PayPal, Inc. v. David Weiss / Paybyweb, Inc.
Claim Number: FA1707001740061
Complainant is PayPal, Inc. (“Complainant”), represented by Molly Buck Richard of Richard Law Group, Inc., Texas, USA. Respondent is David Weiss / Paybyweb, Inc. (“Respondent”), Florida, USA.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <paypals.com>, registered with GoDaddy.com, 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.
The Honorable Charles K. McCotter, Jr. (Ret.) as Panelist.
Complainant submitted a Complaint to the Forum electronically on July 14, 2017; the Forum received payment on July 14, 2017.
On July 16, 2017, GoDaddy.com, LLC confirmed by e-mail to the Forum that the <paypals.com> domain name is registered with GoDaddy.com, LLC and that Respondent is the current registrant of the name. GoDaddy.com, LLC has verified that Respondent is bound by the GoDaddy.com, 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 July 18, 2017, the Forum served the Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of August 7, 2017 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@paypals.com. Also on July 18, 2017, 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 August 7, 2017.
On August 8, 2017, pursuant to Complainant's request to have the dispute decided by a single-member Panel, the Forum appointed the Honorable Charles K. McCotter, Jr. (Ret.) as Panelist.
On August 9, 2017, Complainant filed a timely additional submission. On August 11, 2017, Respondent filed a timely additional submission.
Having reviewed the communications records, the Administrative Panel (the "Panel") finds that the Forum has discharged its responsibility under Paragraph 2(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules") "to employ reasonably available means calculated to achieve actual notice to Respondent" through submission of Electronic and Written Notices, as defined in Rule 1 and Rule 2.
Complainant requests that the domain name be transferred from Respondent to Complainant.
A. Complainant
Complainant operates a worldwide online payment system. Complainant uses the PAYPAL mark to promote its business. Complainant registered its PAYPAL mark with the United States Patent and Trademark Office (“USPTO”) (e.g., Reg. No. 2,646,490, registered Nov. 5, 2002), and has rights in the mark pursuant to Policy ¶ 4(a)(i). Respondent’s <paypals.com> is confusingly similar to Complainant’s mark because it merely appends the letter “s” and the generic top-level domain (“gTLD”) “.com” to the fully incorporated mark.
Respondent has no rights or legitimate interests in the <paypals.com> domain name. Complainant has not licensed or otherwise authorized Respondent to use PAYPAL and Respondent is not commonly known by the disputed domain name. Further, Respondent has not used the disputed domain name in connection with any bona fide offering of goods or services or legitimate noncommercial or fair use. Instead, the domain name resolves to a site that criticizes Complainant’s business and promotes hyperlinks that compete with Complainant’s business.
Finally, Respondent is using the <paypals.com> domain name in bad faith. Respondent’s offer to sell the name at a price exceeding out-of-pocket costs, disruption of Complainant’s business, and use of a privacy shield to conceal its identity are all evidence that Respondent registered and used the domain name in bad faith. Furthermore, due to the fame of Complainant’s PAYPAL mark, Respondent had actual notice of Complainant’s rights in the mark and attempted to attract Internet traffic and commercially benefit from the goodwill of the mark by creating confusion as to the source, sponsorship, affiliation, or endorsement of its website.
B. Respondent
Respondent registered the <paypals.com> domain name on March 28, 2003. Respondent contends that its <paypals.com> domain name is not confusingly similar to Complainant’s mark because by adding the letter “s”, the meaning of the terms in the domain name are changed.
Respondent has used the disputed domain name in connection with a bona fide offering of goods or services or legitimate noncommercial or fair use because the resolving website offered goods and services that did not compete with Complainant’s business. Respondent only redirected the website to a gripe site after it was harassed by Complainant and believed that the diversion was necessary to prevent Complainant from taking the disputed domain name. Respondent included a disclaimer with a hyperlink to Complainant’s website for those Internet users seeking Complainant, which stated, “Click here, if you are looking for Paypal.”
Finally, Respondent did not register the <paypals.com> domain name in bad faith because the domain was originally registered for Complainant’s benefit as part of a referral program that is now discontinued. Respondent did not act in bad faith under Policy ¶ 4(b)(i) because—although it did reach out to Complainant for the domain name’s purchase—Respondent alternatively stated to Complainant that if a price was not agreed upon, then it “will be using it to provide content that will not dilute the Paypal name.” As to disruption, Respondent immediately changed the allegedly infringing content upon being notified by Complainant. Respondent has not received any monetary gain from the forwarding of the domain name to gripe sites.
Complainant’s 13 year delay in filing their claim against Respondent raises a defense based on the doctrine of laches.
C. Complainant’s Additional Submission
Respondent argues, without any documentary evidence, that it registered the domain name with the initial plan of using it to promote PayPal’s reseller program and Respondent used it “with PayPal’s knowledge,” generating over a thousand new merchants for PayPal. There is no evidence that there was ever a relationship between the parties. Even if there had been, Complainant has never permitted third parties to register domain names that include its primary brand PAYPAL.
Although Respondent argues that he was part of a reseller program and he spoke to PayPal representatives over the phone at some unidentified time, there is simply no evidence whatsoever that Complainant was aware of Respondent or his use of <paypals.com> until the Fall of 2016.
Respondent’s own admissions, demonstrate that Respondent used the domain to market competitors to PayPal until PayPal initially wrote Respondent objecting to this practice. Respondent states that upon being contacted by PayPal, he immediately changed the site to direct to a school fundraising site. This page says “Coming Soon.” There is no evidence that this site was ever active or that Respondent legitimately used it for any fundraising.
More importantly, one does not establish good faith merely by changing the content of a site in an attempt to make it non-infringing, especially after the receipt of a cease and desist letter.
Respondent acknowledges in his Response that he emailed PayPal in June of 2017 to see if they were interested in purchasing the domain name, noting that prior to contacting them, he again redirected the domain from the alleged school fundraising site to <paypalsucks.com>. That site purports to be a “gripe site” but in fact offers competing money transfer and payment services.
Once PayPal contacted Respondent in the Fall of 2016 complaining of this domain name, Respondent made several attempts to change the content to try to avoid an adverse UDRP decision, further establishing Respondent’s bad faith registration and use under Policy ¶ 4(a)(iii).
Complainant has established that Respondent registered and used the disputed domain name in bad faith. The domain name <paypals.com> is similar to the famous PAYPAL mark. Respondent is not known by the name PAYPAL or PAYPALS. Respondent acknowledges that prior to purchasing the domain name, Respondent ran a business called PaybyWeb which offered check processing which appears to still be the case. While Respondent argues that the domain was originally purchased to work with PayPal, there is no documentary evidence of this fact and the only communications between the parties occurred after PayPal contacted Respondent in the fall of 2016 about the use of the domain name to offering competing services. Since that time, Respondent has clearly attempted to avoid a decision of bad faith by moving the site to various other sites that Respondent believed would avoid an adverse decision.
D. Respondent’s Additional Submission
PaybyWeb does not provide similar or competitive services to those offered by PayPal. PayPal is a 3rd Party Processor and process transactions using their own merchant account(s) and payout transactions. Paybyweb provides actual merchant accounts to businesses. Paybyweb is registered with banks/processors to act as an agent and set up merchants directly with a processor to run credit card transactions.
Paybyweb initially registered the domain name <paypals.com> to work with PayPal and its reseller program and worked with PayPal in the reseller program for five years. Paybyweb referred over one thousand new merchants to PayPal. After PayPal discontinued their reseller program, Paybyweb updated the content on the <paypals.com> site to offer merchant accounts and links to PayPal. This did not compete with the services PayPal provides. The site was live for years with no issue from PayPal. Paybyweb took the site down once PayPal complained, and replaced it with the school fundraising page. This page was still under construction when Paybyweb received another complaint from PayPal. Paybyweb then forwarded the domain to PaypalSucks.com and NoPaypal.com.
Respondent has evidence of PayPal’s referral program and that PayPal knew of Respondent’s use of the <paypals.com> domain name. In May and June of 2012, a PayPal employee made two posts on <paypal-community.com about the discontinuation of the referral program and continuing to promote PayPal.
For use of their reseller program, PayPal offered branded content pages/forms. Paybyweb had to place PayPal’s computer code on Paybyweb pages in order for the PayPal Signup Forms to show up. With that code, PayPal could easily see which domains were referring merchants.
Complainant operates a worldwide online payment system. Complainant uses the PAYPAL mark to promote its business. Complainant has rights in the PAYPAL mark through registration with the USPTO (e.g., Reg. No. 2,646,490, registered Nov. 5, 2002). Respondent’s <paypals.com> is confusingly similar to Complainant’s mark because it merely appends the letter “s” and the generic top-level domain (“gTLD”) “.com” to the fully incorporated mark.
Respondent, David Weiss / Paybyweb, Inc., registered the <paypals.com> domain name on March 28, 2003.
Respondent has no rights or legitimate interests in the <paypals.com> domain name. Complainant has not licensed or otherwise authorized Respondent to use PAYPAL and Respondent is not commonly known by the disputed domain name. Further, Respondent has not used the disputed domain name in connection with any bona fide offering of goods or services or legitimate noncommercial or fair use. Instead, at the time of the filing of the Complaint, the domain name resolved to a site that criticizes Complainant’s business and promotes hyperlinks that compete with Complainant’s business.
Finally, Respondent registered and uses the <paypals.com> domain name in bad faith. All of Respondent’s uses of the domain name were made in bad faith including the initial alleged use in a reseller program. There is no evidence that Complainant ever gave Respondent authorization to use its PAYPAL mark in a domain name.
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.
Complainant has rights in the PAYPAL mark under Policy ¶ 4(a)(i) through registration with the USPTO. See T-Mobile USA, Inc. dba Metrics v. Ryan G Foo / PPA Media Services, FA 1627542 (Forum Aug. 9, 2015) (finding that Complainant has rights in the METROPCS mark through its registration with the United States Patent and Trademark Office).
Respondent contends that its <paypals.com> domain name is not confusingly similar to Complainant’s PAYPAL mark because it creates two words: “pay” and “pals”. However, the Panel finds that Respondent’s <paypals.com> is confusingly similar to Complainant’s mark because it merely appends the letter “s” and the generic top-level domain (“gTLD”) “.com” to the fully incorporated mark.
Complainant must first make a prima facie case that Respondent lacks rights and legitimate interests in the disputed domain name under Policy ¶ 4(a)(ii), and then the burden shifts to Respondent to show it does have rights or legitimate interests. See Hanna-Barbera Prods., Inc. v. Entm’t Commentaries, FA 741828 (Forum Aug. 18, 2006) (holding that the complainant must first make a prima facie case that the respondent lacks rights and legitimate interests in the disputed domain name under UDRP ¶ 4(a)(ii) before the burden shifts to the respondent to show that it does have rights or legitimate interests in a domain name).
Complainant asserts that Respondent has no rights or legitimate interests in the disputed domain name. Complainant has not licensed or otherwise authorized Respondent to use its PAYPAL mark. A lack of contradicting evidence in the record that a respondent was authorized to use a complainant’s mark in a domain name can be evidence of a lack of rights and legitimate interests. See Navistar International Corporation v. N Rahmany, FA 1620789 (Forum June 8, 2015) (finding that the respondent was not commonly known by the disputed domain name where the complainant had never authorized the respondent to incorporate its NAVISTAR mark in any domain name registration). Additionally, WHOIS information can be used to support a finding under Policy ¶ 4(c)(ii) that a respondent is not commonly known by a disputed domain name especially where a privacy service has been engaged. A privacy service was used by Respondent, but was lifted as a result of the commencement of this proceeding. The WHOIS information of record lists “REGISTRATION PRIVATE”, as the registrant prior to the lifting of the privacy services, and “DAVID WEISS” as the registrant currently. Therefore, the Panel finds that Respondent is not commonly known by the <paypals.com> domain name under Policy ¶ 4(c)(ii).
Next, Complainant contends that Respondent is not using the disputed domain name in connection with any bona fide offering of goods or services or any legitimate noncommercial or fair use.
Respondent contends that it registered the domain name originally for the purpose of working with Complainant’s reseller program which has since been terminated. Respondent argues that it once used the domain name to resolve to a website offering services similar to Complainant’s business including merchant accounts and payment processing. Complainant contacted Respondent and asked that the domain name be transferred because the <paypals.com> domain name was offering competing services. Respondent contends that since being notified, the <paypals.com> domain name no longer offers services that compete with Complainant’s business and is being used in connection with a bona fide offering of goods or services. Respondent contends that the <paypals.com> domain name was recently used as an elementary school fundraising site which offered school scrapbook and memory books for purchase.
Respondent asserts that the <paypals.com> domain name diverted to a “gripe site” only after Respondent had been harassed by Complainant for continuing to use the disputed domain name. Further, Respondent contends it has rights and legitimate interests in the domain name because it receives no funds from the gripe site.
Use of a confusingly similar domain name to display criticism of Complainant’s business and competing hyperlinks is not a bona fide offering of goods or services or any legitimate noncommercial or fair use See Provide Commerce, Inc. v. e on Craze, FA 1626318 (Forum Aug. 11, 2015) (holding that the respondent was not making a bona fide offering of goods or services, or a legitimate noncommercial or fair use of the disputed domain name under Policy ¶¶ 4(c)(i) and 4(c)(iii) where the respondent was using the disputed domain name to host generic links to third-party websites, some of which directly competed with the complainant’s business); see also Direct Line Group Ltd. v. Purge I.T., D2000-0583, (WIPO Aug. 13, 2000) (finding that use of the complainant’s name and adoption of it in a domain name is inherently likely to lead some people to believe that the complainant’s are connected with it); see also Weekley Homes, L.P. v. Fix My House Or Else?, FA 96609 (Forum Apr. 18, 2001) (finding that establishment of a website containing criticism is not a legitimate use of the <davidweekleyhome.com> domain name because the disputed domain name is confusingly similar to the complainant's DAVID WEEKLEY HOMES mark). Here, Complainant supplied screenshots of the <paypals.com> resolving to a gripe site which criticizes Complainant’s business and displays competing hyperlinks to divert Internet users to Complainant’s competitors’ businesses. Therefore, the Panel finds that at the time of the filing of the Complaint, Respondent failed to use the disputed domain name in connection with a bona fide offering of goods or services or a legitimate noncommercial or fair use.
Further, Respondent’s offer to sell the <paypals.com> domain name to Complainant for $10,000 is evidence that Respondent lacks rights and legitimate interests in the domain name. Offers to sell for more than the out-of-pocket registration costs support a finding that a respondent lacks rights and legitimate interests in the disputed domain name. See George Weston Bakeries Inc. v. McBroom, FA 933276 (Forum Apr. 25, 2007) (holding that where a respondent makes a “disproportionate” offer to sell its domain name registration to the complainant for more than its out-of-pocket registration costs, there is additional evidence that the respondent lacks rights and legitimate interests in the disputed domain name).
Unlike the rights and legitimate interest, which are required to be assessed at the time of the filing of the complaint, bad faith has to be assessed at the time of registration. See Fuji Heavy Industries Ltd. (Fuji Jukogyo Kabushiki Kaisha) v. Radacini Autotrading SRL, D2007-0009 (WIPO December 17, 2007).
Respondent contends that he did not register the <paypals.com> domain name in bad faith stating that he registered the domain name in conjunction with a PayPal reseller program. Respondent relies heavily on two 2012 posts by a PayPal employee on <paypal-community.com>:
May 25, 2012 9:02 PM
Re: Does Paypal have a referral program or affiliate program?
PayPal does not have a referral program for new merchants, although we used to awhile back. . . .
June 05, 2012 6:50 PM
Re: Does Paypal have a referral program or affiliate program?
Thank you for your continued patronage! We value all of our merchants, whether they’ve been with us for 2 or 12 years, and it’s your continued usage that makes PayPal valuable to everyone involved. . . .I had asked myself the same questions when the referral program was discontinued. . . .
While these two posts suggest the existence of a PayPal reseller program sometime in the past, the posts shed no light on the terms of the program or any agreement authorizing a reseller to use the PAYPAL mark in a domain name. The posts do not show that Respondent was a member of such a program. Nor does Respondent’s allegation of installation of a PayPal computer code on his computer to see branded content pages and forms provide evidence of PayPal’s authorization to use the PAYPAL mark in a domain name. See Hewlett-Packard Company v. HP Supplies and Nationwide Office Supplies Ltd., FA 282387 (Forum July 22, 2004) (finding that Respondent claims to be part of the Hewlett-Packard “partnership / channel programme” in the UK but Respondent provides no proof of this allegation and Complainant’s records do not reflect any such association. By putting the famous HP mark into its domain name, Respondent had the intention of using the goodwill built up in the HP brand to attract visitors to its website for commercial gain by creating a likelihood of confusion with Complainant’s mark as to the source, sponsorship, affiliation or endorsement of Respondent’s website and Respondent’s products.).
Complainant registered the PAYPAL mark on November 5, 2002. Almost five months later, on March 28, 2003, Respondent registered the <paypals.com> domain name, purportedly for use in a PayPal reseller program. However, Respondent has failed to produce any evidence of a reseller agreement or any agreement by Complainant authorizing Respondent to use the PAYPAL mark in a domain name. To the contrary, Complainant says that it has never permitted third parties to register domain names that include its PayPal brand. The Panel concludes that Respondent’s conduct in the initial registration was opportunistic and therefore in bad faith. See Fanuc Corporation v. SC Metalkid 2008 SRL and Alunăriței Liliana, D2016-0005 (WIPO June 17, 2016) (The Respondent’s conduct was opportunistic and designed to obtain an advantage in the market for the Respondent’s own benefit).
When Respondent began hosting competing hyperlinks, Respondent disrupted Complainant’s business by attempting to divert potential customers away from Complainant. See Health Republic Insurance Company v. Above.com Legal, FA1506001622088 (Forum July 10, 2015) (“The use of a domain name’s resolving website to host links to competitors of a complainant shows intent to disrupt that complainant’s business, thereby showing bad faith in use and registration under Policy ¶ 4(b)(iii).”). Therefore, Respondent disrupted Complainant’s business and registered the <paypals.com> domain name in bad faith.
Also, Respondent registered and used the <paypals.com> domain name in bad faith under Policy ¶ 4(b)(iv) by attempting to attract Internet traffic and commercially benefit from the goodwill of the PAYPAL mark by displaying competing hyperlinks. See Staples, Inc. and Staples the Office Superstores, LLC v. HANNA EL HIN / DTAPLES.COM, FA1404001557007 (Forum June 6, 2014) (“Therefore, the Panel finds that Respondent registered and is using the <dtaples.com> domain name in bad faith under Policy ¶ 4(b)(iv) because the Respondent is using the disputed domain name to host third-party links to Complainant’s competitors from which Respondent is presumed to obtain some commercial benefit.”); see also Diners Club Int’l, Ltd. v. Infotechnics Ltd., FA 169085 (Forum Aug. 20, 2003) (“Respondent’s registration and use of a domain name nearly identical to Complainant’s mark to criticize Complainant’s business practices is evidence of registration and use of the <diners-club.net> domain name in bad faith pursuant to Policy ¶ 4(a)(iii).”).
Respondent registered the <paypals.com> domain name with actual knowledge of Complainant’s PAYPAL mark, which is evidence of bad faith under Policy ¶ 4(a)(iii). See Univision Comm'cns Inc. v. Norte, FA 1000079 (Forum Aug. 16, 2007) (rejecting the respondent's contention that it did not register the disputed domain name in bad faith since the panel found that the respondent had knowledge of the complainant's rights in the UNIVISION mark when registering the disputed domain name).
Although Respondent engaged a privacy service, the use of a privacy service, without more, cannot reach the threshold of bad faith registration and use. See WWF-World Wide Fund for Nature aka WWF International v. Moniker Online Services LLC and Gregory Ricks, D2006-0975 (WIPO November 1, 2006) (finding use of proxy registration service does not of itself indicate bad faith; there are many legitimate reasons for proxy registration services). Here, considering the totality of the circumstances, the events surrounding Respondent’s engagement of a privacy service do not give rise to a finding of bad faith registration and use.
More importantly, one does not establish good faith merely by changing the content of a site in an attempt to make it non-infringing, especially after the receipt of a cease and desist letter. See State Farm Mutual Automobile Insurance Company v. Sean Dada FA 1521298 (FORUM Oct. 25, 2013)(where the Respondent changed the content of the resolving website after a cease and desist letter, the Panel found that the Respondent’s modification of the at-issue website after receiving a cease and desist letter tends to show that the current content of the website is merely a front to avoid an adverse UDRP decision; also holding that this tends to show Respondent’s bad faith registration and use of the domain name under Policy ¶ 4(a)(iii)).
Respondent’s conduct subsequent to the initial registration shows a pattern of bad faith use from which bad faith registration can be inferred. Respondent says he registered the domain name for participation in a reseller program; however, Respondent has failed to show evidence of authorization by Complainant to use its mark in a domain name. Subsequently, Respondent’s use changed three more times and all of Respondent’s uses of the domain name show bad faith registration and use.
Doctrine of Laches
Respondent argues that Complainant should not have waited over 13 years to file a claim. Although the doctrine of laches is not a defense to a proceeding under the Policy, the Panel may consider the doctrine of laches as evidence for Respondent in its considerations of the elements of the Policy. See Square Peg Interactive Inc. v. Naim Interactive Inc., FA 209572 (Forum Dec. 29, 2003) (“Although laches by itself is not a defense to a complaint brought under the Policy, Complainant's delay in seeking relief is relevant to a determination of whether Respondent has been able to build up legitimate rights in the Domain Name in the interim, and whether it is using the Domain name in bad faith.”). Here, the doctrine of laches does not help Respondent, because Respondent’s use at the time of the filing of the Complaint—of trying to sell the domain name to Complainant for an amount in excess of out-of-pocket costs—does not provide Respondent with legitimate rights and Respondent initial use in 2003 shows bad faith registration and use.
Complainant having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be GRANTED.
Accordingly, it is Ordered that the <paypals.com> domain name be TRANSFERRED from Respondent to Complainant.
The Honorable Charles K. McCotter, Jr. (Ret.), Panelist
Dated: August 17, 2017
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