WIPO Arbitration and Mediation Center


Costco Wholesale Corporation and Costco Wholesale Membership Inc. v. Nick Matyas

Case No. D2010-1798

1. The Parties

Complainants are Costco Wholesale Corporation and Costco Wholesale Membership Inc. of Issaquah, Washington, United States of America, represented by the Law Office of Mark J. Nielsen, United States of America.

Respondent is Nick Matyas of Costa Mesa, California, United States of America.

2. The Domain Name And Registrar

The disputed domain name <costcofreight.com> is registered with 1&1 Internet AG.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on October 26, 2010. On October 26, 2010, the Center transmitted by email to 1&1 Internet AG a request for registrar verification in connection with the disputed domain name. On October 28, 2010, 1&1 Internet AG transmitted by email to the Center its verification response, confirming that the 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” 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 Respondent of the Complaint, and the proceedings commenced on November 5, 2010. In accordance with the Rules, paragraph 5(a), the due date for Response was November 25, 2010. The Response was filed with the Center on November 24, 2010.

The Center appointed Richard G. Lyon as the sole panelist in this matter on December 8, 2010. The Panel finds that it was properly constituted and has jurisdiction to decide this administrative 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.

4. Factual Background

Complainants are affiliated companies that are engaged in warehouse club merchandising of many goods and services to consumers. In the United States of America, where Respondent is located, Complainant currently operates over 400 warehouse stores. In its past fiscal year Complaints’ group of companies had worldwide sales exceeding USD 76 billion. Complainants own many trademarks that incorporate the word Costco around the world, including more than fifty that are registered with the United States Patent and Trademark Office (USPTO). The earliest of these identified by Complainants was registered with the USPTO in 1998. Complainants also use the word COSTCO to market their goods and services online, including the domain names <costco.com> and <costco.ca>.

Respondent registered the disputed domain name on April 2, 2004. According to a screen shot submitted with the Complaint the disputed domain name in October 2010 resolved to a site offering consumers assistance in shipping and return policy disputes. The site was entitled “Shipping and Return Policy Legal Center-File Complaint and Dispute” and included commentary regarding such disputes and links to alternative dispute resolution providers, lawyers, and other services that a consumer might find helpful if pursuing such a dispute. The disputed domain name at that time also included a number of commercial advertisements, with links to attorneys, coupons, popular websites, and legal aids. Several of the ads are indentified as “Ads by Google.”

When the Panel tried to access the disputed domain name he received the following message, “error 403-forbidden. You tried to access a document for which you don’t have privileges.”

5. Parties’ Contentions

A. Complainants contend as follows:

The disputed domain name has as its main feature the word Costco, which is Complainants’ principal trademark. Addition of a common word, in this case freight, does not obviate confusion between the disputed domain name and Complainants’ marks.

Complainants have never had any business dealings with Respondent and have never authorized Respondent to use their marks. Respondent’s use of the disputed domain name, which has no connection with Complainants, directs internet traffic seeking Complainants to Respondent’s website, deceiving Internet users about a possible connection between Complainants and Respondent.

Respondent registered the disputed domain name in bad faith. COSTCO is a well-know trademark in the United States, and Respondent was very likely well aware of it when he registered the disputed domain name in 2004. Complainants operate over 100 stores in California, the state of Respondent’s residence. Quoting from the Complaint, “Respondent’s only conceivable business purpose in registering the [disputed domain name] was to profit from the diversion of internet users to its own retail website unrelated to COSTCO.”

Similarly, Respondent used the disputed domain name in bad faith, taking advantage of Complainants’ marks to attract Internet users to Respondents own site for commercial gain.

B. Respondent contends as follows:

Respondent has more than 35 years’ experience in the freight and logistics industry. He owns 697 domain names addressing two industries: mediation and legal related services, and freight and logistics related services. The disputed domain name falls into the latter category. Costco is a common misspelling of the acronym for China Ocean Shipping Co., COSCO, and COSTCO itself is shorthand in the freight logistics industries for Cost Containment, Container Cost Control and Reducing Costs. Complainants, to Respondent’s knowledge, do not operate in the freight and logistics industry.

Respondent protests that Complainants made no effort to resolve this dispute before filing the Complaint, which he characterizes as an effort, ”to acquire [the disputed] domain name without compensation.” Further, quoting from the Response, “Respondent Requests Fair Market Value for www.costcofreight.com.”

Respondent does not wish to withhold nor deny Complainant use of domain name. Respondent wishes to resolve Complainant dispute with a mutual remedy. Respondent requests compensation for domain name in one of two methods: a) monetary compensation based on what WIPO panel establishes as fair market value compensation; or b) free lifetime Costco Wholesale Executive Membership.”

6. Discussion And Findings

A. Identical or Confusingly Similar.

Complainants hold many USPTO-registered trademarks for and that incorporate the word Costco. Costco is the dominant feature of the disputed domain name, and the addition of a common word (even one not related to Complainants’ principal business) does not obviate confusing similarity. Complainants have established this Policy element.

B. Rights or Legitimate Interests; Used in Bad Faith.

Respondent, without authority, has incorporated Complainants’ marks into the disputed domain name. Respondent’s observation that Complainants do not operate in the freight and logistics industry, even if true,1 is irrelevant. When, as here, the mark bears no relation to the business operated at the disputed domain name, the likelihood that Respondent chose the disputed domain name to take advantage of Complainants’ marks increases. Respondent presents no convincing reason that might legitimate that choice.

Respondent offers no evidence to support his assertion that Costco as a word or acronym is common in the freight and logistics business and in fact does not assert that any such similarity is the reason he chose the disputed domain name. Neither of the acronyms Respondent cites is referred to on the screen shot of his website submitted with the Complaint. The most likely inference (by far) is that Respondent selected Complainants’ mark for the goodwill attached to it, as proscribed by paragraph 4(b)(iv) of the Policy.

None of this, of course, calls into question the legitimacy of Respondent’s businesses. What is at issue is the legitimacy of his use of Complainants’ marks without authority in the disputed domain name. Under well-established Policy precedent Complainants have demonstrated that Respondent has no right or legitimate interest in that. Without a right or legitimate interest in the disputed domain name Respondent’s use is classic bad faith.

C. Registered in Bad Faith

That leaves the question of whether Respondent registered the disputed domain name with this purpose in mind. Respondent does not deny knowledge of Complainants or their marks at the time of registration, nor, given the widespread use of the COSTCO brand, could he credibly do so. See, e.g., Classmates Online, Inc. v. John Zuccarini, individually and dba RaveClub Berlin, WIPO Case No. D2002-0635.

The only alternative possible on the record is equally condemned: an attempt to sell the disputed domain name to the owner of the mark that it incorporates as its principal feature. That too is evidence of bad faith, as expressly provided in paragraph 4(b)(i) of the Policy: “(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.” Consideration need not be cash to fall within this example; see Freddy Adu v. Frank Fushille, WIPO Case No. D2004-0682. The quotation from the Response set out above indicates that Respondent obviously seeks more than reimbursement of his out-of-pocket costs; rather he requests “fair market value.”

Complainants have proven that Respondent registered the disputed domain name in bad faith.

7. Decision

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

Richard G. Lyon
Sole Panelist
Date: December 16, 2010

1 No documentary evidence was submitted by the Respondent to support this Contention. Additionally, a review of Complainant’s evidence submitted as Annexes to the Compliant, reveals that Complainant in fact is the owner of U.S. Trademark Registration No. 1994826, filed on March 20, 1995, for the COSTCO mark in International Class 039, “delivery of goods by truck, travel agency services, namely arranging travel tours; making reservations and bookings for transportation; travel booking agencies; travel clubs; travel guide services; and travel information services.”