes that the communications between the parties, particularly that from the Respondent on November 30, 2001, makes it clear that he never intended to sell one name alone. See also National Australia Bank Ltd. v. Quality Systems Consulting-QSC Pty Ltd, WIPO Case No. D2000-0765, where a Panel in similar circumstances not only entered into and decided the question of whether there had been a settlement, but in the course of doing so, made an evidentiary ruling on the admissibility of communications stated to be "without prejudice".
9.1 This Panel finds that the Domain Names <vanguardfund.com>, <vanguardfund.net> and <vanguardfunds.net> have been proven to be confusingly similar to trademarks in which the Complainant has rights; that the Respondent has no rights or interests in the aforesaid Domain Names and that they were registered and are being used by the Respondent in bad faith.
9.2 The Panel orders that the Domain Names <vanguardfund.com> <vanguardfund.net>and <vanguardfunds.net> be transferred to the Complainant.
Cecil O.D. Branson, Q.C.
Dated: April 7, 2002