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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Ameripay, LLC v. Paylocity Corporation (formerly Ameripay Payroll, Ltd.)

Case No. D2007-0452

 

1. The Parties

The Complainant is Ameripay, LLC, New Rochelle, New Jersey, United States of America, represented by Richard L. Ravin of Hartman & Winnicki, P.C., United States of America (“Complainant”).

The Respondent is Paylocity Corporation, formerly Ameripay Payroll, Ltd., Elk Grove Village, Illinois, United States of America (“Respondent”).

2. The Domain Name and Registrar

The disputed domain name <ameripay.com> is registered with Tucows, Inc (“Tucows”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on March 23, 2007. On March 27, 2007, the Center transmitted by email to Tucows a request for registrar verification in connection with the domain name at issue. On March 27, 2007, Tucows transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details for the administrative and technical contact. The Center verified that the Complaint together with the amendment to the Complaint satisfied the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy”), the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”), and the WIPO Supplemental Rules for Uniform Domain Name Dispute Resolution Policy (the “Supplemental Rules”).

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified Respondent of the Complaint, and the proceedings commenced on April 11, 2007. In accordance with the Rules, paragraph 5(a), the due date for Response was May 1, 2007. The Response was timely filed with the Center on April 25, 2007.

The Center appointed David H. Bernstein as the sole panelist in this matter on May 7, 2007. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.

On May 9, 2007, Complainant filed an “Amendment to Complaint to Correct Typographical Errors”. Respondent did not file any objection to the submission of this document. Because the errors corrected were not substantive, the Panel has accepted this document.

4. Factual Background

Complainant was founded in 1995 as “Ameripay, LLC”, a limited liability company, organized under the laws of the State of New Jersey, with a principal place of business in New Rochelle, New Jersey, United States of America. Since then, Complainant has been using the term AMERIPAY as its trade name and mark in connection with the advertising, marketing, and sale of its goods and services, including without limitation, the provision of payroll processing services. Complainant is the owner of U.S. Trademark Registrations 1,972,887 and 3,069,879 for the mark AMERIPAY for bill payment services rendering telephonically, tax payment processing services, and payroll tax debiting services.

Respondent was incorporated in 1997 as “Ameripay Payroll” and registered the domain name <ameripay.com> in 1999. In 2003, Complainant filed suit against Respondent for trademark infringement. In 2006, Respondent made an Offer of Judgment under Rule 68 of the Federal Rules of Civil Procedure, under which Respondent offered, inter alia, to be “permanently enjoined from using the name ‘AMERIPAY’ as a trade name, trademark, or within a domain name anywhere in the United States”. Complainant accepted the Offer of Judgment, and on that basis, the litigation was resolved, with the court entering the agreed-to injunction. Respondent has since changed its name to “Paylocity Corporation”.

Following entry of the injunction, Complainant demanded transfer of the <ameripay.com> domain name. Complainant also asserted that Respondent was in violation of the injunction because Respondent continued to use its <ameripay.com> email addresses in advertisements, and continued to accept emails addressed to the <ameripay.com> email addresses. Respondent states that, through March 2007, any emails to the old <ameripay.com> addresses received an automatic response instructing the sender that Respondent’s new email address was at the <paylocity.com> domain name.

 

5. Parties’ Contentions

A. Complainant

Complainant asserts that the domain name <ameripay.com> is identical to its registered AMERIPAY service mark.

Complainant asserts that Respondent lacks any legitimate interest in the AMERIPAY mark. Although Respondent’s corporate name originally included the term Ameripay, Complainant asserts that Respondent’s use of the AMERIPAY trademark constituted trademark infringement, an assertion that, Complainant says, is confirmed by the fact that the court has enjoined Respondent from using that domain name. Complainant also asserts that, by virtue of the injunction, Respondent is not permitted to use the domain name or a name corresponding to the domain name in any manner.

Finally, Complainant states that the domain name was registered and is being used in bad faith because Respondent was aware of Complainant’s rights in the name when it registered the domain name in January 1999. In support of that assertion, Complainant states that it sent a letter to the president of Respondent in 1998 demanding that Respondent discontinue use of the AMERIPAY mark. Although Respondent allegedly agreed to discontinue use of the AMERIPAY mark at that time, Complainant states that Respondent reneged on its agreement, which is what ultimately led to the filing of the lawsuit. In the meantime, Respondent continued to use the AMERIPAY mark and the <ameripay.com> domain name in infringing ways, which constitutes bad faith, and has even continued to use the domain name in bad faith following the entry of the injunction.

B. Respondent

Respondent acknowledges that Complainant owns the AMERIPAY trademark and concedes that the court has enjoined it from using the <ameripay.com> domain name. Respondent vehemently objects to any implication, though, that the injunction is indicative of any wrongdoing; to the contrary, Respondent states that its conduct never constituted trademark infringement and that the only reason it made an offer of judgment was to settle a long-running, expensive and distracting litigation. Respondent also states that it adopted the name after conducting a trademark search and after receiving clearance by counsel.

Respondent states that, since receipt of the Complaint in March 2007, it discontinued the automatic responses to emails sent to the <ameripay.com> addresses, and now is making no use of the domain name. Rather, Respondent is now passively holding the domain name until the expiration of its registration in January 2008.

Respondent further states that it had a legitimate interest in the domain name because it operated a business under the name “Ameripay Payroll” from August 1997 through early 2006.

Finally, Respondent insists that it registered the <ameripay.com> domain name in good faith, and that its subsequent use of the domain name was also in good faith.

 

6. Discussion and Findings

Pursuant to paragraph 4(a) of the Policy, to succeed in obtaining transfer of the domain name, Complainant must prove that:

(i) the domain name is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and

(ii) 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.

For the reasons discussed below, the Panel finds that all three requirements of paragraph 4(a) of the Policy have been met.

A. Identical or Confusingly Similar

Respondent concedes that Complainant owns the trademark AMERIPAY. Given that the domain name <ameripay.com> is identical to Complainant’s trademark, Complainant has carried its burden of proving the first factor of the Policy, paragraph 4(a)(i).

B. Rights or Legitimate Interests

Whatever rights Respondent may have had in the past, it is undisputed that Respondent is now enjoined from making any use whatsoever of the AMERIPAY trademark and the <ameripay.com> domain name. Whether that injunction was entered because Respondent would likely have been found liable for trademark infringement, or because Respondent was looking for an expedient way to extract itself from a frivolous but expensive lawsuit, is irrelevant for purposes of this proceeding. In light of the injunction, it is plain to the Panel that Respondent has no current rights in the <ameripay.com> domain name and cannot claim any legitimate interest. Respondent has articulated an interest in passively holding the domain name until it expires in January 2008, but any such interest cannot be deemed legitimate given that Respondent can not use the domain name and instead seems to be holding it only to prevent Complainant from using it. Complainant has thus sustained its burden of proof under the second element of the Policy.

C. Registered and Used in Bad Faith

Respondent does not dispute that it continued to make some use of the <ameripay.com> domain name following the court’s entry of the permanent injunction. Although Respondent attempts to minimize the nature of its use, the publication of advertisements containing <ameripay.com> email addresses, and the process of sending automatic responses to any emails sent to such addresses, appears to be a “use” that is enjoined by the court’s order.

These facts are sufficient to constitute bad faith use of the domain name. Thus, the only remaining question is whether Respondent registered the domain name in bad faith.

The parties vigorously advance their relative positions – Complainant accuses Respondent of being an infringer from the start; Respondent claims that it has always acted in good faith but settled the suit only to end this contentious drain on its resources. This disagreement was, apparently, at the heart of the parties’ litigation, which spanned over two years. Obviously, the Panel cannot, in just two weeks on a slim paper record, make any findings on the merits of the parties’ dispute. However, given the existence of the injunction, and the fact that Respondent seems to be holding the domain name only for tactical reasons, the Panel finds that the facts are sufficient to support an inference of bad faith registration. Respondent could have continued to defend its conduct in the litigation, if it so elected; given that it chose not to do so, it should not be allowed tactically to continue to advance in this proceeding the same defenses that it chose to waive in the litigation.

Accordingly, and on the somewhat unusual facts of this case, the Panel finds that Complainant has satisfied its burden of showing that the Respondent registered and used the domain name in fad faith under paragraph 4(a)(iii) of the Policy.

7. Decision

For all the foregoing reasons, in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain name <ameripay.com> be transferred to the Complainant.

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David Bernstein
Sole Panelist

Dated: May 21, 2007