WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Membership, Inc., Costco Wholesale Corporation v. Domain Admin, Whois Privacy Corp. / Ryan G Foo, PPA Media Services

Case No. D2015-1290

1. The Parties

The Complainants are Costco Wholesale Membership, Inc. and Costco Wholesale Corporation (referred to collectively as “the Complainant”) 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 Domain Admin, Whois Privacy Corp. of Nassau, Bahamas / Ryan G Foo, PPA Media Services of Santiago, Chile.

2. The Domain Name and Registrar

The disputed domain name <costcobusiness.com> (the “Domain Name”) is registered with Internet.bs Corp. (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on July 24, 2015. On July 27, 2015, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Domain Name. On July 30, 2015, the Registrar transmitted by email to the Center its verification response disclosing registrant and contact information for the Domain Name which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on July 30, 2015 providing the registrant and contact information disclosed by the Registrar, and inviting the Complainant to submit an amendment to the Complaint. The Complainant filed an amendment to the Complaint on July 30, 2015.

The Center verified that the Complaint together with the amendment to 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 August 3, 2015. In accordance with the Rules, paragraph 5(a), the due date for Response was August 23, 2015. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on August 24, 2015.

The Center appointed Jon Lang as the sole panelist in this matter on September 2, 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.

4. Factual Background

Costco Wholesale Corporation is a public company that directly or indirectly owns all of the business operations under the COSTCO trademark throughout the world. Costco Wholesale Membership Inc. is a subsidiary of Costco Wholesale Corporation and owns, among other assets, U.S. trademark rights and domain names associated with the COSTCO trademark.

Preliminary Matter: Consolidation

The Complaint maintains 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 and therefore it would be equitable and procedurally efficient to consolidate the claims of Costco Wholesale Corporation and Costco Wholesale Membership Inc. The Panel agrees that it would be equitable and procedurally efficient to permit the consolidation. Costco Wholesale Membership, Inc. and Costco Wholesale Corporation will be referred to collectively as “Costco” in this background section and when summarizing the contentions of the Parties in the following section.

Costco is a world leader in warehouse club merchandizing and related services and has operated membership warehouse stores under the COSTCO trademark and trade name since 1983. It is one of the largest and best‐known retailers in the United States with USD 110 billion in sales in fiscal year 2014. The COSTCO trademark has become famous for the sale of brand name and high quality private label merchandise at low prices in no‐frills warehouse‐style stores.

“Costco” is a coined name developed by the founders of the business and Costco is the only legitimate owner of the COSTCO trademarks. Costco owns trademark registrations for the COSTCO trademark in a variety of forms, including COSTCO (in stylized letters), COSTCO WHOLESALE & Design and COSTCO.COM. It obtained its first U.S. trademark registration for COSTCO in 1985 and has continued to expand and maintain a large portfolio of COSTCO trademark registrations in the United States. By way of example, Costco owns the following U.S. Trade Mark Registrations:

Mark Filing Date Registration No.
COSTCO March 20, 1995 1,976,242
COSTCO WHOLESALE & Design March 5, 1997 2,244,972

COSTCO.COM January 18, 2000 2,440,636
COSTCO (stylized) March 24, 2000 2,481,924

Through a wholly owned affiliate, Costco also owns a large number of trademark registrations for COSTCO marks in other countries around the world.

Costco owns the <costco.com> domain name and maintains an active presence on the Internet. It operates online retail websites for its members in the United States, Canada, Mexico and the United Kingdom of Great Britain and Northern Ireland, offering a wide range of goods and services through its “www.costco.com”, “www.costco.ca”, “www.costco.com.mx” and “www.costco.co.uk” websites. In fiscal year 2014, Costco’s sales through these websites were approximately USD 3 billion. Costco’s operations in Japan, the Republic of Korea, Taiwan, Province of China, Australia and Spain have informational websites at “www.costco.co.jp”, “www.costco.co.kr”, “www.costco.com.tw”, “www.costco.com.au” and “www.costco.es”, respectively, that provide shoppers with information about membership, products and services, and warehouse store locations and hours.

The Respondent is Ryan G Foo, PPA Media Services of Santiago, Chile. Apart from the Respondent registering the Domain Name on November 19, 2005, not much more is known about him/them as he/they have not taken any part in these proceedings.

5. Parties’ Contentions

A. Complainant

The following is a brief summary of the Complainant’s contentions.

Generally

The Domain Name resolves to a rotating sequence of web pages, namely a survey request for Costco shoppers, a check printing business and a link farm site with many “Costco” links. Choosing the link for “Costco Wholesale” leads to another page with more “Costco” links that take visitors to retail websites with no affiliation whatsoever with the Complainant.

Many shoppers use the Internet to find and purchase the Complainant’s goods and services.

The Respondent registered the Domain Name and uses it to direct Internet traffic to its website. The Respondent’s action evidences a clear intent to disrupt the Complainant’s business, deceive its consumers and trade off its goodwill by creating an unauthorized association between it and the COSTCO trademarks.

The Domain Name is Confusingly Similar to the Complainant’s Registered Trademarks

The Domain Name consists of the Complainant’s well‐known registered trademark, COSTCO and the common term, “business”. The addition of such a common term to the COSTCO trademark does not mitigate the confusing similarity between the Domain Name and the COSTCO trademarks. Indeed, because the Complainant offers a special level of membership specifically for businesses, the addition of the common term “business” serves to exacerbate the confusing similarity between the COSTCO trademark and Domain Name, increasing the risk of confusion.

The Respondent Has No Rights or Legitimate Interests in the Domain Name

The Respondent has no rights or legitimate interests in any domain name, trademark or trade name incorporating or confusingly similar to the COSTCO trademark, has not used the Domain Name in connection with a bona fide offering of goods or services, owns no trademark registrations for the Domain Name or any portion thereof, and has not been commonly known by the Domain Name or any portion thereof. The Complainant has not licensed or otherwise permitted the Respondent to use its marks or the Domain Name. The Respondent does not own and cannot lawfully obtain any trademark or intellectual property rights in the COSTCO trademark or any words or phrases that incorporate or are confusingly similar to the COSTCO trademark.

The Respondent Registered and Is Using the Domain Name in Bad Faith

Registration - The Respondent’s choice of domain name was not a coincidence. COSTCO is a trademark coined by the Complainant’s founders in 1983 and lawfully registered and used only by the Complainant, who obtained trademark registrations for the COSTCO trademark as early as 1985. The COSTCO trademark long ago became famous as the Complainant’s sales grew rapidly from USD 4.1 billion in 1990 to USD 110 billion in fiscal year 2014. The Respondent registered the Domain Name on November 19, 2005, many years after the COSTCO trademark had become famous. Because of the notoriety of the COSTCO trademark, the Respondent must have been aware of the Complainant’s rights (in the COSTCO trademark) when it registered the Domain Name and when it put it to use diverting Internet users to its website. The Complainant’s many registrations also constitute constructive notice in the United States of its rights in the COSTCO trademark. Awareness of another’s rights in a mark or domain name at the time of registration is evidence of bad faith registration.

The Respondent’s registration of the Domain Name was done in bad faith because it had no legitimate right or business interest in any COSTCO‐formative domain name. The Respondent’s only conceivable business purpose in registering the Domain Name was to profit from the diversion of Internet users to its own retail website unrelated to the Complainant.

The Respondent’s use of the Domain Name to divert Internet traffic to a retail website in direct competition with the Complainant demonstrates the Respondent’s intention to disrupt the Complainant’s business by diverting its potential customers to its own retail website.

Use – The Respondent uses the Domain Name to divert Internet users looking for the Complainant to a website for its own commercial benefit. This confuses and deceives Internet users, damages the Complainant’s business and reputation, and provides an illicit commercial benefit to the Respondent by trading on the Complainant’s reputation and goodwill.

The first landing page for users of the Domain Name is a deceptive survey for Costco shoppers that is likely to cause confusion and deception as to the Complainant’s involvement with or approval of the survey. The second landing page is a check printing website in direct competition with the Complainant’s check printing services. Both landing pages constitute bad faith use of the Domain Name because they are intended to deceive consumers and damage the Complainant’s business. The third landing page is a “link farm” website built around numerous fallacious “Costco” links, which also deceives consumers and damages the Complainant’s business by associating other businesses with its name and reputation.

The Respondent does not use the Domain Name in any legitimate, good faith manner and there is no legitimate, good faith use of the Domain Name possible by the Respondent.

B. Respondent

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

6. Discussion and Findings

Paragraph 4(a) of the Policy requires a complainant to prove that a respondent has registered a domain name which is: (i) identical or confusingly similar to a trademark or service mark in which a complainant has rights; and (ii) that the respondent has no rights or legitimate interests in respect of the domain name; and (iii) that the domain name has been registered and is being used in bad faith. A complainant must prove each of these three elements to succeed.

A. Identical or Confusingly Similar

The Complainant clearly has rights in the COSTCO (and other related) trademarks for the purposes of the Policy.

Ignoring the generic Top-Level Domain “.com” (as the Panel may do for comparison purposes), the Domain Name comprises the Complainant’s COSTCO mark and the generic term, “business”. As the COSTCO mark and Domain Name are not identical, the issue of confusing similarity must be considered. Under the UDRP, the test for confusing similarity involves a comparison between the trademark and the domain name to determine the likelihood of Internet user confusion. To satisfy the test, the trademark to which the domain name is said to be confusingly similar, would generally need to be recognizable as such within the domain name. The addition of common, dictionary, descriptive, or negative terms are usually regarded as insufficient to prevent Internet user confusion. Application of the confusing similarity test under the UDRP typically involves a comparison, on a visual or aural level, between the trademark and the domain name.

The issue is whether the addition of the term “business” renders the Domain Name something other than confusingly similar to the Complainant’s COSTCO mark. COSTCO is the first and dominant element of the Domain Name. The inclusion of the generic term “business” does not detract from the immediate recognition, on an aural or visual level, of the COSTCO mark. The Domain Name and COSTCO mark are confusingly similar.

Even if one were to adopt a possibly more stringent test and require, as some UDRP panels have done, a risk that Internet users may actually believe that there is a real connection between the Domain Name and the Complainant and/or its goods and services, the Complainant would satisfy this first element of the three part test. The impression created by the Domain Name, especially given the inclusion of the term “business” (given the Complainant’s level of membership specifically for businesses, and generally), may well give rise to the possibility that Internet users would think that the owner of the Domain Name is in fact the owner of the Complainant’s COSTCO mark to which it is similar, or that there is some form of association between the Respondent and the Complainant.

The Panel finds that the Domain Name is confusingly similar to the COSTCO mark for the purposes of the Policy and thus this element of paragraph 4(a)(i) of the Policy has been established.

B. Rights or Legitimate Interests

By its allegations, the Complainant has made out a prima facie case that the Respondent lacks rights or legitimate interests in the Domain Name and, as such, the burden of production shifts to the Respondent to come forward with appropriate arguments or evidence demonstrating that it does in fact have such rights or legitimate interests. The Respondent has not done so and accordingly, the Panel is entitled to find, given the prima facie case made out by the Complainant, that the Respondent indeed lacks rights or legitimate interests in the Domain Name. Before doing so however, the Panel will consider whether such a finding would in any way be inappropriate.

A respondent can show it has rights to or legitimate interests in a domain name in various ways even where, as is the case here, it is not licensed by or affiliated with the complainant. For instance, it can show that it has been commonly known by the Domain Name or that it is 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 in issue.

Here, however, the Respondent is not known by the Domain Name. Moreover, given the nature of the website to which the Domain Name resolves as earlier described, the Panel would not accept that there is a legitimate noncommercial or fair use. In any event, any noncommercial or fair use must be without intent to mislead, but it is likely in fact (in the absence of any alternative explanation), that the very purpose of the Respondent choosing the Domain Name was to deliberately create a false impression of association with the Complainant. In Drexel University v. David Brouda, WIPO Case No. D2001-0067, the panel stated that “rights or legitimate interests cannot be created where the user of the domain name at issue would not choose such a name unless he was seeking to create an impression of association with the Complainant”. That seems to be the case here.

A respondent can also show that it is using a domain name in connection with a bona fide offering of goods or services. However, it would be difficult to accept that the Respondent’s website, to which a domain name which is confusingly similar to the Complainant’s COSTCO mark resolves, could be a bona fide offering when it includes, inter alia, a check printing business, a service which the Complainant also provides, and a link farm site with many “Costco” links to other businesses unrelated to the Complainant.

There is no evidence before this Panel that the Respondent has rights or legitimate interests in the Domain Name. The Respondent certainly hasn’t provided any. The contentions of the Complainant, by which it has made out a prima facie case that the Respondent has no rights or legitimate interests, have not been contradicted or challenged, or cast into doubt by the brief analysis set out above.

Accordingly, the Panel finds that the Complainant has fulfilled the requirements of paragraph 4(a)(ii) of the Policy.

C. Registered and Used in Bad Faith

One way a complainant may demonstrate bad faith registration and use is to show that a respondent has intentionally attempted to attract, for commercial gain, Internet users to its website by creating a likelihood of confusion with a complainant’s mark as to the source, sponsorship, affiliation or endorsement of its website or of products or services on it. Given that these are the circumstances in the present case, the Panel finds that, for the purposes of the Policy, there is evidence of both registration and use of the Domain Name in bad faith.

The Policy sets out other grounds upon which a finding of bad faith registration and use may be founded, e.g., where it can be shown that a respondent has registered a domain name primarily for the purpose of disrupting the business of a competitor. However, given the finding set out above, it is unnecessary to go on to consider other possible grounds.

In all the above circumstances, the Panel finds that, for the purposes of the Policy, there is evidence of both registration and use of the Domain Name in bad faith.

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 Domain Name <costcobusiness.com> be transferred to Costco Wholesale Membership, Inc. (the entity proposed as transferee by the Complainant).

Jon Lang
Sole Panelist
Date: September 8, 2015