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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Jogn Dinway/Hosting Media

Case No. D2007-1426

1. The Parties

The Complainants are Costco Wholesale Membership Inc., Costco Wholesale Corporation, United States of America, represented by Mark J. Nielsen, United States of America.

The Respondent is Jogn Dinway/Hosting Media, of Netherlands.

2. The Domain Name and Registrar

The disputed domain name <usacostco.info> is registered with Direct Information Pvt. Ltd. d/b/a PublicDomainRegistry.com (herein the “domain name in dispute”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on September 26, 2007. On September 28, 2007, the Center transmitted by email to Direct Information Pvt. Ltd. d/b/a PublicDomainRegistry.com a request for registrar verification in connection with the domain name at issue. On September 29, 2007, Direct Information Pvt Ltd d/b/a PublicDomainRegistry.com 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”), 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 October 11, 2007. In accordance with the Rules, paragraph 5(a), the due date for Response was October 31, 2007. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on November 1, 2007.

The Center appointed J. Nelson Landry as the sole panelist in this matter on November 9, 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 operate a membership warehouse club merchandising and related services in association with the COSTCO trademark and trade name since 1983. They currently operate over 500 such stores with more than 50 million card holders worldwide. With over 375 stores and 36 million cards holders, it is one of the largest retailers in the United States with over US$ 58 billion in 2006.

The term COSTCO is a coined word which is the common term in a family of trademarks including COSTCO, COSTCO in stylized letters, COSTCO WHOLESALE & Design and COSTCO.COM for a wide variety of services and various printed publications and other materials (herein the “COSTCO Trademarks” or “Trademarks”).

The first COSTCO registration obtained by the Complainants was in 1985 followed by 50 other COSTCO Trademark registrations and along with a wholly owned affiliate, the Complainants also own hundreds of COSTCO Trademarks registrations in other countries around the world.

The Complainants’ stores offer a large range of merchandises, including food, paper products, clothing, personal care products, computers and home electronic products, office supplies, furniture and home furniture, appliances, jewelry, tools, garden supplies, tires and automotive supplies, sports equipment, and many other various products. Furthermore the Complainants offer a wide variety of services such as photo processing, articles and hearing aids services, telecommunications, business equipments, leasing, travel and many others. The information about these services is provided in their monthly publication and at the “www.costco.com” website.

The Complainants also operate retail websites in various countries such as Canada, United Kingdom of Great Britain and Northern Ireland, Mexico, Japan, Taiwan, Province of the Republic of China, and Republic of Korea.

The domain name <usacostco.info> was registered by the Respondent on May 4, 2007. The Complainants subsequently learned that this domain name resolved to a pornographic website at “www.porn.info” as it appears from Exhibit F printed on September 25, 2007.

The Respondent does not appear to own any trademark registration for the domain name in dispute or COSTCO and the Complainants have not licensed or otherwise permitted the Respondent to use any COSTCO Trademarks or the domain name in dispute. The Respondent uses the domain name in dispute to direct Internet traffic to its website and then to the abovementioned pornographic website.

5. Parties’ Contentions

A. Complainants

The Complainants contend that by the continuous, extended and growing use and promotion of the COSTCO Trademarks, the said Trademarks have become famous and that the domain name in dispute is confusingly similar to the COSTCO Trademarks and that the addition of such terms as “usa” and “info” does not mitigate the confusing similarity between the domain name in dispute and the COSTCO Trademarks, relying on earlier UDRP decisions which so held upon commenting on the addition of words such as “furniture”, “home” or “tires”, more particularly when the domain name incorporates in its entirety the distinctive term of a trademark. See Parfums Christian Dior v. 1 Netpower, Inc., WIPO Case No. D2000-0022; EAuto, L.L.C. v. Triple S. Auto Parts d/b/a Kung Fu Yea Enterprises, Inc., WIPO Case No. D2000-0047.

The Complainants contend that the Respondent has no rights or legitimate interests in the domain name in dispute or trademark incorporating the COSTCO term since it has not used the said domain name in connection with a bona fide offering of goods and services, does not own a trademark registration for the said domain name and has not been commonly known by the said domain name.

The Complainants submit that without a license or permission to use the trademark, the Respondent registered the domain name in dispute and uses it to direct Internet traffic to his website. These activities clearly disrupt the Complainants’ business, deceived their customers and tradeoff on Complainants’ goodwill. See Sanrio Co. Ltd. and Sanrio v. Neric Lau, WIPO Case No. D2000-0172.

Finally the Complainants contend that the Respondent registered and is using the domain name in dispute in bad faith. According to the Complainants, the choice of the domain name by the Respondent was not a coincidence, considering that COSTCO is a coined term used since 1983, within numerous registered Trademarks since 1985 and with growing sales to more than US 25 billion in 2006. Furthermore, the Complainants represent that by reason of the fame of the COSTCO Trademarks, the Respondent must have been aware of the Complainants’ rights therein when the Respondent registered the domain name in dispute and put it to use diverting Internet users to its website. See The Channel Tunnel Group Ltd. v. John Powell, WIPO Case No. D2000-0038.

According to the Complainants, the fact that the Respondent has intentionally attempted to attract for commercial gain Internet users to his website by creating a likelihood of confusion with the Complainants’ Trademarks and apparent sponsorship or endorsement is further evidence that the domain name in dispute was registered in bad faith. The Respondent’s only conceivable business purposes were to profit from the fame of the Trademarks, and the Respondent’s use of the domain name in dispute to divert Internet users looking for the Complainants under COSTCO to a pornographic website for its own commercial use demonstrates not only damage to the Complainants’ business and reputation but a source of illicit commercial benefit to the Respondent, the whole resulting from use of the domain name in dispute in bad faith. See Speedo Holdings B.V. v. Dave Evans, WIPO Case No. D2007-0911; Nick Cannon v. Nikolay Zuyev, WIPO Case No. D2007-0870; Angus Sholto-Douglas, Kwandwe Private Game Reserve v. Sergey Fedorov, WIPO Case No. D2006-1184.

B. Respondent

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

6. Discussion and Findings

Paragraph 4(a) of the Policy requires that the Complainant prove each of the following three elements in order for a domain name to be cancelled or transferred:

(i) The domain name registered by the respondent is identical or confusingly similar to a trademark or service mark in which the complainant has rights, and

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

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

A. Identical or Confusingly Similar

The evidence of continuous, expanding and substantial use of a large family of Trademarks with the common distinctive coined term COSTCO since its first use in 1983 and numerous registrations in the United States and several other countries are evidence that the Complainants have significant rights in the Trademarks and that the Complainants benefit not only in the United States but in other countries in the world of substantial goodwill and fame associated with the said Trademarks.

The domain name in dispute incorporates the most distinctive term “COSTCO” to which the Respondent added a well-known geographic identification “usa” and the top level domain name suffix “.info”. As represented by the Complainants, there are several UDRP decisions which have held that the addition of a common term to a trademark does not diminish the confusing similarity between the domain name in dispute and the Complainants’ Trademarks. It is clear to this Panel in the present case that the domain name in dispute is confusingly similar with the Complainants’ COSTCO Trademarks.

The first criterion has been met.

B. Rights or Legitimate Interests

The Respondent has not filed any response in this proceeding. Therefore the Panel may accept all reasonable inferences and allegations included in the Complaint as true. The Complainant has made a prima facie case that the Respondent lacks rights or legitimate interests in the domain name in dispute by stating that the Respondent has never been known by the name “Costco” or the domain name in dispute, and is not making a legitimate non-commercial or fair use of the domain name in dispute. Furthermore, the Complainants have never given a license nor in any way authorized the Respondent to make use of the Complainants’ Trademarks. There is no evidence that the Respondent has ever engaged in any legitimate business under the Complainants’ Trademarks. While there is no evidence that the Respondent’s action constitutes an attempt to extort money from the Complainants, it is certainly fair to conclude that the holding of the domain name in dispute denies the Complainants access to the use of the domain name corresponding to their COSTCO Trademarks.

Upon considering the absence of authorisation to use “Costco” in the domain name in dispute, the diversion of Internet users, most likely thousands, presumably Americans, thinking that with the presence of “usa” they would reach the website of the Complainants in going to <usacostco.info> and finding themselves redirected to a pornographic site is at least the contrary to a course of conduct by a person, as the Respondent, that may contend having rights or legitimate interests in the domain name. This Panel finds that there are no possible legitimate interests in the Respondent’s activities.

The second criterion has been met.

C. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy states circumstances which, if found, shall be evidence of the registration and use of the domain name in bad faith:

(i) circumstances indicating that you have registered or you have 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 the Complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or

(ii) you have 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 you have engaged in a pattern of such conduct; or

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

(iv) by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your 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 your website or location or of a product or service on your website or location.

It should be noted that the circumstances of bad faith are not limited to the above.

While the constructive notice arising out of a US trademark registration does not apply to a resident of another country such as the Netherlands, it is inconceivable to this Panel that the Respondent selected this coined word “costco” without any awareness or knowledge of its existence as a registered trademark, furthermore when the same Respondent adds thereto the suffix “usa” which combination “usacostco” would be most appealing to numerous persons in the United States of America in which country the Trademark COSTCO is so extensively used and widely known. These facts plus the confusing similarity between the domain in dispute and the COSTCO Trademarks are, to this Panel, convincing evidence that the domain name in dispute has been registered in bad faith.

According to the evidence, the only use associated with the domain name in dispute is the diversion of Internet visitors to a pornographic website, thereby benefiting from the possible sponsorship by the Complainants of these activities, generating benefits to the Respondent from illicit commercial activities and consequently damaging the Complainants’ reputation. As cited by the Complainants, many UDRP panels have previously found that such activities in association with the use of a domain name are strong evidence of bad faith and this Panel has no hesitation in concurring with these earlier decisions and finds that the Respondent has used the domain name in dispute in bad faith.

The third criterion has been met.

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 domain name <usacostco.info> be transferred to the Complainant Costco Wholesale Membership, Inc.

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J. Nelson Landry
Sole Panelist

Dated: November 23, 2007