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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Membership, Inc., Costco Wholesale Corporation v. Yur Bar

Case No. D2009-1414

1. The Parties

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

The Respondent is Yur Bar, with a purported address in Minsk, the Republic of Belarus.

2. The Domain Name and Registrar

The disputed domain name <costco-pharmacy.org> (the "Domain Name") is registered with PSI-USA, Inc. dba Domain Robot.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on October 21, 2009. On October 22, 2009, the Center transmitted by email to PSI-USA, Inc. dba Domain Robot a request for registrar verification in connection with the Domain Name. On October 26, PSI-USA, Inc. dba Domain Robot 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" 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 the Respondent of the Complaint, and the proceedings commenced on October 28, 2009. In accordance with the Rules, paragraph 5(a), the due date for Response was November 17, 2009. The Respondent did not submit any response. Accordingly, the Center notified the Respondent`s default on November 20, 2009.

The Center appointed Keith Gymer as the sole panelist in this matter on December 7, 2009. 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.

The Panel notes that delivery of the hardcopy of the Complaint to the Respondent was not possible by fax or mail with the contact details as recorded on the WhoIs record for the Domain Name. The UPS tracking document records that the intended recipient "Yur Bar" was not known, as a company or person, at the recorded address and the telephone numbers shown were "not correct". For that reason, the Respondent`s address has been qualified as being "a purported address" above.

4. Factual Background

The Complainants ("Costco") are members of the Costco group of companies. Costco is an international enterprise, established in 1983, and operates membership warehouse stores in many countries under the COSTCO mark. Its business includes the sale of pharmaceuticals. It operates a website at "www.costo.com". It has numerous registrations in the United States and elsewhere for COSTCO marks in various classes, including US 1,976,242 for COSTCO in Class 42 dating from 1995, which covers, inter alia, pharmacy services.

The Respondent, Yur Bar, is of unconfirmed legal status, although the WhoIs record suggests that the Respondent is an individual rather than a company. According to the WhoIs record, the Domain Name <costco-pharmacy.org> was created on May 25, 2009.

5. Parties` Contentions

A. Complainants

The Complainants made the following submissions (edited extracts taken directly from the Complaint):

Nature of the Dispute

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. Costco currently operates over 550 warehouse stores worldwide, including over 400 COSTCO warehouse stores in the United States and Puerto Rico and over 150 in Australia, Canada, Japan, the Republic of Korea, Mexico, Taiwan, and the "United Kingdom (U.K.) ‘. Costco has more than 58 million authorized cardholders worldwide and more than 40 million authorized cardholders in the United States. Costco is one of the largest and best-known retailers in the United States, with over USD69 billion in sales in fiscal year 2009. Costco`s stock has been publicly traded since 1985. Costco is currently the twenty-fourth largest company and the fourth largest retailer in the Fortune 500. As a result of its size and notoriety, Costco has been the subject of regular news and feature coverage in all types of media. The COSTCO trademark has become famous for the sale of brand name and high quality private label merchandise at low prices in no-frills warehouse-style stores.

Costco is a coined name developed by the founders of Costco, and Costco is the only legitimate owner of COSTCO trademarks anywhere in the world. Costco owns trademark registrations for the famous COSTCO trademark in a variety of forms, including COSTCO (in stylized letters), COSTCO WHOLESALE & design, and COSTCO.COM, for a wide variety of services and for various printed publications and other materials. Costco obtained its first United States trademark registration of COSTCO in 1985 and has continued to expand and maintain a large portfolio of COSTCO trademark registrations in the United States and many other countries. Costco has received numerous trademark registrations from the United States Patent and Trademark Office for various marks that include the word "Costco". These registrations are all in full force and effect. (A complete list of active trademark registrations for COSTCO trademarks in the United Sates was attached to the Complaint). Through a wholly owned affiliate, Costco also owns hundreds of trademark registrations for COSTCO marks in other countries around the world.

Costco`s warehouse stores offer a wide range of merchandise, including over-the-counter pharmaceuticals, prescription pharmaceuticals, personal care products, nutritional supplements, fresh, frozen and prepared food, beverages, household paper products, clothing, computers and home electronics products, office supplies, books, DVDs and CDs, furniture and home furnishings, appliances, jewelry, holiday decorations, tools, garden supplies, tires and automotive supplies, and sports equipment.

Costco also offers a wide variety of services such as pharmacy services (both online and in its warehouse stores), photo processing and printing, optical and hearing aid services, bakery, deli and take-out food, tire installation, delivery services, auto, home and health insurance, auto sales and financing, roadside assistance, commercial and mortgage lending, real estate brokerage services, online training, telecommunications, payroll processing, credit card processing, business equipment leasing, financial planning, online investing, overnight delivery, and travel services. Some of these services are provided by Costco itself, but many of them are provided by third parties carefully selected by Costco and authorized by Costco to provide services to Costco cardholders in association with the COSTCO trademark. Costco provides information about these services in its warehouse stores, in Costco`s monthly publication, The Costco Connection (which has a monthly circulation of over 6 million in the United States), and at its "www.costco.com" website, which provides links to access or apply for these services or obtain information about them.

Costco owns the <costco.com>domain name and maintains an active presence on the Internet using this domain name as its URL. [A screen print of the home page of Costco`s United States website on October 19, 2009 was attached to the Complaint]. Costco offers a wide variety of goods and services (including pharmacy services) through its "www.costco.com" website. In fiscal year 2008, Costco`s sales through its "www.costco.com" website exceeded USD2 billion. It is clear, therefore, that many Costco shoppers use the Internet to find and purchase Costco`s goods and services.

Costco also operates a retail web site for Canadian shoppers at "www.costco.ca". Costco`s operations in the United Kingdom, Mexico, Japan, Taiwan, and the Republic of Korea also operate COSTCO web sites at "www.costco.co.uk", "www.costco.com.mx", "www.costco.co.jp", "www.costco.com.tw" and "www.costco.co.kr" respectively.

Costco`s pharmacy services have received particular attention in media coverage because of Costco`s ability to sell brand name and generic prescription pharmaceuticals at prices far below other retailers and pharmacies. Though a Costco membership is normally required to purchase goods and services from Costco, its pharmacy services are available to all consumers. [A screen print of the pharmacy web page found at the "www.costco.com" website as of October 19, 2009 was included in the Exhibits to the Complaint].

Among the COSTCO registrations, the following are some of the registrations that cover Costco`s pharmacy services and its retail and wholesale store services (including the sale of pharmaceuticals and personal care products) in the United States. [True copies of print-outs from the website of the U.S. Patent and Trademark Office for the registrations listed below were attached to the Complaint].

Mark COSTCO COSTCO WHOLESALE & design COSTCO.COM COSTCO (stylized)

Filing Date March 20, 1995 March 5, 1997 January 18, 2000 March 24, 2000

Registration No. 1,976,242 2,244,972 2,440,636 2,481,924

Costco has learned that the <costco-pharmacy.org> Domain Name resolves to a retail website at "costco-pharmacy.org", and operated by Respondent. A wide variety of prescription pharmaceuticals and related consumer products are offered for sale through this web site. [A screen print of the home page of Respondent`s web site as of October 19, 2009 was attached to the Complaint.]

The Domain Name is Confusingly Similar to Costco`s Registered Trademarks

Respondent`s <costco-pharmacy.org>Domain Name is confusingly similar to Costco`s COSTCO trademarks. The <costco-pharmacy.org> Domain Name consists of Costco`s well-known registered trademark, COSTCO and the common term, "pharmacy", separated from COSTCO by a hyphen, which has the effect of making COSTCO more prominent.

As noted above, Costco owns numerous registrations for COSTCO trademarks. The addition of common terms such as "pharmacy" to the COSTCO trademark does not mitigate the confusing similarity between the Domain Name and Costco`s COSTCO trademarks. See Quixtar Investments, Inc. v. Dennis Hoffman, WIPO Case No. D2000-0253 (May 29, 2000) ("QUIXTARMORTGAGE.COM - is legally identical to Complainant`s mark, QUIXTAR. The addition of the generic terms "MORTGAGE" and ".COM" to the domain name in dispute has little, if any, affect on a determination of legal identity between the domain name and the mark"); EAuto, L.L.C. v. Triple S. Auto Parts, d/b/a Kung Fu Yea Enterprises, Inc., WIPO Case No. D2000-0047 (March 3, 2000) ("When a domain name incorporates, in its entirety, a distinctive mark, that creates a sufficient similarity between the mark and the domain name to render it confusingly similar."); Parfums Christian Dior v. 1 Netpower, Inc., WIPO Case No. D2000-0022 (March 3, 2000) (finding that four domain names that added the descriptive words "fashion" or "cosmetics" after the trademark were confusingly similar to the trademark).

In addition, a number of previous UDRP panels have found specifically that the addition of common terms to the COSTCO mark is not sufficient to negate confusing similarity between the domain names and that mark. See Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Henry Chan, WIPO Case No. D2004-0218 (May 18, 2004) ("[T]he domain names <costcofurniture.com> and <costcohome.com> are confusingly similar to [the COSTCO] mark in which Complainants have rights".); Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Yong Li, WIPO Case No. D2004-0296 (June 9, 2004) ("[T]he Complainant`s trademark ‘COSTCO` is embodied in the disputed domain name <costcotires.com> and the addition of the generic term such as ‘tires` is descriptive and does not mitigate the phonetical and visual confusing similarity".); Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Jogn Dinway/Hosting Media, WIPO Case No. D2007-1426 (November 23, 2007) ("the addition of such terms as ‘usa` and ‘info` does not mitigate the confusing similarity between the domain name in dispute [i.e., usacostco.info] and the COSTCO Trademarks"); Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Almantas Kakareka and Hostmaster Oneandone, 1&1 Internet, Inc., WIPO Case No. D2007-1833 (February 11, 2008) ("the addition of the word ‘feedback` to Complainants` COSTCO mark strongly suggests a web site for consumers to provide comments to the Costco company with respect to its goods and services and thus tends to increase rather than diminish the confusing similarity between the Domain Name and Complainants` marks"); Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Cindy Chau, WIPO Case No. D2008-1283 (October 7, 2008) ("Because the disputed domain name [i.e., costcogift.com] uses the mark in its entirety and merely adds the generic word ‘gift,` the domain name is confusingly similar to the Complainant`s mark."); Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Nathniel Ho/EDF RTD, WIPO Case No. D2009-0782 (August 17, 2009) ("The <costcodrugs. com> domain name consists of Complainant`s well-known registered trademark, COSTCO and the common term, "pharmacy", separated from "costco" by a hyphen, which has the effect of making "costco" more prominent. The addition of common terms such as "drugs" to the COSTCO trademark does not mitigate the confusing similarity between the domain name in dispute and Complainant`s COSTCO trademarks.").

Because Costco sells a wide variety of pharmaceutical products identical to or very similar to the products offered at Respondent`s web site at "www.costco-pharmacy.org", the addition of a common term such as "drugs" to the COSTCO trademark exacerbates the confusing similarity between the COSTCO trademark and the Domain Name and increases the risk of confusion between the Domain Name and the COSTCO trademarks.

Respondent Has No Rights or Legitimate Interests in the 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, has not used the Domain Name in connection with a bona fide offering of goods or services, owns no trademark registrations for the Domain Name or any portion thereof, and has not been commonly known by the Domain Name or any portion thereof. Costco has not licensed or otherwise permitted Respondent to use its marks or the Domain Name. Respondent does not own and "(in the Complainants` view)" 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 Domain Name and uses it to direct Internet traffic to its web site. 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. See Sanrio Company, Ltd. and Sanrio, Inc. v. Neric Lau, WIPO Case No. D2000-0172 (Mar. 3, 2000) ("Respondent cannot be said to have legitimately chosen the SANRIOSURPRISES.COM domain name unless it was seeking to create an impression of an association with Complainants. Since there is no such authorized association, Respondent`s interests in the domain name cannot be said to be legitimate.").

Respondent Registered and Is Using the Domain Name in Bad Faith

Bad Faith Registration of the Domain Name

Respondent`s choice of 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 as its sales grew rapidly from USD4.1 billion in 1990 to almost USD70 billion in 2009. Respondent registered the <costco-pharmacy.org>domain name on May 25, 2009, 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 Domain Name and when it put it to use diverting Internet users to its web site. Costco`s many registrations also constitute constructive notice in the United States of its rights in the COSTCO trademark. Awareness of another`s rights in a mark or domain name at the time of registration is evidence of bad faith registration. See The Channel Tunnel Group Ltd. v. John Powell, WIPO Case No. D2000-0038 (Mar. 17, 2000) (prior knowledge of Complainant`s registered trademark was a key factor in panel`s finding of bad faith).

A domain name owner has registered a domain name in bad faith if it did so in circumstances suggesting that the Respondent has "intentionally attempted to attract, for commercial gain, Internet users to [its] web site 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 [its] web site or location or of a product or service on [its] web site or location." Respondent`s registration of the Domain Name was done in bad faith because it had no legitimate rights or business interests in any COSTCO formative domain name. Respondent`s only conceivable business purposes in registering the Domain Name was to profit from the diversion of Internet users to its own retail web site unrelated to Costco. This is unmistakably bad faith registration of the Domain Name.

A domain name registrant acts in bad faith if it registers a domain name "primarily for the purpose of disrupting the business of a competitor." Respondent`s use of the Domain Name to divert Internet traffic to a retail web site in direct competition with Costco proves Respondent`s intention to disrupt Costco`s business by diverting potential Costco customers to Respondent`s retail web site.

Bad Faith Use of the Domain Name

Respondent uses the Domain Name to divert Internet users looking for Costco to a retail web site 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 the Domain Name for a web site illegally selling prescription pharmaceuticals without prescriptions also puts Costco`s excellent reputation at risk. If any products sold through Respondent`s web site are impure or counterfeit or if orders placed through Respondent`s web site are filled incorrectly, the consequences may include death and serious harm to innocent people. Costco`s reputation may be badly damaged by such mishaps, which are entirely beyond its control. This clearly establishes bad faith use of the Domain Name pursuant to paragraph 4(b)(iv) of the Policy.

Respondent`s bad faith use of the Domain Name is further confirmed by the fact that the home page for Respondent`s website prominently shows both "costco" and "Costco Pharmacy". These uses of the registered COSTCO trademark would confirm innocent consumers` belief that Respondent`s site is indeed associated with and/or operated by Costco. This would give consumers a false sense of security in ordering through this site. Respondent`s use of the COSTCO trademark in both the Domain Name and its web site clearly establishes bad faith use of the Domain Name pursuant to paragraph 4(b)(iv) of the Policy.

In view of the uniqueness and fame of the COSTCO trademark and Respondent`s transparent intention to register and use a domain name based on the COSTCO trademark purely for its own commercial gain, Respondent`s use of the Domain Name is inescapably in bad faith. Respondent does not use the Domain Name in any legitimate, good faith manner, and there is no legitimate, good faith use of the Domain Name possible by Respondent. See General Electric Company v. Fisher Zvieli, a/k/a Zvieli Fisher, WIPO Case No. D2000-0377 (July 15, 2000) ("There is no conceivable good faith use to which Respondent, who has no right or legitimate interest in the domain name at issue, could put the [wwwge.com] domain name at issue, which is identical or confusingly similar to the famous ‘GE` mark.").

Remedies Requested

Costco requests the administrative Panel appointed in this proceeding to issue a decision that the Domain Name be transferred to Costco Wholesale Membership, Inc.

B. Respondent

The Respondent made no response to the Complainants` contentions.

6. Discussion and Findings

In order for the Panel to decide to grant the remedy of transfer of a domain name to a Complainant under the Policy it is necessary that the Complainant must prove, as required by 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 Complainant has 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.

The fact that the Respondent has not provided a Response to the Complaint does not relieve the Complainant of the burden of proving its case. In the absence of a Response, paragraph 5(e) of the Rules expressly requires the Panel to "decide the dispute based upon the complaint". Under paragraph 14(a) of the Rules in the event of such a "default" the Panel is still required "to proceed to a decision on the complaint", whilst under paragraph 14(b) it "shall draw such inferences therefrom as it considers appropriate."

Consequently, the Panel must proceed with an assessment of the Complaint on its merits.

A. Identical or Confusingly Similar

The Domain Name is <costco-pharmacy.org>.

The Complainants have amply demonstrated significant registered trademark rights in COSTCO, including for pharmacy services (e.g. United States trademark 1,976,242 dating from 1995), and extensive use of the COSTCO mark for such services, at least in the United States, all long predating the date of creation of the Domain Name.

The initial word COSTCO is clearly the dominant and distinctively recognisable element, separate from the purely descriptive term "pharmacy" in the Domain Name <costco-pharmacy.org>. The mere inclusion of descriptive elements with a distinctive mark in which a complainant has relevant trademark rights is insufficient to render a domain name dissimilar. There is no doubt, in the Panel`s, opinion that <costco-pharmacy.com> is confusingly similar to COSTCO in the present circumstances.

The Panel therefore finds that the Domain Name is confusingly similar to an earlier trademark in which the Complainants have rights, and the requirements of paragraph 4(a)(i) of the Policy are met.

B. Rights or Legitimate Interests

Under Paragraph 4(c) of the Policy, any of the following circumstances, (by way of example) might serve to demonstrate the Respondent`s rights or legitimate interests to a domain name for purposes of Paragraph 4(a)(ii):

(i) before any notice to the Respondent of the dispute, 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) the Respondent (as an individual, business, or other organization) has been commonly known by the domain name, even if the Respondent has acquired no trade mark or service mark rights; or

(iii) the Respondent is making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trade mark or service mark at issue.

The Respondent has made no express claims to any rights of its own; clearly the Respondent Yur Bar is not known by the Domain Name, nor does it claim to have made any legitimate use of the Domain Name.

The evidence in the Complaint shows conclusively that the Respondent has simply adopted the Domain Name to take advantage of public recognition of the Complainants` name and business - specifically by establishing a website for selling pharmaceuticals under the COSTCO name and thereby passing itself off as being part of or connected with the Complainants` business group.

In the Panel`s view this could never be a bona-fide offering or use. It is unquestionably an illegitimate use, expressly for commercial gain, which will inevitably mislead and divert consumers and tarnish the Complainants` name, directly the opposite of the legitimate example in paragraph 4(a)(ii) of the Policy..

Consequently, the Panel holds that the Respondent has no rights or legitimate interests in respect of the Domain Name and the requirements of paragraph 4(a)(ii) of the Policy are met.

C. Registered and Used in Bad Faith

Under paragraph 4(b) of the Policy, the following are some pertinent examples of the sort of conduct which a Panel may take (without limitation) as evidence of registration and use in bad faith:

(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, [the Respondent has] intentionally attempted to attract, for commercial gain, Internet users to [the 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 Respondent`s] website or location.

In the Panel`s opinion, the unchallenged evidence in the Complaint demonstrates conclusively that the Respondent has registered the Domain Name with the immediate and realised intention of establishing a website using the COSTCO mark and name to attract users, for obvious commercial gain, and manifestly creating a misleading and confusing impression as to the source, affiliation or endorsement of the Respondent`s website business. Inevitably, such misuse will cause disruption and damage to the Complainant`s business name and reputation.

Additionally, the Panel also considers it significant that the contact address details for the Respondent Yur Bar are apparently invalid, and that there is no contact address provided on the Respondent`s website to identify where the business is really located. It is noteworthy that the website itself answers the hypothetical question "Why is your product so cheap?" with the statement: "We do not spend anything on marketing, there are no taxes to be paid as the product comes into the country unregistered, the manufacturer is located in an offshore zone and the production costs are way lower." To the Panel, that rather suggests that the Respondent`s business location is hidden precisely to avoid the fiscal and regulatory costs, which legitimate pharmaceutical businesses would be expected to bear in the interest of consumer protection, and that consumers would therefore be put at risk as a consequence of such avoidance.

For the same reasons as in Section B above, the Panel also considers the example of paragraph 4(b)(iv) of the Policy is directly applicable in the present case.

For the purposes of the Policy, the Panel has no hesitation in concluding that the Domain Name has been registered and is being used in bad faith and that paragraph 4(a)(iii) of the Policy is also 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 <costco-pharmacy.org> be transferred to the Complainant, Costco Wholesale Membership, Inc.

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Keith Gymer
Sole Panelist

Dated: December 22, 2009