8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  December 20, 2013 

PAID, Inc.

(Exact Name of Registrant as Specified in Charter)

Delaware	0-28720	73-1479833
(State or Other Jurisdiction of Incorporation	(Commission File Number)	(IRS Employer Identification No.)

200 Friberg Parkway Suite 4004 Westborough, Massachusetts	01581
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 861-6050

40 Washington Street, Westborough, Massachusetts 01581

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.03   Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The Company filed a patent infringement lawsuit against eBay Inc. in the United States District Court for the District of Massachusetts on December 20, 2013. The Company is represented in its lawsuit on a contingency basis by Hunton & Williams LLP ("Hunton"). To fund the expense of the lawsuit not covered by Hunton, the Company simultaneously entered into a financing arrangement that will cover all remainder fees and costs of the lawsuit. The Company will not itself be required to pay any lawsuit-related fees or costs other than those incurred directly by the Company such as employee travel costs or administrative expenses. Solely to the extent there are any recoveries from the lawsuit, Hunton will receive a contingency fee and the financier will receive an independent fee, equal to a percentage of proceeds of no more than 35% in the aggregate, plus total accrued fees and costs. The amount of the costs that the financier will advance, and thus be reimbursed out of proceeds from any recoveries by the Company, and the total value of the contingency fee, is not known. To secure its payment obligations to the financier, the Company granted a security interest in the personal property of the Company, including the subject patents and all lawsuits, judgments and proceeds therefrom.

Item 8.01   Other Events.

The Company filed a patent infringement lawsuit against eBay Inc. in the United States District Court for the District of Massachusetts on December 20, 2013. The Company is represented in its lawsuit by Hunton & Williams LLP “(Hunton”). Hunton will receive a contingency fee of 35% of any successful outcome, plus payment of costs and legal fees, and will be required to share in this contingency payment with a financier. In other limited circumstances, such as an acquisition or change in control, Hunton may receive additional fees and may share those fees with the financier.

The Company owns several patents, which include patent numbers 8,521,642, 8,352,357, 7,930,237, 7,324,968 titled “Method and System for Improved Online Auction” and has additional continuation claims in process before the U.S Patent & Trademark Office (USPTO). These patents relate to the real-time calculation of shipping, insurance, and taxes online.

The Company originally filed its patent application in March 2002, to solve a pervasive problem in the online marketplace. The Company was awarded its first patent, No. 7,324,968, on January 29, 2008. This patent relates to the real-time calculation of shipping costs for items purchased online, including using a zip code as a destination location indicator.  The Company’s second patent, No. 7,930,237, was issued on April 19, 2011 and, among other things, facilitates advanced, rapid, accurate estimation of shipping costs across multiple shipping carriers.  The Company’s third patent, No. 8,352,357 issued on January 8, 2013, covers systems and methods for calculating shipping and taxes associated with items offered for sale on online. The fourth patent, No. 8,521,642 issued on August 27, 2013 focuses on systems and methods for calculating shipping and taxes associated with items offered for sale on websites with multiple sellers. A fifth patent is pending. A Press Release regarding this matter is attached as Exhibit 99.1.

Item 9.01   Financial Statements and Exhibits.

(d)   Exhibits:

99.1      Press Release

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PAID, INC.
Date:       December 27, 2013	By:	/s/ W. Austin Lewis, IV
		W. Austin Lewis, IV, President

EXHIBIT INDEX

Exhibit Description

99.1 Press Release

EX-99.1

EXHIBIT 99.1         PRESS RELEASE

WESTBOROUGH, MA–(Dec 23, 2013) – PAID, Inc. (OTCBB: PAYD) filed a patent infringement lawsuit against eBay Inc. in the United States District Court for the District of Massachusetts on December 20, 2013. PAID is represented in its lawsuit by Hunton & Williams LLP, an international law firm with intellectual property attorneys in multiple offices around the world.

PAID, Inc. owns patent numbers 8,521,642, 8,352,357, 7,930,237, 7,324,968 titled “Method and System for Improved Online Auction” and has additional continuation claims in process before the U.S Patent & Trademark Office (USPTO). These patents relate to the real-time calculation of shipping, insurance, and taxes online.

“PAID has been a key player in developing technologies and methods relating to tools used to facilitate commerce online,” stated Austin Lewis, PAID’s CEO. “We will continue to grow our customer base and add functionality to expand on our portfolio and solidify our position as an innovator in this space.”

PAID originally filed its patent application in March, 2002, to solve a pervasive problem in the online marketplace. PAID was awarded its first patent, No. 7,324,968, on January 29, 2008. This patent relates to the real-time calculation of shipping costs for items purchased online, including using a zip code as a destination location indicator. Our second patent, No. 7,930,237, was issued on April 19, 2011 and, among other things, facilitates advanced, rapid, accurate estimation of shipping costs across multiple shipping carriers. Our third patent, No. 8,352,357 issued on January 8, 2013, covers systems and methods for calculating shipping and taxes associated with items offered for sale on online. The fourth patent, No. 8,521,642 issued on August 27, 2013 focuses on systems and methods for calculating shipping and taxes associated with items offered for sale on websites with multiple sellers. For full patent details, visitwww.USPTO.gov.

“We intend to protect PAID’s intellectual property and enforce its property rights amongst all infringers,” added Lewis.

About PAID, Inc.:
PAID, Inc. is a one-stop brand management and marketing resource to music, entertainment and sports personalities and organizations, and offers AuctionInc™ online shipping calculation and shopping cart software employing its patented technology to streamline ecommerce. Known for quality and customer service, PAID offers turnkey online, mobile, social media and traditional marketing campaigns, as VIP ticketing, web site design, merchandising, ecommerce and fan community management programs. More details are available at www.paid.com.

About Hunton & Williams L.L.P.
Founded in 1901, Hunton & Williams is committed to providing quality legal service to its clients, whether an individual, global corporation, government or other entity. The firm has more than 800 lawyers practicing from 19 offices across the United States, Europe and Asia, helping clients realize new opportunities and solve complex problems with confidence. The firm’s practice groups provide full services to clients across a wide variety of practice areas, including intellectual property and commercial litigation.

Safe Harbor statement under the Private Securities Litigation Reform Act of 1995:
Statements in this news release looking forward in time involve risks and uncertainties, including the risks associated with the effect of changing economic conditions, trends in the markets, the success of any litigation, the successful monetization of the patent, variations in the company’s cash flow, competition, celebrity programs, business development efforts, technology availability and cost of materials and other risk factors. Factors that could cause actual results to differ materially are discussed in the Company’s most recent filings with the Securities and Exchange Commission.