Medpay Systems, Inc. v AffiniPay
Claim Number: FA1404001553796
Complainant is Medpay Systems, Inc. (“Complainant”), represented by David D. Lin of Lewis & Lin LLC, New York, USA. Respondent is AffiniPay (“Respondent”), represented by Chun T. Wright of REID COLLINS & TSAI LLP, District of Columbia, USA.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <medpay.com>, registered with Network Solutions, LLC.
The undersigned certifies that he has acted independently and impartially and to the best of his knowledge has no known conflict in serving as Panelist in this proceeding.
Debrett G. Lyons as Panelist.
Complainant submitted a Complaint to the National Arbitration Forum electronically on April 11, 2014; the National Arbitration Forum received payment on April 11, 2014.
On April 12, 2014, Network Solutions, LLC confirmed by e-mail to the National Arbitration Forum that the <medpay.com> domain name is registered with Network Solutions, LLC and that Respondent is the current registrant of the name. Network Solutions, LLC has verified that Respondent is bound by the Network Solutions, LLC registration agreement and has thereby agreed to resolve domain disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).
On April 14, 2014, the Forum served the Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of May 5, 2014 by which Respondent could file a Response to the Complaint, via e-mail to all entities and persons listed on Respondent’s registration as technical, administrative, and billing contacts, and to postmaster@medpay.com. Also on April 14, 2014, the Written Notice of the Complaint, notifying Respondent of the e-mail addresses served and the deadline for a Response, was transmitted to Respondent via post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts.
A timely Response was received and determined to be complete on May 5, 2014.
Both parties then made Additional Submissions which were received in a timely manner and in compliance with Supplemental Rule 7.
On May 20, 2014, pursuant to Complainant's request to have the dispute decided by a single-member Panel, the National Arbitration Forum appointed Debrett G. Lyons as Panelist (the “Panel”).
After reviewing Complaint, Response and the parties’ Additional Submissions, Panel requested Forum to issue a Panel Order on May 29, 2014. The parties responded to that Order. The Order and those responses are later described.
.
Complainant requests that the domain name be transferred from Respondent to Complainant.
A. Complainant
Complainant asserts trademark rights in MEDPAY and alleges that the disputed domain name is identical to its trademark.
Complainant alleges that Respondent has no rights or legitimate interests in the disputed domain name.
Complainant alleges that Respondent registered and used the disputed domain names in bad faith.
B. Respondent
Respondent broadly denies those allegations and, in particular, argues the dispute is a trademark law dispute going beyond the scope of the UDRP.
Respondent has commenced proceedings before the United States Trademark Trial and Appeal Board (“TTAB”) for cancellation of Complainant’s US Federal trademark registration of MEDPAY for alleged non-use.
Respondent states that Complainant commenced proceedings in the United States District Court for the Southern District of New York (“SDNY”) alleging that Respondent is a cybersquatter and trademark infringer.
Respondent submits that even if the dispute is to be determined under the UDRP, Complainant’s trademark rights may exist de jure but the underlying basis for these rights—use in commerce—is far from certain. In any event, Respondent argues that there can be no likelihood of confusion since Complainant has failed to use the MEDPAY trademark in any meaningful way so as to cause consumers to be confused.
Further, Respondent says it is not the individual targeted by the Complaint. Respondent only recently acquired the domain name and so prior use of the domain name is not conduct by Respondent.
Respondent has been in business since 2004 providing an online payment gateway. Respondent has an existing business using other “--PAY” trademarks and purchased the domain name in good faith in March 2014 to support a business offering credit card processing and related services to associations, trade groups, medical practices, and other groups which it had first developed in August 2010.
Finally, Respondent submits that the doctrine of laches militates against Complainant. Complainant waited seventeen years to bring these proceedings.
C. Additional Submissions
As indicated above, both parties made Additional Submissions which the Panel has taken into account in reaching its decision and which are referred to as required in the following Discussion.
D. Panel Order
After reviewing the aforedescribed material, the parties were sent a Panel Order in the following terms:
“The Complainant is hereby invited to provide further and better particulars of its claim to common law rights in the trademark, MEDPAY. The Panel is particularly interested in proof of use of the trademark in the three (3) years period ending on April 1st, 2014. The Complainant is invited to provide that information by no later than Friday, June 13th, 2014.
Dependent upon if and when that information is received, the Respondent will be given a period to be set in which to comment on the information.”
Complainant provided further evidence and argument and, within a later period set, Respondent commented on that material.
Panel has considered that material and commentary in the Discussion which follows.
E. Further Unsolicited Submissions
Both parties went further than was asked of them by the Panel Order and made counter-replies and retorts which the Panel has disregarded.
The factual findings pertinent to the decision in this case are that:
1. Complaint provides healthcare patient payment collection services by reference to the registered trademark MEDPAY;
2. the trademark is the subject of United States Trademark Reg. No. 1,962,072 registered March 12, 1996, standing in the name of Complainant;
3. the disputed domain name was registered on June 21, 1997 by an unidentified third party;
4. on March 31, 2001 and presumably for a time thereabouts, the domain name resolved to a website which promoted a web based outsourcing software business for healthcare organisations’ administrative needs;
5. that business was seemingly led by a Dr. George Kallins and traded under the name, MEDPAY.
6. for some years there has been no active website associated with the domain name;
7. on January 17, 2014, Complainant’s trademark attorney sent a demand letter to a Mark Auburn requiring transfer of the domain name;
8. as a result of that letter, it is declared by Complainant’s trademark attorney that a conversation with Mr. Auburn ensued during which the domain name was offered for sale for USD10,000 to 15,000;
9. A snapshot from a WHOIS database updated at April 11, 2014, shows Respondent as the disputed domain name registrant, the administrative contact as a John Porter, and gives the registrant email as mark@bronzehorseman.com;
10. that email address was used by Mark Auburn;
11. on April 3, 2014, Respondent filed a petition for cancellation of Complainant’s Federal trademark registration. The action is pending before both the United States Trademark Trial and Appeal Board (“TTAB”);
12. after this complaint was filed with the Forum, Complainant filed a civil complaint in the SDNY alleging that trademark infringement and cybersquatting by Respondent.
Paragraph 15(a) of 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 Policy requires that Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:
(1) the domain name registered by Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and
(2) Respondent has no rights or legitimate interests in respect of the domain name; and
(3) the domain name has been registered and is being used in bad faith.
There is a long and healthy recognition by Courts, Tribunals, and other legal and administrative fora that duplication of effort is to be avoided. However, in this case it is not at all clear that application of the UDRP would produce a decision which in either its reasoning or outcome duplicated the work another was about to undertake.
Complainant made a statement under Rule 3(b)(xi) that there were “no other legal proceedings that have been commenced or terminated in connection with or relating to” the disputed domain name. Complainant certified that to its knowledge that information was true and correct.
On information from Respondent, a different picture emerges; one in which the parties are known to one another and are protagonists in (at least) two other sets of legal proceedings, one before the TTAB where Respondent has challenged the validity of Complainant’s trademark registration, the other where the SDNY is to hear and decide on arguments of trademark infringement and cybersquatting.
Respondent is right to say that the dispute between the parties goes “far beyond the scope of the UDRP” but that is not the same as saying that those bodies will decide the same issues as require examination under the UDRP, still less that the outcomes of those proceedings will deliver decisions which dispose of the domain name in a particular way. In particular, the TTAB decision will have no bearing on the fate of the domain name and the SDNY case may have none. Indeed, based only on the evidence before this Panel, there is an open question as to whether or not a court would characterize Respondent as a cybersquatter.
Panel finds that the facts put before it indicate that the Policy is in fact directly relevant and that there is no reason for the Panel to disqualify itself. Panel therefore proceeds to apply the Policy.
The arguments and counter-arguments are littered with examples of ways in which the Policy has been misunderstood by the parties. Paragraph 4(a)(i) of the Policy requires a two-fold enquiry – a threshold investigation into whether a complainant has rights in a trademark, followed by an assessment of whether the disputed domain name is identical or confusingly similar to that trademark.
Paragraph 4(a)(i) of the Policy does not distinguish between registered and unregistered trademark rights. It is well established by decisions under this Policy that a trademark registered with a national authority is evidence of trademark rights (see State Farm Mut. Auto. Ins. Co. v. Periasami Malain, FA 705262 (Nat. Arb. Forum June 19, 2006) (“Complainant’s registrations with the United States Patent and Trademark Office of the trademark, STATE FARM, establishes its rights in the STATE FARM mark pursuant to Policy, paragraph 4(a)(i).”). It is of no relevance whatsoever to the establishment of trademark rights that the registration might be the object of a pending, yet undecided, cancellation action. Provided the registration remains on foot at the time of this decision, it is enough to prove rights no matter what might later become of it. Reference to the USPTO website shows that a decision in the cancellation action is at least some months away.
Since Complainant provides evidence of its USPTO trademark registration, the Panel is satisfied that it has trademark rights in MEDPAY.
Panel is also satisfied that the disputed domain name is legally identical to Complainant’s trademark (see Rollerblade, Inc. v. McCrady, D2000-0429 (WIPO June 25, 2000) finding that the top level of the domain name such as “.net” or “.com” does not affect the domain name for the purpose of determining whether it is identical or confusingly similar). Respondent’s argument that there can be no possible confusion because there is no public use of Complainant’s trademark is misguided. The test is confusing similarity, not actual confusion. In any event, it might be said that this question does not arise at all since there is legal identity of the terms.
Panel finds that Complainant has satisfied the requirements of paragraph 4(a)(i) of the Policy.
Without detracting in any way from that finding, Panel considers this to be a convenient point to make additional observations concerning the nature of the trademark and concerning Complainant’s claim to a reputation in the trademark.
Respondent was right to criticize the complaint for sweeping but unsubstantiated claims to a (US) nationwide reputation lying behind the trademark. Aside from a declaratory statement to that effect from an officer of Complainant, there was no evidence of that matter. The Panel Order elicited material of some interest, but nothing which would cause the Panel to think that the trademark enjoyed a level of awareness approaching anything like household recognition. The evidence was of a modest business with very modest use of its name, a fact which must be later weighted when assessing Complainant’s persistent accusation that Respondent targeted Complainant’s trademark and business.
Something, too, should be said here of the trademark itself. Although a registered trademark, MEDPAY is clearly composed of two terms which allude almost directly to that nature of the services offered. It is a term apt to describe those and related services and is likely in the opinion of the Panel to be adopted by more than one trader without improper motives. That is not to say that Complainant does not have the exclusive right to use that term in a trademark sense by reason of its Federal registration, but for the later purpose of testing Respondent’s intentions under the Policy, it is a genuine possibility that others might choose the same name in good faith, regardless of whether or not their use of the term might be actionable as trademark infringement.
Paragraph 4(c) of the Policy states that any of the following circumstances, in particular but without limitation, if found by the Panel to be proved based on its evaluation of all evidence presented, shall demonstrate rights or legitimate interests to a domain name for purposes of paragraph 4(a)(ii) of the Policy:
(i) before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or
(ii) you (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or
(iii) you are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trade mark or service mark at issue.
Complainant need only make out a prima facie case that Respondent has no rights or legitimate interests in the disputed domain name, after which the onus shifts to Respondent to rebut that case by demonstrating those rights or interests (see Do The Hustle, LLC v. Tropic Web, D2000‑0624 (WIPO Aug. 21, 2000).
The publicly available WHOIS information does not provide prima facie evidence that Respondent might be commonly known by the disputed domain name and there is no clear evidence that Respondent is in fact known by the name, MEDPAY. There is no evidence that Respondent has relevant trademark rights. There is no evidence that Complainant has authorized Respondent to use the trademark and Complainant denies any such authorization.
At the time of the complaint, the domain name was not in use and so there is no foundation to show that the disputed domain name might have been used in connection with a bona fide offering of goods or services.
Panel finds that Complainant has established a prima facie case and so the onus shifts to Respondent to establish a legitimate interest in the domain name.
Paragraph 4(c)(i) of the Policy lies at the heart of the matter. Can it be said that before Respondent had notice of the dispute it had used, or made demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services?
Panel finds that the relevant date is April 11, 2014, the date on which the complaint was transmitted to Respondent by the Forum. No earlier date can be read as notice of the dispute to the Respondent.
Respondent’s case is that it has been in business since 2004 providing an online payment gateway and using a number of “— PAY” suffixed trademarks including LAWPAY and AFFINIPAY.
It is said that Respondent purchased the domain name in an arm’s length deal in March 2014 to further support a line of business offering credit card processing and related services to associations, trade groups, medical practices, and other groups which it has developed in August 2010 under the MEDPAY name.
Respondent had in fact contacted Complainant’s trademark attorney in 2013 with a view to possible purchase of the trademark but the discussion was inconclusive. On Panel’s reading of the evidence, Respondent then made its own arrangements which included negotiation for purchase of the disputed domain name via Mark Auburn who acted in a liaison capacity with the previous owner of the domain name. Respondent also made enquiries as to the scope of use of the trademark over a statutory three year period and formed the view that the trademark registration was vulnerable to cancellation for non-use. Some days prior to the date of filing of the complaint, Respondent had lodged a cancellation petition with the TTAB.
Through the medium of Mark Auburn, Respondent acquired the domain name on March 31, 2014, again some days before the complaint was filed.
Accordingly, Respondent submits that it did not acquire the domain name until long after any use of the domain name upon which Complainant relies to draw inferences of bad faith use. It follows, too, that Respondent is not the person who offered to sell the domain name to Complainant.
However, Complainant submits that Mark Auburn and Respondent should be treated as one and the same entity. In support of that position, Complainant notes, correctly, that Mark Auburn’s email address is mark@bronzehorseman.com, an address which for a short time continued to appear in the WHOIS data for the domain name, even after Respondent was named as the registrant.
Respondent says that the reference to the mark@bronzehorseman.com e-mail account in the WHOIS data is vestigial. The reference existed for a short time after recordal of the change of registrant and was a mere administrative oversight, says Respondent. It was soon rectified to the email address Respondent has routinely used since.
Returning to the reference point of paragraph 4(c)(i) of the Policy and to the matter of whether, before April 11, 2014, Respondent had used, or made demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services, the Panel makes the following additional findings:
§ There is no evidence of any collusion between Mark Auburn and Respondent intended to avoid the impact of the Policy or otherwise.
§ Panel finds that there is nothing in the evidence to contradict or call into doubt Respondent’s claim that it made an honest, arm’s length purchase of the domain name from a third party with whom it has had no further dealings.
§ All of the alleged instances of bad faith registration predate acquisition of the domain name by Respondent by many years.
§ Respondent has proved itself to have an established genuine business using a small stable of “—PAY” styled trademarks.
§ There is some evidence to show that Respondent had used the name MEDPAY since 2010.
§ There is ample evidence that Respondent had made demonstrable preparations to use the domain name in connection with a bona fide offering of services.
This is not the picture of an assiduous infringer slowly engineering the downfall of the rightful trademark owner. Indeed, on one construction of the evidence, it could be said that the complaint was the design of a party disappointed by its failure, for whatever reason, to secure the purchase of the domain name, who has turned the Policy against the transferee, indifferent to the genuine intentions of that party.
Panel finds that Respondent has shown a legitimate interest in the domain name since its conduct falls under the paragraph 4(c)(i) of the Policy.
With that finding the complaint fails and Panel need do no more. In this case and for the sake of absolute clarity, Panel has chosen to go on and make the paragraph 4(a)(iii) analysis.
Complainant must prove on the balance of probabilities both that the disputed domain name was registered in bad faith and used in bad faith.
Further guidance on that requirement is found in paragraph 4(b) of the Policy, which sets out four circumstances, any one of which is taken to be evidence of the registration and use of a domain name in bad faith if established.
The four specified circumstances are:
‘(i) circumstances indicating that the respondent has registered or acquired 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 the respondent’s documented out-of-pocket costs directly related to the domain name; or
(ii) the 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; or
(iii) the respondent has registered the domain name primarily for the purpose of disrupting the business of a competitor; or
(iv) by using the domain name, respondent has intentionally attempted to attract, for commercial gain, internet users to respondent’s 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 the respondent’s website or location or of a product or service on the site or location.’
Panel finds that there is no evidence whatsoever that Respondent was primarily actuated by a motive described in subparagraphs (i) to (iii) above and since subparagraph (iv) hinges on use (and there has been no relevant use) then Complainant is left to prove both registration in bad faith and then use in bad faith.
There is no evidence of registration in bad faith in 1997 by an unidentified first registrant of the name (and were there any, it would require very close scrutiny for reasons explained earlier in connection with laches). Even if the transfer to Respondent is treated as re-registration of the name, there is still nothing to show Respondent acted in bad faith.
Since there has been no use of the domain name by Respondent, there is no potential for bad faith use and Panel takes the view that, on the facts, there is no scope for application of the principle of so-called passive holding.
Complainant has failed to show registration or use in bad faith.
Having failed to establish all three elements required under the ICANN Policy, the Panel concludes that relief shall be DENIED.
Accordingly, it is Ordered that the <medpay.com> domain name REMAIN WITH Respondent.
Debrett G. Lyons, Panelist
Dated: July 7, 2014
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