Pepperdine University v. BDC Partners, Inc.
Case No. D2006-1003
1. The Parties
The Complainant is Pepperdine University of Malibu, California, United States of America, represented by Kristin Kosinski of the United States of America.
The Respondent is BDC Partners, Inc. of Burnsville, Minnesota, United States of America, represented by Merchant & Gould, PC of the United States of America.
2. The Domain Names and Registrar
The disputed domain names <pepperdineuniversitywaves.com> and <pepperdineuniversitywaves.net> are registered with Go Daddy Software.
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on August 7, 2006. On August 8, 2006, the Center transmitted by email to Go Daddy Software a request for registrar verification in connection with the domain names at issue. On August 9, 2006, Go Daddy Software transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative and technical contacts. The Center verified that the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on August 11, 2006. In accordance with the Rules, paragraph 5(a), the due date for Response was August 31, 2006. The Response was filed with the Center on August 31, 2006.
The Center appointed John R. Keys, Jr. as the sole panelist in this matter on September 11, 2006. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
4. Factual Background
Complainant Pepperdine University is an institution of higher education offering undergraduate, graduate, law, and business degrees in the United States of America and abroad. Pepperdine used the name “Pepperdine” and the name “Waves” as its mascot continuously since its founding in 1937. In 1971, the institution acquired university status and has used the name Pepperdine University continuously since that time.
Complainant owns nine U.S. federal Trademark or Service Mark registrations, as follows:
PEPPERDINE UNIVERSITY 1937 FREELY YE RECEIVED FREELY GIVE, Reg. No. 1,887,548, Reg. Date 4/4/1995, for educational services;
PEPPERDINE UNIVERSITY 1937 FREELY YE RECEIVED FREELY GIVE, Reg. No. 2,829,501, Reg. Date 4/6/2004, for towels and clothing;
PEPPERDINE, Reg. No. 1,885,392, Reg. Date 3/21/1995, for educational services;
PEPPERDINE, Reg. No. 2,837,994, Reg. Date 5/4/2004, for towels and clothing;
WAVES, Reg. No. 2,668,597, Reg. Date 12/31/2002, for educational services;
PEPPERDINE WAVES with wave logo, Reg. No. 2,967,811, Reg. Date 7/12/2005, for educational services and clothing;
WAVES with wave logo, Reg. No. 2,903,783, Reg. Date 11/16/2004, for educational services;
PEPPERDINE with wave logo, Reg. No. 2,921,310, Reg. Date 1/25/2005, for clothing and education and entertainment services;
PEPPERDINE with wave logo, Reg. No. 2,902,116, Reg. Date 11/9/2004, for clothing and education and entertainment services.
Complainant also owns 12 California state trademark registrations dating from 1991 and 1992 for the marks PEPPERDINE, PEPPERDINE UNIVERSITY, or PEPPERDINE WAVES, and 13 marks registered outside the United States for variants of “Pepperdine University.”
The University owns and uses several domain names, including <pepperdine.edu>, <pepperdine.com>, and <pepperdinesports.com>, where Internet users may find information about the University and its programs, view pictures of the University, and obtain procedures for purchasing athletic tickets and school merchandise. The merchandise features the marks PEPPERDINE and WAVES.
Pepperdine University has invested significant time, money, and effort in developing and promoting its various marks and maintaining its good reputation.
Respondent, BDC Partners, Inc., is a wholly owned subsidiary of BDC Capital, Inc., established in December 2004 and based in Burnsville, Minnesota. BDC Capital describes itself as an investment company “with the purpose of building an investment portfolio consisting of revenue generating assets and emerging companies well-positioned for future growth.”
Beginning in 2004, Respondent purchased more than 23,000 college, university, and high school domain names in what it describes as “one of the most comprehensive acquisitions of a single category of domain names in e-commerce history.” Each domain name consists of the name of the school and the school mascot with a “.com” or a “.net” suffix. Respondent claims to have “acquired approximately 97 percent of all the colleges and universities in primary athletic conference categories in the United States” and approximately 99 percent of all U.S. high schools. In announcing its acquisitions, Respondent stated, “We believe that both the individual and the aggregate values of these largely undeveloped domain names hold promise as marketing, communications, and outreach vehicles.”
Respondent states that it has begun developing and continues to develop a series of online social networking communities for students and alumni of approximately 23,500 high schools and over 1,400 colleges and universities. Respondent says its strategic plan in relation to its school domain names is to offer a social network to students and alumni of schools by providing content on websites based on the school to which the students and alumni belong.
Respondent further states that it has plans for two tiers of websites that will be used with the registered domain names. The first tier is a generic social network that allows students and alumni of the college to interact via online polls and chat rooms. A more elaborate second tier of websites will host additional content related to the school. Respondent says that it has worked with and will continue to work with the schools to provide content for the second tier of websites.
On April 11, 2005, and April 21, 2005, Respondent registered the domain names <pepperdineuniversitywaves.com> and <pepperdineuniversitywaves.net> (the “Domain Names”) without the permission of Pepperdine University.
On November 7, 2005, Complainant sent Respondent a letter requesting that Respondent transfer the two Domain Names to the University and cease and desist from using both Domain Names.
By letter dated November 15, 2005, Respondent did not agree either to transfer the Domain Names or to stop using them. Rather, Respondent stated, “It is our goal to assist each school individually in marketing its products through the Internet, not only to increase exposure of the school to the public, but also as a way to generate additional revenues and/or donations.” Respondent stated, “We hope you will consider our offer to discuss marketing possibilities.”
On January 23, 2006, Complainant wrote to Respondent stating that it was not interested in working with BDC Partners, Inc. in the proposed venture and reasserting that it believed Respondent’s registration of the two Domain Names constituted unauthorized use of the University’s marks and unlawful cybersquatting. Respondent did not answer this letter.
The Domain Names presently lead a user to sites with no content and the message that “This Page Cannot be Displayed.”
5. Parties’ Contentions
1. The Domain Names are identical and confusingly similar to a trademark or service mark in which Pepperdine has rights.
Complainant contends that it has common law rights in the marks PEPPERDINE, PEPPERDINE UNIVERSITY and WAVES based on continuous use over long periods of time and statutory rights based on federal and state trade and service mark registrations of the marks PEPPERDINE, PEPPERDINE UNIVERSITY, WAVES, and PEPEPPERDINE WAVES. Complainant further contends that Respondent’s Domain Names <pepperdineuniversitywaves.com> and <pepperdineuniversitywaves.net> are identical or confusingly similar to the marks in which the University has legal rights.
The combination of marks into a single domain name and the addition of generic top level domains like “.com” and “.net” are not significant.
Complainant further contends that the Domain Names are confusingly similar to the University’s marks in that an Internet user would likely be confused as to whether the websites to which the Domain Names resolve are associated with the University.
2. Respondent has no rights or legitimate interests in respect of the Domain Names.
Complainant contends that Respondent’s use of the Domain Names is not in connection with a bona fide offering of goods or services. Respondent has not made “demonstrable preparations” to use the Domain Names and is passively holding the names. There is no evidence of actual use of the names at issue here.
Respondent’s plan, if any, would require Pepperdine to accept Respondent’s offer to contract with it to use the domains, which Pepperdine is unwilling to do. Complainant maintains that this amounts to passive holding in that Pepperdine must either comply with Respondent’s demands or stand by while Respondent uses its marks without permission.
Complainant contends that Respondent is not commonly known by the Domain Names and does not have any legitimate rights in the Domain Names.
Complainant contends that Respondent is not making a legitimate, noncommercial or fair use of the Domain Names without the intent for commercial gain, to misleadingly divert customers, or to tarnish the marks of Pepperdine University. Respondent’s own public statements and response to Complainant’s cease and desist letter indicate that Respondent sees the Domain Names as potential revenue generating assets and intends to make commercial use of the Domain Names.
3. The Domain Names were registered and are being used in bad faith.
Complainant contends that Respondent engaged in a pattern of registering domain names that included school names and mascots in order to prevent Pepperdine University from reflecting its marks in a corresponding domain name. The University points to Respondent’s extensive acquisition of some 23,000 domain names consisting of school names and mascots. With respect to Pepperdine itself, Complainant notes that Respondent rejected Pepperdine’s request for transfer of the Domain Names and offered to help Pepperdine with its marketing and that Respondent persists in its refusal to transfer the names even after Pepperdine made clear that it was not interested in entering into a business relationship with Respondent. Respondent thus is preventing Pepperdine from reflecting its own trademarks and service marks in corresponding domain names.
Complainant contends that Respondent registered the Domain Names primarily for the purpose of creating its own lucrative business opportunity. Bad faith can be inferred where a respondent has registered domain names solely for the purpose of generating money-making business opportunities, which is what Respondent is doing here. Pepperdine is in a position whereby Respondent is potentially able to profit from use of websites as marketing, communications, and outreach vehicles by using domain names that are identical and confusingly similar to Complainant’s trade and service marks.
Complainant contends that bad faith can be inferred where Respondent registered the Domain Names comprising names which can only refer to Pepperdine University, a well-known institution, and its mascot and for which there is no justification for the selection of the Domain Names. Respondent must have known of Pepperdine University and its associated goodwill and should not be permitted to capitalize on the University’s good reputation for its own profit.
1. Complainant has No Right to Stop Respondent’s Fair Use of the Domain Names.
Respondent does not dispute that the Domain Names are identical or confusingly similar to Complainant’s marks. Rather, Respondent contends that Respondent chose the Domain Names because use of the school name and mascot is the only way to accurately describe the students and alumni of the schools and that Respondent’s use of the Domain Names is a nominative fair use, which necessarily uses the Complainant’s name. Respondent contends that Complainant does not have the exclusive right to use the marks to comment on its school and points to the fact that a Google search shows numerous third party uses of the name Pepperdine University.
Respondent has a right to use the Domain Names at issue in this case to refer to Complainant, its students and alumni, and to provide services to those individuals who desire to comment on the school.
2. Respondent has a Legitimate Right to use the Domain Names based on Sections 4(c)(i) and 4(c)(iii) of the UDRP.
Respondent contends that it has made demonstrable preparations to use the Domain Names in Connection with a bona fide offering of services. Under Paragraph 4(c)(i) of the Policy, a complainant cannot prevail if the respondent, prior to notice of the dispute, has made “use of, or demonstrable preparations to use, the domain name in connection with a bona fide offering of goods or services”. Respondent contends that it has made demonstrable steps to develop content for its websites located at the Domain Names at issue here. Since Respondent registered the names, it has been in the process of developing the content for the websites. In order to test the websites, Respondent developed a series of “www2 sites.” To access the website, a user types in “www2.example.com.” While the general public would not likely see the websites located at the www2 domain names, Respondent is able to test the names live.
Respondent’s development of other websites also shows that it has taken demonstrable steps to develop its social network. BDC has activated several websites. Students may make comments about the school, criticize decisions made by the school, cheer on sports teams, and communicate regarding any other number of issues surrounding their institution.
Respondent says it has taken numerous steps toward the offering of bona fide services under its Domain Names and its broader social network, including:
- Developing a business plan regarding the websites in Respondent’s social network, including Complainant’s school.
- Registering approximately 25,000 domain names in relation to the schools that are a part of the social network.
- Purchasing software to develop chat rooms and content for Respondent’s social network.
- Developing websites for many of the 25,000 domain names, showing that Respondent has taken steps to establish its business plan.
- Sending out a press release regarding Respondent’s social network.
- Communicating with schools regarding the placement of additional content on websites.
- Developing content for the websites at issue in this case.
Respondent contends that under Paragraph 4(c)(iii) of the Policy, it has a legitimate right under the Nominative Fair Use Doctrine to use the disputed Domain Names if the domain name is used to provide information about the Complainant. The Doctrine provides that a party may use a trademark holder’s mark to identify the holder’s product or service provided (1) the service is not readily identifiable without use of the mark; (2) only so much of the mark is used that is necessary to identify the service; and (3) the user does not suggest sponsorship or endorsement by the mark holder.
Respondent asserts that it cannot identify Pepperdine University, its mascot the Waves, or the students and alumni of that school without use of Complainant’s marks. The name Pepperdine University is the only way to describe Pepperdine University. Use of that name and the Waves mascot is also the only way to identify students and alumni of that university.
Respondent only uses the portion of the mark necessary to properly identify the students and alumni of Pepperdine University. They are students from Pepperdine University and their mascot is the Waves. Respondent’s use is limited to the specific school and mascot in the Domain Names.
There is no evidence that Respondent’s registration of the Domain Names at issue here has suggested a sponsorship or endorsement by Complainant. Indeed, every website designed for Respondent’s social network includes a disclaimer, further evidence that Respondent does not suggest a sponsorship or affiliation with the school.
Finally, Respondent contends that Respondent’s planned use of the Domain Names has been found by multiple panels to be a legitimate use in relation to a domain name consisting of a college name. These decisions, Respondent contends, directly contradict Complainant’s reliance on two decisions from the National Arbitration Forum: Lebanon Valley College v. BDC Partners, Inc. and Dickinson College v. BDC Partners, Inc. in relation to its claims in this case. Those decisions failed to properly consider the demonstrable steps taken by Respondent, failed to properly consider the Nominative Fair Use Doctrine, and failed to recognize the numerous cases where a college name is used by a third party for a legitimate purpose. Furthermore, those two decisions are being appealed in the United States District Court for the District of Arizona, Case No. 2:06-cv-01699-MHM.
3. Respondent did not Register the Disputed Domain Names in Bad Faith.
Respondent contends that the Policy provides a list of four non-exclusive factors to determine the issue of bad faith and that none of the four factors apply to this case.
Respondent maintains that it did not register the Domain Names to sell, rent, or transfer the names to Complainant, evidence that the registration was not made in bad faith. Respondent provides a declaration stating that the Domain Names at issue in this matter were registered to be part of a social network for students and alumni of Pepperdine University. At no time has the company offered any domain name for sale.
Respondent has no plans to deliver content that requires copyright or trademark licensing unless licenses are in place with the appropriate entities. Additionally, Respondent is using the Domain Names solely to describe the students who access a particular social network website. Respondent’s goal in creating its social network with the Domain Names at issue in this case was to enable current students and alumni of the schools to interact with other students and alumni that attended the schools or lived in the towns and cities in which they were raised and educated.
Respondent contends that Complainant’s allegations that Respondent registered more than 23,000 domain names for the purpose of “creating its own lucrative business opportunity” are insufficient to find an intentional bad faith registration.
Respondent contends that the facts do not show that Respondent registered the Domain Names to prevent Complainant from using the Domain Names. This is not a situation of a rush to register the Domain Names. Rather, Respondent registered the Domain Names as part of its social network that comprised over 25,000 domain names. Registrant did not single out Complainant — rather the Domain Names were registered for a legitimate purpose, showing that bad faith intent was not present.
Respondent did not register the Domain Names for the purpose of disrupting Complainant’s business. Respondent and Complainant are not competitors. There is no evidence that Respondent ever has or ever will disrupt Complainant’s business.
Respondent contends that Complainant’s allegation that the Domain Names were registered because “the domains comprise names which can only refer to the Complainant, Pepperdine University, and its mascot, the Waves” in and of itself does not indicate bad faith. Furthermore, the fact is consistent with Respondent’s assertion that the Nominative Fair Use Doctrine applies. There is no other way to properly describe Complainant other than its name, and Complainant admits that is exactly what Respondent has done.
Respondent contends that it did not engage in a bad faith attempt to attract Internet users to its website by causing consumer confusion. Respondent registered the Domain Names to accurately describe the contents of the services provided by Respondent—a chat room for students and alumni of Complainant. There is no evidence that students, alumni, or the general public will be confused based on Respondent’s Domain Names. Furthermore, Complainant cannot point to any evidence that Respondent intended to cause confusion among the students and alumni to attract them to its website.
Respondent did not register the Domain Names at issue in this case for the purpose of redirecting traffic from the school to its website or disrupting Complainant’s business. Respondent is not a competitor of Complainant. Rather, Respondent provides a communication forum that enables students and alumni of Complainant’s institution to interact with other students and alumni who attended that institution. To adequately describe the services provided by Respondent, Respondent combined the school name and its mascot into a single domain name.
To avoid any issues regarding confusion as to the source of Respondent’s websites, Respondent’s practice is to place disclaimers on its websites when they go live. The general disclaimer states: “Copyright 2006 GoSchools.com. All rights reserved. goschools.com is not affiliated with any University, College or High School. All other trademarks are held by their respective holders.” Respondent’s declaration states that the disclaimer or link to the school will be used on all websites operated by Respondent under its social-networking plan.
6. Discussion and Findings
Under paragraph 4(a) of the Policy, Complainant must prove each of the following three elements of its case in order to obtain the requested relief:
(i) Respondent’s Domain Name is identical or confusingly similar to a trademark or service mark in which Complainant has rights;
(ii) Respondent has no rights or legitimate interests in respect of the Domain Name; and
(iii) Respondent’s Domain Name has been registered and is being used in bad faith.
The Panel considers each element in order.
A. Identical or Confusingly Similar
Complainant has demonstrated that it owns established statutory and common law rights in the marks PEPPERDINE, PEPPERDINE UNIVERSITY, PEPPERDINE WAVES, and WAVES. The Domain Names at issue here incorporate those marks in their entirety and, in fact, conjoin two or more of Complainant’s marks in a single domain name, adding only the generic top level domains “.com” and “.net.” These differences are not significant.
Indeed, Respondent does not actually contest that the Domain Names are identical or confusingly similar to Complainant’s legally established marks. Its argument is essentially that it has a legal right to do this as a matter of “nominative fair use” because this is the only way to refer to the University and its students for purposes of comment. This argument is more appropriately considered elsewhere in the analysis as a question of whether Respondent possesses rights or legitimate interests in the Domain Name. See Dickinson College v. BDC Partners, Inc., NAF Case No. FA0605000703190 (June 28, 2006).
The Panel concludes that the Domain Names are identical and/or confusingly similar to trade and service marks in which Complainant possesses established legal rights.
B. Rights or Legitimate Interests
There is no dispute that Respondent is not commonly known by any of the Domain Names or that it has obtained rights in the Domain Names from Complainant. The contested issues are whether Respondent has made demonstrable preparations to use the Domain Names in connection with a bona fide offering of goods or services and whether Respondent is entitled to use of the Domain Names as a nominative fair use.
1. Demonstrable Preparations for use in connection with a bona fide offering.
Respondent contends that it has a legitimate right to use the Domain Names based on Paragraph 4(c)(i) of the UDRP on grounds that it has made “use of, or demonstrable preparations to use, the domain name in connection with a bona fide offering of goods or services.” See SFX Entertainment, Inc. v. Phillip Cushway, WIPO Case No. D2000-0356 (finding that the Respondent had a legitimate interest in the domain name by showing demonstrable preparations to use the domain name). Respondent has in fact made preparations to initiate a business based on its registration of some 23,000 domain names and has established at least a couple of active websites. In the Panel’s view, there are fundamental problems with Respondent’s argument.
First, Paragraph 4(c)(i) of the Policy requires that use or demonstrable preparations to use refer to the domain name at issue. Dickinson College v. BDC Partners, Inc., FA0605000703190; Sybase, Inc. v. Analytical Systems, WIPO Case No. D2004-0360. The Domain Names direct the user to web pages that display no content, only the message that the page cannot be displayed. Respondent did produce a copy of a screen shot of what it described as a “www2” sample site with the Domain Names appearing on the address bar which it says was live for a short time. However, the Policy requires that demonstrable preparations be shown to have been made “before any notice to [Respondent] of the dispute.” Paragraph 4(c)(i). The only indicator of when this test site was active is August 12, 2006, which is five days after the Complaint was filed in this proceeding and approximately seven months after Complainant had informed Respondent in a letter, “The University continues to maintain the position that BDC’s registration of pepperdineuniversitywaves.com and pepperdineuniversitywaves.net constitutes unauthorized use of the University’s marks and unlawful cybersquatting.”
Thus, there is insufficient evidence that some 17 months after registration, Respondent made demonstrable preparations to use the Domain Names at issue in this case prior to notice of the dispute. There is no active site now, and Respondent is passively holding the Domain Names, which has been held not to create rights or legitimate interests in Domain Names. Archipelago Holdings LLC, v. Creative Genius Domain Sales and Robert Aragon d/b/a/ Creative Genius Domain Name Sales, WIPO Case No. D2001-0729.
Second, whatever demonstrable preparations Respondent has made generally, there is serious question with respect to whether those preparations are in connection with a bona fide offering of services. The Panel is not questioning the bona fide of a social network for students and alums. However, Respondent’s plan is based in large measure upon registering Domain Names using other people’s legally established trade and service marks without license or permission from the owners of those marks. That is certainly true at least with respect to Pepperdine’s marks in this case. In Lebanon Valley College v. BDC Partners, Inc., NAF Case No. FA0605000703608 (July 3, 2006), the Panel found that such use of the College’s name and mascot was not a bona fide use of the domain names. This Panel agrees with that conclusion in the present case.
2. Nominative Fair Use
Paragraph 4(c)(iii) of the Policy provides that a respondent can demonstrate its rights or legitimate interests to the domain name, for purposes of Paragraph 4(a)(ii), if respondent “is making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.” Respondent contends that under the Nominative Fair Use Doctrine, it is making fair use of the Domain Names.
The Nominative Fair Use Doctrine, as invoked by Respondent, provides that a party may use a trademark holder’s mark to identify the holder’s product or service provided (1) the service is not readily identifiable without use of the mark; (2) only so much of the mark is used that is necessary to identify the service; and (3) the user does not suggest sponsorship or endorsement by the mark holder. The New Kids On The Block v. News Am. Publ’g Inc., 971 F.2d 302 (9th Cir. 1991). A number of WIPO panels have accepted nominative fair use in this context, but the analysis is contextual and fact-specific. See Pfizer, Inc. v. Van Robichaux, WIPO Case No. D2003-0399. The Doctrine, which is judicially created, needs to be placed in context and defined.
The Lanham Trademark Act recognizes and codifies fair use as a defense to claims of trademark infringement where the “use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party, or their geographic origin.” 15 U.S.C. § 1115(b)(4). This statutory fair use, also called classic fair use, applies where the alleged infringer has used the plaintiff trademark holder’s mark to describe the infringer’s own products or services. In contrast, the Nominative Fair Use doctrine originates in the problem arising when the alleged infringer uses another person’s trademark to describe the mark owner’s products or services and the “goods and services are effectively identifiable only by their trademarks.” New Kids, 971 F.2d at 306. In such cases, use of the trademark does not necessarily imply sponsorship or endorsement of the product because the mark is used only to describe the thing, rather than to identify its source. Id. at 306-07. The descriptive use of the words does not function as a trademark to identify the source of goods or services so there is, in effect, no trademark infringement.
The initial question, then, is whether the present case is one of nominative fair use, as Respondent contends, or whether it is actually an issue of classic fair use, because there are differences in the respective analyses. Respondent here says that it intends, at least at its “first tier”, to use the Domain Names to establish a chat room for social networking by Pepperdine students and alumni. While users of such a network might use it to comment upon Pepperdine University’s policies or actions, they might use it for many other purposes as well. In any event, Respondent’s proposed service is not providing information or commentary about the university; it is providing the network facility whereby users may “chat” about anything they care to chat about. Respondent is in fact using Pepperdine’s trademarks to refer to Respondent’s own service, not to Pepperdine’s products or services. Respondent’s use of the Domain Names thus would fall under the ambit of statutory or classic fair use, rather than nominative fair use.
Under a statutory analysis, the Panel finds that Respondent has fundamental problems trying to make a fair use defense. The Domain Names, which include only established trade and service marks belonging to Complainant, are not used only to describe Respondent’s services. In fact, they do not appear to be used as descriptors at all. Rather, those Domain Names tend to look and function more like trademarks, as identifiers of the source or sponsorship of the websites to which they lead. The Panel concludes that Respondent has not made out a case of statutory fair use. The analysis might well end here, but we will address nominative fair use out of an abundance of caution inasmuch as this has been the focus of Respondent’s argument.
Respondent’s reliance upon Nominative Fair Use essentially runs counter to basic principles underlying the doctrine. First, to state the obvious, Respondent has developed no content for a Pepperdine-oriented website, so Respondent is not actually using the Domain Names to identify or describe Complainant’s products or services. The basic rationale for applying the doctrine−to obviate a claimed infringement−is not present here.
Second, Respondent, fundamentally, is not using the Domain Names to describe Pepperdine University’s products or services. The Domain Names consist only of the marks themselves, and while the word “university” may be read to describe very generally what the entity is, it is too great a stretch to call this a description of the products or services Pepperdine offers. Use of the mark WAVES certainly is not descriptive of Pepperdine’s products or services. As noted above, the Domain Names at issue here function more as indicators of source than as description of products and services.
Moving to application of the three-part test articulated in New Kids and the first aspect of that test, the Panel does not accept Respondent’s contention that the only way to identify Pepperdine University and its students and alumni is by using Complainant’s marks. Respondent starts by misidentifying the products and services at issue in the first part of the test. The students and alumni/ae are not goods or services of the University. More importantly, it simply is not true that “Pepperdine University Waves” is the only way to describe the products and services of the institution. One might have to use the name Pepperdine in some fashion to do that, but beyond that, there are any number of non-mark variants that might suffice to accomplish Respondent’s purpose.
Respondent fails also to satisfy the second prong of the New Kids test in that it is not using “only so much of the mark as necessary to identify the service”. “Waves” is certainly unnecessary to identify services and “University” might be as well, depending upon what services we are actually talking about. See Lebanon Valley College, supra.
Finally, the Panel finds that the Domain Names themselves suggest sponsorship or endorsement by the University. While Respondent says it will include a disclaimer of affiliation on each website, there is as yet no website and, therefore, no disclaimer by which to prove the point. Nor would the disclaimer necessarily negate the suggestion of sponsorship contained in the Domain Names, as further discussed below.
We have discussed nominative fair use because that is the case and the test upon which Respondent has relied. We note, however, that there is a split of judicial authority on this issue in the United States, as evidenced by the more recent decision in Century 21 Real Estate Corp. v. Lending Tree, Inc., 425 F.3d 211 (3d Cir. 2005), in which the court adopted a different analytical framework from that used in New Kids. That analysis would be difficult to apply in the context of the Policy, but in the Panel’s view would not lead ultimately to a different result here.
In short, the Panel concludes that the legal doctrine of nominative fair use does not provide Respondent with the rights or legitimate interest necessary to meet the criteria of the Policy.
3. Other College Name Cases
Respondent contends that its planned use of the Domain Names “has been found by multiple panels to be a legitimate use in relation to a domain name consisting of a college name,” citing several cases. Those cases do not provide the strong support that Respondent suggests. In Pensacola Christian College Inc. v. Peter Gage, NAF Case No. FA0110000101314 (December 12, 2001), the Panel found that respondent had legitimate rights and interests in the domain name <pensacolachristiancollege.com> relating to a site on which to post messages and provide commentary concerning the college’s rules and policies. The college had no registered mark and a weak claim of common law rights. Respondent identified its website as unofficial and contained a link to the official site. The other cases cited are less helpful to Respondent.
The decision in University of Washington Bothell v. Jumpline 2000, WIPO Case No. D2005-0908, does not stand for the proposition for which Respondent cites it. The Panel found that the respondent did not have legitimate rights or interests in the domain name. The Panel denied the complaint on grounds that there was no bad faith registration because the complainant and respondent were working together cooperatively on an alumni event when respondent registered the domain name.
In University of Central Florida v. Knight Publishing Inc., NAF Case No. FA0505000485962 (July 13, 2005), the Panel held that Respondent had legitimate rights in the use of “ucfnews” and “ucffuture”, because these had evolved from Respondent’s newspaper “Central Florida Future,” originally a University of Central Florida (“UCF”) campus publication, which Respondent had published since 1968.
In The Wharton School of the University of Pennsylvania v. Motherboards.com, NAF Case No. FA0306000161274 (July 24, 2003), Respondent was found to have legitimate rights in a website relating to the city of Wharton, Texas, not the Complainant school, and the Panel stressed that Complainant had not adequately supported its contentions with evidence.
None of the cases on which Respondent relies is persuasive here. On the other hand, two recent NAF Panel decisions, the Lebanon Valley College and Dickinson College cases cited above, involving this Respondent, the same formula domain names, and much the same facts and arguments have concluded that Respondent did not have legitimate rights or interests in the domain names at issue and are more on point and better reasoned.
The Panel concludes that Respondent has not shown that it has legitimate rights and interests in the Domain Names and that Complainant has therefore established the second aspect of its case.
C. Registered and Used in Bad Faith
Complainant must prove both that Respondent registered the Domain Names in bad faith and that it is using the Domain Names in bad faith. Green Tyre Company Plc. v. Shannon Group, WIPO Case No. D2005-0877. Paragraph 4(b) of the Policy describes four particular circumstances by which bad faith registration and use may be shown, three of which we consider here. The Policy expressly states that this list is not intended to be limiting.
There is substantial authority that registration of a domain name that is confusingly similar to a famous trademark by any entity that has no relationship to that mark is itself sufficient evidence of bad faith registration and use. Sporty’s Farm LLC v. Sportsman’s Market, Inc., 202 F.3d 489, 498 (2d Cir. 2000); AT&T Corp. v. John Zuccarini d/b/a Music Wave and RaveClub Berlin, WIPO Case No. D2002-0440; Veuve Clicquot Ponsardin, Maison Fondée en 1772 v. The Polygenix Group Co., WIPO Case No. D2000-0163 (use of a name connected with such a well-known product by someone with no connection with the product suggests opportunistic bad faith).
In the case of Pepperdine University, a well known institution of higher learning in the United States, Respondent necessarily knew, at least constructively based on the University’s federal and state trade and service mark registrations, that Complainant had established legal rights in the marks PEPPERDINE, PEPPERDINE UNIVERSITY, and WAVES. See Waterman, S.A.S. v. Brian Art, WIPO Case No. D2005-0340 (finding bad faith registration and noting that complainant’s mark was well-known); Marconi Data Systems, Inc. v. IRG Coins and Ink Source, Inc., WIPO Case No. D2000-0090 (registration of a mark puts a respondent on constructive notice); Microsoft Corporation v. Party Night, Inc. d/b/a Peter Carrington, WIPO Case No. D2003-0501 (“it is not reasonable to expect the Respondent to register the disputed Domain Names if the Respondent had no knowledge of the Complainant’s trademark and services in connection thereto.”). Respondent knowingly and intentionally registered both Domain Names at issue here incorporating all three of Complainant’s marks identically and in their entirety into those names. The purpose to be reasonably inferred from the facts, despite protests to the contrary, is that Respondent intended to trade upon the goodwill Pepperdine has in its marks, utilizing the confusion attendant upon the use of the University’s marks to attract Internet traffic to Respondent’s site(s) for commercial gain. See America Online, Inc. v. Anson Chan, WIPO Case No. D2001-0004. This is sufficient to establish bad faith registration. See Sporty’s Farm, 202 F.3d at 498.
Respondent attempts to counter the plain inference of bad faith registration by arguing that it registered the names to accurately describe the contents of the services provided by Respondent—a chat room for students and alumni of Pepperdine University, that there is no evidence of intent to cause confusion among students and alumni to attract them to the site, and that the use of a disclaimer on the website would eliminate confusion and would be evidence that there is no bad faith. The arguments are not persuasive in this case.
The Domain Names, first of all, do not in fact accurately describe Respondent’s projected services. A fair reading of the Domain Names suggests nothing about chat rooms, social networks, students or alumni. The Domain Names read instead like an official University site, which they are not. Second, the Domain Names do not reflect a naming necessity. As one Panel previously pointed out in another of Respondent’s cases, Respondent has a number of naming options it could have pursued for a website that would have identified its own services as they might pertain to Pepperdine alums or students. Lebanon Valley College, supra. For example, Respondent might have used its own “GoSchools.com” domain in some way; it might have used a number of descriptive terms like “students”, “alums”, “chat”, etc. The Panel’s only point here is that Respondent’s use of Complainant’s trademarks as it has is not the only way Respondent can describe its services.
Again, with respect to the issue of intent, bad faith can seldom be proved directly by admission or confession. It must usually, and permissibly, be inferred from the facts and circumstances. Here, the facts are that Respondent took Complainant’s established marks and all the value inherent in them, and registered them as its own domain names intending to use them to generate revenues for itself. Those names would have little value to Respondent unless there was to be some reliance on the prospect of confusion. See The Chancellor, Masters and Scholars of the University of Oxford v. CQ, WIPO Case No. D2001-0920.
Paragraph 4(b)(iv) of the Policy provides that one circumstance evidencing bad faith registration and use is “by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your website or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your website or location or of a product or service on your website or location.” The Panel’s view is that it is clearly Respondent’s plan to attract Internet users to its website for its own commercial gain by exploiting to some degree the confusion caused by its use of Complainant’s established marks.
Respondent does attempt to avoid the inference of bad faith by arguing that it will include a disclaimer of University endorsement on its site if and when it creates and activates the site. The promise of a disclaimer, which does not yet exist in this particular case, might be evidence of something, but it does not obviate the basic problem if there is initial confusion which Respondent exploits to attract users to its websites. As the Panel in Dickinson College, supra, noted and the Panel in Lebanon Valley College explained at some length, a number of U.S. Courts of Appeals subscribe to the view that there may be “initial interest confusion” in the context of the Internet resulting from the unauthorized use of trademarks to divert traffic, thereby capitalizing unlawfully on a trademark holder’s goodwill. Australian Gold, Inc. v. Hatfield, 436 F.3d 1228, 1238-39 (10th Cir. 2006); Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999). The Policy makes explicit at Paragraph 4(b)(iv) that bad faith exists where one uses another’s trademarks to divert Internet traffic from the mark owner to one’s own website. Even with a disclaimer placed somewhere on Respondent’s site, the basic mechanism of using Pepperdine’s trademarks to attract users to a non-Pepperdine site for purposes of Respondent’s commercial gain would remain intact.
To the extent that Respondent may contend that bad faith use cannot be shown because it does not yet have an active Pepperdine website and is therefore not actually using a site to divert traffic to itself, the Panel looks to those cases in which the passive holding of a domain name has been held to evidence bad faith use of the name where other factors exist. Sybase, Inc. v. Analytical Systems, WIPO Case No. D2004-0360; Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003; DCI S.A. v. Link Commercial Corporation, WIPO Case No. D2000-1232; Marconi Data Systems, Inc. v. IRG Coins and Ink Source, Inc., WIPO Case No. D2000-0090. In the Panel’s view, such factors exist here. Complainant’s marks are well known and incorporated into the Domain Names in their entirety with no effort on Respondent’s part to distinguish the Domain Names from Complainant’s marks, as it might easily have done. Respondent is using the Domain Names to try to leverage Complainant into a business arrangement that Complainant has made quite clear to Respondent it does not want. Respondent has not overcome the plain inferences of bad faith with substantial evidence of its good faith. See Telstra, supra. Under the circumstances, the Panel concludes that Respondent’s passive holding of the Domain Names constitutes evidence of bad faith use of those names. Dickinson College, supra.
Paragraph 4(b)(ii) of the Policy recognizes bad faith where respondent has “registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that [respondent has] engaged in a pattern of such conduct.” Complainant invokes this provision of the Policy, but there is little real support for it, either factually or in prior decisions cited to the Panel. There certainly is an established pattern on the part of Respondent of registering domain names—over 23,000 of them—but there is really no evidence that Respondent’s purpose is specifically to prevent Pepperdine, or any other school, from using its marks in a corresponding domain name. For one thing, Pepperdine does have Domain Names in which its marks, or some of them, are reflected. Respondent’s plan and pattern does not appear to be so much a preventive move against the school as it is a grand plan to exploit for itself an opportunity created by the fact that schools have tended to use the “.edu” and “.org” generic top level domains rather than “.com” and “.net”.
There are interesting issues here, however, with respect to Paragraph 4(b)(i) of the Policy, which provides that the following shall be evidence of registration and use of a domain name in bad faith:
Circumstances indicating that you [registrant] have registered the Domain Name primarily for the purpose of selling, renting, or otherwise transferring the Domain Name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the Domain Name.
Respondent asserts that it has never attempted to sell the Domain Names to Complainant, which is literally true but begs the question of how one defines “sale.” It is also true that Respondent has refused Complainant’s requests to transfer the Domain Names to Complainant but has instead attempted to negotiate a business arrangement with Complainant to use the Domain Names to develop a commercial website. As Complainant notes, this places Complainant in the position of having to contract with a party with whom it does not wish to do business or effectively cede to Respondent a substantial measure of control over the use of its own trademarks and goodwill. While there has been no attempt at an outright sale, there has certainly been an attempt by Respondent to leverage Pepperdine’s trademarks against Complainant to generate revenues for Respondent in excess of Respondent’s actual costs directly related to the Domain Names. See World Wrestling Federation Entertainment, Inc. v. Michael Bosman, WIPO Case No. D1999-0001 (“Because respondent offered to sell the Domain Name to complainant ‘for valuable consideration in excess of’ any out-of-pocket costs directly related to the Domain Name, respondent has ‘used’ the Domain Name in bad faith as defined in the Policy.”). If this does not contravene the letter of the Policy, it still appears to the Panel to be abusive in nature and certainly runs counter to the Policy’s spirit.
The Panel concludes that Complainant has shown both bad faith registration and use of the Domain Names.
For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the Domain Names, <pepperdineuniversitywaves.com> and <pepperdineuniversitywaves.net>, be transferred to the Complainant.
John R. Keys, Jr.
Dated: September 25, 2006.