WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Corporation, Costco Wholesale Membership, Inc. v. Hu Rucheng

Case No. D2013-0228

1. The Parties

Complainants are Costco Wholesale Corporation, Costco Wholesale Membership, Inc. of Issaquah, Washington, United States of America, represented by Law Office of Mark J. Nielsen, United States of America.

Respondent is Hu Rucheng of Putian, China.

2. The Domain Name and Registrar

The disputed domain name <costco2012tw.info> 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 January 31, 2013. On February 1, 2013, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On February 1, 2013, the Registrar transmitted by email to the Center its verification response confirming that 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 Respondent of the Complaint, and the proceedings commenced on February 5, 2013. In accordance with the Rules, paragraph 5(a), the due date for Response was February 25, 2013. Respondent did not submit any response. Accordingly, the Center notified Respondent’s default on February 26, 2013.

The Center appointed Yijun Tian as the sole panelist in this matter on March 19, 2013. 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

Complainants, Costco Wholesale Corporation and Costco Wholesale Membership, Inc (“Costco”), are companies incorporated in Issaquah, Washington, United States of America (“USA”). Costco is a recognized world leader in warehouse club merchandizing and related services. Costco currently operates over 622 warehouse stores worldwide, and has more than 67 million authorized cardholders worldwide.

Costco has exclusive rights in several COSTCO trademarks (hereafter “COSTCO Marks”). Complainants are the only legitimate owner of the well-known registered COSTCO trademarks globally, including the USA (since 1985; see Exhibit D to the Complaint) and China (see Exhibit K to the Compliant). Through a wholly owned affiliate, Costco also owns hundreds of trademark registrations for COSTCO marks in other countries and regions around the world (See Exhibits D and F to the Complaint). It also owns the domain names <costco.com> (since January 11, 1996), <costco.ca>, <costco.co.uk>, <costco.com.mx>, <costco.co.jp>, <costco.com.tw>, <costco.co.kr>, and <costco.com.au> respectively (see also Exhibits E and H to the Complaint.)

Respondent is Hu Rucheng of Putian, China. The disputed domain name <costco2012tw.info> was registered by Respondent on July 17, 2012, long after COSTCO Marks became internationally known (Exhibit A to the Complaint).

5. Parties’ Contentions

A. Complainant

(a) The disputed domain name is confusingly similar to Costco’s registered trademarks

The disputed domain name <costco2012tw.info> consists of Costco’s well-known registered trademark, COSTCO, and the common terms “2012”, and “tw”.

The addition of common terms such as “2012” and “tw” to the COSTCO trademark do not mitigate the confusing similarity between the disputed domain name and Costco’s COSTCO trademarks.

Previous UDRP panels have uniformly found that the addition of common terms to the COSTCO mark is not sufficient to negate confusing similarity between the disputed domain name and the COSTCO mark.

Because Costco sells a wide variety of products in Taiwan and elsewhere, the addition of common terms such as “2012” and “tw” to the COSTCO trademark exacerbates the confusing similarity between the COSTCO trademark and the disputed domain name.

(b) Respondent has no rights or legitimate interests in the disputed domain name.

Respondent has no rights or legitimate interests in any domain name, trademark or trade name incorporating or confusingly similar to the COSTCO trademark.

It has not used the disputed domain name in connection with a bona fide offering of goods or services, owns no trademark registrations for the disputed domain name or any portion thereof, and has not been commonly known by the disputed domain name or any portion thereof.

Costco has not licensed or otherwise permitted Respondent to use its marks or the disputed domain name.

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. Nevertheless, Respondent registered the disputed domain name and uses it to direct Internet traffic to its website.

Respondent’s action evidences a clear intent to disrupt Costco’s business, deceive consumers, and trade off of Costco’s goodwill by creating an unauthorized association between it and the COSTCO trademarks.

(i) Bad faith registration of the disputed domain name

Respondent’s choice of disputed domain name was not a coincidence. COSTCO is a trademark coined by Costco’s founders in 1983 and lawfully registered and used only by Costco.

Costco received trademark registrations for the COSTCO trademark as early as 1985, and the COSTCO trademark long ago became famous.

Respondent registered the disputed domain name on July 17, 2012, many years after the COSTCO trademark had become famous.

Because of the notoriety of the COSTCO trademark, Respondent must have been aware of Costco’s rights in the COSTCO trademark when it registered the disputed domain name.

Awareness of another’s rights in a mark or disputed domain name at the time of registration is evidence of bad faith registration.

The disputed domain name containing the suffix “tw” resolves to a website in Chinese. Respondent is targeting consumers in Taiwan.

Costco currently operates nine warehouse stores in Taiwan and opened its first warehouse store there in 1997. Respondent registered the disputed domain name on July 17, 2012, many years after the COSTCO trademark had become famous in Taiwan.

Respondent’s registration of the disputed domain name was in bad faith because it had no rights or legitimate interests in any COSTCO-formative domain name.

Respondent’s only conceivable business purposes in registering the disputed domain name was to profit from the diversion of Internet users to its own retail website unrelated to Costco.

(ii) Bad faith use of the disputed domain name.

Respondent uses the disputed domain name to divert Internet users looking for Costco to a website for its own commercial benefit.

This confuses and deceives Internet users, damages Costco’s business and reputation, and provides an illicit commercial benefit to Respondent by trading on Costco’s reputation and goodwill.

Respondent’s use of HAO SHIH DO, Costco’s Chinese trademark, in a Chinese language website apparently targeted at consumers in Taiwan, where Costco has nine warehouse stores, is further evidence of bad faith and an attempt to confuse and deceive potential Chinese speaking customers to Respondent’s retail website.

In view of the uniqueness and fame of the COSTCO trademark and Respondent’s transparent intention to register and use a disputed domain name based on the COSTCO trademark purely for its own commercial gain, Respondent’s use of the disputed domain name is inescapably in bad faith.

Respondent does not use the disputed domain name in any legitimate, good faith manner, and there is no possible legitimate or good faith use of the disputed domain name by Respondent.

B. Respondent

Respondent did not reply to Complainant’s contentions.

6. Discussion and Findings

Paragraph 4(a) of the Policy requires that Complainant must prove each of the following three elements to obtain an order that the disputed domain name should be cancelled or transferred:

(i) the disputed domain name registered by Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights;

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

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

On the basis of the evidence introduced by Complainant and in particular with regards to the content of the relevant provisions of the Policy, (paragraphs 4(a), (b), (c)), the Panel concludes as follows:

A. Identical or Confusingly Similar

The Panel finds that Complainants have rights in the COSTCO Marks acquired through registration. The COSTCO Marks have been registered worldwide including in the USA and Taiwan Province of China, and Complainants have a widespread reputation as a world leader in warehouse club merchandizing and related services.

The disputed domain name <costco2012tw.info> comprises the COSTCO Mark in its entirety. The disputed domain name only differs from Complainants’ trademark by the additions of the number “2012” and the final phrase “tw” to the mark COSTCO. This does not seem to the Panel to eliminate the identity or at least the similarity between Complainant’s registered trademark and the disputed domain name.

Previous UDRP panels have consistently held that a domain name is identical or confusingly similar to a trademark for purposes of the Policy “when the domain name includes the trade mark, 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).

Generally a respondent “may not avoid likely confusion by appropriating another’s entire mark and adding descriptive or non-distinctive matter to it”. (The Argento Wine Company Limited v. Argento Beijing Trading Company, WIPO Case No. D2009-0610; General Electric Company v. CPIC NET and Hussain Syed, WIPO Case No. D2001-0087; PCCW-HKT DataCom Services Limited v. Yingke, ADNDRC Case No. HK0500065).

Mere addition of the descriptive terms “2012” and “tw” as suffixes to Complainants’ mark fails to distinguish. By contrast, it may increase the likelihood of confusion between the disputed domain name and Complainant’s trademark. “2012” is the year that the disputed domain name was registered. “tw” is an abbreviation of Taiwan. Consumers who visit <costco2012tw.info> are likely to be confused and may falsely believe that <costco2012tw.info> is established and operated by Complainants in Taiwan in 2012. (see ABB Asea Brown Boveri Ltd. v. A.B.B Transmission Engineering Co., Ltd., WIPO Case No. D2007-1466; Kabushiki Kaisha Toshiba dba Toshiba Corporation v. WUFACAI, WIPO Case No. D2006-0768; see also Jurlique International Pty Ltd v. Domains by Proxy, Inc. / troy ho, WIPO Case No. D2011-1237).

Thus, the Panel finds that the additional terms “2012” and “tw” are not sufficient to negate the confusing similarity between the disputed domain name and the COSTCO Marks.

The Panel therefore holds that the Complaint fulfils the first condition of paragraph 4(a) of the Policy.

B. Rights or Legitimate Interests

Paragraph 4(c) of the Policy provides a list of circumstances any of which is sufficient to demonstrate that Respondent has rights or legitimate interests in the disputed domain name:

(i) use of, or preparations to use, the disputed domain name in connection with a bona fide offering of goods or services;

(ii) the fact that Respondent has been known commonly by the disputed domain name; or

(iii) legitimate noncommercial or fair use of the disputed domain name.

The overall burden of proof on this element rests with Complainant. However, it is well established by previous UDRP panel decisions that once a complainant establishes a prima facie case that a respondent lacks rights or legitimate interests in a domain name, the burden of production shifts to the respondent to rebut the complainant’s contentions. If the respondent fails to do so, the complainant is deemed to have satisfied paragraph 4(a)(ii) of the Policy. (Danzas Holding AG, DHL Operations B.V. v. Ma Shikai, WIPO Case No. D2008-0441; WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition ("WIPO Overview 2.0"), paragraph 2.1 and cases cited therein).

Complainants have rights in the COSTCO Marks globally, including the COSTCO Mark registration in Taiwan Province of China since 1998 (see Exhibit K to the Complaint) which long precedes Respondent’s registrations of the disputed domain name (July 17, 2012).

According to the Complaint, Costco is a recognized world leader in warehouse club merchandizing and related services. Costco has operated membership warehouse stores under the COSTCO trademark and trade name since 1983. It currently operates over 622 warehouse stores worldwide, and has more than 67 million authorized cardholders. It is currently the 24th largest company in the Fortune 500, the third largest retailer in the USA and the seventh largest retailer in the world.

Moreover, Respondent is not an authorized dealer of Complainants. Complainants have therefore established a prima facie case that Respondent has no rights or legitimate interests in the disputed domain name and thereby shifted the burden to Respondent to produce evidence to rebut this presumption (The Argento Wine Company Limited v. Argento Beijing Trading Company, supra; 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).

Based on the following reasons the Panel finds that Respondent has no rights or legitimate interests in the disputed domain name:

(a) There has been no evidence adduced to show that Respondent is using the disputed domain name in connection with a bona fide offering of goods or services. Respondent has not provided evidence of a legitimate use of the disputed domain name or reasons to justify the choice of the word “costco” in its business operation. There has been no evidence to show that Complainants have licensed or otherwise permitted Respondent to use the COSTCO Mark or to apply for or use any domain name incorporating the COSTCO Mark;

(b) There has been no evidence adduced to show that Respondent has been commonly known by the disputed domain name. There has been no evidence adduced to show that Respondent has any registered trademark rights with respect to the disputed domain name. Respondent registered the disputed domain name <costco2012tw.info> on July 17, 2012, long after the registration of the COSTCO mark. The disputed domain name is identical or confusingly similar to Complainant’s COSTCO Mark.

(c) There has been no evidence adduced to show that Respondent is making a legitimate noncommercial or fair use of the disputed domain name. By contrast, according to the information provided by Complainant, Respondent was in actuality advertising, offering and selling a variety of products under the shop name COSTCO and “好市多” (HAO SHIH DO, Costco’s Chinese trademark) in a Chinese language website resolved at <costco2012tw.info> (Exhibit L to the Complaint).

The Panel finds that Respondent has failed to produce any evidence to establish its rights or legitimate interests in the disputed domain name. The Panel therefore holds that the Complaint fulfils the second condition of paragraph 4(a) of the Policy.

C. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy sets out four circumstances which, without limitation, shall be evidence of the registration and use of the disputed domain name in bad faith, namely:

(i) circumstances indicating that Respondent has registered or acquired the disputed domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registrations to Complainant who is the owner of the trademark or service mark or to a competitor of Complainant, for valuable consideration in excess of Respondent’s documented out-of-pocket costs directly related to the disputed domain name; or

(ii) Respondent has registered the disputed 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 Respondent has engaged in a pattern of such conduct; or

(iii) Respondent has registered the disputed domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) by using the disputed domain name, Respondent has intentionally attempted to attract, for commercial gain, Internet users to Respondent’s websites or other on-line location, by creating a likelihood of confusion with Complainant’s mark as to the source, sponsorship, affiliation, or endorsement of Respondent’s websites or location or of a product.

The Panel concludes that the circumstances referred to in paragraph 4(b)(iv) of the Policy are applicable to the present case and upon the evidence of these circumstances and other relevant circumstances, it is adequate to conclude that Respondent has registered and used the disputed domain name in bad faith.

a) Registered in Bad Faith

The Panel finds that Complainants have a widespread reputation in the COSTCO Mark with regard to its services. Complainants have registered its COSTCO Marks internationally, including registration in Taiwan Province of China (since 1998). Moreover, the website resolved at the disputed domain name advertises for sale various products under the mark COSTCO and “好市多”. Respondent would not have advertised its services under on COSTCO mark via its website if it was unaware of COSTCO’s reputation. In the other words, it is not conceivable that Respondent would not have had actual notice of Complainants’ trademark right at the time of the registration of the disputed domain name. The Panel therefore finds that the COSTCO Mark is not one that traders could legitimately adopt other than for the purpose of creating an impression of an association with Complainants. (The Argento Wine Company Limited v. Argento Beijing Trading Company, supra).

Moreover, Respondent has chosen not to formally respond to Complainants’ allegations. According to the UDRP decision in The Argento Wine Company Limited v Argento Beijing Trading Company, supra, “the failure of the Respondent to respond to the Complaint further supports an inference of bad faith”. (see also Bayerische Motoren Werke AG v. (This Domain is For Sale) Joshuathan Investments, Inc., WIPO Case No. D2002-0787). Thus, the Panel concludes that the disputed domain name was registered in bad faith with the intent to create an impression of an association with Complainants.

b) Used in Bad Faith

Complainants have adduced evidence to prove that by using a confusingly similar domain name, Respondent has “intentionally attempted to attract, for commercial gain, Internet users to Respondent’s websites” offering Complainant’s COSTCO branded services without authorization. Complainants claimed that Respondent uses the disputed domain name to divert Internet users looking for Costco to a website for its own “commercial benefit”. In other words, Respondent is attempting to attract consumers for “commercial gain” to the disputed domain name by creating confusion among consumers by utilising the COSTCO Marks.

To establish an “intention for commercial gain” for the purpose of this Policy, evidence is required to indicate that it is “more likely than not” that intention existed (The Argento Wine Company Limited v. Argento Beijing Trading Company, supra; Wal-Mart Stores, Inc. and Wal-Mart China Co. Ltd v. Liangchenyong, ADNDRC Case No. HKcc-0800008).

Given the widespread reputation of the COSTCO Mark (as well as the content on Respondent homepage - mentioned above), the Panel finds that the public is likely to be confused into thinking that the disputed domain name has a connection with Complainant, contrary to the fact. There is a strong likelihood of confusion as to source, sponsorship, affiliation or endorsement of the website to which the disputed domain name is resolved (see Exhibits H and L to the Complaint). In other words, Respondent has, through the use of a confusingly similar domain name and webpage contents, created a likelihood of confusion with the COSTCO Mark. Noting also that apparently no clarification as to Respondent’s relationship to Complainants is made on the homepage of the disputed domain name, potential Internet users are likely to be led to believe that the website resolved at the disputed domain name <costco2012tw.info> is either Complainant’s site or the site of official authorized partners of Complainants, which is not true. Moreover, Respondent has not responded formally to the Complaint. The Panel therefore concludes that the disputed domain name was used by Respondent in bad faith.

In summary, Respondent, by choosing to register and use the disputed domain name which is confusingly similar to Complainants’ trademark, intended to ride on the goodwill of Complainants’ trademark in an attempt to exploit, for commercial gain, Internet users destined for Complainants. In the absence of evidence to the contrary and rebuttal from Respondent, the choice of the disputed domain name and the conduct of Respondent as far as the website to which the disputed domain name resolves is indicative of registration and use of the disputed domain name in bad faith.

The Panel therefore holds that the Complaint fulfils the third condition of paragraph 4(a) of the Policy.

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 at <costco2012tw.info> be transferred to Complainant - Costco Wholesale Membership, Inc.

Yijun Tian
Sole Panelist
Dated: April 18, 2013