WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Membership Inc. and Costco Wholesale Corporation v. Jessie Tsai

Case No. D2020-1031

1. The Parties

The Complainants are Costco Wholesale Membership Inc., United States of America (“United States”), and Costco Wholesale Corporation, United States (collectively, the “Complainant”), represented by Law Office of Mark J. Nielsen, United States.

The Respondent is Jessie Tsai, Taiwan Province of China.

2. The Domain Names and Registrar

The disputed domain name <costcoagency.com> is registered with Network Solutions, LLC.

The disputed domain name <costco588.com> is registered with GoDaddy.com, LLC (collectively, the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on April 27, 2020. On April 28, 2020, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain names. On April 29 and 30, 2020, 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 for the disputed domain name <costcoagency.com>, and disclosing registrant and contact information for the disputed domain name <costco588.com>. The Center sent an email communication to the Complainant on May 1, 2020 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 May 1, 2020. On May 2 and 4, 2020, the Center received email communications from the Respondent.

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 May 7, 2020. In accordance with the Rules, paragraph 5, the due date for Response was May 27, 2020. On May 12, 2020, the Center received an email communications from the Respondent, in which the Respondent expressed interest in settlement negotiations. On May 12, 2020, the Center sent an email to the Parties regarding possible settlement. On May 14, 2020, the Center received the Complainant’s reply that it did not wish to suspend the proceeding for settlement purposes. No substantive Response was filed with the Center. On May 28, 2020, the Center informed the Parties that it would proceed to appoint the Panel.

The Center appointed Deanna Wong Wai Man as the sole panelist in this matter on June 9, 2020. 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

The first Complainant, Costco Wholesale Corporation, a Washington corporation, is a public company that directly or indirectly owns all of the business operations under the COSTCO trademark throughout the world. The second Complainant, Costco Wholesale Membership Inc., a California corporation, 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 Complainant group provides warehouse club merchandising and related services internationally. Some of its services are provided by the Complainant group itself, but many of them are provided by third parties carefully selected by the Complainant and authorized by the Complainant to provide services to COSTCO cardholders in association with the COSTCO trademark. The Complainant group has been operating membership warehouse stores under the COSTCO trademark and trade name since 1983. Currently, it operates 787 warehouse stores worldwide, including 547 COSTCO warehouse stores in the United States and 240 in other regions, including China, where the Respondent resides. The Complainant group has operated warehouse stores in Taiwan Province of China since 1997 and currently operate 13 warehouse stores in Taiwan Province of China, in addition to online sales through its website at “www.costco.com.tw”. The first Complainant has been publicly traded since 1985 and is currently the fifteenth largest company in the Fortune 500. With USD 149 billion in sales in fiscal year 2019, it is the second largest retailer in the world.

The Complainant owns a large portfolio of trademark registrations (word and device marks) for COSTCO, for instance, the United States trademark registrations number 1318685, registered on February 5, 1985, number 1976242, registered on May 28, 1996, and number 2481924, registered on August 28, 2001. The Complainant also owns a portfolio of related trademarks, including COSTCO WHOLESALE & Design, for example, the United States trademark registration number 2244972, registered on May 11, 1999. The company Price Costco International, Inc., subsidiary of the first Complainant, also owns a number of trademark registrations for COSTCO marks in other countries or areas around the world. The Complainant operates online retail websites for its members in many countries offering a wide range of goods and services at its domain names. It operates, amongst others, a website at the domain name <costco.com>, which was registered on March 17, 1997.

The disputed domain names were both registered by the Respondent on the same date, September 3, 2019. The Complainant provides evidence that the disputed domain names once directed to the same active website, which was operated as an online shopping platform. On the date of this decision, the website is still active, but the contents have been substantially modified, displaying a new name COST588 Repackage “金龙之家”.

5. Parties’ Contentions

A. Complainant

The Complainant essentially contends that the disputed domain names are confusingly similar to its trademarks for COSTCO, that the Respondent has no rights or legitimate interests in respect of the disputed domain names, and that the disputed domain names were registered, and are being used in bad faith.

The Complainant claims that its trademarks are famous and well-regarded in the retail sector. Moreover, the Complainant provides evidence that the disputed domain names were both linked to the same active website, which it claims was taking unfair advantage of its trademarks and falsely claimed its agency relationship with the Complainant. The Complainant essentially contends that the use made by the Respondent does not confer any rights or legitimate interests in respect of the disputed domain names, and constitutes use in bad faith.

The Complainant requests the transfer of the disputed domain names to the Complainant Costco Wholesale Membership, Inc.

B. Respondent

The Respondent did not reply to the Complainant’s contentions substantively. It only replied to the Center by email and claimed that it did not use the website that the domain names directed to for any commercial activities. It additionally proposed to explore settlement with the Complainant, which was eventually rejected by the Complainant.

6. Discussion and Findings

The Policy requires the Complainant to prove three elements:

(i) the disputed domain names are identical or confusingly similar to a trademark or service mark in which the Complainant has rights;

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

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

Based on the evidence and arguments submitted, the Panel’s findings are as follows:

A. Identical or Confusingly Similar

The Panel finds that the Complainant has shown that it has valid rights in the mark COSTCO, based on its intensive use and registration of the same as a trademark globally.

As to confusing similarity, the disputed domain names consist, each time, of the Complainant’s trademark COSTCO, combined with a seemingly arbitrary combination of numbers “588” (which could also be auspicious numbers in China, as these transliterate to “I have fortune” in the Chinese language), or a dictionary word (“agency”). The applicable generic Top-Level Domains (“gTLD”) (“.com” in this case) is viewed as a standard registration requirement, and may as such be disregarded by the Panel, see in this regard the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (the “WIPO Overview 3.0”), section 1.11.1. Moreover, the WIPO Overview 3.0, section 1.7, states: “in cases where a domain name incorporates the entirety of a trademark, or where at least a dominant feature of the relevant mark is recognizable in the domain name, the domain name will normally be considered confusingly similar to that mark for purposes of UDRP standing” (see also Wal-Mart Stores, Inc. v. Richard McLeod d/b/a For Sale, WIPO Case No. D2000-0662).

The Panel concludes that the disputed domain names contain, each time, the entirety of the Complainant’s trademark, as their only distinctive and clearly recognizable feature. The addition of arbitrary combination of numbers or a dictionary word (respectively “588” and “agency”) does not prevent a finding of confusing similarity. Accordingly, the Panel rules that the disputed domain names are confusingly similar to the Complainant's trademarks, and that the Complainant has satisfied the requirements for the first element under the Policy.

B. Rights or Legitimate Interests

On the basis of the evidence and arguments submitted, the Panel holds that the Complainant makes out a prima facie case that that the Respondent is not, and has never been, an authorized reseller, service provider, licensee or distributor of the Complainant, and is not making legitimate noncommercial use or fair use of the Complainant’s trademarks. As such, the Panel finds that the burden of production regarding this element shifts to the Respondent (see WIPO Overview 3.0, section 2.1). However, no substantive evidence or arguments have been submitted by the Respondent in reply. Moreover, reviewing the facts, the Panel notes that the disputed domain names both once directed to the same website (before it was substantively modified), which shows a clear intent on the part of the Respondent to obtain illegal commercial gains by diverting consumers to its online shopping platform, by taking unfair advantage of the goodwill and reputation of the Complainant’s trademarks covering the same and/or related commercial sector for COSTCO.

Furthermore, the Panel notes that the nature of the disputed domain names, being both confusingly similar to the Complainant’s trademarks, carries a high risk of implied affiliation with the Complainant (see also WIPO Overview 3.0, section 2.5.1), and that the Respondent is not commonly known by any of the disputed domain names.

On the basis of the foregoing elements, the Panel considers that none of the circumstances of rights or legitimate interests envisaged by paragraph 4(c) of the Policy apply, and that the Complainant has satisfied the requirements of the second element under the Policy.

C. Registered and Used in Bad Faith

The registration of the disputed domain names, which incorporate the Complainant’s trademark for COSTCO in its entirety, except for the addition of seemingly arbitrary number combination or dictionary word in the disputed domain names, is clearly intended to mislead and divert consumers away from the Complainant’s official websites or authorized third parties’ websites, to the Respondent’s online shopping platform, competing with the Complainant’s services directly. Given the strong reputation and fame of the Complainant’s trademarks, obtained years before the registration date of the disputed domain names, the Panel holds that the registration of the disputed domain names was obtained in bad faith. In the Panel’s view, the preceding elements clearly indicate the bad faith of the Respondent, and the Panel therefore rules that it has been demonstrated that the Respondent registered the disputed domain names in bad faith.

As to use of the disputed domain names in bad faith, the disputed domain names were once resolved to the same online shopping platform that resells and repackages products purchased from the Complainant, and that prominently displays a variety of marks which resemble the Complainant’s trademarks, including using COSTCOAGENCY and COSTCO588 REPACKAGE marks that imitate the Complainant’s COSTCO marks, and using COST588 REPACAKGE device mark (“logo”) that imitates the Complainant’s COSTCO WHOLESALE device mark (“logo”). Moreover, this website also falsely claims to be an agent of the Complainant, and enables the consumers to shop for the Complainant’s products from it, which all purport, amongst other elements, that the Respondent is part of, or is connected to, the Complainant. Given that the Complainant also carefully selected some third parties and authorized them to provide services to COSTCO cardholders in association with the COSTCO trademark, the Respondent clearly tries to pass its website off as at least an authorized website associated with the Complainant.

However, on the date of this decision, the disputed domain names link to a modified website without the above infringing contents, but instead showing “We don’t have any products to show here right now.” In this regard, the WIPO Overview 3.0, section 3.3 provides: “From the inception of the UDRP, panelists have found that the non-use of a domain name (including a blank or ‘coming soon’ page) would not prevent a finding of bad faith under the doctrine of passive holding.” As this modified website is still in use, which is more than mere passive holding by the Respondent, the Panel is of the view that this does not prevent a finding of bad faith, either.

The foregoing elements lead the Panel to conclude that the Respondent has registered and used the disputed domain names in bad faith, to take unfair advantage of the Complainant’s trademarks and reputation, for commercial gains.

Finally, the Respondent has failed to provide any response or evidence to establish its good faith or absence of bad faith. The Panel rules that the Complainant has satisfied the requirements of the third element under the Policy.

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 <costco588.com> and <costcoagency.com> be transferred to the Complainant Costco Wholesale Membership, Inc.

Deanna Wong Wai Man
Sole Panelist
Date: June 22, 2020