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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Corporation and Costco Wholesale Membership, Inc. v. Traverito Traverito

Case No. D2007-0523

 

1. The Parties

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

The Complainants have named two Respondents: Moniker Privacy Services, Pompano Beach, Florida, United States of America; and Traverito Traverito, Barcelona, Alabama, Spain. Moniker Privacy Services is simply a privacy domain name registration service. The Registrar has confirmed that the registered owner of the domain name is Traverito Traverito, Barcelona, Alabama, Spain. Accordingly, the Panel will treat Traverito Traverito as the sole Respondent.

2. The Domain Name and Registrar

The disputed domain name <costcoautoinsurance.com> is registered with Moniker Online Services, LLC.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on April 5, 2007. On April 10, 2007, the Center transmitted by email to Moniker Online Services, LLC a request for registrar verification in connection with the domain name at issue. On April 19, 2007, Moniker Online Services, LLC 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 administrative, billing, and technical contact. The Complainants filed an amendment to the Complaint on April 26, 2007. 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”), 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 the Respondent of the Complaint, and the proceedings commenced on May 4, 2007. In accordance with the Rules, paragraph 5(a), the due date for Response was May 24, 2007. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on May 29, 2007.

The Center appointed The Honourable Neil Anthony Brown QC as the sole panelist in this matter on June 11, 2007. 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 Complainants are world leaders in warehouse club membership merchandising and related services, operating large warehouse stores in an innovative form of selling under which their customers are members who, in return for a membership fee, obtain quality goods and services at competitive prices. The Complainants have been very successful and operate in many countries throughout the world. Thus they presently have 500 stores and 50 million members and they had sales of USD 58 billion in 2006. They operate their own website at “www.costco.com” through which they conduct a lot of their business. Among many other services that they offer on their website is automobile insurance.

The Complainants have registered many trademarks for COSTCO in the United States of America and worldwide since 1983 and included among them are the following trademarks registered with the United States Patent and Trademark Office (‘USPTO’) which expressly include the administration and underwriting of automobile insurance:

Mark	Filing Date	Registration No.
COSTCO	November 5, 1998	2,299,958
COSTCO (stylized)	November 5, 1998	2,306 055

The Respondent registered the domain name <costcoautoinsurance.com> on April 1, 2005.

5. Parties’ Contentions

A. Complainants

The Complainants allege that the domain name <costcoautoinsurance.com> should no longer be registered with the Respondent but that it should be transferred to the Complainant Costco Wholesale Membership Inc. They contend that this should be done because, within the meaning of paragraph 4 of the Policy, the domain name <costcoautoinsurance.com> is confusingly similar to the Complainants’ registered trademarks described above and hereinafter referred to as “the COSTCO mark”, that the Respondent has no rights or legitimate interests in the domain name and that the domain name has been registered and subsequently used in bad faith. The Complainants maintain that they can prove all three of these requirements and that the appropriate remedy is to transfer the domain name to the Complainant Costco Wholesale Membership Inc.

In support of their case on the first of these three elements, the Complainants rely on the COSTCO marks and says that the domain name <costcoautoinsurance.com> is confusingly similar to them because the Respondent has taken the whole of the mark COSTCO and added to it a generic and common expression that reflects part of the Complainants’ business and does not serve to distinguish the domain name from the trademark.

The Complainants then contend, to establish the second element, that the Respondent has no rights or legitimate interests in the domain name, because the facts show an obvious intention by the Respondent to trade on the COSTCO mark and mislead consumers into believing that the domain name is an official domain name of the Complainants, that by using it to obtain access to a website they will arrive at the Complainants’ website and that the auto insurance and other services promoted on that website are the Complainants’ products or products endorsed by them. Nor, it is argued, can the Respondent bring itself within any of the provisions of paragraph 4(c) of the Policy.

Finally, the Complainants contend that the domain name was registered and is being used in bad faith. They contend that this is so because the Respondent’s conduct brings it within paragraph 4(b)(iv) of the Policy as it shows that the Respondent is intentionally attempting to attract Internet users to its website for commercial gain by creating the likelihood of confusion with the COSTCO mark to induce internet users to believe that they have arrived at a website sponsored or authorized by the Complainants.

B. Respondent

The Respondent did not reply to the Complainants’ contentions.

 

6. Discussion and Findings

Paragraph 15 of the Rules provides that the Panel is to decide the complaint on the basis of the statements and documents submitted and in accordance with the Policy, the Rules and any rules and principles of law that it deems applicable.

In that regard, the Panel also notes that the fact that the Respondent has not lodged a Response, does not avoid the necessity of examining the issues and of doing so in the light of the evidence. The onus remains on the Complainants to make out their case and past WIPO UDRP panels have said many times that despite the absence of a submission from a Respondent, a Complainant must nevertheless show that all three elements of the Policy have been made out before any order can be made to transfer a domain name. However, as the Panel will illustrate later, it is possible to draw inferences from the evidence that has been submitted and in some cases from silence.

The Panel therefore turns to discuss the various issues that arise for decision on the facts as they are known.

For the Complainants to succeed they must prove, within the meaning of paragraph 4(a) of the Policy, that:

(i) The domain name is identical or confusingly similar to a trademark or service mark in which the Complainants have rights; 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.

It is to be noted that paragraph 4 of the Policy provides that a complainant must prove that each of the three elements is present. The Panel will therefore deal with each of these requirements in turn.

A. Identical or Confusingly Similar

The Panel finds that the domain name <costcoautoinsurance.com> is confusingly similar to the trademark COSTCO, which has been wholly incorporated into the domain name and to which the expression “autoinsurance” has been added. That is so for the following reasons.

First, it is confusingly similar to the COSTCO trademark. The dominant feature of the domain name that compels the attention of the potential customer and of any reasonable bystander is the word “costco”, which instantly invokes the name Costco, being the famous warehouse merchandising company. The belief engendered by the domain name, that it is associated with the COSTCO brand, is not dispelled in the slightest by adding the expression “autoinsurance”, as this would clearly be taken to be referring to the provision of auto insurance services by the Complainants, that being one of the services openly promoted on their own website. The domain name, in addition to the inevitable initial inherent confusion, would also therefore likely be assumed by internet users to be associated with the Costco companies and hence with the trademark COSTCO.

In that regard, it has been held many times by UDRP panels that the addition to a trademark of a common or generic word or an expression which does no more than describe some aspect of the trademarked goods or activity of the trademark owner, will not negate a finding of confusing similarity that is otherwise present on the evidence. Thus, in Dr. Ing. h.c.F. Porsche AG v. Gary Charles Brown, a k a Gary Brown, a k a Charlie Brown, a k a Gary Charlie Brown, WIPO Case No. D2001-0919, it was held that the domain name <porscheimporter.com> was confusingly similar to the trademark PORSCHE because, as the panel said:

“…The combination “Porsche Importer” uses Complainant’s mark as the principal identifier of a business that engages in trade of Complainant’s products. (There is thus)… a likelihood that the public, viewing the domain names, will draw that conclusion that Complainant is the enterprise that is undertaking to provide the subject products. The public (in this case Internet users) will be confused as to the source of the products or sponsorship of the activities.”

The cases cited by the Complainants and involving the Complainants themselves, Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Harry Chan, WIPO Case No. D2004-0218 and Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Yong Li, WIPO Case No. D2004-0296, are to the same effect.

Likewise, in the present case, the word “Costco” is so dominant in the domain name that the public would more probably than not initially conclude that the auto insurance referred to in the domain name is provided by the Complainants, which of course it is not. There is therefore a confusion added to the similarity already created by virtue of the use of the entire trademark in the domain name.

It has also been held by many UDRP panels that suffixes such as “.com” do not negate a finding of confusing similarity that is otherwise present on the evidence, as it is in the present case.

As the Complainants have established that there is a confusing similarity between the domain name and the trademark referred to above of which they are the owners, they have accordingly made out the first of the three elements that they must establish.

B. Rights or Legitimate Interests

Under paragraph 4(a)(ii) of the Policy, the complainant has the burden of establishing that the Respondent has no rights or legitimate interests in respect of the domain name.

But by virtue of paragraph 4(c) of the Policy, it is open to a respondent to establish its rights or legitimate interests in a domain name, among other circumstances, by showing any of the following elements:

(i) before any notice to you [Respondent] 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 [Respondent] (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 [Respondent] 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.

Thus, if a respondent proves any of these elements or indeed anything else that shows it has a right or legitimate interest in the domain name, the complainant will have failed to discharge its onus and the complaint will fail.

The Panel’s task in deciding if a registrant has any rights or legitimate interests in a domain name is made more difficult when the registrant is in default and does not file a Response or any other form of submission. The Respondent in the present case was given notice that it had until May 24, 2007 to send in its Response, that it would be in default if it did not do so and that, by virtue of paragraph 14 of the Rules, the Panel might draw appropriate inferences from that default.

It is also well established that, as it is put in paragraph 2.1 of the Overview of WIPO Panel Views on Selected UDRP Questions, “…a complainant is required to make out an initial prima facie case that the respondent lacks rights or legitimate interests. Once such prima facie case is made, respondent carries the burden of demonstrating rights or legitimate interests in the domain name. If the respondent fails to do so, a complainant is deemed to have satisfied paragraph 4(a)(ii) of the UDRP”.

The Panel, after considering all of the evidence in the Complaint and the exhibits attached to it, finds that the Complainants have made out a prima facie case that the Respondent has no rights or legitimate interests in the domain name. The Respondent has not made any attempt to rebut this prima facie case, and the Panel therefore concludes that the Respondent has no such rights or legitimate interests in the domain name.

The Respondent chose, without the Complainants’ authorization, the famous COSTCO name and trademark as the dominant part of its domain name and simply added an expression that describes one of the services provided by the Complainants. It has then linked the domain name to a “link farm” website containing sponsored links to businesses providing services in direct competition with the auto and other insurance services provided by the Complainants, other services to which the Complainants’ own name has been falsely linked and a site purporting to be to the Complainants’ website, which it is not.

It has been held many times that, as it was put in Baudville, In. v. Henry Chan, WIPO Case No. D2004-0059, “…no rights or legitimate interest derive from this type of use of another’s trademark”. Accordingly, the conduct of the Respondent calls for an explanation, which the Respondent could have given but has not. In the absence of such an explanation by the Respondent, the Panel draws the inference that “any evidence of the Respondent would not have been in [its] favour”: Pharmacia & Upjohn AB v. Dario H. Romero, WIPO Case No. D2000-1273.

The Complainants have therefore established that the Respondent has no rights or legitimate interests in respect of the domain name, and have thus made out the second of the three elements that they must establish.

C. Registered and Used in Bad Faith

The Complainants must prove on the balance of probabilities both that the domain name was registered in bad faith and that it is being used in bad faith: Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003.

Further guidance on how to implement this requirement is to be found in paragraph 4(b) of the Policy, which sets out four circumstances, any one of which shall be evidence of the registration and use of a domain name in bad faith, although other circumstances may also be relied on, as the four circumstances are not exclusive. The four specified circumstances are:

“(i) circumstances indicating that the respondent has registered or 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 respondent’s documented out-of-pocket costs directly related to the domain name; or

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

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

(iv) by using the domain name, respondent has intentionally attempted to attract, for commercial gain, internet users to respondent’s website or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of the respondent’s website or location or of a product or service on the site or location.”

The conduct of the Respondent in the present case may well bring it within several provisions of paragraphs 4(b) of the Policy. However, as the Panel finds that the case clearly comes within paragraph 4(b)(iv) of the Policy, it is not necessary to consider those other provisions.

As has already been noted, the domain name is being used to host a website that contains sponsored links to businesses providing services in direct competition with the auto insurance and other services provided by the Complainants. That website also promotes other services to which the Complainants’ own name has been falsely linked and a site purporting to be to the Complainants’ website, which it is not.

This is made apparent by Exhibit L to the Complaint which is a screen shot of the home page of the website to which the disputed domain name resolves. That page shows several links to providers of auto and other types of insurance and to other services such as stockbrokers and mortgage brokers.

The Panel has also made its own examination of the website and has found that the website promotes a range of auto and other insurance services provided by businesses none of which are the Complainants.

Applying these facts to the provisions of paragraph 4(b)(iv) of the Policy, the Panel agrees with the Complainants that this “ confuses and deceives internet users, damages Costco’s business, and provides an illicit commercial benefit to Respondent by trading on Costco’s reputation and goodwill”. It also agrees with the Complainants that the factual situation just described “clearly establishes bad faith use of the domain name pursuant to paragraph 4(b)(iv) of the Policy” and that the cases already cited support those propositions. That is so for the following reasons:

First, the Respondent was undoubtedly attempting to attract internet users to its website by using the COSTCO trademark. Looking at the website to which the domain name resolves, it is impossible for the Panel to accept that this was being done for any reason other than commercial gain in one form or another, for the website has an essentially commercial nature about it: see Scania CV AB (Publ) v. Unaci, Inc., WIPO Case No. D2005-0585.

Secondly, by using the COSTCO name and trademark, the Respondent created a likelihood of confusion because Internet users would naturally think the domain name would lead to an official Costco website, which it does not.

Thirdly, the confusion that was and is likely to be created is confusion about the affiliation of the various goods and services on the Respondent’s website and as to whether or not they are genuine Costco services or in some way associated with them. When consumers see on a purported Costco site like the Respondent’s the same products they would expect to find on an official Costco site, in this case insurance, they will naturally assume that those products are being offered with the Costco imprimatur, when in fact they are not. When they see other goods and services, they will naturally assume that they also are being sponsored or endorsed by the Complainants, which they likewise are not.

Clearly, this is all a deliberate and deceptive attempt to promote the notion in the minds of consumers that they have arrived at a Costco website and hence it is a deliberate attempt to trade off the Complainant’s name and trademark.

The Panel finds that these circumstances create confusion with the Complainants’ trademark as to the sponsorship, affiliation and endorsement of the Respondent’s site and the services on it and on the sites to which it is linked and that the Respondent must be taken to have intended this confusion and to have been doing it for commercial gain in one form or another.

The facts therefore come within paragraph 4(b)(iv) of the Policy and clearly constitute bad faith in the manner in which the Respondent is using the domain name.

They also constitute bad faith in the registration of the domain name, for, to paraphrase the words used in Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003: “ …it is not possible to conceive of a plausible circumstance in which the Respondent could legitimately use the disputed domain name. It is also not possible to conceive of a plausible situation in which the Respondent would have been unaware of this fact at the time of registration. These findings, together with the finding … that the Respondent has no rights or interests in the domain name, lead the Administrative Panel to conclude that the disputed domain name has been registered by the Respondent in bad faith”.

Accordingly, the Complainants have made out the third of the three elements that they must establish.

7. Decision

For all the foregoing reasons and as the Complainants have requested that the domain name be transferred to the Complainant Costco Wholesale Membership Inc., in accordance with Paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain name <costcoautoinsurance.com> be transferred to the Complainant Costco Wholesale Membership Inc.

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The Honourable Neil Anthony Brown QC
Sole Panelist

Datde: June 25, 2007