XPays, Inc. v. Grover Smiley, dba Grovers Presentations
Claim Number: FA0202000104209
The Complainant is XPays, Inc., San Francisco, CA (“Complainant”) represented by Yano Rubinstein, of Oppenheimer Wolff & Donnelly LLP. The Respondent is Grover Smiley, dba Grovers Presentations, Buford, GA (“Respondent”) represented by (name witheld at request of counsel).
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <xxxpays.com>, registered with Intercosmos Media Group, Inc.
The undersigned certifies that he acted independently and impartially and to the best of his knowledge, has no known conflict in serving as Panelist in this proceeding.
Hugues G. Richard as Panelist.
Complainant submitted a Complaint to the National Arbitration Forum (“the Forum”) electronically on February 5, 2002; the Forum received a hard copy of the Complaint on February 11, 2002.
On February 5, 2002, Intercosmos Media Group, Inc. confirmed by e-mail to the Forum that the domain name <xxxpays.com> is registered with Intercosmos Media Group, Inc. and that the Respondent is the current registrant of the name. Intercosmos Media Group, Inc. has verified that Respondent is bound by the Intercosmos Media Group, Inc. registration agreement and has thereby agreed to resolve domain-name disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).
On February 11, 2002, a Notification of Complaint and Commencement of Administrative Proceeding (the “Commencement Notification”), setting a deadline of March 4, 2002 by which Respondent could file a Response to the Complaint, was transmitted to Respondent via e-mail, post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts, and to email@example.com by e-mail.
A timely Response was received and determined to be complete on March 4, 2002.
On March 8, 2002 the Forum timely received an additional submission from the Complainant.
A further submission, from the Respondent, was timely received by the Forum on March 13, 2002.
On March 15, 2002, pursuant to Complainant’s request to have the dispute decided by a single-member Panel, the Forum appointed Hugues G. Richard as Panelist.
Complainant requests that the domain name be transferred from Respondent to Complainant.
Identical or Confusingly Similar
Complainant contends that the disputed domain name (<xxxpays.com>) is identical or confusingly similar to its registered trademark "XPAYS" since it includes entirely its trademark. Moreover, it alleges that the addition of the letters "xx" does not negate a finding that Respondent's domain name is identical or confusingly similar to Complainant's trademark.
Rights or Legitimate Interests
Complainant also alleges that Respondent has no rights or legitimate interests in the disputed domain name since :
i) there is no bona fide offering of services given that Respondent sells a competitor's services at its web site or causes, by the use of the disputed domain name integrating Complainant's trademark, consumer confusion in order to profit from the goodwill associated with said trademark;
ii) Respondent is not commonly known by "XXXPAYS" given that it does not carry on business nor is it incorporated under that particular name and that it does not own trademark registration for the expression "xxxpays.com";
iii) "Respondent's use of "XXXPAYS" is neither a non-commercial use nor a fair use" given that it intends to misleadingly divert consumers to its web site for commercial gain.
Registration and Use in Bad Faith
Finally, the Complainant alleges that Respondent has registered the domain name in bad faith since it registered it despite being familiar with and aware of the "XPAYS" brand name. Respondent is also using the domain name in bad faith by "capitalizing on web site confusion" and "misdirecting traffic to its website" by using Complainant's trademark in the domain name. Moreover, Complainant contends that Respondent's failure to list correct contact information and attempts to delay legal proceedings constitute evidence of its bad faith.
Burden of proof
For its part, Respondent alleges that Complainant has not met its burden of proof under the ICANN Policy.
It also contends that the Panel should not grant Complainant's request since there is no clear case of "cyber squatting" and "cyber piracy" in the case at hand.
Identical or Confusingly Similar
Furthermore, Respondent alleges that the word "xxxpays" and "xxxpays.com" are distinct and different from Complainant's trademarks. Moreover, Respondent asserts that the words "xxxpays" and "xpays" have different meanings since "the use of three x's is commonly known as a reference to adult material while one x does not have the same common meaning".
Rights or Legitimate Interests
Respondent also dismisses Complainant's allegations as to the absence of bona fide offering of services. It alleges that it is making a bona fide offering of services since both parties are not selling competing services. It also reiterates its allegations as to Complainant's failure to meet its burden of proof on that particular aspect of its onus.
Registration and Use in Bad Faith
Finally, Respondent alleges that Complainant has not met its burden of proof. Respondent claims that the Complainant's statements are mere conjecture and that it has not submitted adequate proof to substantiate its allegations. Furthermore, it adds that the words in dispute ("xxxpays" and "xpays") are different.
C. COMPLAINANT'S REPLY
Respondent's failure to rebut the allegations
In its reply, Complainant alleges that Respondent has failed to rebut its allegations and to provide any supported facts to dispute the Complainant's allegations.
Meaning of one "X"
As to the meaning of one "X", the Complainant dismisses Respondent's assertion that "X" is not commonly known as a reference to adult material. It alleges that "the terms "X" and "XXX" are synonymous with adult-oriented material".
Addition of "XX"
Furthermore, Complainant alleges that “the addition of the XX to Complainant’s [XPAYS] mark does not prevent likelihood of confusion between the domain xxxpays from the XPAYS mark”.
Nature of services
Complainant alleges, in its reply, that since both parties are offering the same services they are, in fact, competitors.
Offer for sale
Finally, Complainant claims that an additional element proves Respondent's use in bad faith. The domain name has been listed for sale on the web site <www. greatdomains.com> and Complainant considers that such conduct demonstrates bad faith.
RESPONDENT'S ADDITIONAL SUBMISSION
Burden of proof
In its additional submission, Respondent reiterates its allegation concerning Complainant's failure to discharge itself from its burden of proof and concludes that Complainant has not provided adequate proof.
Respondent also alleges that the terms "X" and "XXX" have different meanings. Therefore the domain names <xpays.com> and <xxx.pays.com> are not confusingly similar since their respective meaning are different.
Finally, Respondent reiterates its contentions as to having rights or legitimate interests in the disputed domain name.
The following unchallenged facts have been asserted :
The Complainant is a company created in August, 1998 which exploits a web site associated to the domain name <xpays.com>. It offers advertising services, through its web site, for the industry of oriented-adult entertainment since December 2, 1998. Complainant provides a service of "dissemination of advertising of the goods and services of others via a global computer network".
Furthermore, the Complainant owns a U.S. trademark registration for XPAYS, used in connection with its services, which was registered on August 22, 2000. This trademark was first used on August 3, 1998.
Complainant also applied on May 21, 2001, for a U.S. trademark registration for XPAYS PERFORMANCE NETWORK & Design which was first used on January 31, 2000. This application was allowed and published for opposition on January 15, 2002.
Respondent, known as Grover Smiley, dba Grovers Presentations, registered, on August 3, 2001, the disputed domain name (<xxxpays.com>), which is used in connection with a web site selling certain advertising services solely on a per "click" basis rather than on a commission basis like Complainant’s web site.
On December 28, 2001 a cease and desist letter, requesting the transfer of the disputed domain name, was sent to Respondent.
By its response, Respondent refused to transfer the disputed domain name and directed the Complainant to a dispute-resolution service provider.
Having reviewed the evidence, submitted by the parties, the Panel makes the following findings :
The evidence submitted by the Complainant supports its assertion that its trademark (XPAYS) has acquired a certain degree of distinctiveness in the adult advertising industry. Complainant has expended a great amount of money "in promotional advertisements of its domain name and web site over the past three years by placing advertisements on numerous web sites and in various trade publications and by printing the domain name on numerous give-aways". It also "has advertised its services monthly in the leading trade magazine, AVN Online, since March 2000". Furthermore, Complainant "has displayed prominent exhibits at five of the last six major adult industry trade shows". The Panel infers that such promotional and advertisement activities have caused the Complainant’s trademark to be known in the industry and to acquire distinctiveness.
The Panel also finds that both parties are competitors since they offer the same services through their respective web sites. Respondent’s allegations in regards to the nature of the parties’ relationship cannot be accepted by the Panel. The distinctions established by Respondent, in order to attempt to demonstrate that the services offered by the parties are distinct, are insufficient to negate the fact that both parties are competitors.
Paragraph 15(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules") instructs this Panel to "decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable".
Paragraph 4(a) of the Uniform Domain Name Dispute Resolution Policy (hereinafter referred as to the "Policy") requires that the Complainant must prove each of the following three elements to obtain an order cancelling or transferring a domain name :
(i) 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) the Respondent has no rights or legitimate interests in respect of the domain name; and
(iii) the domain name has been registered and is being used in bad faith.
After the "General Considerations", these three elements will be considered hereinafter.
As a general principle, a Panel shall decide a dispute on the basis of the statements and allegations made in the Complaint and Response as well as the documentary evidence submitted in connection thereto.
Consequently, the Panel shall not decide on a Complaint solely on the basis of the allegations submitted by the parties since each have a burden of proving its allegations nor is the role of the Panel to seek further extrinsic evidence (other than judicial knowledge) to support the parties’ allegations, as this may be disruptive of the Process. Therefore, it is not sufficient for a party to simply make allegations without submitting the appropriate documentation whenever possible to either support, sustain or challenge the allegations of the other.
i) Identical and/or Confusingly Similar
It has been established in previous UDRP decisions that the addition of a descriptive term (here, "xx") to the distinctive part of a domain name does not negate a finding that the disputed domain name is confusingly similar to a trademark.
For instance, in Victoria’s Secret v. Victoria Summers the Panel found that the domain name <victoriasecretshop.com> was confusingly similar to Victoria’s Secret’s trademark (VICTORIA’S SECRET) even though a descriptive word ("shop") was added to it in composing the domain name. See Also Brown & Bigelow, Inc. v. Rodela (finding that the domain name <hoylecasino.com> is confusingly similar to Complainant’s HOYLE trademak); See Also Caterpillar, Inc. v. Matthew Quin (finding that the domain names <caterpillarparts.com> and <caterpillarspares.com> are confusingly similar to Complainant’s CATERPILLAR trademark). This is even more so, when the generic term "has an obvious relationship to Complainant’s business".
In the case at hand, it clearly appears from the evidence that Complainant has rights in the trademark XPAYS which is distinctive of its services. It is irrelevant to determine if the Complainant has rights in the XXXPAYS or XXXPAYS.COM trademark since the Panel has to evaluate if the disputed domain name is confusingly similar to Complainant’s trademark.
Taking into account the meanings of the terms "xxx" and "x", the type of services offered by the Complainant and the above mentioned decisions, the Panel concludes that, the disputed domain name is confusingly similar to Complainant’s trademark.
ii) Rights or Legitimate Interests
The Panel can rely on any of the following circumstances, without limitation, to find that Respondent has rights or legitimate interests in the domain name :
i) the use or demonstrable preparations to use, the domain name or name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or
ii) the fact that Respondent has been commonly known by the domain name; or
iii) a legitimate non-commercial 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.
The Panel refers to the decision in Pivotal Corp. v. Discovery Street Trading Co.  where it was decided that, once lack of legitimate interests or rights has been sufficiently alleged by a Complainant, Respondent's failure to adequately address this issue may allow the Panel to draw an adverse inference. It is not unreasonable to come to this conclusion given the fact that Respondent is the sole party able to provide evidence of any of the above mentioned circumstances.
Respondent’s allegations and submitted evidences are insufficient to demonstrate its legitimate interests or rights in the disputed domain name.
Moreover, Complainant has, to the satisfaction of this Panel, established on a balance of probabilities that Respondent has no rights or legitimate interests in the domain name.
There was no bona fide offering of services since Respondent was aware, or should have been aware, of Complainant’s trademark given that both parties are competitors. By using the disputed domain name, confusingly similar to Complainant’s trademark, Respondent is attempting to profit from the goodwill associated with Complainant’s trademark and such conduct cannot constitute a bona fide offering of services.
Furthermore, having failed to show that it has been commonly known by the domain name or that it was making a legitimate non-commercial or fair use of said trademark, the Panel concludes that Respondent has no legitimate interests or rights in the domain name.
iii) Registration and Use in Bad Faith
Paragraph 4b) of the ICANN Policy states that the following circumstances, in particular but without limitation, if found by the panel to be present, shall be evidence of the registration and use of a domain name in bad faith :
i) circumstances indicating that Respondent has registered or has acquired the domain name primarily for the purpose of selling ... for valuable consideration in excess of Respondent's documented out-of-pocket costs directly related to the domain name; or
ii) the domain name has been registered in order to prevent the owner of the trademark from reflecting the mark in a corresponding domain name, provided that Respondent has engaged in a pattern of such conduct; or
iii) the domain name has been registered primarily for the purpose of disrupting the business of a competitor; or
iv) the domain is used to intentionally attempted to attract, for commercial gain, Internet users to the Respondent's web site or other online location, by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation, or endorsement of its web site or location or of a product or service on its web site or location.
As previously stated, both parties are competitors. Therefore, Respondent was aware, or at least should have been aware, of Complainant’s trademark prior to registering its domain name. The evidence shows that Respondent registered the disputed domain name almost 3 years after Complainant’s first use of the mark XPAYS. The Panel has also concluded that Complainant’s mark is distinctive and known in the industry of adult-oriented materials. In Snow Fun Inc. v. James O’Connor, the Panel found that the respondent registered the domain name in bad faith since it "had to have been aware of Complainant’s mark prior to registering the domain name". Given all of the circumstances, the Panel infers that Respondent has intentionally incorporated Complainant’s trademark in its domain name in order to "cash in" on the goodwill attached to said trademark. Such conduct constitutes registration in bad faith.
The Panel finds that Respondent is using the domain name in bad faith given that it registered the disputed domain name, which is confusingly similar to Complainant's trademark, in order to attract, for commercial gain, Internet users to its web site. It has been proven by the Complainant that both parties are competitors. The Panel cannot see any plausible reason why Respondent has registered a domain name which incorporates the Complainant's trademark (XPAYS), especially, when the disputed domain name does not reflect Respondent’s corporate or trade name.
Since Respondent is using the domain name to promote services identical to those offered by Complainant, the Panel concludes that Respondent used the domain name to "profit from the Complainant’s mark by attracting Internet users to its competing web site" and that such intentional conduct constitutes use in bad faith.
For the foregoing reasons, the Panel concludes that :
- The domain name registered by the Respondent is confusingly similar to the trademark to which the Complainant has rights;
- The Respondent has no rights or legitimate interests in respect of the domain name; and
- The domain name has been registered and is being used by the Respondent in bad faith.
Pursuant to Paragraph 4(i) of the ICANN Policy, the Panel orders that the domain name <xxxpays.com> registered by Respondent Grover Smiley dba Grovers Presentations be transferred by the Registrar, Intercosmos Media Group, Inc., to the Complainant, XPays, Inc.
Hugues G. Richard, Panelist
Dated: March 28th, 2002.
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 Complainant's proceedings do not include any refrences to the registration date of its domain name (<xpays.com>).
 Complainant's Exhibit 10.
 FA 96931 (Nat. Arb. Forum May 8, 2001).
 FA 96466 (Nat. Arb. Forum Mar. 5, 2001).
 D2000-0314 (WIPO June 12, 2000).
 Space Imaging LLC v. Brownwell, AF 0298 (eResolution Sept. 22, 2000).
 D2000-0648 (WIPO August 14, 2000).
 Tiger Oak Inc. v. Fourb Publishing Inc., FA 96819 (Nat. Arb. Forum May 4, 2000) (finding no legitimate non-commercial or fair use where respondent’s domain name "would appear likely to cause confusion by attracting users interested in Seattle Magazine thereby diverting consumers to respondent’s site").
 FA 96578 (Nat. Arb. Forum Mar. 8, 2001).
 See Ambisco, Inc. v. Tradeware Corporation, FA 96820 (Nat. Arb. Forum Apr. 18, 2001) ("Respondent’s use of the domain name to promote products and services confusingly similar to Complainant’s business is evidence of bad faith". Also see Gorstew Ltd. v. Satin Leaf, Inc., FA 95414 (Nat. Arb. Forum Oct. 4, 2000) (finding use in bad faith when respondent uses complainant’s trademark in the domain name, thereby creating the inference that the web site and products listed thereon emanate from Complainant).
 Southern Exposure v. Southern Exposure, Inc., FA 94864 (Nat. Arb. Forum July 18, 2000).