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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Membership Inc., Costco Wholesale Corporation v. David Kim

Case No. D2008-1517

1. The Parties

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

Respondent is David Kim, Los Angeles, California, United States of America.

2. The domain name and registrar

The disputed domain name <costcobanners.com> is registered with Melbourne IT Ltd.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on October 3, 2008. On October 7, 2008, the Center transmitted by email to Melbourne IT Ltd a request for registrar verification in connection with the domain name at issue. On October 8, 2008, Melbourne IT Ltd 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”), 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 October 13, 2008. In accordance with the Rules, paragraph 5(a), the due date for Response was November 2, 2008. Respondent did not submit any response. Accordingly, the Center notified Respondent’s default on November 3, 2008.

The Center appointed Lynda J. Zadra-Symes as the sole panelist in this matter on November 20, 2008. 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

Complainant is a warehouse club that has operated membership warehouse stores under the COSTCO trademark and trade name since 1983. Complainant owns over 50 United States trademark registrations for marks including the word COSTCO for a wide variety of services, including retail and wholesale store services, and for various printed publications and other materials. Complainant, through its wholly owned affiliate, also owns hundreds of trademark registrations for marks including the word COSTCO in other countries around the world.

Complainant owns the domain name <costco.com> and maintains an active presence on the Internet using that domain name. Complainant’s sales through its “www.costco.com” website in 2007 exceeded USD1 billion.

The disputed domain was registered on December 21, 2007 and resolves to a retail website bearing the name “www.costcobanners.com” operated by Respondent. Banner advertisements and design services are offered for sale through this website. Respondent uses the disputed domain name as both the URL for this website and the trade name of the business operating through the website.

Complainant attempted to resolve this dispute amicably by contacting Respondent through the email address listed in the WhoIs information for the disputed domain name but received no response.

5. Parties’ Contentions

A. Complainant

Complainant contends that the disputed domain name is confusingly similar to Complainant’s registered trademarks, that Respondent has no rights or legitimate interests in the disputed domain name, and that Respondent registered and is using the disputed domain name in bad faith.

B. Respondent

Respondent did not reply to Complainant’s contentions.

6. Discussion and Findings

In order to succeed in its claim, Complainant must demonstrate that all of the elements enumerated in paragraph 4(a) of the Policy have been satisfied:

(i) the domain name 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 interests with respect to the domain name; and

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

Paragraph 15(a) of the Rules instructs this Panel to decide a Complaint “on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”

A. Identical or Confusingly Similar

Complainant has demonstrated that it owns valid and registered and common law trademark rights in the mark COSTCO. Complainant contends that the disputed domain name is confusingly similar to its COSTCO trademarks as it consists of Complainant’s well-known COSTCO registered trademark and the common term “banner”. The disputed domain name incorporates Complainant’s trademark in its entirety. The addition of the generic term “banners” used to denote Internet advertising does not avoid a finding of confusing similarity between the disputed domain name and Complainant’s COSTCO trademarks.

Accordingly, the Panel finds that Complainant has satisfied this requirement.

B. Rights or Legitimate Interests

Based on the record, Respondent is not affiliated or related to Complainant in any way, nor is Respondent licensed by Complainant or otherwise authorized to use the COSTCO name or trademark.

Respondent owns no trademark registrations or applications for the disputed domain name and has not been commonly known by the disputed domain name. Respondent’s registration and use of Complainant’s trademark to direct Internet traffic to Respondent’s website is not a bona fide offering of goods or services. Rather, Respondent’s action evidences an intent to disrupt Complainant’s business and trade off Complainant’s goodwill in its COSTCO trademark.

There is nothing in the record to indicate that Respondent has any genuine rights or legitimate interests in the disputed domain name.

The Panel finds that Respondent has no rights or legitimate interests with regard to the disputed domain name.

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 disputed domain name in bad faith:

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

(ii) 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) 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 Respondent’s website or location of a product or service on Respondent’s website or location.

Respondent registered the disputed domain name on December 21, 2007, many years after the COSTCO mark had become famous. Because of the notoriety of the COSTCO trademark (especially in California, where Respondent resides), Respondent was no doubt aware of Complainant’s rights in the COSTCO trademark when Respondent registered the disputed domain name and began using it as the trade name and URL for its website. Respondent’s purpose in registering the disputed domain name was apparently to profit from the diversion of Internet users to Respondent’s website and to disrupt the business of Complainant.

When Internet users are diverted to Respondent’s website, they see the disputed domain name as the trade name of Respondent’s business, thus compounding the confusion that led the Internet users to Respondent’s website. This confusion and deception of Internet users damages Complainant’s business and reputation and provides illicit commercial benefit to Respondent by trading on Complainant’s reputation and goodwill in its COSTCO trademark.

The Panel finds that Respondent has registered and used the disputed domain name in bad faith.

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 <costcobanners.com> be transferred to Complainant Costco Wholesale Membership, Inc.

Lynda J. Zadra-Symes
Sole Panelist

Dated: December 5, 2008