World Intellectual Property Organization

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Corporation, Costco Wholesale Membership Inc. v. Shenyang Rongyariyuexing Coltd, Xin Shicun

Case No. D2010-1864

1. The Parties

The Complainant is Costco Wholesale Corporation, Costco Wholesale Membership Inc. of Washington, United States of America represented by Law Office of Mark J. Nielsen of United States of America.

The Respondent is Shenyang Rongyariyuexing Coltd, Xin Shicun of Shen Yang, the People’s Republic of China.

2. The Domain Names and Registrars

The disputed domain names <costco-mall.com> (“domain name 1”) and <hsd-sc.com> (“domain name 2”) are registered with Xin Net Technology Corp. and HiChina Zhicheng Technology Ltd., respectively (the “Registrars”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on November 3, 2010. On November 3, 2010, the Center transmitted by email to the Registrars requests for registrar verification in connection with the disputed domain names. On November 4, 2010, the Registrars transmitted by email to the Center their verification responses confirming that the Respondent is listed as the registrant for the disputed domain names and providing the Respondent’s contact details.

The Center has verified that the Complaint satisfies the formal requirements of the Uniform Domain Name Dispute Resolution Policy (the “Policy” or “UDRP”), 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”).

On November 10, 2010, the Center transmitted an email to the parties in both Chinese and English regarding the language of the proceeding. On November 11, 2010, the Complainant submitted a request that English be the language of the proceeding. The Respondent did not comment on the language of the proceeding by the due date.

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceeding commenced on November 17, 2010. In accordance with the Rules, paragraph 5(a), the due date for the Response was December 7, 2010. The Respondent did not submit any Response. Accordingly, the Center notified the parties of the Respondent’s default on December 8, 2010.

The Center appointed Sebastian Hughes as the sole panelist in this matter on December 14, 2010. 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.

4. Factual Background

A. Complainant

The Complainant is a company incorporated in the United States of America and the owner of numerous registrations worldwide for the trade mark COSTCO (“the Trade Mark”), first registered by the Complainant in 1985. The Complainant is also the owner of numerous domain names comprising the Trade Mark.

The Complainant is also the owner of registrations for the Chinese language trade mark 好市多 (pronounced “HAO SHI DUO”) in Taiwan Province of China, the People’s Republic of China and the Hong Kong SAR of China (the “HSD Mark”), first registered by the Complainant in 1998.

B. Respondent

The Respondent is a corporate individual apparently with an address in China.

C. Disputed Domain Names

The disputed domain names were registered on January 29, 2010 and January 28, 2010 respectively.

5. Parties’ Contentions

A. Complainant

The Complainant made the following allegations in the Complaint.

The Complainant has operated membership warehouse stores under the Trade Mark since 1983 and is a recognised world leader in warehouse club merchandising and related services. The Complainant currently operates over 573 warehouse stores worldwide under the Trade Mark. The Complainant has more than 60 million authorised cardholders worldwide. The Complainant is currently the 24th largest company and the 4th largest retailer in the Fortune 500. As a result of its size and notoriety, the Complainant has been the subject of regular news and feature coverage in all types of media. The Trade Mark has become famous in respect of the above services.

The Complainant currently operates 6 warehouse stores in Taiwan Province of China, having opened its first warehouse store there in 1997. The Complainant is well-known in Taiwan Province of China and has over 1.3 million authorised cardholders there. In 1997, the Complainant adopted the HSD Mark as the Chinese language equivalent of the Trade Mark for use in Taiwan Province of China, the People’s Republic of China and the Hong Kong SAR of China. Since 1997, the Complainant has used the HSD Mark extensively and prominently to identify the Complainant and its retail and wholesale services to consumers in Taiwan Province of China.

Both of the disputed domain names are resolved to the same retail website which features the HSD Mark in the same red colour used by the Complainant for the Trade Mark and the HSD Mark, the Complainant’s Costco.com logo and a link to the Complainant’s “www.costco.com” website (the “Website”). The Website also appears to contain links to third party websites.

The disputed domain names are confusingly similar to the Trade Mark and the HSD Mark (the “Trade Marks”), respectively.

The word “mall” should be discounted in assessing the similarity between domain name 1 and the Trade Mark. Domain name 2 is an abbreviation for the HSD Mark and the Chinese words 商场 meaning “shopping mall”, which are used prominently by the Respondent on the Website and can be translated into English as “Costco Shopping Mall”.

The Respondent has no legitimate interest in the disputed domain names, has not used the disputed domain names in connection with a bona fide offering of goods or services, owns no trade mark registrations in respect of the disputed domain names, and has not been commonly known by the disputed domain names. The Complainant has not licensed or otherwise permitted the Respondent to use the Trade Marks or the disputed domain names.

The Respondent has registered and used the disputed domain names in bad faith to intentionally attract users, for commercial gain, to the Website, by creating confusion with the Complainant’s Trade Marks.

B. Respondent

The Respondent did not reply to the Complainant’s contentions.

6. Discussion and Findings

6.1. Language of the Proceeding

The language of the registration agreement for the disputed domain name is Chinese. Pursuant to the Rules, paragraph 11, in the absence of an agreement between the parties, or unless specified otherwise in the registration agreement, the language of the administrative proceeding shall be the language of the registration agreement. From the evidence presented in the record, no agreement appears to have been entered into between the Complainant and the Respondent to the effect that the language of the proceeding should be English.

Paragraph 11(a) allows the Panel to determine the language of the proceeding having regard to all the circumstances. In particular, it is established practice to take paragraphs 10(b) and (c) of the Rules into consideration for the purpose of determining the language of the proceeding. In other words, it is important to ensure fairness to the parties and the maintenance of an inexpensive and expeditious avenue for resolving domain name disputes. Language requirements should not lead to undue burdens being placed on the parties and undue delay to the proceeding (Whirlpool Corporation, Whirlpool Properties, Inc. v. Hui’erpu (HK) electrical appliance co. ltd., WIPO Case No. D2008-0293; Solvay S.A. v. Hyun-Jun Shin, WIPO Case No. D2006-0593).

The Complainant has requested that English be the language of the proceeding for the following reasons:

(1) The disputed domain names consist of an ordinary English word “mall” combined with “Costco”, and

the abbreviation of “Hao Shi Duo Shang Chang”, which is the English equivalent of the Chinese

characters that mean “Costco Mall”;

(2) The Website contains both English and Chinese language headings, including a link showing the Complainant’s “Costco.com” logo in English. It is clear that the Website is intended for consumers with a functional knowledge of English and the ability to navigate on the Internet using English;

(3) The Website prominently features “www.hsd-sc.com” beneath the name of the Website in Chinese characters so that visitors to the site will recognise “hsd-sc” as an abbreviation of “Hao Shi Duo Shang Chang”, the English equivalent of the Chinese characters, and will associate the domain name 2 with the Website;

(4) The “Costco” name is famous for retail store and online retail services. The Respondent chose the disputed domain names, in English, in order to gain an unfair competitive advantage with Chinese-speaking consumers who are aware of the Complainant and have a functional knowledge of English;

(5) The “.com” TLD originated in the United States of America and is the abbreviation for the English word “commercial”. Though the “.com” TLD is not limited to use by companies in the United States of America, it is the most common TLD among English-speaking users of the Internet. That the Respondent chose this TLD for the disputed domain names is further evidence of its intent to do business with consumers with at least a functional knowledge of English – and to take advantage of the goodwill associated with the English and Chinese names of the Complainant, a very well known American retailer;

(6) The Respondent must have an awareness of the Complainant as a well-known United States company and of the English language. The Respondent did not choose the disputed domain names by accident, and it should be prepared to defend its conduct in the language of the disputed domain names.

The Respondent did not make any submissions with respect to the language of the proceeding and did not object to the use of English as the language of the proceeding.

In exercising its discretion to use a language other than that of the registration agreement, the panel has to exercise such discretion judicially in the spirit of fairness and justice to both parties, taking into account all relevant circumstances of the case, including matters such as the parties’ ability to understand and use the proposed language, time and costs (Groupe Auchan v. xmxzl, WIPO Case No. DCC2006-0004; Finter Bank Zurich v. Shumin Peng, WIPO Case No. D2006-0432).

The Panel does not find the submissions of the Respondent regarding the language of the proceeding especially persuasive or particularly on point. Had the Respondent made cogent submissions requesting Chinese as the language of the proceeding, it is likely the Panel would have ordered that Chinese be the language of the proceeding.

The Panel nonetheless finds that sufficient evidence has been adduced by the Complainant to suggest the likely possibility that the Respondent is conversant and proficient in the English language (Finter Bank Zurich v. Shumin Peng, supra). In all the circumstances of the case, and given the failure of the Respondent to file a Response or respond to the Center’s communications regarding the language of the proceeding, the Panel concludes it would likely be burdensome on the Complainant and involve further costs and delay should the Complainant be required to translate the Complaint into Chinese language.

In view of all of the above considerations, the Panel determines that, on balance, it is not foreseeable that the Respondent will be prejudiced, should English be adopted as the language of the proceeding.

Having considered all the matters above, the Panel determines under paragraph 11(a) that English shall be the language of the proceeding.

A. Identical or Confusingly Similar

The Panel finds that the Complainant has rights in the Trade Marks acquired through use and registration which predate by many years the date of registration of the disputed domain names.

UDRP panels have consistently held that domain names may be found identical or confusingly similar to a trade mark for purposes of the Policy “when the domain name includes the trade mark, or a confusingly similar approximation, regardless of the other terms in the domain name” (Wal-Mart Stores, Inc. v. Richard MacLeod d/b/a For Sale, WIPO Case No. D2000-0662).

It is also established that the addition of generic terms to a disputed domain name has little, if any, effect on a determination of confusing similarity between the domain name and the mark (Quixtar Investments, Inc. v. Dennis Hoffman, WIPO Case No. D2000-0253); furthermore, mere addition of a generic or descriptive term does not exclude the likelihood of confusion (PRL USA Holdings, Inc. v. Spiral Matrix, WIPO Case No. D2006-0189).

The addition of the generic word “mall”, which directly describes the retail shopping centres operated by the Complainant under the Trade Mark, does not serve to distinguish domain name 1 from the Trade Mark in any way.

Domain name 2 could be considered as an abbreviation of the “pinyin”1 for 好市多商场 (Hao Shi Duo Shang Chang) which may be read as “Hao Shi Duo shopping mall”. Domain name 2 arguably comprises the first letters of each of these five pinyin words. In the circumstances of this case, in particular with regard to the Respondent’s operation of the Website which is a retail website in the same industry as and presumably in competition with the Complainant, further to the Respondent’s registration of domain name 1, the Panel finds that domain name 2 is confusingly similar to the HSD Mark, particularly for Chinese language speakers. 2

The Panel finds that the disputed domain names are confusingly similar to the Trade Marks.

The Panel therefore holds that the Complaint has fulfilled the first condition of paragraph 4(a) of the Policy.

B. Rights or Legitimate Interests

Paragraph 4(c) of the Policy provides a list of circumstances any of which is sufficient to demonstrate that the Respondent has rights or legitimate interests in the disputed domain names:

(i) before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain names or names corresponding to the domain names in connection with a bona fide offering of goods or services; or

(ii) you (as an individual, business, or other organisation) have been commonly known by the domain names even if you have acquired no trade mark or service mark rights; or

(iii) you are making a legitimate non-commercial or fair use of the domain names, without intent for commercial gain to misleadingly divert consumers or to tarnish the trade mark or service mark at issue.

There is no evidence that the Complainant has authorised, licensed, or permitted the Respondent to register or use the disputed domain names or to use the Trade Marks. The Complainant has prior rights in the Trade Marks which precede the Respondent’s registration of the disputed domain names by many years. The Complainant has therefore shown a prima facie case that the Respondent has no rights and legitimate interests in the disputed domain names, and the burden is thus on the Respondent to produce evidence to rebut this presumption (Do The Hustle, LLC v. Tropic Web, WIPO Case No. D2000-0624; Croatia Airlines d.d. v. Modern Empire Internet Ltd., WIPO Case No. D2003-0455).

The Respondent has failed to show that it has acquired any trade mark rights in respect of the disputed domain names or that the disputed domain names have been used in connection with a bona fide offering of goods or services. To the contrary, it is clear that the disputed domain names have been used to attract Internet users to the Website, which features unauthorised use of the Trade Marks and is a retail website in direct competition with the Complainant.

There has been no evidence adduced to show that the Respondent has been commonly known by the disputed domain names.

There has been no evidence adduced to show that the Respondent is making a legitimate non-commercial or fair use of the disputed domain names.

The Panel finds that the Respondent has failed to produce any evidence to establish rights or legitimate interests in the disputed domains. The Panel therefore finds that the Complaint fulfils the second condition of paragraph 4(a) of the Policy.

C. Registered and Used in Bad Faith

Pursuant to paragraph 4(b)(iv) of the Policy, the following conduct amounts to registration and use in bad faith on the part of the Respondent:

“By using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your 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 your website or location or of a product or service on your website or location.”

The Panel finds that the public is likely to be confused into thinking that the disputed domain names have a connection with the Complainant, contrary to fact. There is a strong likelihood of confusion as to source, sponsorship, affiliation or endorsement of the Website and the products and services offered by the Respondent on the Website. Furthermore, the Respondent has flagrantly copied onto its Website the Complainant’s Costco.com logo, which is used to provide an unauthorised link to the Complainant’s website. The Website also features the same red corporate livery used by the Complainant in respect of its business and the Trade Marks.

It is clear that the Website is being used in order to pass off the retail business of the Respondent as a business of or licensed by the Complainant.

The Panel therefore finds the requisite element of bad faith has been satisfied, under paragraph 4(b)(iv) of the Policy.

The Panel also considers that, in the circumstances of this case, the failure of the Respondent to file a Response to the Complaint further supports an inference of bad faith (Bayerische Motoren Werke AG v. (This Domain is For Sale) Joshuathan Investments, Inc., WIPO Case No. D2002-0787).

For all the foregoing reasons, the Panel concludes that the disputed domain names have been registered and are being used in bad faith. Accordingly the third condition of paragraph 4(a) of the Policy has been fulfilled.

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 names <costco-mall.com> and <hsd-sc.com> be transferred to the Complainant.

Sebastian Hughes
Sole Panelist
Date: December 28, 2010


1 English script transliteration.

2 In this case the content of the website provides an indication as to a respondent's targeting of a specific trade mark through the domain name chosen. Accordingly, the context in which a domain name is being used may be helpful to assess confusing similarity (see Reuters Limited v. Global Net 2000, Inc, WIPO Case No. D2000-0441).

 

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