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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>,
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
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
3.5 The Complainant agreed that its claim and remedies concerning the registration
of the Domain Name, the dispute, or the dispute’s 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. Parties’ 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>. Vanguard’s 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 Vanguard’s 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 Complainant’s 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 Respondent’s 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 Respondent’s 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 Complainant’s 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
- 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 Respondent’s 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 Respondent’s 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
- 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 Respondent’s 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 Respondent’s <vanguardfunds.net>, <vanguardfund.net>
and <domain names> incorporates Vanguard’s "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 Vanguard’s several
registered marks as noted herein.
5.6 Respondent Has No Legitimate Interest in <vanguardfunds.net>, <vanguardfund.net>
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 Vanguard’s site may incorrectly
believe that Vanguard’s 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. § 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
Vanguard has not agreed or consented to Respondent’s 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"
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, Respondent’s 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).
Respondent’s failure to use the domain names weigh in favor of finding bad
faith, as does Respondent’s refusal to transfer or cancel the domain names in
the face of Vanguard’s 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, § 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, § 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
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 Respondent’s 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 Complainant’s, 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
As a result, Respondent’s registered domain names are compound words (just
one word) and Complainant’s 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,
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 Complainant’s 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
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
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" Complainant’s 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 "…I
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
- 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
- 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 Respondent’s 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
a. Although the disputed domain names share with the marks registered by Complainant
some generic words, Respondent’s domain names are compound words functioning
as single words, while Complainant’s 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)
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)
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 Respondent’s consideration he has
a bona fide legitimate interest over them (Policy, Paragraph 4(a) (ii)
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),
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),
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 Respondent’s communication of February 7, 2002, to WIPO. Complainant
respectfully requests that this brief communication, which addresses certain
statements contained in Respondent’s 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 Complainant’s 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 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)
(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;
(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
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 Complainant’s 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 Complainant’s 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 hadn’t 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 Complainant’s 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
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
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 Respondent’s 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 parties’ 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 ‘Without Prejudice’
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 ‘without prejudice’ 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
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 ‘without prejudice’ 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 § 1152, 1154; Kansas Code of Civil Procedure
§§ 60-452, 60-453; New Jersey Evidence Rules 52 and 53. [italics
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 ‘without prejudice’ 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
‘without prejudice’ 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, ‘without prejudice’
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 Policy’s 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.
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.
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 letter’s 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)
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 Respondent’s 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 Panel’s 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