WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Authorize.Net LLC v. Cardservice High Sierra
Case No. D2008-0760
1. The Parties
Complainant is Authorize.Net LLC of American Fork, Utah, United States of America, represented by the law firm Morrison & Foerster, LLP, United States of America.
Respondent is Cardservice High Sierra of Colfax, California, United States of America, represented internally.
2. The Domain Name and Registrar
The disputed domain name <authorized.net> is registered with DSTR Acquisition VII, LLC d/b/a Dotregistrar.com (“Dotregistrar”).
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on May 14, 2008. On May 15, 2008, the Center transmitted by email to Dotregistrar a request for registrar verification in connection with the disputed domain name. Also on May 15, 2008, Dotregistrar transmitted by email to the Center its verification response confirming that Respondent is listed as the registrant and providing the contact details. The Center verified that 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 May 22, 2008. In accordance with the Rules, paragraph 5(a), the due date for Response was June 11, 2008. No response having been filed, on June 12, 2008 the Center notified Respondent’s default. Immediately upon receipt of the email notification of default, Respondent replied to the Center by email requesting that the default “be vacated for 48 hours.” In this email Respondent’s representative cites his misunderstanding of the first line of the Center’s Complainant transmittal cover sheet, which reads “you have no duty to act at this time.” While admitting that “this is not a valid excuse,” Respondent requested two more days to submit its Response and in fact made the filing two days later, on June 13, 2008.
The Center appointed Richard G. Lyon as the sole panelist in this matter on June 23, 2008. The Panel finds that it was properly constituted and has jurisdiction over this proceeding. The Panel has submitted his Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
On June 24, 2008, by email sent simultaneously to the Center, Respondent, and the Panel, Complainant transmitted a document entitled “Reply.” The following day the Center, at the Panel’s request, advised the parties as follows:
“The Panel has received a proposed Reply from Complainant’s counsel. The Panel will consider whether to allow the Reply and, if so, whether Respondent will be permitted to make an additional filing. Until further order of the Panel, neither party shall submit any further pleadings or make any further communications to the WIPO Center.
Both parties are reminded that paragraph 8 of the Rules for Uniform Domain Name Dispute Resolution Policy that provides as follows: “No Party or anyone acting on its behalf may have any unilateral communication with the Panel. All communications between a Party and the Panel or the Provider shall be made to a case administrator appointed by the Provider in the manner prescribed in the Provider’s Supplemental Rules.” The Panel deems Complainant’s transmittal of the proposed Reply directly to him to have been in violation of this Rule.”
4. Factual Background
Complainant provides payment gateway services that allow merchants to accept credit card and electronic check payments through the merchants’ websites. Since the late 1990s Complainant has provided software and services for payment processing using the mark AUTHORIZE.NET. Complainant holds several registrations in the United States Patent and Trademark Office (USPTO) for AUTHORIZE.NET; the first of these was registered in January 2001, claiming a first use in commerce in 1996. Complainant’s principal website is “www.authorize.net”. Complainant uses many “affiliates” (Complainant’s word) or “resellers” (Respondent’s word) to generate business for it. These third parties market and sell Complainant’s electronic payment services and earn residual and commission payments in connection with such sales.
Respondent registered the disputed domain name in 1998. Since at least 1999 Respondent has been an authorized affiliate/reseller of Complainant’s services. According to the Wayback machine, “www.archive.org”, Respondent has used the disputed domain name continuously since 1999. The first archived page identifies Respondent as an “Authorized Reseller of [Complainant]” with Complainant’s name and logo. By clicking on that logo, an internet user apparently would have been linked to Complainant’s home page.
The parties communicated about Respondent’s use of the disputed domain name in 2005. An email message from a channel sales manager of Complainant to Respondent refers to an earlier telephone conversation between them and includes Complainant’s request that Respondent include the following statement on Respondent’s website:
“AUTHORIZE.NET, the AUTHORIZE.NET logo, and ECHECK.NET are trademarks or registered trademarks of Authorize.Net Corporation or its parent company Lightbridge, Inc.”
According to the archived pages, this acknowledgment was added at about that time.
In February 20081 Complainant’s parent company sent Respondent a letter, stating among other things that Respondent’s “registration and use of the [disputed domain name] is a violation of [Complainant’s] federally-protected rights under the Lanham Act” and demanding immediate cessation of Respondent’s use of the disputed domain name and transfer of it to Complainant. Respondent did not reply to this letter.
5. Parties’ Contentions
Complainant contends as follows:
Rights in a mark. Complainant has enforceable trademark rights in AUTHORIZE.NET because of its USPTO-registered marks and common law rights that began to accrue since Complainant began using its mark for its credit card processing services in 1996. The disputed domain name differs from these marks only by changing the present tense to the past tense, authorize.net to authorized.net, and is therefore confusingly similar to Complainant’s marks.
Rights or Legitimate Interests. Respondent lacks rights or legitimate interests in the disputed domain name because it has consistently used Complainant’s marks without authority on its website, giving the misleading impression that the Internet user has reached Complainant’s website. This use allows Respondent to compete directly with Complainant by earning commissions on sales that otherwise would be made by Complainant directly: Respondent “present[s] [itself] as Complainant or [ ] create[s] [a] website [ ] that will cause confusion between [Respondent] and Complainant.” This use is not bona fide under the Policy. Such use is commercial and has not been authorized by Complainant. Respondent has not been commonly known by the disputed domain name, despite its long use of it, as the Policy requires Respondent to have been so known by third parties prior to registration of the disputed domain name.
Registered and Used in Bad Faith. Respondent’s use of the disputed domain name generates referral fees through Complainant’s program and, because of its confusing similarity to Complainant’s marks, implies that it is Complainant, thus attracting business to Respondent through use of the goodwill attached to Complainant’s marks. A misleading link, said on Respondent’s website to redirect the customer to a gateway authorized by Complainant, actually refers the user to one of Complainant’s competitors. Respondent was obviously aware of Complainant’s marks at the time it registered the disputed domain name, as it has consistently used the disputed domain name as part of its affiliate status.
Respondent does not contest Complainant’s trademark rights or confusing similarity of the disputed domain name to them. Respondent pitches its defense on Complainant’s knowledge of and acquiescence in Respondent’s use of the disputed domain name for almost ten years, including explicit approval contained in the November 2005 email quoted above. This is said to demonstrate Respondent’s bona fide use of the disputed domain name prior to commencement of this dispute and prevent any finding of bad faith.
6. Discussion and Findings
A. Procedural Matters. The Panel has two procedural issues to decide.
Late Response. Ordinarily where a late-filed Response is received by the Center and no extension has been granted by the Center, the Center’s practice is to acknowledge receipt thereof, noting that it will be in the sole discretion of the Panel to determine whether to admit and consider the same in rendering its decision, and whether to order further procedural steps, if any. In this case, in Complainant’s proposed Reply, Complainant asserts that “the Response should not even be considered because it was filed after the deadline.” Under the circumstances noted above, in the Panel’s view, Respondent should not be punished for its candor, and notes in that regard that neither Complainant, the Center, nor the Panel (which had not yet been appointed) was materially injured or even inconvenienced by a two-day delay. In such circumstances the Panel will adhere to his customary practice, and the practice of other panels in similar circumstances, and consider the Response.2
The Reply. Complainant does not demand of itself the same strict compliance with the Rules it would impose on Respondent, as it has submitted a pleading nowhere authorized and, if the Rules be read literally, expressly prohibited. Consistently with the Policy’s goal of expedited processes, the Policy, the Rules, and the Supplemental Rules allow each party only a single filing. Additional submissions are, strictly speaking, permitted only at the Panel’s express request. See Rules, paragraph 12, WIPO Overview of WIPO Panel Views on Selected UDRP Questions, paragraph 4.2 (Minority View). Most Panels, however, will consider an unsolicited reply in exceptional circumstances, ibid. (Majority View); Mani Brothers, LLC v. Lincoln Gasking, WIPO Case No. D2008-0097; Gigglesworld Corporation v. Mrs. Jello, WIPO Case No. D2007-1189 (order denying proposed supplemental filing quoted in fn. 1). Under an “exceptional circumstances” test the Panel would ordinarily not consider the proposed Reply here, as there is nothing in the Response that Complainant could not or should not have anticipated, and the Reply consists entirely of re-argument of matters already set out in the Complaint and a dispute over one of Respondent’s factual contentions easily verifiable by the Panel without a reminder from Complainant. So that there can be no question, however, that Complainant has been “given a fair opportunity to present its case,” Rules, paragraph 10(b), and because of one noteworthy omission in the Reply discussed briefly below, the Panel will consider the Reply in deciding this proceeding.3
B. Identical or Confusingly Similar.
Respondent does not contest Complainant’s trademark rights, and the similarity between those marks and the disputed domain name is obvious.
C. Rights or Legitimate Interests.
Complainant bears the burden of pr oof under each Policy element. As many panels have recognized, its burden under paragraph 4(a)(ii) of the Policy is particularly heavy when Respondent has used the disputed domain name for an actual business (and not merely click-through revenues or other “ parking ” activities) for many years prior to the commencement of the dispute. A finding for a complainant in such cases requires the panel to disqualify from the protection of paragraph 4(c)(i) of the Policy conduct that no one has found to be criminal, tortious, or otherwise unlawful, solely on the authority of complainant ’ s allegations and evidence. See, e.g ., Bittorrent Marketing GmbH v. AdIntensity Ltd, Adam Smith , WIPO Case No. D2007-1033. Complainant’s burden in this case is steeper still because Respondent’s long use has perforce been known to Complainant - for almost a decade Respondent has been one of its resellers that generated business for it - and very likely expressly permitted. Implicitly it was permitted from 1999 until 2005, when Complainant requested the trademark acknowledgment, and then again until the cease-and-desist letter in early 2008. T o be sure, there is no defense of laches or estoppel available under the Policy, 4 but nine years (or six years, if the 2005 email furnished by Respondent somehow be deemed “notice . . . of the dispute” for purposes of paragraph 4(c)(i)) of knowing continuous use without complaint certainly creates a very credible claim to a right or legitimate interest.
The cases cited by Complainant in support of its contentions under paragraph 4(a)(ii), though in fact considering “affiliate” relationships in some respects comparable to those here, included markedly different facts and do not address the issue of Complainant’s tacit or express approval of the use to which Respondent has put the disputed domain name. Ross-Simons of Warwick, Inc. v. Admin Billing, WIPO Case No. D2004-0696, was a default case. The complaint was filed less than a year after registration of the disputed domain names, and there was no hint that complainant had ever approved respondent’s registration or use of the domain names at issue. Furthermore, respondent had registered not one but a plethora of domain names incorporating phrases confusingly similar to complainant’s mark, many of which included the type of misspellings universally condemned as typosquatting. In The Paragon Gifts, Inc. v. GOVS, WIPO Case No. D2003-0892, other default case, the affiliate similarly engaged in typosquatting, and again the complaint was brought shortly after the offending conduct.
The most closely analogous factual pattern the Panel could find is National Futures Association v. John L. Person, WIPO Case No. D2005-0690. Respondent in that case had been affiliated with complainant for many years. In 1999 he obtained the disputed domain name and began sending out advertisements displaying it. Respondent submitted proofs of his advertisements to complainant for approval, they were reviewed by complainant’s staff and given references numbers confirming review, and they were apparently approved. In 2004 complainant sent respondent a notice of non-compliance with association rules regarding the documentation required for customer testimonials displayed on respondent’s website, but did not then address respondent’s use of the disputed domain name. The complaint was filed a year later. In denying the complaint the panel stated: “Based on the circumstances presented here, the Panel concludes that Respondent has a legitimate interest in the Domain Name because it used the Domain Name for a bona fide offering of goods and services with Complainant’s knowledge and acquiescence for several years before any notice of an objection by Complainant.”
The present case presents some facts more favorable to Respondent, as Complainant here undeniably profited directly from each referral from Respondent’s website that generated a commission. The Person case identified changed circumstances that generated the complaint; here, the only apparent change in circumstances is Complainant’s change of mind more than nine years after Respondent’s first use. In this proceeding neither Respondent’s conduct generally nor the specific use of Complainant’s mark on Respondent’s website appears to have changed significantly over the years, beyond Respondent’s addition of the requested trademark acknowledgment at Complainant’s request. Complainant points to no new conduct in 2008, when it sent its cease-and-desist letter, which it claimed rendered illegitimate an earlier or otherwise permitted use.
The Panel finds that Complainant has not met its burden of proof under paragraph 4(a)(ii) of the Policy, as Respondent has shown in the circumstances of this proceeding that it has a legitimate interest in the disputed domain name.
The record provides further compelling reasons for denial of the Complaint. For one thing, the complete dealings between the parties, and probably also the full extent of their dispute, has not been – and given the abbreviated procedures under the Policy could never be – fully set forth before the Panel. There is, for example, no explanation for Complainant’s six years of silence before the 2005 email requesting a trademark acknowledgment. The Reply’s omission of this issue is either inexplicable or the eloquent dog that did nothing in the night.5 So far as appears from the evidence Respondent’s adding the acknowledgement satisfied Complainant for another two or three years. What restrictions did Complainant place upon its resellers? Complainant identifies none beyond its counsel’s summary statement (again not supported by any evidence) that “Complainant does not permit its affiliates to present themselves as Complainant or to create websites that will cause confusion between the affiliate and Complainant.” What is Respondent’s reseller status today? Neither party explains fully. Even if there were evidence on these issues, answering the questions would probably plunge the Panel into legal determinations of contract interpretation and infringement. The Policy was intended to combat intentional cybersquatting; when more is at stake and more evidence than written submissions is required, the matter belongs in the national courts. See, e.g., Lonely Planet Publications Pty Ltd v. Mike Tyler, WIPO Case No. D2004-0670.
And this is not an action against a nameless or unidentifiable domain name aggregator safely beyond the jurisdiction of the courts in Complainant’s home country. Respondent, a present or former “affiliate” of Complainant, has an address in a state of the United States of America not far from the state in which Complainant maintains its headquarters. Whatever the parties’ real dispute, it can readily be addressed through litigation. None of the Panel’s findings is binding in subsequent court proceedings, where the substantive standards (among them a possible laches or estoppel defense) may differ as well.
D. Registered and Used in Bad Faith.
As the requirements of paragraph 4(a) of the Policy are conjunctive, the Panel need not address this Policy element. The Panel does note that there is no proof, only another conclusory allegation, that when Respondent registered the disputed domain name almost ten years ago that it did so for any reason other than to participate in Complainant’s affiliate program with Complainant’s full knowledge and consent, and no allegation of facts from which the Panel could infer bad faith at that time.
For all the foregoing reasons, the Complaint is denied.
Richard G. Lyon
Dated: June 30, 2008
1 This is the first instance cited in the Complaint of correspondence between the parties, other than processing commissions earned by Respondent as Complainant's reseller. The 2005 email is an attachment to the Response. In its Reply Complainant’s counsel states that Complainant requested transfer of the disputed domain name in December 2005 and “continuously and unsuccessfully” thereafter attempted further communications to the same effect. No evidence is offered to support this allegation.
2 The Panel acknowledges contrary authority, see, e.g., Fashiontv.com GmbH v. Mr. Chris Olic, WIPO Case No. D2005-0994, and is aware that unscrupulous respondents or their counsel occasionally request extensions only to prolong misuse of the domain names at issue, see Mobile Communication Service Inc. v. WebReg, RN, WIPO Case No. D2005-1304. The record here suggests no such abuse, and as in the case of Sanderling Pty Ltd, trading as Thimblelady v. Roxanne International, WIPO Case No. D2007-0385, “the Respondent did not ignore the Complaint,” and the delay was minimal.
3 Customary practice is to permit a respondent an opportunity to respond to any admitted supplemental filing. Because of the Panel's decision, that is unnecessary in this proceeding.
4 E.g., Car Advisory Network, Inc. v. Journal Community Publishing Group, Inc., WIPO Case No. D2008-0717; Tax Analysts v. eCorp, WIPO Case No. D2007-0040; Jules I. Kendall v. Donald Mayer Re skipkendall.com, WIPO Case No. D2000-0868
5 “ . . . the curious incident of the dog in the nighttime.”
”The dog did nothing in the nighttime.”
“That was the curious incident.” A. Doyle, Memoirs of Sherlock Holmes, “Silver Blaze.”