The recent UDRP decision of American Airlines, Inc. v. MegaWeb.com Inc. has raised some eyebrows. And not because the domain name at issue was transferred or not transferred. It’s the decision itself that seems puzzling.
American Airlines sought transfer of the domain name americanairways.com from MegaWeb.com. Of course American Airlines argued all three prongs of the test, namely that (1) its mark American Airlines and the subject domain name americanairways are confusingly similar, (2) MegaWeb.com did not have a legitimate interest in the subject domain and (3) MegaWeb.com reserved the subject domain name in bad faith.
In defense of the allegations, MegaWeb.com argued – of course – that the mark American Airlines and the domain name americanairways are not confusingly similar. Specifically, MegaWeb.com argued that although the two names share the common term “AMERICAN” – the remaining portions of the names are sufficiently different (e.g., American airways is descriptive for a complete air transport system and there is a clear and distinct difference between airlines and airways) – thus the mark American Airlines is not identical or confusingly similar to the term american airways.
Based upon the evidence of record, the panel agreed with MegaWeb.com that the mark American Airlines and subject domain name americanairways are not confusingly similar. Under the UDRP process, a panel may decide to end its analysis should the complainant fail to prove prong one or two of the test and render its decision in favor of the respondent. In this case, however, the panel decided to provide analysis for prongs two and three of the test.
What’s puzzling is that although the panel decided that the complainants mark and subject domain name are not confusingly similar, the panel still concluded that MegaWeb.com had no legitimate interest in the subject domain name and had registered it in bad faith. Huh.
One of the factors relied upon by the panel in determining whether MegaWeb.com had a legitimate interest and registered the subject domain name in bad faith is that MegaWeb.com operates a pay-per-click website under the subject domain name that lists, and can direct Internet traffic to, competitors of the complainant. Based, in part, on that evidence, the panel concluded that MegaWeb.com didn’t have a legitamate interest in the domain name and had reserved it in bad faith.
Can there really be bad faith registration of a domain name that is not confusingly similar to a complanaint’s mark? If the domain is not confusingly similar to a complainant’s mark, how could there have been bad faith registration?
Might the panel have been saying that although it would like to have ordered transfer of the domain name it simply couldn’t because of complainant’s failure to prove prong one of the test - that complainant’s mark and subject domain name are confusingly similar?
What does this decision mean for future complainants, if anything? Doesn’t the decision really say that pay-per-click web sites are not legitimate services even when offered in connection with non-infringing domain names? Even so, would that change the outcome of any future decisions? I don’t think so.