WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Corporation, Price Costco International, Inc. v. Costco General Trading

Case No. D2015-1048

1. The Parties

The Complainants are Costco Wholesale Corporation and Price Costco International Inc. of Issaquah, Washington, United States of America (“United States” or “U.S.”), represented by the Law Office of Mark J. Nielsen, United States.

The Respondent is Costco General Trading of Dubai, United Arab Emirates, self-represented.

2. The Domain Name and Registrar

The disputed domain name <costcouae.com> (the “Disputed Domain Name”) is registered with GoDaddy.com, LLC (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on June 18, 2015. On June 19, 2015, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Disputed Domain Name. On June 19, 2015, 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.

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 the Respondent of the Complaint, and the proceedings commenced on June 24, 2015. In accordance with the Rules, paragraph 5(a), the due date for Response was July 14, 2015. The Response was filed with the Center on July 14, 2015.

The Center appointed Nick J. Gardner as the sole panelist in this matter on July 17, 2015. 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.

On July 21, 2015, the Panel issued a Procedural Order in the following terms:

“The Panel invites the Respondent to provide a supplemental statement with additional information on each of the matters set out below, with accompanying documentary evidence confirming the information provided (such evidence to be in English, or if not to be accompanied with English translations):

1) Proving the Respondent’s status as an incorporated company in the United Arab Emirates and showing its date of incorporation.

2) Providing details of its business activity since its date of incorporation including details of customer numbers and turnover.

3) Explaining its relationship with Alma Computer Networks which (according to the Respondent’s website) it is “partnered with”.

4) Explaining how it came to choose its name and why in particular its name includes both the word “costco” and the words “general trading” given that those words bear no obvious significance in relation to the Respondent’s area of business activity which (according to the Respondent’s website) is the provision of IT related services.

The Respondent shall have until July 30, 2015 to submit its supplemental statement which should not exceed 2500 words in length. The Complainant shall then have till August 7, 2015 to submit if it wishes a supplemental statement (not to exceed 2500 words in length) responding to any matters contained in the Respondent’s supplemental statement.”

On July 30, 2015, the Respondent filed a Supplemental Statement. On the same day the Complainants filed a Supplemental Statement.

4. Factual Background

The Complainants in this administrative proceeding are Costco Wholesale Corporation, a Washington corporation, and Price Costco International, Inc., a Nevada corporation each having its principal place of business in Issaquah, Washington. Costco Wholesale Corporation is a public company that directly or indirectly owns all of the business operations under the COSTCO trademark throughout the world. Price Costco International, Inc. is a subsidiary of Costco Wholesale Corporation and owns, among other assets, trademark rights and domain names associated with the COSTCO trademark outside the U.S. In practical terms for the purposes of this decision it is not necessary to distinguish between the Complainants.

The Complainants operate what they describe as a “warehouse club merchandizing” business as well as related services. They have operated membership warehouse stores under the COSTCO trademark and trade name since 1983. They currently operate over 674 warehouse stores worldwide, including over 475 COSTCO warehouse stores in the United States and Puerto Rico and 199 in Australia, Canada, Japan, Republic of Korea, Mexico, Spain, Taiwan Province of China and the United Kingdom of Great Britain and Northern Ireland. The Complainants have more than 76 million authorized cardholder members worldwide and more than 47 million authorized cardholders in the United States. The Complainants are one of the best known retailers in the United States, with USD 110 billion in sales in fiscal year 2014. The Complainants’ stock has been publicly traded since 1985 and they are currently the eighteenth largest company in the Fortune 500, the third largest retailer in the United States and one of the largest retailers in the world. The filed evidence establishes that the Complainants are internationally famous for the sale of brand name and high quality private label merchandise at low prices in no-frills warehouse-style stores.

The Complainants obtained their first U.S. trademark registration of COSTCO in 1985 and now are the owner of numerous trademark registrations in many countries throughout the world for the word “COSTCO”. See for example United States trademark no. 1318685 for the word “COSTCO” in class 42 issued on February 5, 1985. The Complainants own United Arab Emirates trademark no. 92115 for a stylized form of the word “COSTCO” issued on August 26, 2011.

The Complainants own the <costco.com> domain name and maintain an active presence on the Internet using this domain name as its URL. They also use a number of country specific domain names all incorporating the word “costco” in the domain name. In fiscal year 2014, the Complainants sales through their “www.costco.com”, “www.costco.ca” and “www.costco.co.uk” websites were approximately USD 3 billion.

On May 4, 2014, the Respondent registered the Disputed Domain Name. The Respondent currently uses the Disputed Domain Name as the URL for a website promoting “Costco General Trading”. The website describes this entity as providing a wide variety of technology related services. The “Services” page states that “COSTCO is partnered with ALMAS Computer Networks is [sic] a leading provider of structured cabling solutions. . . .”. The Contacts page shows a street address in Dubai and an email address and phone number.

The word “costco” is a made up word with no separate or independent meaning apart from in relation to the Complainants or their products.

The Respondent is located in Dubai which is an emirate in the Middle East which, together with six other emirates, makes up the country called the United Arab Emirates, which is commonly referred to by the abbreviation UAE.

5. Parties' Contentions

A. Complainant

The Complainants’ case can be summarised as follows.

a) The Disputed Domain Name is confusingly similar to their COSTCO trademarks as (i) it incorporates in its entirety the Complainants’ well-known and distinctive COSTCO trademark, and (ii) the combination thereof with generic terminology is insufficient to distinguish the Disputed Domain Name from the Complainants’ trademark.

b) The Respondent does not have any rights or legitimate interests in the Disputed Domain Name.

c) The Respondent uses the Disputed Domain Name in bad faith as it must have been aware of the Complainants’ rights in the word COSTCO at the time it registered the Disputed Domain Name. The Respondent’s only conceivable business purposes in registering the Disputed Domain Name was to profit from the diversion of Internet users to its own website and deceiving consumers about an association between the Complainants and the Respondent’s web site.

B. Respondent

It is convenient to set out verbatim the substantive parts of the Response, as follows [all errors present in original]:

“Responded based out of Dubai, U.A.E is a legally registered company in the United Arab Emirates with all legal documentation from necessary government departments and has no intention of conflict with the complainant in any means. The trade name approval process in Dubai Economic Department of U.A.E follows certain procedures to validate Trade Names and the same is applicable for this company. The complainant has also initiated a proceeding with Dubai Economic Department regarding the trade name and the responded is working with the Dubai Economic Department and Complainant’s representative in this region Rouse & Co International to resolve the dispute in Trade Name and the domain.

Bad Faith Registration of the Domain

The Registrant/Responded would like to clarify that there is no bad faith in the registration of the disputed domain as the company operates under the name Costco General Trading L.L.C which is legally registered with Economic Department in Dubai, U.A.E. and it has opted to use the name in domain. The Responded is no way related to the complainant or neither trading same products as complainant as in the online store www.costco.com The complainant has no physical presence in this region which could be a reason to have caused the issue at the first place. Therefore their presence is completely unknown until the responded received the first communication from Rouse & Co, representing the Complainant in this region. We are working on resolving this issue with the complainant in the Department of Economy in Dubai which also includes the disputed domain, in U.A.E. and would request WIPO to keep this case on hold till we reach a resolution at Dubai Economic Department which includes Trade Name and the domain name. We will communicate to you on the updates of the issue as we reach a conclusion.”

It is also convenient to set out verbatim the substantive content of the Respondent’s Supplemental Statement, as follows [all errors present in original]:

“1. Respondent’s status as an incorporated company in the United Arab Emirates and showing its date of incorporation. (Attached in email, the Commercial License for reference).

2. Details on activity carried out, customer numbers and turn over, we are not in the position to share this information at this point, as couple of our board of directors are currently on vacation and are unavailable and it may not be possible to share financial details without approval.

3. It is a process to propose few names to the Licensing authority when selecting the trade name and Costco general trading was one of the other options. The licensing department had selected Costco General Trading out of the options provided. ‘General Trading’ is one of the common licensing type used in UAE and the it was opted by the company.”

6. Discussion and Findings

Joint Complainants

The Panel accepts the Complainants’ submission that for the purposes of this dispute, the interests of the Complainants are co-extensive, and their grievance against the Respondent arises from common legal interests. The Panel agrees that it is equitable and procedurally efficient to consolidate the claims of Costco Wholesale Corporation and Price Costco International, Inc. See WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”), paragraph 4.16 and panel decisions cited therein.

Substantive Issues

Paragraph 4(a) of the Policy states that the Complainant must prove each of the three following elements:

i. the Disputed Domain Name is identical to or confusingly similar to a trademark or service mark in which the Complainants have rights;

ii. the Respondent has no rights or legitimate interests in the Disputed Domain Name;

iii. the Disputed Domain Name has been registered and is being used in bad faith.

A. Identical or Confusingly Similar

The Complainants have submitted detailed evidence that they are the owner of numerous trademarks consisting of the word “COSTCO”.

The Panel holds that the Disputed Domain Name is confusingly similar to the above trademarks. The Disputed Domain Name, as registered by the Respondent, incorporates the COSTCO trademark. Previous UDRP panels have consistently held that domain names are identical or confusingly similar to a trademark for purposes of the Policy, “when the domain name includes the trademark, 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). The only differences in the present case is the addition of the letters “uae” which are clearly a generic term being a common geographical abbreviation for the United Arab Emirates. This addition does not suffice to negate the similarity between the Disputed Domain Name and the Complainant’s COSTCO trademark - it is established that, where a mark is the distinctive part of a disputed domain name, the disputed domain name is considered to be confusingly similar to the registered mark (DHL Operations B.V. v. DHL Packers, WIPO Case No. D2008-1694).

Accordingly the Panel finds that the Disputed Domain Name is confusingly similar to the Complainants’ trademark and hence the first condition of paragraph 4(a) of the Policy has been fulfilled.

B. Rights or Legitimate Interests

Paragraph 4(c) of the Policy non-exhaustively lists three circumstances that demonstrate a right or legitimate interest in a domain name:

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 organisation) 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.

In the present circumstances the Complainant has not authorised, licensed, or permitted the Respondent to register or use the Disputed Domain Name or to use the COSTCO trademark. The Complainant has prior rights in the COSTCO trademark which precede the Respondent’s registration of the Disputed Domain Name. The Complainant has therefore established a prima facie case that the Respondent has no rights or legitimate interests in the Disputed Domain Name and thereby the burden of production shifts to the Respondent to produce evidence demonstrating rights or legitimate interests in respect of the Disputed Domain Name (see for example 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).

As the Panel understands it, the Respondent’s case is that the Disputed Domain Name simply reflects its corporate name, and that it selected its corporate name, and hence the Disputed Domain Name, with no knowledge of the Complainant. It appears from the copy of the license filed with the Respondent’s Supplemental Statement that the Respondent came into existence in May 2014. Looking at the evidence as a whole the Panel on the balance of probabilities does not accept that the Respondent was unaware of the Complainant at the time it chose its name and registered the Disputed Domain Name. The Panel is conscious that proceedings under the UDRP are of a limited and restricted nature, do not involve oral hearings, discovery or cross examination, and hence are only applicable to clear cut cases, and it is not usually appropriate to decide disputed questions of fact or matters of truth or falsehood. That does not however mean the Panel cannot reach a conclusion as to the veracity of a case that is being advanced where the only evidence that is provided is in the form of conclusory statements that are inherently not credible, and which are not supported by relevant corrobative or third party evidence. The Panel considers this to be such a case. The Panel reaches this conclusion for the following reasons:

1. The filed evidence establishes the Complainants were very well known internationally by 2014.

2. Although the Complainants had no physical presence in Dubai the evidence establishes they were likely to be well known in the emirate at least to persons engaged in business or commerce with an international connection.

3. The word “costco” is a made up word with no separate independent meaning.

4. The Complainants had a trademark registration in the United Arab Emirates for the word “COSTCO”. Whilst there is no specific obligation upon a registrant of a domain name to carry out trademark searches had the Respondent done so it would have readily found this mark.

5. Even if in the light of the above the Respondent and/or those involved in establishing the Respondent had no actual knowledge of the Complainants (which seems to the Panel to be highly unlikely) even the most cursory of Internet searches would have quickly identified the Complainants and the nature and size of their business – the Panel cannot believe that such a search was not performed, particularly given the Respondent’s professed area of business in the supply of IT related services.

6. In addition the name “Costco General Trading” seems to the Panel to be a peculiarly inappropriate name for the Respondent to adopt if its business really is, as its website portrays, the supply and installation of structured cabling and other related IT services. Nothing in the name bears any relation whatsoever to this area of business. The Procedural Order issued by the Panel provided the Respondent with an opportunity to explain this peculiarity, but the Respondent’s Supplemental Statement provides no further meaningful information on this issue.

7. In addition if the Respondent was operating a genuine business under its name it is to be expected it would be able to provide details of that business in terms of size, numbers of customers and so on. Again the Procedural Order issued by the Panel provided the Respondent with an opportunity to provide such information, but the Respondent’s Supplemental Statement provides no further meaningful information on this issue.

Accordingly the Panel concludes the Respondent adopted its name and the Disputed Domain Name with knowledge of the Complainants and their rights in the word “COSTCO”. In those circumstances the Panel declines to find that the Respondent has the benefit of any of the circumstances listed in paragraph 4(c) of the Policy. Accordingly the Panel finds that the Respondent has no rights or legitimate interests in the Disputed Domain Name and the second condition of paragraph 4(a) of the Policy has been fulfilled.

C. Registered and Used in Bad Faith

In the present circumstances, the distinctive nature of the COSTCO trademark, and the evidence as to the extent of the reputation the Complainants enjoy in the COSTCO trademark, and the confusingly similar nature of the Disputed Domain Name to the COSTCO trademark, and the lack of any credible explanation from the Respondent as to why it chose its name and why it registered the Disputed Domain Name leads the Panel to conclude the registration and use was in bad faith. In the present case, the Panel concludes that on the balance of probabilities the Respondent did not select the Disputed Domain Name independently and without knowledge of the Complainants or their trademark.

The website operated by the Respondent at the Disputed Domain Name purports to promote a business involving the supply and installation of structured cabling and other related IT services. The website comprises three pages under the titles “Home”, “Services” and “Contact” and is of a relatively basic nature. The contact page provides details of the Respondent’s address and a Google map showing its location. Having looked at this website the Panel was unable to conclude that it provided reasonable corroboration of a genuine business being operated by the Respondent. The Panel’s Procedural Order invited the Respondent to provide further information substantiating its business activities, but its Supplemental Statement has not done so. In the circumstances, on the balance of probabilities the Panel concludes the Respondent has failed to show that it is engaged in a bona fide business of the type portrayed on its website.

The Panel concludes that the Respondent chose to register a name comprising the Complainants’ widely known trademark combined with a generic geographical identifier. The evidence before the Panel does not provide sufficient material for the Panel to reach a conclusion on exactly what the Respondent’s intention was in so doing. Under paragraph 4(b) of the Policy a non-exhaustive list of factors evidencing registration and use in bad faith comprises:

(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 on-line 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 circumstances factor (ii) is not applicable but the Panel cannot clearly determine which, if any, of the other factors may apply. However the Panel notes that in any event this list is non-exhaustive and accepts the Complainants’ submission that the registration of the Disputed Domain Name with knowledge of the Complainants’ widely known trademark is itself evidence of bad faith – see The Channel Tunnel Group Ltd. v. John Powell, WIPO Case No. D2000-0038. This is particularly so given that the Respondent has been provided with an express request to explain how and why it chose its corporate name and hence the Disputed Domain Name, but has not provided any meaningful response to that request.

Accordingly the Panel finds that the Disputed Domain Name has been registered and is 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 Disputed Domain Name <costcouae.com> be transferred to Price Costco International, Inc.

Nick J. Gardner
Sole Panelist
Date: August 6, 2015