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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Victor Venedictov

Case No. D2017-2420

1. The Parties

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

The Respondent is Victor Venedictov of Moscow, Russian Federation.

2. The Domain Name and Registrar

The disputed domain name <costso.com> is registered with eNom, Inc. (the "Registrar").

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on December 6, 2017. On December 7, 2017, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On the same day, 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 and 4, the Center formally notified the Respondent of the Complaint, and the proceedings commenced on December 20, 2017. In accordance with the Rules, paragraph 5, the due date for Response was January 9, 2018. The Respondent did not submit any response. Accordingly, the Center notified the Respondent's default on January 10, 2018.

The Center appointed Andrea Jaeger-Lenz as the sole panelist in this matter on January 26, 2018. 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.

As the registration agreement applying to the disputed domain name is in the English language, the language of the proceeding is English.

4. Factual Background

The Complainant is a recognized world leader in warehouse club merchandizing and related services, currently the fifteenth largest company in the Fortune 500, and second largest retailer in the world. It operates 744 warehouse stores worldwide, including 517 Costco warehouse stores in the United States and 227 in Australia, Canada, France, Iceland, Japan, Republic of Korea, Mexico, Spain, the United Kingdom of Great Britain and Northern Ireland and Taiwan Province of China. There are more than 88 million authorized cardholders worldwide and more than 54 million authorized cardholders in the United States. The Complainant's retail stores offer a wide range of merchandise from food stuffs to sports equipment.

The Complainant is the owner of numerous trademark registrations including the word "costco", with more than 50 active trademark registrations in the United States. The eldest COSTCO trademark has been registered on February 5, 1985 (Registration No. 1318685). The Complainant holds, amongst others, the trademarks COSTCO, Registration No. 1976242, registered on May 28, 1996, COSTCO WHOLESALE & Design, Registration No. 2244972, registered on May 11, 1999, COSTCO.COM, Registration No. 2440636, registered on April 3, 2001 and COSTCO (stylized), Registration No. 2481924, registered on August 28, 2001. Besides that, through a wholly owned affiliate, the Complainant owns trademark rights in COSTCO in other countries around the world.

Furthermore, the Complainant is the owner of the domain names <costco.com>, <costco.ca>, <costco.com.mx>, <costco.co.uk>, <costco.co.kr>, <costco.com.tw> and other ccTLDs with "costco", and maintains an active presence on the Internet using the domain name <costco.com> as its URL. There is also an online retail website for the members in the United States and other countries in the world.

The disputed domain name <costso.com> has been registered by the Respondent on December 6, 2000. According to the Complainant, the disputed domain name at one point resolved into a website of Wal-Mart, one of the Complainant's biggest competitors. According to the evidence in the Complaint, as of lately the disputed domain name resolves into a website with a variety of links to websites purportedly operated by the Complainant.

5. Parties' Contentions

A. Complainant

The Complainant argues that it is deceptive to consumers and harmful to the Complainant that Internet users looking for the Complainant and erroneously enter <costso.com> will find themselves on the website of the Complainant's biggest competitor or on websites purportedly operated by the Complainant.

In the Complainant's opinion, the disputed domain name consists of an obvious misspelling of "costco", with an "s" instead of a "c" between the "t" and the "o". "costso" is very similar visually to "costco", and phonetically as well.

According to the Complainant, the Respondent has no rights or legitimate interests in the disputed domain name. He has not used the disputed domain name in connection with a bona fide offering of goods or services, he has no trademark registration for the disputed domain name or any portion thereof, nor has he been commonly known by the disputed domain name or any portion thereof. The Complainant has not licensed or otherwise permitted the Respondent to use its marks or the disputed domain name. The Respondent does not and, moreover, 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 interest of the Respondent is to disrupt the Complainant's business, deceive consumers and trade off of the Complainant's goodwill.

The Complainant finds that the Respondent's choice of domain name was not a coincidence, but that he intends to take advantage of the Complainant's reputation. The Complainant's trademark COSTCO has become famous over the years, so that the Respondent must have been aware of the Complainant's rights in the COSTCO trademark. Having no legitimate rights or business interest in any domain name confusingly similar to COSTCO, the Respondent registered the disputed domain name in bad faith.

According to the Complainant, the disputed domain name is also used in bad faith, since the Respondent uses it to divert Internet users looking for the Complainant's Internet presence to a competing website for his own benefit. This confuses and deceives Internet users, damages the Complainant's business and reputation, and provides an illicit benefit to the Respondent by trading on the Complainant's reputation and goodwill.

B. Respondent

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

6. Discussion and Findings

Pursuant to paragraph 4(a) of the Policy, the Complainant must prove that each of the following three elements is present:

(i) the domain name is identical or confusingly similar to the complainant's trademark; and

(ii) the respondent has no rights or legitimate interests in respect of the domain name; and

(iii) the domain name has been registered and is being used in bad faith.

In the following, the Panel will discuss in consecutive order whether each of these requirements are met here.

A. Identical or Confusingly Similar

A domain name which consists of a common, obvious, or intentional misspelling of a trademark is considered by panels to be confusingly similar to the relevant mark (see LinkedIn Corporation v. Daphne Reynolds, WIPO Case No. D2015-1679).

The only difference between the word "costco" as a part of the Complainant's trademarks and domain names, and the word "costso" as a part of the disputed domain name is the substitution of the letter "c" by the letter "s". Therefore, the disputed domain name is confusingly similar visually to the Complainant's trademark. The substitution of "c" by "s" does not substantially change the pronunciation. Thus, the disputed domain name is also confusingly similar phonetically to the Complainant's trademark. A previous UDRP panel found that a misspelling of the COSTCO trademark is not sufficient to negate confusing similarity between such a domain name and the COSTCO trademark (see Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Yong Li, WIPO Case No. D2004-0296). Minor alterations cannot prevent a finding of confusing similarity between the trademark and the disputed domain name (see Red Bull GmbH v. Grey Design, WIPO Case No. D2001-1035; Dow Jones & Company, Inc. and Dow Jones, L.P. v. Powerclick, Inc., WIPO Case No. D2000-1259). Substitution of a single letter is not apt to dispel for purposes of confusing similarity (see e.g., Hunter Douglas Industries, BV, and Hunter Douglas Window Fashions, Inc. v. Erik Little, WIPO Case No. D2005-0460).

B. Rights or Legitimate Interests

It is established case law that it is sufficient for the Complainant to make a prima facie showing that the Respondent has no rights or legitimate interest in the disputed domain name in order to place the burden of production on the Respondent (see Credit Agricole S.A. v. Dick Weisz, WIPO Case No. D2010-1683; Champion Innovations, Ltd. v. Udo Dussling (45FHH), WIPO Case No. D2005-1094; Croatia Airlines d.d. v. Modern Empire Internet Ltd., WIPO Case No. D2003-0455; Belupo d.d. v. WACHEM d.o.o., WIPO Case No. D2004-0110).

The Panel notes that with respect to paragraph 4(c)(i) of the Policy, there is no evidence that the Respondent, before any notice of the dispute, used or prepared to use the disputed domain name or a name corresponding to the disputed domain name in connection with a bona fide offering of goods or services.

Additionally, with respect to paragraph 4(c)(ii) of the Policy, there is no evidence that indicates that the Respondent has ever been commonly known by the disputed domain name or has acquired trademark rights.

Furthermore, with respect to paragraph 4(c)(iii) of the Policy, the Respondent has not made and is not making a legitimate noncommercial or fair use of the disputed domain name.

Considering the above, the Panel finds that the Complainant has established a prima facie case that the Respondent lacks any rights and/or legitimate interests in the disputed domain name.

Hence, the burden of production is on the Respondent. In such case, the Respondent must, by substantial evidence, demonstrate his rights or legitimate interests in the disputed domain name in order to refute the prima facie case. The Respondent has made no such showing, since there has not been any response to the Complainant's contentions.

Hence, the Panel finds that the Respondent's default in refuting the prima facie case made by the Complainant is sufficient to establish a lack of rights or legitimate interests of the Respondent in the disputed domain name.

C. Registered and Used in Bad Faith

Under paragraph 4(a)(iii) of the Policy, a complainant has to establish that a respondent registered and used the disputed domain name in bad faith.

Whether a domain name was registered and is being used in bad faith for purposes of the Policy, may be determined by evaluating the following criteria set forth in paragraph 4(b) of the Policy:

- circumstances indicating that the registrant has registered or the registrant has 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 the registrant's documented out-of-pocket costs directly related to the domain name;

- the registrant has 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 the registrant has engaged in a pattern of such conduct;

- the registrant has registered the domain name primarily for the purpose of disrupting the business of a competitor;

- by using the domain name, the registrant has intentionally attempted to attract, for commercial gain, Internet users to the registrant's website or other online location, by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation, or endorsement of the registrant's website or location or of a product or service on the registrant's website or location.

As the Complainant has pointed out, the Respondent must have been aware of the Complainant's rights in the COSTCO trademark and its domain names. The Complainant brought evidence that it operates numerous stores in the United States and worldwide, and its sales in the fiscal year 2017 increased to USD 126 billion. Given that the Complainant's trademark COSTCO is a fanciful term devoid of any obvious meaning in the relevant trade, it is inconceivable that it is a coincidence that the disputed domain name resolves into the website of the Complainant's biggest competitor. It is clear for the Panel that the Respondent's main interest in the registration of the disputed domain name was to disrupt the business of the Complainant by misleading potential customers of the Complainant to the website of a competitor of the Complainant or to mislead Internet users to websites purportedly operated by the Complainant. Therefore, the disputed domain name has been registered in bad faith.

According to section 1.9 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition ("WIPO Overview 3.0"), panels will normally find that employing a misspelling in the way that Internet users are misled to another website by typing mistakes signals an intention on the part of the respondent to confuse users seeking or expecting the complainant. According to the Complainant, the disputed domain name was used to lead to the website of the Complainant's biggest competitor although Internet users expected to find the Complainant's website and currently leads to a website with links purportedly operated by the Complainant. Since the Respondent does not have any rights or legitimate interests in either of the uses of the disputed domain name, there is no legitimate, good faith use of the disputed domain name possible by the Respondent (see General Electric Company v. Fisher Zvieli, a/k/a Zvieli Fisher, WIPO Case No. D2000-0377). Thus, the disputed domain name has been used 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 name <costso.com> be transferred to the Complainant.

Andrea Jaeger-Lenz
Sole Panelist
Date: February 9, 2018

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