WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Corporation v. yang xinfu, yangxinfu / YinSi BaoHu Yi KaiQi (Hidden by Whois Privacy Protection Service)

Case No. D2016-1268

1. The Parties

The Complainant is Costco Wholesale Corporation of Issaquah, Washington, United States of America (“United States” or “U.S.”), represented by Law Office of Mark J. Nielsen, United States.

The Respondent is yang xinfu, yangxinfu of Changde, Hunan, China / YinSi BaoHu Yi KaiQi (Hidden by Whois Privacy Protection Service) of Beijing, China.

2. The Domain Name and Registrar

The disputed domain name <kirkland-usa.com> is registered with HiChina Zhicheng Technology Ltd. (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on June 23, 2016. On June 23, 2016, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On June 27, 2016, the Registrar transmitted by email to the Center its verification response disclosing registrant and contact information for the disputed domain name which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to the Complainant on June 28, 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 28, 2016.

On June 28, 2016, the Center sent an email communication to the parties in both Chinese and English regarding the language of the proceeding. On June 28, 2016, the Complainant confirmed its request that English be the language of the proceeding. The Respondent did not comment on the language of the proceeding.

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 proceeding commenced on July 6, 2016. In accordance with the Rules, paragraph 5, the due date for Response was July 26, 2016. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on July 27, 2016.

The Center appointed Francine Tan as the sole panelist in this matter on August 8, 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.

4. Factual Background

The Complainant is a publicly-traded company that operates its business in the sphere of warehouse club merchandising throughout the world under the “Costco” brand name. The business has been in operation since around 1983. The Complainant currently operates over 706 warehouse stores across the world including 494 in the United States. In the fiscal year 2015, the Complainant had USD 113 billion in sales, and is ranked the 18th largest company in the Fortune 500. The Complainant has become famous for the sale of brand name and high quality private label merchandise at low prices in warehouse-style stores.

The Complainant sells a wide range of products including nutritional supplements, over-the-counter pharmaceuticals, prescription pharmaceuticals, fresh, frozen and packaged food, non-alcoholic beverages, personal care products, household paper products, clothing, computers and home electronics products, furniture, home furnishings, jewelry, etc. under the KIRKLAND SIGNATURE trade mark. The trade mark was adopted in 1995 as its primary private label trade mark.

The Complainant operates online retail websites for its members in the U.S., Canada, Mexico, the United Kingdom of Great Britain and Northern Ireland, the Republic of Korea and Taiwan, China, and in the fiscal year 2015, its sales were over USD 3.4 billion. The Complainant’s sales of products bearing the KIRKLAND SIGNATURE trade mark are estimated to be approximately 25 percent of its total sales, i.e., approximately USD 25-30 billion per year.

The Complainant states that its KIRKLAND SIGNATURE products are very popular outside the U.S. because of their quality and value. Its nutritional supplements are particularly popular in China. Large volumes of KIRKLAND SIGNATURE products are sold through Tmall, a Chinese website for B2C online retail.

The Complainant’s logo trade mark has been used since 1995. The word “Kirkland” appears prominently in the logo and constitutes the primary element in the logo. Its products are commonly referred to by members of the public as “Kirkland products”. For this reason, the Complainant devised a Chinese character mark which is phonetically similar to “Kirkland” (pronounced as “ke ke lan” – “科克兰”) for use in China and other countries with significant Chinese-speaking populations.

The Complainant obtained its first U.S. trade mark registration for KIRKLAND SIGNATURE in 1997. The mark has since been registered in many other countries including in China. The KIRKLAND trade marks have been registered in China since as early as July 21, 1997.

The disputed domain name was registered on September 19, 2014. It resolves to a retail website apparently operated by the Respondent which purportedly sells KIRKLAND SIGNATURE products. The Complainant does not know if they are genuine KIRKLAND SIGNATURE products. The Complainant states that the Respondent has refused to respond to attempts by the Complainant to resolve the dispute concerning the disputed domain name amicably.

5. Parties’ Contentions

A. Complainant

1. The Complainant asserts that the disputed domain name is confusingly similar to its KIRKLAND trade marks. It consists of the said KIRKLAND trade mark and “usa”, the abbreviation for the Complainant’s country of origin. The addition of the term “usa” does not remove the confusing similarity with the Complainant’s KIRKLAND SIGNATURE trade marks. The addition of “usa” in the disputed domain name in fact exacerbates the confusing similarity with the KIRKLAND trade marks since the Complainant is a well-known U.S. company.

2. The Respondent has no rights or legitimate interests in the disputed domain name.

The Respondent is not an authorized reseller of KIRKLAND SIGNATURE products. The Respondent’s website has several prominent features intended to convince visitors to the site that the Complainant operates the site or is associated with or endorses the site, for example:

(a) the repeated and prominent use of the Complainant’s registered KIRKLAND SIGNATURE logo mark;

(b) the repeated and prominent claim, in Chinese characters, at the top of the home page, that the site is the “Kirkland KE KE LAN official Chinese website”;

(c) a design feature similar to the KIRKLAND SIGNATURE Guarantee on every KIRKLAND SIGNATURE product with a certain text in Chinese;

(d) the prominent use of a photograph of a group of Caucasian men and women that suggests that they are the owners and/or employees of the business that operates the Respondent’s website;

(f) the repeated use of Chinese characters that are phonetically identical to the Complainant’s Chinese character mark, 科克兰… ; and

(g) the complete absence of anything to suggest that the operator of the Respondent’s website is not the Complainant or a business authorized by the Complainant.

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

3. The Respondent registered and has used the disputed domain name in bad faith.

The Respondent’s choice of the disputed domain name was not a coincidence. The Complainant is the second largest retailer in the world and its premier private label products are widely known and recognized. The disputed domain name was registered many years after the KIRKLAND trade marks had become famous. A domain name holder has registered a domain name in bad faith it if did so in circumstances suggesting that the it “intentionally attempted to attract for commercial gain, Internet users to [its] website or other online location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliations, or endorsement of [its] website or location, or of a product or service on [its] website or location” (paragraph 4(b)(iv), Policy). The Respondent’s only conceivable business purpose in registering the disputed domain name was to profit from the diversion of Internet users to its own retail website.

The Respondent’s use of the disputed domain name in the manner seen from its website is designed to confuse and deceive Internet users by associating itself so strongly with the KIRKLAND trade marks that Internet users would believe that the website is operated by or associated directly with the Complainant. The repeated use of the false claim that the site is the “Kirkland KE KE LAN official Chinese website” amply demonstrates the Respondent’s bad faith use of the disputed domain name. There has been no legitimate, good faith use of the disputed domain name by the Respondent.

B. Respondent

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

6. Discussion and Findings

A. Language of the Proceeding

The language of the Registration Agreement is Chinese, but the Complainant requested that English be treated as the language of the proceeding. It argued that:

(i) the disputed domain name is in English, comprising the Complainant’s famous brand, KIRKLAND, and the term “usa”, the initials for the United States where the Complainant and its products originate;

(ii) the Respondent’s website sells what purports to be genuine products from the Complainant. Although the website appears to target Chinese consumers, it clearly tries to suggest that the site is operated by the Complainant or an authorized reseller of the Complainant’s products in the United States, even including a photograph of a group of smiling Caucasian men and women;

(iii) the Respondent must have been aware of the Complainant and its KIRKLAND SIGNATURE products prior to registering the disputed domain name. The Respondent did not choose the disputed domain name by accident and it is reasonable to presume that the Respondent has at least a basic knowledge of English;

(iv) requiring the Complainant to translate the Complaint into Chinese will add considerably to the expense of the proceeding and delay it, which will allow the Respondent more time to profit from the use of the disputed domain name. Language requirements should not lead to an undue burden being placed on the parties and on the proceeding.

The Complainant stated it would not object, in the interest of fairness, to allowing the Respondent to file a response in Chinese if it chose to.

The Respondent did not respond on the issue of the language of the proceeding.

Paragraph 10(b) and (c) of the Rules state that panelists are to ensure that the administrative proceeding takes place with due expedition and that the parties are treated fairly and given a fair opportunity to present their case.

The Panel determines that English should be the language of the proceeding in this case. The Panel is persuaded that the Respondent is probably familiar with the English language. The assumption that the Respondent is familiar with the English language is rebuttable but the Respondent has not contended otherwise. The Panel is mindful that all communications from the Center to the parties were transmitted in both Chinese and English and therefore the Respondent has been afforded the opportunity to present its case in this proceeding and to respond on the issue of the language of the proceeding. The Respondent chose not to. On the other hand, to require the Complainant to translate the Complaint and supporting evidence into Chinese would unduly delay the proceeding.

Having considered all the circumstances of this case, the Panel determines that it is appropriate that English is the language of the proceeding.

B. Identical or Confusingly Similar

The Complainant has established it has registered trade mark rights in KIRKLAND SIGNATURE as well as common law trade mark rights in the word KIRKLAND. The Panel finds that the disputed domain name is confusingly similar to KIRKLAND SIGNATURE/KIRKLAND since the primary, distinctive word, KIRKLAND, appears in the disputed domain name. The addition of the generic abbreviation, “usa”, does not remove the confusing similarity with the Complainant’s trade mark. In fact, as the Complainant rightly pointed out, it adds to the confusion with the Complainant’s mark as the Complainant and its products emanate from the United States.

The Panel therefore finds that the first element of paragraph 4(a) has been established.

C. Rights or Legitimate Interests

The Panel finds that a prima facie case has been established by the Complainant, that the Respondent has no rights or legitimate interests in the disputed domain name. The Complainant is only required to establish a prima facie case in relation to paragraph 4(a)(ii) of the Policy as it is well recognized that it is, realistically speaking, difficult for complainants to prove in fully comprehensive terms the absence of a respondent’s rights or legitimate interests in a domain name whereas the respondent is in the best position to provide evidence to support its claim of rights or legitimate interests in a domain name. Accordingly, it is a well-accepted position taken by UDRP panelists that after a complainant has established a prima facie case, the burden then shifts to the respondent to show that it has rights or legitimate interests in the domain name. See paragraph 2.1 of the WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”).

Paragraph 4(c) of the Policy provides examples of circumstances which, if founds to be proved, would demonstrate the Respondent’s rights or legitimate interests to the domain name:

“(i) before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or

(ii) you (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or

(iii) you are 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 at issue.”

The Respondent has not rebutted the Complainant’s assertions. Pursuant to paragraph 5(e) of the Rules and in the absence of any of the circumstances enumerated above, the Panel concludes that the Complaint has satisfied the requirements of paragraph 4(a)(ii) of the Policy.

The Panel therefore finds that the second element of paragraph 4(a) of the Policy has been satisifed by the Complainant.

D. Registered and Used in Bad Faith

The Respondent defaulted in filing a response to the allegations made by the Complainant. As a result, the Panel has to decide in this case on the basis of the undisputed factual assertions made in the Complaint (paragraph 14(a) of the Rules).

The Complainant’s KIRKLAND SIGNATURE trade marks have been used for many years, even in China (since 1997), and are associated with the Complainant. The disputed domain name was registered many years thereafter. The Panel is persuaded, in view of the long use of the KIRKLAND SIGNATURE trade marks, the fame of the Complainant, and the fact that there was repeated use of the false claim that the site is the “Kirkland KE KE LAN official Chinese website”, that the Respondent registered and used the disputed domain name in bad faith. The evidence points to the Respondent, more likely than not, having chosen to register the disputed domain name with a view to attracting, for commercial gain, Internet users to its website, by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship or affiliation (paragraph 4(b)(iv) of the Policy). Earlier UDRP panel decisions have established the principle that the registration of a domain name that is obviously connected with a trade mark which is widely known by an entity which has no obvious connection with the trade mark suggests opportunistic bad faith. See Veuve Cliquot Ponsardin, Maison Fondee en 1772 v. The Polygenic Group Co., WIPO Case No. D2000-0163; Swarovski Aktiengesellschaft v. Liu Ji, WIPO Case No. D2011-0445. The Respondent did not respond in this proceeding nor to the attempts made by the Complainant to resolve the issue. One can therefore only conclude that the Respondent’s registration and use of the disputed domain name was for the sole purpose of attracting and misleading Internet users to the Respondent’s website for commercial advantage.

The Panel therefore finds that the third element of paragraph 4(a) of the Policy has been satisfied by the Complainant.

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, <kirkland-usa.com>, be transferred to the Complainant.

Francine Tan
Sole Panelist
Date: August 20, 2016