WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Corporation, Costco Wholesale Membership, Inc. v. Gerardo Suarez, Medicina Mexico, S.A. De C.V.

Case No. D2013-1811

1. The Parties

The Complainants are Costco Wholesale Corporation and Costco Wholesale Membership, Inc. of Issaquah, Washington, United States of America (“US”), represented by Law Office of Mark J. Nielsen, US.

The Respondent is Gerardo Suarez, Medicina Mexico, S.A. De C.V. of Zona Rio, Tijuana, Baja California, Mexico.

2. The Domain Name and Registrar

The disputed domain name <costcomeds.com> is registered with Mesh Digital Limited (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on October 22, 2013. On October 23, 2013, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On the same date, the Registrar transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details. In response to a request for clarification sent by the Center to the Registrar regarding the exact information of the Registrar, the Complainant filed an amendment to the Complaint on November 5, 2013.

On October 29, 2013, the Center received a pre-commencement email communication from the Respondent.

The Center verified that the Complaint together with the amended Complaint satisfied 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”).

In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on November 11, 2013. In accordance with the Rules, paragraph 5(a), the due date for Response was December 1, 2013.

On November 13, 2013, the Center received an email communication from Respondent in which, inter alia, the Respondent requested a 65 day extension of the Response due date. On the same date, the Complainant replied to the Respondent’s email with an objection to such request. On November 14, 2013, the Center informed the parties that the Center declined to extend the period for Response and that, therefore, the due date for submitting a Response remained December 1, 2013.

On November 14, 2013 and November 15, 2013, the Center received two email communications from Respondent which, inter alia, included a letter addressed to Mr. Halloran, Chief Counsel for ICANN. The Center informed the Parties that the above-referred communications would be brought to the Panel’s attention (when duly appointed) and that the Panel would have discretion to consider such submissions and/or take any further procedural steps, if necessary.

On November 16, 2013, the Center received an email communication from the Respondent.

On December 3, 2013, the Center notified the Parties that, pursuant to Paragraph 6 of the Rules, the Center would proceed to Panel Appointment.

On December 4, 2013, the Center received a further email communication from the Respondent.

The content of the Respondent's various communications and requests for extensions of time are summarised in section 6.B below.

The Center appointed Andrew D. S. Lothian as the sole panelist in this matter on December 11, 2013. 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

The Complainants in this administrative proceeding are Costco Wholesale Membership Inc., a California corporation, and Costco Wholesale Corporation, a Washington corporation, each having its principal place of business in Issaquah, Washington, US. The Complainants state that their interests for the purposes of this dispute are co-extensive. The Complainants’ stock has been publicly traded since 1985 and they are currently the twenty-second largest company in the Fortune 500 and the seventh largest retailer in the world. The Complainants have operated membership warehouse stores under the COSTCO trademark and trade name since 1983 and have more than 70 million authorized card holders worldwide. The Complainants currently operate over 638 warehouse stores worldwide, including over 454 COSTCO branded warehouse stores in the US and Puerto Rico and 34 warehouse stores in Mexico.

The Complainants have been active in Mexico for over 20 years and currently have over 3.2 million authorized COSTCO branded cardholders in that country. The Complainants opened their first warehouse store in Tijuana, where the Respondent is based, in 1994. The Complainants provide pharmacy services in their warehouse stores in Mexico. The Complainants have also operated warehouse stores in Australia since 2009 and have registered their COSTCO mark in that territory for all services relevant to their business operations there, including pharmacy services.

The Complainants, and their wholly owned affiliates, have exclusive rights in multiple registered trademarks for the mark COSTCO worldwide including registrations in the US dating from and after 1985. For example, the first Complainant is the owner of US registered trademark No. 1976242 COSTCO (word mark) registered on May 28, 1996 in respect of retail and wholesale store services including pharmacy services. One of the Complainants’ wholly owned subsidiaries, Price Costco International Inc., has registered the COSTCO mark in Mexico for a wide variety of services. For example, it is the owner of Mexico registered trademark No. 592762 COSTCO (nominative mark) registered on November 18, 1998, for multiple retail services including pharmacy services. The Complainants maintain an active presence on the Internet using, inter alia, the domain names <costco.com> for members in the US, <costco.ca> for members in Canada (these two providing online sales) and <costco.com.mx> (providing information about membership, products and services and locations and hours) for members in Mexico. In its fiscal year 2012, the Complainants’ sales through its “www.costco.com” and “www.costco.ca” websites were over USD 2 billion.

The Respondent is Medicina Mexico, S.A. de C.V., a Mexican Corporation. Mr. Suarez, whose correspondence with the Center is described in detail below, is also named on the WhoIs of the disputed domain name. The disputed domain name was created on November 28, 2011. The website associated with the disputed domain name features an online pharmacy service. The “About Us” page states that the Respondent operates 93 licensed pharmacies in Mexico. It also states that Mr. Suarez is the president of the Respondent. The said website contains a prominent disclaimer in red lettering at the top of the home page which states: “Costcomeds.com is the property of Medicina Mexico, S.A. de C.V. and is not in any way, form or shape connected to Costco Wholesale.”

5. Parties’ Contentions

A. Complainants

The Complainants contend that the disputed domain name is confusingly similar to trademarks in which they own rights; that the Respondent has no rights or legitimate interests in the disputed domain name; and that the disputed domain name has been registered and is being used in bad faith.

The Complainants note that the Respondent’s website is available in English and Spanish and that prices are denominated in US dollars, the default currency, Mexican pesos and Australian dollars. The Complainants conclude that the Respondent is presumably seeking business from customers in the US, Mexico and Australia.

The Complainants state that “Costco” is a coined name developed by their founders and that they are the only legitimate owners of COSTCO registered trademarks anywhere in the world. The Complainants assert that many “Costco” shoppers use the Internet to find and purchase the Complainants’ goods and services. The Complainants submit that the addition of a common term such as “meds”, denoting medications, to the COSTCO trademark does not mitigate the confusing similarity between the disputed domain name and the Complainants’ COSTCO trademarks. The Complainants add that the term “meds” exacerbates the confusing similarity and increases the risk of confusion between the disputed domain name and the COSTCO trademark because the Complainants provide pharmacy services and sell pharmaceutical products.

The Complainants assert that the Respondent has no legitimate interest in any domain name, trademark or trade name incorporating or confusingly similar to their COSTCO trademark, has not used the disputed domain name in connection with a bona fide offering of goods or services, owns no trademark registrations for the disputed domain name or any portion thereof, cannot lawfully obtain any trademark or intellectual property rights in the COSTCO trademark or to confusingly similar words or phrases, and has not been commonly known by the disputed domain name or any portion thereof. The Complainants state that they have not licensed or otherwise permitted the Respondent to use the COSTCO mark in the disputed domain name and that the Respondent’s registration and use of the disputed domain name evidences a clear intent to disrupt the Complainants’ business, deceive consumers and trade off the Complainants’ goodwill by creating an unauthorized association between it and the COSTCO trademark. The Complainants submit that the Respondent cannot be said to have legitimately chosen the disputed domain name unless it was seeking to create an impression of an association with the Complainants.

The Complainants assert that the Respondent’s choice of the disputed domain name was not a coincidence. The Complainants submit that the COSTCO trademark became famous long before the Respondent registered the disputed domain name in 2011, as the Complainants’ sales grew from USD 4.1 billion in 1990 to USD 102 billion in 2013. The Complainants contend that the Respondent must have been aware of the Complainants’ rights in the COSTCO trademark when it registered the disputed domain name due to the notoriety of that trademark and that such awareness is evidence of bad faith registration. The Complainants add that their activities in Mexico mean that the COSTCO trademark is well-known in Mexico and that it is very likely that the Respondent had actual knowledge thereof when the disputed domain name was created.

The Complainants argue that the disputed domain name was registered in bad faith because the Respondent had no legitimate right or business interest in any COSTCO-formative domain name and that its only conceivable business purpose was to profit from the diversion of Internet users to the Respondent’s own pharmacy website unrelated to the Complainants’ business. The Complainants state that the disputed domain name constitutes a registration primarily for the purpose of disrupting the business of a competitor.

The Complainants assert that bad faith use of the disputed domain name is established by the Respondent’s diversion of Internet users looking for the Complainants to a website for its own commercial benefit, thus trading on the Complainants’ reputation and goodwill. The Complainants submit that the Respondent does not use the disputed domain name in any legitimate good faith manner and that there is no legitimate good faith use of the disputed domain name possible by the Respondent.

The Complainants acknowledge the fact that the Respondent’s website includes a disclaimer regarding the Complainants’ business. The Complainants contend that this confirms that the Respondent was well aware of the Complainants and the fame of their COSTCO mark before it registered and used the disputed domain name yet considered that it should try to distance the disputed domain name from the COSTCO mark while receiving the benefit of its use. The Complainants assert that the disclaimer will not dispel consumer confusion because people will arrive at the associated website with an immediate impression that because of the URL and trade name it must be affiliated with the Complainants. The Complainants also note that while the disclaimer states that the website is not connected to the Complainants’ business it does not explain how the Respondent is prominently using the COSTCO trademark without some kind of association with the Complainants. The Complainants submit that the disclaimer is insufficient to dispel a deliberately created initial impression of association with the COSTCO mark and leaves open the possibility of sponsorship or license of the mark. The Complainant summarizes its points by stating that the website sends mixed messages about the Parties’ relationship which will not be understood by all customers.

The Complainants note their concern that any negative outcome arising from the Respondent’s pharmaceutical sales would cause the media to identify the disputed domain name as the source of affected products such that the Respondent’s disclaimer would be irrelevant to the reputational harm that would be suffered by the Complainants from such publicity. The Complainants add that negative Internet and social media posts would also occur independently of the Respondent’s disclaimer and would be associated with the Complainants.

The Complainants state that this is not a case of a reseller of genuine products bearing the Complainants’ brand name and that none of the Respondent’s product offerings are the Complainants’ products. The Complainants quote paragraph 3.5 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”) regarding disclaimers and submit that in the present case there are several indications of bad faith in the registration and use of the disputed domain name and no other factors indicating good faith or legitimate interest. The Complainants contend that in consequence the WIPO Overview 2.0 fully supports the Complainants’ position that the Respondent’s disclaimer does not mitigate the Respondent’s bad faith or justify exposing the Complainants’ reputation for pharmacy services to the vagaries of Respondent’s business.

The Complainants submit that several prior panels have found that disclaimers have failed to prevent confusion or to dispel findings of bad faith and cite two cases supportive of the view that a disclaimer on a website selling competitive products to those of the complainant does not shield the respondent but bolsters a finding that the respondent adopted the relative domain name with full knowledge of the complainant’s rights; and that a disclaimer does not offset the risk of initial interest confusion where the relative domain name is viewed on a search engine.

B. Respondent

As discussed in greater detail in section 6.B below, the Respondent has not filed a formal Response in these proceedings and Mr. Suarez has requested an extension of time for filing such Response. Nevertheless, Mr. Suarez provided details of the Respondent’s proposed defense in his letter to ICANN’s Chief Counsel dated November 14, 2013 (and received by the Center on November 15, 2013). The Panel has therefore set out the Respondent’s contentions as contained in that letter.

The Respondent contends that the Complainants have no rights to the disputed domain name as the Respondent developed this as its brand in 2011. The Respondent states that the Complainants have been aware of the Respondent's brand for over two years and submits that the Complainants are also aware that the Respondent's logo specifically states it is “not connected to COSTCO Wholesale in any way, form or shape”.

The Respondent states that the Complainants own numerous COSTCO trademarks and that the Complainants’ main business is a membership club operated under “Costco aka Costco Wholesale”. The Respondent notes that the Complainants have a trademark on their design and logo and also on items which are sold within their stores.

The Respondent asserts that the Complainants have no trademark for “Costco Meds” or “Costco Pharmacy”. The Respondent states that it has filed a trademark application for “Costcomeds.com” in Mexico and is waiting for acceptance and approval. The Respondent notes that it is not a membership club. The Respondent contends that the disputed domain name was not registered in bad faith and that no confusion exists between the disputed domain name and the Complainants. The Respondent asserts that the Complainants do not sell the Respondent’s products over the Internet and notes that “our ownership including our Government licenses are located on our web site.” The Respondent submits that it has developed a large customer base through advertising and obtained a second meaning not related to the Complainants.

6. Discussion and Findings

A. Consolidation of Complainants

The Panel notes that the present Complaint has been filed by multiple Complainants. Paragraph 4.16 of the WIPO Overview 2.0 deals with this subject inter alia as follows:

“Can multiple complainants bring a single consolidated complaint against a respondent? Can a single consolidated complaint be brought against multiple respondents?

WIPO panels have articulated principles governing the question of whether a complaint filed with WIPO by multiple complainants may be brought against (one or more) respondents. These criteria encompass situations in which (i) the complainants either have a specific common grievance against the respondent, or the respondent has engaged in common conduct that has affected the complainants' individual rights in a similar fashion; (ii) it would be equitable and procedurally efficient to permit the consolidation; or in the case of complaints brought (whether or not filed by multiple complainants) against more than one respondent, where (i) the domain names or the websites to which they resolve are subject to common control, and (ii) the consolidation would be fair and equitable to all parties.

In order for the filing of a single complaint brought by multiple complainants or against multiple respondents which meets the above criteria to be accepted, such complaint would typically need to be accompanied by a request for consolidation which establishes that the relevant criteria have been met. The onus of establishing this falls on the filing party/parties, and where the relevant criteria have not been met, the complaint in its filed form would not be accepted.”

In the present case, the Complainants have not expressly requested consolidation, nor has their submission discussed the terms of the relevant criteria directly, other than to note that the Complainants’ interests are co-extensive. The Panel notes however that the Complainants are companies within the same corporate group and that their case sets out a specific common grievance against the Respondent, such that the Respondent’s conduct affects the Complainants’ rights and interests in a similar fashion. The Respondent has not objected to the Complaint having been brought against it by joint complainants, nor has the Panel identified any possible prejudice to it which would arise from consolidation. The Panel considers in all of the above circumstances that it would be procedurally efficient to allow the Complainants to proceed with the single Complaint as filed and is content that such consolidation is fair and equitable to all of the Parties.

The Complainants have nominated the Second Complainant, Costco Wholesale Membership, Inc., to receive a transfer of the disputed domain name in the event that the Complaint succeeds.

B. Preliminary issue: The Respondent’s requests for extensions of time

As will be noted from the Procedural History above, the Respondent’s Mr. Suarez has engaged in considerable correspondence with the Center regarding its request for an extension of time. Mr. Suarez is named on the WhoIs of the disputed domain name along with the registrant organization “Medicina Mexico, S.A. De C.V.” However, it is not entirely clear to the Panel whether Mr. Suarez is seeking to represent the Respondent in his capacity as president of Medicina Mexico, S.A. De C.V., or is representing Medicina Mexico, S.A. De C.V. in his capacity as licensed attorney in the Republic of Mexico, or in both capacities.

The content and chronology of Mr. Suarez’ communications with the Center is as follows:

Mr. Suarez’ first communication is his email of October 29, 2013. Mr. Suarez states that he is a licensed attorney in the Republic of Mexico and is currently representing a client in a murder trial in which there are 42 other defendants. In consequence, Mr. Suarez requests a time extension of 65 days for the Respondent to file its Response. Mr. Suarez indicates that the Respondent would prepare “a valid defense with substantial documentation”.

The second communication of Mr. Suarez, dated November 13, 2013, repeats the nature of the trial in which he is engaged and indicates that this is expected to end by January 14, 2014. Mr. Suarez therefore renews his request for an extension of time of 65 days in which to file the Response. On the same date, the Complainant’s counsel replies that the Complainants believe that the proceedings should not be delayed and suggests that the Respondent find another lawyer to act on its behalf if Mr. Suarez is unable to attend to the matter in a timely manner.

In its email of November 14, 2013, the Center refuses the request for an extension of time, noting that there do not appear to be exceptional circumstances as required by paragraph 5(d) of the Rules. Mr. Suarez replies to the Center’s email on the same date indicating that he considers the Center’s decision to be extremely prejudicial and requesting that this be reviewed by an attorney. Mr. Suarez adds that he is under a court order to represent his client and that the Center is demanding that he violate such order.

On November 15, 2013, Mr. Suarez emails the Center a copy of a letter which he has written to ICANN’s Chief Counsel. This letter is two pages and some 670 words in length. In it, Mr. Suarez recounts his communications with the Center and repeats his position regarding the effect of the Center’s decision on an extension of time. Mr. Suarez goes on to say that he has spoken to attorneys representing Verisign, the registry for “.com” domain names, and that in light of such conversation he will dismiss a complaint which he filed before the Mexican courts and will file a new in the US District Court, which he notes has jurisdiction over “.com” domain names. Mr. Suarez adds that he has asked his associate to file a complaint against the Complainants and ICANN seeking various remedies. Mr. Suarez concludes the letter with some details of his defense to the Complaint which the Panel has noted in the Parties’ Contentions section above.

On November 16, 2013, Mr. Suarez issues a further email in response to the Center’s acknowledgment of receipt of his email and letter dated November 15, 2013, in which the Center had reminded him that the due date for filing the Response was December 1, 2013. In this email, Mr. Suarez indicates that it will be impossible for him to file the Response by the deadline due to his current criminal trial which runs from Monday to Saturday, with Sundays being reserved for trial preparation. Mr. Suarez adds that his associate is preparing court action in the US which is to be filed prior to December 1. Mr. Suarez suggests in light of the forthcoming action that the Center should “change [its] policy relating to attorneys”.

In replying to the email from Mr. Suarez of November 16, 2013, the Center explains that if the Respondent fails to comply with the deadline for filing the Response, the Center will proceed to appoint a single-member Panel from its published list. The Center adds that if a Response were to be submitted later than the deadline it would be in the discretion of the Panel whether to consider this in deciding the case.

On December 4, 2013, Mr. Suarez sends a further email to the Center indicating that he has no objections to the Center handling the administrative proceeding when he is free from trial. Mr. Suarez repeats the details of the trial in which he is engaged and that he is unable to respond to the Complaint prior to January 14, 2014 and refers to his repeated requests for an extension of time. Mr. Suarez states that his counsel in the US has filed a civil complaint in the US District Court against ICANN for unfair business practices, neglect of responsibility to monitor the Center in domain name disputes and for declaratory relief together with a motion for a preliminary injunction and a temporary restraining order. Mr. Suarez indicates that a copy of the moving papers is being served upon Verisign.

The question before the Panel is whether to grant the Respondent an extension of time for the filing of its Response until January 14, 2014 as it has requested. The Panel first reminds itself that an administrative proceeding under the Policy is intended to be summary in nature and that the time limits imposed are consequently strictly defined and of a relatively short duration. For example, in terms of paragraph 5(a) of the Rules, the Respondent shall submit any response to a complaint within 20 days of the date of commencement of the administrative proceeding. Similarly, paragraph 15(b) of the Rules provides that the Panel shall forward its decision on a complaint to the Provider (in this case the Center) within 14 days of the Panel’s appointment. Furthermore, and most importantly, paragraph 10(c) of the Rules requires the Panel to ensure that the administrative proceeding takes place “with due expedition”.

These strictures are however somewhat tempered by other provisions of the Rules. Paragraph 10(c) itself goes on to provide that the Panel may extend, “in exceptional cases”, a period of time fixed by the Rules. The Panel must also ensure, in terms of paragraph 10(b) of the Rules, that the Parties are treated with equality and that “each Party is given a fair opportunity to present its case”.

It is clear to the Panel that the Respondent has been aware of the Complaint since well before formal notification took place on November 11, 2013 and in fact no later than October 29, 2013 when the Respondent’s counsel Mr. Suarez first made contact with the Center. Furthermore, in accordance with the requirements of paragraph 3(b)(xii) of the Rules, the Complainants stated that they had transmitted a copy of the Complaint by email to the Respondent on October 22, 2013. Based on the time that has elapsed since the latter date, the Respondent has had the benefit of some two months in which to prepare its Response to the Complaint. In most circumstances this would be more than sufficient time. Mr. Suarez requests additional time because he is an attorney and is currently engaged to represent a defendant in a major criminal trial in Mexico, which according to his emails leaves him no time for anything else until its conclusion. As noted above, Mr. Suarez has not made it clear to the Center or to the Panel why his personal involvement is key to the Respondent’s case; despite the fact that Mr. Suarez focuses on his status as an attorney in his correspondence, it is not clear to the Panel whether he writes in his capacity as the Respondent’s president or as the counsel engaged to represent the Respondent, or perhaps in both capacities.

Despite his avowed lack of availability until January 14, 2014, Mr. Suarez has however been highly active in connection with the Complaint since October 29, 2013. He has been engaged in issuing multiple emails seeking the extension of time, some of which are relatively brief while others are lengthier; he has written a detailed letter to ICANN; he has allegedly been engaged in discussing matters with Verisign’ s attorneys; and ultimately, he has apparently liaised with his US associate and has issued instructions for the raising of court proceedings in the US District Court against both ICANN and the Complainants seeking a variety of remedies. The Panel is left with the distinct impression that had the Respondent put the same amount of effort into answering the Complaint in this case as Mr. Suarez has put into his correspondence since becoming aware of the Complaint, the Respondent would and should have been able to furnish the Panel with a fulsome Response either before or shortly after the Panel’s appointment. The Panel notes the Complainants’ position that if Mr. Suarez is unavailable for the reasons he has given, the Respondent may instruct an alternative attorney to represent it. The Panel agrees. Even assuming that Mr. Suarez’ involvement is indispensable to the Respondent’s case, and it is not apparent to the Panel from the correspondence why this should be so, Mr. Suarez is evidently in a position to instruct the raising of an action in the US District Court notwithstanding the restrictions on his time and he or the Respondent would likewise have been in a similar position to issue instructions to another attorney for the preparation of a Response in the present administrative proceeding. Equally, if Mr. Suarez is acting in his capacity as president of the Respondent, it is hard to imagine that he is the only member of staff in a business claiming to operate 93 licensed pharmacies who would be able to provide an answer to the Complaint.

Accordingly, having carefully considered the correspondence received from Mr. Suarez, the Panel considers that this does not constitute an exceptional case in which the extension of time requested by the Respondent should be granted. The consequence of this ruling is that the Respondent is effectively in default. This does not automatically result in a decision in favor of the Complainant, nor does it alter the onus on the Complainants to establish each of the three elements required by paragraph 4(a) of the UDRP (see paragraph 4.6 of the WIPO Overview 2.0). Furthermore, given that the Respondent has provided a response to the merits of the Complaint within its correspondence, as summarized in the Respondent’ s contentions section above, the Panel is prepared to take this into consideration. The Panel will require to accord this less weight than had it been presented in a fully compliant Response, in the absence of the Respondent’ s certification of completeness and accuracy required by paragraph 5(b)(viii) of the Rules.

The Panel notes for completeness that if the Respondent is dissatisfied by the above ruling or otherwise with the outcome of this administrative proceeding, it is free to submit the dispute to a court of competent jurisdiction in accordance with paragraph 4(k) of the Policy.

C. Preliminary issue: Effect of Court Proceedings

Preliminary issue: Suspension or Termination

Mr. Suarez refers to proceedings both in Mexico, which he states he has dismissed, and in the US District Court, the latter of which is said to be directed against both ICANN and the Complainants. In his letter to ICANN, Mr. Suarez states that the latter action would be filed before December 1, 2013. For their part, the Complainants have stated on information and belief that no other legal proceedings have been commenced or terminated in connection with or relating to the disputed domain name.

Neither party has sought suspension or termination of this administrative proceeding in light of the court action which Mr. Suarez indicated would be commenced before December 1, 2013. However, the Panel has discretion to order such termination or suspension in terms of paragraph 18 of the Rules, which is headed “Effect of Court Proceedings”. Paragraph 18(a) of the Rules provides:

“In the event of any legal proceedings initiated prior to or during an administrative proceeding in respect of a domain-name dispute that is the subject of the complaint, the Panel shall have the discretion to decide whether to suspend or terminate the administrative proceeding, or to proceed to a decision.”

Neither the Panel nor the Center have received any evidence of the commencement of the action referred to by Mr. Suarez. Furthermore, given that such action is expressed to be against both ICANN and the Complainants for a variety of remedies, it is not entirely clear that it could be considered to be “proceedings...in respect of a domain-name dispute that is the subject of the complaint”. In these circumstances, the Panel does not consider it appropriate to exercise its discretion to suspend or terminate the administrative proceeding.

D. Identical or Confusingly Similar

The Panel is satisfied that the Complainants have established that they have rights in the registered trademark COSTCO. This mark is repeated in the disputed domain name in its entirety as the first and, in the Panel’s view, most dominant element along with the term “meds”. The Panel accepts the Complainants’ contention that the latter term denotes (or perhaps more precisely is a popular abbreviation of) the common term “medications”. It is widely accepted by panels under the Policy that the addition of a common term to a trademark in a domain name does not obviate confusing similarity. In the present case, the Panel notes that the Complainants’ business includes the offering of pharmacy services and considers that this is likely to exacerbate the confusing similarity between the disputed domain name and the Complainants’ trademark. The gTLD suffix “.com” may be disregarded for the purposes of comparison as is customary in cases under the Policy.

In all of these circumstances, the Panel finds that the disputed domain name is confusingly similar to a trademark in which the Complainants have rights and that the requirements of paragraph 4(a)(i) of the Policy have been satisfied.

E. Rights or Legitimate Interests

Paragraph 4(c) of the Policy lists several ways in which the Respondent may demonstrate rights or legitimate interests in the disputed domain name:

“Any of the following circumstances, in particular but without limitation, if found by the Panel to be proved based on its evaluation of all evidence presented, shall demonstrate your rights or legitimate interests to the domain name for purposes of paragraph 4(a)(ii):

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

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

(iii) you are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue”.

The consensus of previous decisions under the Policy is that a complainant may establish this element by making out a prima facie case, not rebutted by the respondent, that the respondent has no rights or legitimate interests in a domain name. In the present case, the Complainants contend that they have not licensed or otherwise permitted the Respondent to use their COSTCO mark in the disputed domain name. The Complainants also submit that the Respondent’s registration and use of the disputed domain name evidences a clear intent to disrupt the Complainants’ business, deceive consumers and trade off the Complainants’ goodwill by creating an unauthorized association between the Respondent and the COSTCO trademark, and that the disputed domain name is not being used in connection with a bona fide offering of goods or services. The Panel considers that these submissions are sufficient to constitute a prima facie case that the Respondent has no rights or legitimate interests in the disputed domain name an accordingly the burden of production shifts to the respondent to bring forward evidence of such rights or legitimate interests.

The Respondent accepts that it uses the disputed domain name in connection with an online pharmacy and consequently is not making a noncommercial use thereof. The Respondent’s position appears to be that before notice to it of the dispute, it has been using the disputed domain name in connection with a bona fide offering of goods or services, namely the pharmacy services which it supplies at the corresponding website.

The Respondent states that it developed “Costcomeds” as its brand in 2011 but does not explain why it did so. In the Panel’s mind there is no natural relation, whether immediately obvious or otherwise, between the word “Costco” and the pharmacy services that the Respondent provides, save that which relates to the Complainants’ well-known trademark. This raises the strong inference that the Respondent selected the disputed domain name to take advantage of Complainants’ mark and for no reason which could be considered to give rise to rights or legitimate interests for the purposes of paragraph 4(a)(ii) of the Policy. The fact that the Respondent may have advertised the disputed domain name since 2011 and/or may have built a customer base on the strength of such advertisements does not change this, nor in the Panel’s view does it confer rights and legitimate interests upon the Respondent in and of itself.

The Respondent refers to the fact that it is a properly licensed pharmacy and states that it displays suitable government licenses on its website. In making this point the Respondent misunderstands the fact that it is not the legitimacy of the business which it operates that is in question in the present administrative proceeding but rather the legitimacy of its having apparently adopted the Complainants’ name and trademark to do so. The Panel is not presented with any explanation from the Respondent as to how it might have selected this name independently of the Complainants’ mark and cannot conceive of any likely or credible explanation. The Respondent merely argues that its actions are permissible because the Complainants have no trademark for the phrases “Costco Meds” or “Costco Pharmacy”. In the Panel’s opinion, such argument does not confer any rights or legitimate interests upon the Respondent.

In these circumstances, the Panel finds that the Complainants have proved that the Respondent has no rights or legitimate interests in the disputed domain name and that the requirements of paragraph 4(a)(ii) of the Policy have been satisfied.

F. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy provides four, non-exclusive, circumstances that, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:

“(i) circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out of pocket costs directly related to the domain name; or

(ii) you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or

(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site or other online location, by creating a likelihood of confusion with the complainant’ s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location”.

In the present case, the Complainants’ submissions focus predominantly on paragraph 4(b)(iii) and (iv) of the Policy. With regard to the proposition that the Respondent has registered the disputed domain name primarily for the purpose of disrupting the business of a competitor, the Panel acknowledges that the Respondent’ s activities could disrupt the business of the Complainants’ pharmacy services. However, the Panel considers that any such disruption is merely the end result of the Respondent’s use of the disputed domain name rather than the primary purpose for which the Respondent registered it.

With regard to paragraph 4(b)(iv) of the Policy, the Complainants point to the Respondent’ s diversion of Internet users looking for the Complainants to a commercial website, thus trading on the Complainants’ reputation and goodwill. The Respondent’s answer to this falls under two main heads. First, it relies on the disclaimer on its website as noted in the Factual Background section above. Secondly, it states that it is not a membership club and that the Complainants have no trademark for “Costco Meds” or “Costco Pharmacy”.

With regard to the Respondent’ s second answer, the real question for the Panel is whether the Respondent registered and is using the disputed domain name with the Complainant’ s rights in mind and with bad faith intent to target these. The undisputed evidence of the Complainant is that it has maintained a significant presence in Mexico for many years and in particular has had an outlet in Tijuana, where the Respondent is based, since 1994. The Complainants have a substantial number of COSTCO branded card holders in Mexico and is clearly well-known in that country. Its retail activities in Mexico are extensive and include the provision of pharmacy services.

The Respondent does not attempt to deny knowledge of the Complainants’ rights at the time it registered the disputed domain name and, given the extent of those rights, would not have been able to do so with any credibility whatsoever. Rather, the Respondent seeks to “pare down” its accountability by attempting to distinguish between its activities and those of the Complainants. This approach does not convince the Panel that the Respondent had a good faith intent regarding the disputed domain name.

Given the notoriety of the Complainants in Mexico and their establishment of valuable rights and goodwill long before the disputed domain name was registered, the Panel is satisfied that the Respondent registered the disputed domain name and has subsequently used it with the Complainants’ rights firmly in mind. It appears to the Panel that the Respondent intended to take unfair advantage of the goodwill which the Complainants have generated since the early 1990s, particularly with regard to the provision of pharmacy services. Furthermore, the Panel considers that the Respondent could not have overlooked the fact that Internet users, seeing the disputed domain name on a search engine, would assume that the Respondent’ s website must be in some way endorsed by the Complainant whether by license, sponsorship or otherwise. In these circumstances, it matters not that the Complainant is a membership organization while the Respondent operates a different business model. It matters not that the Respondent may have built a large customer base; indeed, if this is so it could be due in whole or part to the attractive force of the Complainants’ trademark and may be a consequence of confusion that has already been generated.

Turning to the question of the disclaimer, as the Complainants have already noted, the topic of disclaimers is dealt with under paragraph 3.5 of the WIPO Overview 2.0 which sets out the following consensus view:

“The existence of a disclaimer cannot by itself cure bad faith, when bad faith has been established by other factors. This is typically explained by UDRP panels with reference to the probability of Internet user “initial interest confusion” - by the time such user reaches and reads any disclaimer under the domain name, any registrant objective of attracting visitors for financial advantage to its website through use of the trademark in the domain name will generally have been achieved. A disclaimer can also show that the respondent had prior knowledge of the complainant’s trademark. However a disclaimer, especially if it is sufficiently clear and prominent, may sometimes be found to support other factors indicating good faith or legitimate interest.”

The Panel respectfully adopts the consensus view. The Panel is of the opinion that the mere existence of the disclaimer on the Respondent’s website demonstrates that the Respondent must have been aware of the notoriety of the Complainant’s trademark at the point of registration of the disputed domain name. Indeed, the fact that the Respondent felt the need to publish the disclaimer also indicates its recognition of the fact that the disputed domain name has the potential to create a likelihood of confusion on the part of Internet users.

The Panel is satisfied that the disputed domain name is inherently likely to lead to “initial interest confusion” in the sense that Internet users will be drawn to the Respondent’ s website by the attractive force of the Complainants’ trademark. The Respondent’s objective of bringing such users to its website for financial gain is already achieved before the disclaimer is displayed. The Panel notes that it has identified no evidence on the record demonstrating the Respondent’ s good faith or legitimate interest, such that the existence of the disclaimer could be said to support this. Accordingly, the disclaimer does not absolve the Respondent from a finding of bad faith registration and use.

In all of these circumstances the Complainants have demonstrated to the Panel’ s satisfaction that the Respondent registered and is using the disputed domain name in bad faith in terms of the Policy.

Accordingly, the requirements of paragraph 4(a)(iii) of the Policy have been satisfied.

7. Decision

For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the disputed domain name, <costcomeds.com> be transferred to the Second Complainant, Costco Wholesale Membership, Inc.

Andrew D. S. Lothian
Sole Panelist
Date: December 23, 2013