WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Membership Inc. and Costco Wholesale Corporation v. Domain Admin, Privacy Protection Service INC d/b/a PrivacyProtect.org / Tynan Wong

Case No. D2016-1102

1. The Parties

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

The Respondent is Domain Admin, Privacy Protection Service INC d/b/a PrivacyProtect.org of Nobby Beach, Queensland, Australia / Tynan Wong of Langley, British Columbia, Canada, represented by Andrew Gray, Canada.

2. The Domain Names and Registrar

The disputed domain names <costcoeast.com> and <costcowest.com> are registered with Launchpad.com Inc. (the "Registrar").

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on June 1, 2016. On June 2, 2016, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain names. On June 3, 2016, the Registrar transmitted by email to the Center its verification response disclosing registrant and contact information for the disputed domain names which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on June 3, 2016 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 June 6, 2016.

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 and 4, the Center formally notified the Respondent of the Complaint, and the proceedings commenced on June 15, 2016. In accordance with the Rules, paragraph 5, the due date for Response was July 5, 2016. On June 15, 2016, the Respondent asked for an automatic 4‑day extension of the deadline to file a Response. The Center granted the requested extension and confirmed that the new deadline for Response was July 9, 2016. The Response was filed with the Center on July 8, 2016.

The Center appointed Luca Barbero as the sole panelist in this matter on July 18, 2016. 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.

The Panel accepts the consolidated Complaint brought by the two Complainants as it satisfies the criteria set forth in paragraph 4.16 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition ("WIPO Overview 2.0"), namely the Complainants have a specific common grievance against the Respondent and the Panel finds that the consolidation is fair and equitable to all parties.

In the following paragraphs, the Panel will refer to Costco Wholesale Corporation as "the first Complainant" and to Costco Wholesale Membership Inc. as "the second Complainant".

4. Factual Background

The first Complainant is a public company that directly or indirectly owns all of the business operations under the COSTCO trademark throughout the world. The second Complainant is a subsidiary of the first Complainant and owns, among other assets, the United States trademark rights and domain names associated with the COSTCO trademark.

The Complainants are amongst the world leaders in warehouse club merchandising and related services.

Some of their services are provided by the Complainants themselves, but many of them are provided by third parties carefully selected by the Complainants and authorized by the Complainants to provide services to COSTCO cardholders in association with the COSTCO trademark. The Complainants provide information about these services in their warehouse stores, in their monthly publication "The Costco Connection" (which has a monthly circulation of over 8 million in the United States) and at the website "www.costco.com", which provides links to access or apply for these services or obtain information about them.

The Complainants have been operating membership warehouse stores under the COSTCO trademark and trade name since 1983. Today, they operate 705 warehouse stores worldwide, including over 493 COSTCO warehouse stores in the United States and Puerto Rico, Unincorporated Territory of the United States and 212 in Australia, Canada, Japan, the Republic of Korea, Mexico, Spain, Taiwan, Province of China, and the United Kingdom of Great Britain and Northern Ireland.

The first Complainant has been publicly traded since 1985 and is currently the fifteenth largest company in the Fortune 500, while it was the eighteenth in 2015. With USD 113 billion in sales in fiscal year 2015, it is the second largest retailer in the world.

The Complainants own several trademark registrations constituted of COSTCO alone or in addition to device elements. Amongst others, the second Complainant owns the following United States trademark registrations for the word mark COSTCO: 2029565, registered on January 14, 1997, in International class 35; 2498170, registered on October 16, 2001, in International class 35; 2299958, registered on December 14, 1999, in International class 36; 1954925, registered on February 6, 1996, in International class 37; 2220450, registered on January 26, 1999, in International class 37; 2299957, registered on December 14, 1999, in International class 38; 1994826, registered on August 20, 1996, in International class 39; 1318685, registered on February 5, 1985, in International class 42; 1976242, registered on May 28, 1996, in International class 42.

The company Price Costco International, Inc., subsidiary of the first Complainant, also owns a number of trademark registrations for COSTCO marks in other countries around the world, including the Canadian trademark No. TMA767402 for the word mark COSTCO, registered on May 19, 2010.

The Complainants operate online retail websites for their members in the United States, Canada, Mexico, U.K., the Republic of Korea and Taiwan, Province of China offering a wide range of goods and services at their domain names. They operate, amongst others, a website at the domain name <costco.com>, which was registered on March 17, 1997 in the name of the second Complainant, and <costco.ca>, registered on November 21, 2000 in the name of the subsidiary of the first Complainant Price Costco International, Inc.

The disputed domain names <costcoeast.com> and <costcowest.com> were registered by the Respondent on October 27, 2015 and September 13, 2015, respectively. They currently resolve to websites providing information about products offered for sale by the Complainants in Canada and displaying several sponsored banners and a "Donate" button as well as a link promoting the Respondent's web pages on Facebook named "Costco West - Secret Weekly Sale Items" and "Costco East - Secret Weekly Sale Items".

5. Parties' Contentions

A. Complainant

The Complainants state that COSTCO is a mark coined by the Complainants' founders in 1983 and submit that the disputed domain names are confusingly similar to the COSTCO mark since the disputed domain names encompass COSTCO in its entirety with the mere addition of the common terms "east" and "west". The Complainants also point out that the addition of said terms does not mitigate but, to the contrary, exacerbates, the confusing similarity between the disputed domain names and the Complainants' marks.

The Complainants submit that the Respondent has no legitimate interests in any domain name, trademark or trade name incorporating or confusingly similar to the COSTCO trademark, has not used the disputed domain names in connection with a bona fide offering of goods or services, owns no trademark registrations for the disputed domain names or any portion thereof, and has not been commonly known by the disputed domain names or any portion thereof. The Complainants also state that they have not licensed or otherwise permitted the Respondent to use their marks or the disputed domain names and allege that the Respondent's action evidences a clear intent to disrupt the Complainants' business, deceive consumers, and trade off of the Complainants' goodwill by creating an unauthorized association between it and the COSTCO trademarks.

The Complainants also state that the Respondent's choice of the disputed domain names was not a coincidence, since COSTCO is a coined mark which was subject of trademark registrations as early as 1985 and has become famous long ago in light of the rapid growth of its sales from USD 4.1 billion in 1990 to USD 113 billion in fiscal year 2015. Therefore, the Complainants assert that, because of the notoriety of the COSTCO trademark, the Respondent must have been aware of the Complainants' rights in the COSTCO trademark when it registered the disputed domain names and when it started using them to divert Internet users to its websites.

The Complainants submits that their several trademark registrations constitute constructive notice in the United States of their rights in the COSTCO trademark, and that the Respondent's registration was in bad faith also because the Respondent had no rights or legitimate interests in any COSTCO‐formative domain name and the Respondent's only business purpose in registering the disputed domain names was to profit from pay‐per‐click revenue from Internet users attracted to its websites.

The Complainants also state that the Respondent is using the disputed domain names in bad faith since it is using them to divert Internet traffic to other websites for products and services in direct competition with the Complainants and thus disrupting the Complainants' business.

The Complainants further assert that the Respondent is using the disputed domain names to attract Internet users interested in COSTCO to other websites for its own commercial benefit and is confusing and deceiving Internet users as well as damaging the Complainants' business and reputation.

The Complainants allege that the Respondent's websites use primarily reproductions of materials from the Complainants to lure users to the websites in order to get pay‐per‐click revenue from ads for products and services competitive with the Complainants. The Complainants also state that the circumstance that the Respondent's websites refer to themselves as "fan blogs" does not change the essential function of these websites, which is primarily to post materials provided by the Complainants, not blog entries or other original content about COSTCO.

The Complainants finally submit that the Respondent's use of a privacy protection service is another factor indicating bad faith registration and use of the disputed domain names.

The Complainants also state that they attempted to resolve the dispute with the Respondent prior to the filing of the Complaint but the Respondent did not answer to their requests.

B. Respondent

The Respondent denies the Complainants' assertion that the disputed domain names are identical or confusingly similar to a trademark or service mark in which the Complainants have rights.

The Respondent also claims to have legitimate interests in the disputed domain names since it has been using them in connection with blog sites which are noncommercial in nature. As to the Google AdSense advertisements published on the websites at the disputed domain names, the Respondent asserts that their publication is of an ancillary or limited nature. The Respondent claims that, since October 2014, it has published nearly every week and free of charge, blogs about sales, discounts, special products, services and product recalls available at the Canadian COSTCO stores. The Respondent explains that its blogs are currently released in two editions, "Costco West Fan Blog", covering the provinces of British Columbia, Alberta, Saskatchewan and Manitoba and indexed at the disputed domain name <costcowest.com>, and "Costco East Fan Blog" covering the provinces of Ontario, Quebec, and the Maritime Provinces and indexed at the disputed domain name <costcoeast.com>.

The Respondent states that it has published at least 94 weekly blogs in the Costco West Fan Blog since October 2014 and at least 20 weekly blogs on the Costco East Fan Blog since the beginning of 2016, as of July 7, 2016. It claims that, as of July 7, 2016, its two blogs have collectively received over 2.8 million page views and they host 1,102 public comments. The Respondent also indicates that its Facebook pages "www.facebook.com/costcowestcoupons" and "www.facebook.com/costcoeast" have reached 24,500 and 1,296 followers, respectively.

The Respondent submits that the blogs published on its websites direct traffic towards the Complainants' stores and websites by providing free promotion of the Complainants' products and services and publicizing also the Complainants' product recalls.

It also states that it does not promote any other products or distributors, except incidentally though "pay-per-click" advertising, and points out that it has no control over the content of these ads. The Respondent claims to be using three AdSense for content units per page on its blog, one link unit for its Costco East Fan Blog, zero link units for Costco West Fan Blog. The Respondent also mentions that, since it has never used any Google AdSense search boxes on its blogs, it has not taken advantage of the maximum allowable number of advertising units according to the Google AdSense policies.

The Respondent also highlights that a disclaimer of association with the Complainants is available in the "About" pages of its websites and denies any infringement of the Complainants' trademarks or other intellectual property rights since also the "look and feel" of its websites is different from that of the Complainants' websites.

The Respondent denies the presence of any of the circumstances of bad faith enumerated in paragraph 4(b) of the Policy as well as other circumstances of bad faith.

As to the use of a privacy service to hide its contact details in the WhoIs records, the Respondent states that it initially registered the disputed domain names without enabling privacy protection but activated the service after receiving several unsolicited spam email messages.

The Respondent cites in support of its claims about registration and use in bad faith a UDRP case in which other than the placement of Google advertisements, the Respondent's website appears to be noncommercial, and the Respondent is not offering any goods or services on the Respondent's website and it is not attempting to pass it off as the Complainants' website in any way. Samsung Electronics Co., Ltd. v. Kunal Gangar, WIPO Case No. D2013-0578.

The Respondent invites the Panel to make factual findings about the nature of the content and purpose of its blogs from the material presented in this Response or from a review of its blogs themselves.

The Respondent disputes the Complainants' allegation that it has refused to respond to attempts to resolve this matter. It states that it timely replied to a letter received by the Complainants but received no further correspondence from the Complainant in response other than the one related to this proceeding.

The Respondent also requests that the Panel make a finding of Reverse Domain Name Hijacking on the grounds that the Respondent is operating legitimate "fan sites" at the disputed domain names and the Complainants have failed to provide evidence of "bad faith" as defined by the Policy. The Respondent alleges that the Complainants are attempting to use the Policy in bad faith to hijack the considerable brand equity (demonstrated by the blogs' "hits" and social media awareness) that the blogs have accumulated.

6. Discussion and Findings

According to paragraph 15(a) of the Rules: "A Panel shall decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable". Paragraph 4(a) of the Policy directs that the Complainants must prove each of the following:

(i) that the disputed domain names registered by the Respondent are identical or confusingly similar to a trademark or service mark in which the Complainants have rights;

(ii) that the Respondent has no rights or legitimate interests in respect of the disputed domain names; and

(iii) that the disputed domain names have been registered and are being used in bad faith.

A. Identical or Confusingly Similar

As highlighted above, the Complainants have provided evidence of ownership of several trademark registrations for COSTCO, including word marks registered in the United States in the name of the second Complainant.

As stated in paragraph 1.1 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition ("WIPO Overview 2.0"), ownership of a trademark generally satisfies the threshold requirement of having trademark rights, the location of the trademark, its date of registration, and the goods and/or services for which it is registered being irrelevant for the purpose of finding rights in a trademark under the first element of the UDRP.

Moreover, as highlighted in paragraph 1.9 of WIPO Overview 2.0, the addition of generic, descriptive, or geographical wording to a trademark in a domain name is normally insufficient in itself to avoid a finding of confusing similarity under the first element of the UDRP.

The Panel notes that the disputed domain names incorporate the trademark COSTCO in its entirety with the addition of the terms "east" and "west" and the gTLD suffix ".com", which can be disregarded being generic terms and a technical requirement of registration, respectively.

Therefore, the Panel finds that the Complainants have proven that the disputed domain names are confusingly similar to the trademarks in which the Complainants have established rights according to paragraph 4(a)(i) of the Policy.

B. Rights or Legitimate Interests

With respect to this requirement, the Complainants are required to make a prima facie case that the Respondent lacks rights or legitimate interests and, once such prima facie case is made, the burden of production shifts to the Respondent to submit appropriate allegations or evidence demonstrating rights or legitimate interests in the disputed domain names. If the Respondent fails to demonstrate rights or legitimate interests in the disputed domain names in accordance with paragraph 4(c) of the Policy or on any other basis, the Complainants are deemed to have satisfied paragraph 4(a)(ii) of the Policy. See Malayan Banking Berhad v. Beauty, Success & Truth International, WIPO Case No. D2008-1393; Accor v. Eren Atesmen, WIPO Case No. D2009-0701, and WIPO Overview 2.0, paragraph 2.1.

In the case at hand, the Panel finds that the Complainants have made a prima facie case and that the Respondent has failed to demonstrate, pursuant to paragraph 4(c) of the Policy, that it has rights or legitimate interests in the disputed domain names.

The Panel notes that there is no relation between the Respondent and the Complainants and that the Respondent has not obtained any authorization to use the Complainants' trademark or the disputed domain names. In addition, there is also no indication before the Panel that the Respondent might be commonly known by the disputed domain names.

Furthermore, as discussed below, the Panel notes that the Respondent has not used, or made preparation to use, the disputed domain names in connection with a bona fide offering of goods or services prior to receiving notice of the dispute.

The Respondent argues that it has established rights or legitimate interests in the disputed domain names under paragraph 4(c)(iii) of the Policy based on the use of the disputed domain names in connection with a "fan site" which is noncommercial in nature and claims that its use of Google AdSense is incidental and limited.

The Panel has carefully reviewed the contents of the websites published by the Respondent at the disputed domain names, both examining the related screenshots on record and directly accessing said websites.

The Panel notes that, at the top of the home pages, an altered version of the Complainants' figurative mark COSTCO is published along with other words and figurative elements. Precisely, the wording available on the website at the disputed domain name <costcowest.com> reads "COSTCO WEST British Columbia, Alberta, Saskatchewan, and Manitoba – Fan Blog" while the one published at the disputed domain name <costcoeast.com> reads "COSTCO EAST – Ontario, Quebec and the Maritime Province – Fan Blog".

Immediately below said title, a prominent sponsored banner generated via the Google AdSense program can be seen, followed by flyers from the Complainants which advertise promotional offers made at the Complainants' stores. Two additional prominent sponsored banners can be found on the right side of the home pages, where there is also a box requiring users to type an email address in order to subscribe for updates, and a link to the Respondent's Facebook pages. After having scrolled down the home pages, titles of the Respondent's "recent posts" about COSTCO sales with the related links can be found on the right side. Clicking on said links and on the ones published in correspondence of the Complainants' flyers available on the home pages, the websites redirect to internal pages where the Respondent publishes photographs of products available in COSTCO stores which are apparently not included in Complainants' flyers. Again, sponsored advertisements related to various products and services apparently not related to the Complainants and their mark can be found on the right side of each page. A "Donate" button is also clearly visible on the bottom right side of each page, showing that the Respondent accepts donations from Mastercard, Visa and other types of credit cards.

In light of the above-described presence of several prominent sponsored banners and links promoting third party websites, the Panel does not find the commercial exploitation of the disputed domain names as reflected on the Respondent's websites to be "incidental" or insubstantial. Moreover, even if as the Respondent claims, it has no control over the content of the pay-per-click advertisements, the Respondent admits in its own Response that it generated pay-per-click advertising from the links and advertisements on its websites. The Respondent has also placed a "Donate" button on the websites. Therefore, the Panel finds that the Respondent has failed to demonstrate that the disputed domain names are being used without intent for commercial gain, and therefore the Respondent cannot successfully invoke paragraph 4(c)(iii) of the Policy. See, e.g., The Jennifer Lopez Foundation v. Jeremiah Tieman, Jennifer Lopez Net, Jennifer Lopez, Vaca Systems LLC, WIPO Case No. D2009-0057.

Inter alia, in light of the commercial nature of the Respondent's websites at the disputed domain names, the Panel does not find the websites to be "fan sites" as the Respondent claims; moreover, the Respondent's attempts to build its own subscriber base and advertise what it describes as "secret weekly sale items" overlap with the Complainants' role in promoting their own products and services. Taken together, these facts lead the Panel to conclude that the Respondent has maintained the disputed domain names primarily for its own commercial gain rather than for some noncommercial fair use as would ordinarily be permitted under a typical "fan site". The Panel also examined the additional pages of the Respondent's websites and noticed that a disclaimer of association with the Complainants is present but is visible to visitors only after having selected the "about" link on the home pages of the Respondent's websites; this cannot cure the impression created by the disputed domain names themselves which prominently use the Complainants' famous mark in a way that suggests sponsorship or endorsement. In addition, a contact form is displayed but no additional information about the Respondent is published on the two websites.

In view of the above, Internet users could also be misled into believing that the Respondents' websites are affiliated with the Complainants.

Based on the foregoing, the Panel finds that also the requirement prescribed by paragraph 4(a)(ii) of the Policy has been met.

C. Registered and Used in Bad Faith

In light of the prior registration and longstanding use of the Complainants' trademark COSTCO since decades before the registration of the disputed domain names and of the notoriety acquired by the trademark as a result of the amounts of the Complainants' advertising and sales, it is unlikely that the Respondent was not aware of the trademark when it registered the disputed domain names. Moreover, the Respondent's pointing of the disputed domain names to websites where extensive reference to the Complainants' trademarks and products is made shows that the Respondent was indeed actually aware of the trademark.

For the reasons mentioned in the previous section, the Panel does not find that the Respondent is making a legitimate noncommercial or fair use of the disputed domain names. To the contrary, in view of the circumstances of the case and specifically the Respondent's use of the disputed domain names as highlighted in the evidence on record and the web pages available online at the time of the drafting of the decision, the Panel finds that the Respondent registered and used the disputed domain names to attract Internet users to the Respondent's websites in order to generate pay-per-click advertising revenues, revenues from donations, and increased traffic to the linked Facebook pages that it controls.

The Panel also finds paragraph 4(b)(iv) to be applicable in this case since, based on the above-described circumstances of the case, the Respondent intentionally attempted to attract Internet users to its websites for commercial gain by causing a likelihood of confusion with the Complainants' trademark as to the source, sponsorship, affiliation or endorsement of the Respondent's websites and products available therein.

In view of the above, the Panel concludes that the Respondent registered and is using the disputed domain names 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 disputed domain names <costcoeast.com> and <costcowest.com> be transferred to the Complainant Costco Wholesale Membership, Inc.

The Respondent's request for a finding of Reverse Domain Name Hijacking is denied since, in this Panel's view, the Complainant succeeded in demonstrating all the substantive requirements prescribed by paragraph 4(a) of the Policy, including the Respondent's bad faith registration and use.

The Panel also notes in conclusion that the present decision does not necessarily foreclose the Respondent from promoting weekly sales at the Complainants' stores, but merely from doing so under the domain names subject to this proceeding.

Luca Barbero
Sole Panelist
Date: August 8, 2016