1. The Parties

The Complainant in this proceeding is Costco Wholesale Membership Inc., and Costco Wholesale Corporation of Issaquah, Washington, United States of America (hereinafter individually and collectively “Complainant”).

The Respondent is WebHostingWholesale.com of Santa Clara, California, United States of America (“Respondent”).

2. The Domain Name and Registrar

The domain name in issue is <costcohosting.com> (“Domain Name”) and is registered with Wild West Domains, Inc. (“Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the ”Center”) on July 8, 2004, by e-mail with hard copies received by the Center on July 12, 2004. On July 9, 2004, the Center transmitted by e-mail to the Registrar a request for registrar verification in connection with the Domain Name. On July 12, 2004, the Registrar transmitted by e-mail to the Center its verification response confirming that the Respondent is listed as the registrant for the Domain Name. On July 13, 2004, 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 commencement of the proceeding on July 13, 2004. In accordance with the Rules, Paragraph 5(a), the due date for submitting a Response was August 2, 2004. In response to the communication received from the Center, a representative of the Respondent sent several e-mail messages to the Center concerning the proceeding and requesting an extension of time of nine months for filing a response. Further e-mail correspondence between the parties in this proceeding shows that the Complainant agreed to a one-week extension for the Respondent to file a response. The Center extended the response deadline by one week and informed the Respondent’s representative of this extension on August 6, 2004. The Respondent submitted a Response with respect to this proceeding through an e-mail message dated August 14, 2004, and requested time for a further submission. The Center sent an acknowledgment indicating receipt of the Response. The Complainant also sent a message indicating that it would not object to a filing of an explanation by the Respondent after the response filing deadline assuming such filing did not delay the proceeding further and that the Complainant had an opportunity to respond. On August 16, 2004, the Respondent sent a further e-mail message to the Center concerning the Response. On August 18, 2004, the Complainant sent a supplemental filing entitled “Reply to Respondent’s Response” to the Center. On August 19, 2004, the Respondent sent further e-mails to the Center, particularly, concerning the Complainant’s supplemental filing.

On August 24, 2004, the Center invited the undersigned Panelist to serve as a single member panel in this proceeding. The Panel submitted a “Statement of Acceptance and Declaration of Impartiality and Independence” to the Center, as required, to ensure compliance with the Rules, Paragraph 7. The Center sent a “Notification of Appointment of Administrative Panel and Projected Decision Date” by e-mail to the parties on August 27, 2004. In the Notification, it was also indicated that the parties had provided further submissions concerning this proceeding. In order to review the entire record submitted for this proceeding, the Panel requested that the further submissions by the parties be forwarded to the Panel.

Based upon this review, the Panel concurs with the Center’s finding that the Complaint is in compliance with the Policy, the Rules and the Supplemental Rules and finds that the Panel was properly constituted and appointed, that the one-week extension for the Respondent to file a response was appropriate and that no further extension of time for submissions by the parties will be granted. The Panel further finds that the Response was timely filed, and along with the Complainant indicating no objections to the filing, the Panel will allow admittance of the Response. However, with respect to the further submissions filed by both parties after the response filing deadline, the Panel finds that such submissions were not made in response to a deficiency notification or requested by the Center or the Panel and accordingly will not be admitted in this proceeding. The Panel shall therefore issue a decision based on the Complaint, the Response, the Policy, the Rules and the Supplemental Rules.

4. Factual Background

The Complainant bases the Complaint on numerous U.S. registrations for the mark COSTCO and variations thereof, including for example, U.S. Registration No. 1,318,685 (first use and first use in commerce June 10, 1983; issued February 5, 1985) for the mark COSTCO used in connection with distributorship services in the field of discount general merchandise for participating members (international class 042); U.S. Registration No. 2,545,922 (first use and first use in commerce July 23, 1999; issued March 12, 2002) for the mark COSTCO.COM used in connection with providing access to a global computer information network (international class 038); U.S. Registration No. 2,505,027 (first use and first use in commerce August 31, 1999; issued November 6, 2001) for the mark COSTCO ONLINE and Design used in connection with telephone communication services (international class 038); U.S. Registration No. 2,740,322 (first use and first use in commerce June 1, 2001; issued July 22, 2003) for the stylized mark COSTCO used in connection with providing online training in the fields of software training and certification, personal, professional and business skills, and defensive driving (international class 041). The Complainant provided a list of the registrations for the mark COSTCO and variations thereof as Exhibit D to the Complaint. The Complainant also owns the domain names <costco.com>, <costco.com.mx> and <costco.co.uk> and maintains websites at the domain names <costco.com> and <costco.co.uk> and provided printouts from one of these sites as Exhibit E to the Complaint.

The Domain Name was registered on January 25, 2004, to the Respondent and is set to expire on January 25, 2005. A copy of the whois information for the Domain Name was attached as Exhibit A to the Complaint. There is also a website currently accessible at the Domain Name. Copies of the web pages from the site accessible at the Domain Name were attached as Exhibit H to the Complaint.

5. Parties’ Contentions

Complainant

The Complainant asserts it is a recognized world leader in warehouse club merchandising and related services and has operated membership warehouse stores under the COSTCO trademark and trade name since 1983. The Complainant operates approximately 320 COSTCO warehouse stores in the United States and Puerto Rico and over 110 in Canada, Mexico, the U.K., Korea, Japan and Taiwan, has more than 43 million authorized cardholders worldwide and more than 32 million authorized cardholders in the United States and its stock has been publicly traded since 1985. The Complainant asserts it is one of the largest and best-known retailers in the United States, with over US$41 billion in sales in fiscal year 2003 and has been the subject of regular news and feature coverage in all types of media. The Complainant asserts that its 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.

The Complainant asserts that “Costco” is a coined name developed by the founders of the Complainant and that it is the only legitimate owner of COSTCO trademarks anywhere in the world. The Complainant owns trademark registrations for the 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. The Complainant obtained its first U.S. trademark registration of the mark COSTCO in 1985 and has continued to expand and maintain a portfolio of COSTCO trademark registrations in the United States and many other countries. The Complainant has received numerous trademark registrations from the United States Patent and Trademark Office for various marks that include the word “COSTCO” and that these registrations are all in full force and effect. The Complainant further asserts that the Complainant owns hundreds of trademark registrations for COSTCO marks in other countries around the world through a wholly owned affiliate and owns the domain names <costco.com>, <costco.com.mx> and <costco.co.uk> and maintains active websites at these domain names.

The Complainant further asserts that its warehouse stores offer a wide range of merchandise, including fresh, frozen and prepared food, beverages, household paper products, clothing, personal care products, nutritional supplements, 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. The Complainant also asserts that it offers a wide variety of services such as photo processing, optical and hearing aid services, pharmacy, 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 with some of these services provided by the Complainant but with many of them provided by third parties selected and authorized by the Complainant. The Complainant provides information about these services in its warehouse stores, in its monthly publication, The Costco Connection, and at its “www.costco.com” website, which provides links to apply for these services or obtain information about them. The Complainant also asserts that it offers web hosting services to its cardholders through its website and that these services are substantially similar if not identical to the web hosting services offered by the Respondent in association with the Domain Name.

The Complainant further asserts that when notifying the Respondent of the Complainant’s rights in the COSTCO trademark and demanding that the Respondent’s infringing and damaging activity immediately cease, the Respondent responded by claiming it was entitled to use the COSTCO trademark, acknowledging that its use of the Domain Name is for its benefit and offering to negotiate for the purchase of “rights, names and domain names that could be related to” the Domain Name or to discuss “investment possibilities” with the Complainant. The Complainant’s counsel responded to the Respondent explaining the basis for the Complainant’s rights in the COSTCO mark and refuting the Respondent’s allegations regarding its right to use the Domain Name. The Complainant asserts that the Respondent did not reply and has continued to use the Domain Name for its own benefit.

The Complainant asserts that the Respondent’s Domain Name is confusingly similar to Costco’s COSTCO trademarks based upon the Domain Name consisting of the Complainant’s well-known registered trademark COSTCO and the common term “hosting.” Further the Complainant asserts that, based on the Complainant providing a variety of online and communications services including web hosting services, the addition of a common term such as “hosting” 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.

The Complainant asserts that the Respondent has no legitimate interest 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. The Complainant further asserts that it has not licensed or otherwise permitted Respondent to use its marks or the Domain Name, that the Respondent does not own and 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 and that the Respondent’s action of registering the Domain Name and using it to direct Internet traffic to its website evidences a clear intent to disrupt the Complainant’s business, deceive consumers, and trade off of the Complainant’s goodwill by creating an unauthorized association between it and the COSTCO trademarks.

With respect to bad faith registration and use of the Domain Name, the Complainant asserts that the Respondent’s choice of Domain Name was not a coincidence. Particularly, the Complainant asserts that the Respondent registered the Domain Name on January 25, 2004, many years after the COSTCO trademark had become famous and that because of the notoriety of the COSTCO trademark and the Complainant’s substantial presence in California, the Respondent must have been aware of the Complainant’s rights in the COSTCO trademark when it registered the Domain Name and when it put it to use diverting Internet users to its website.

The Complainant further asserts that the Respondent’s registration of the Domain Name was done in bad faith because it had no legitimate right or business interest in any COSTCO-formative domain name and that the Respondent’s only conceivable business purposes in registering the Domain Name was to profit from the diversion of Internet users to websites unrelated to the Complainant and, perhaps, to eventually sell it to the Complainant. Further the Complainant asserts that, in view of the uniqueness and fame of the COSTCO trademark and the Respondent’s transparent intention to register and use a domain name based on the COSTCO trademark, the Respondent’s use of the Domain Name is inescapably in bad faith and that the 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 the Respondent. The Complainant further asserts that the circumstances surrounding the Respondent’s registration and use of the Domain Name – and the Respondent’s own statements about possible transactions with the Complainant – confirm that it registered the Domain Name primarily for the purpose of disrupting the Complainant’s business and then selling it to the Complainant or others for valuable consideration in excess of its out-of-pocket costs directly related to the Domain Name.

Respondent

The Respondent asserts that the Complainant has failed to prove the three points or the UDRP requirements under Policy, Paragraph 4(a). Particularly, the Respondent asserts that the Complainant has no rights to the term “costco” in the industry that the Domain Name is used nor is there any confusion between the Respondent and the Complainant. The Respondent asserts that the Complainant is wrong in that they have rights to the term “costco” in the industries involving web hosting and information services, Internet data storage, etc., and that the Complainant never had any services remotely associated with any services that the Domain Name is being used for. The Respondent alleges that the Complainant, only a few weeks before submitting its Complaint to the Center, added one single service of hosting which is not even the Complainant’s [service]. The Respondent bases this assertion on checking the Complainant’s site several times after the Complainant’s initial communication with the Respondent but prior to the Complaint being filed with the Center and asserts that this is fraud on the part of the Complainant. The Respondent further asserts that the Complaint submitted by the Complainant shows that the Complainant has not registered the term “Costco” or “costco.com” in any category remotely associated with hosting services, hosting, data services, etc.

The Respondent asserts that the Complainant failed to show that the Respondent has no rights or legitimate interests in the Domain Name. The Respondent asserts that customers obviously purchase web hosting (Website Hosting), and related services through the site at the Domain Name and that the Complainant was trying to get a jump-start in the industry by trying to steal the Respondent’s Domain Name. The Respondent further asserts that there is nothing wrong with having the domain name <costcohosting.com> resolve to <webhostingwholesale.com> while a new site at the Domain Name is prepared.

The Respondent additionally asserts that the Complaint has failed completely in showing that the Respondent has used the Domain Name in bad faith and it has never tried to mislead or direct anyone to its sites by making them think the Respondent was the Complainant, Costco Wholesale Corp. The Respondent further asserts that it is more than willing to place statements on all the pages of its sites that there is no relationship between the Respondent and the Complainant, Costco Wholesale Corp, or <costco.com> as long as that settles the dispute. The Respondent asserts that its intention with <costcohosting.com> is not to create confusion and that no one has ever been confused or made any association between <costcohosting.com> and the Complainant, Costco Wholesale Corp. or <costco.com>.

The Respondent asserts that the Complainant never passed on the Respondent’s offers, or the Complainant, Costco Wholesale Corp., decided not to make use of the Respondent’s Web Hosting Services, and that the Complainant is now using Value Web’s hosting services (barely) on the Complainant’s site. The Respondent asserts that it is its belief that the addition of the hosting services on the <costco.com> site is “only for show,” and it is for WIPO to see, and it could also be a desperate attempt by the Complainant to cover its mistakes. The Respondent asserts that the Complainant, Costco Wholesale Corp., only began offering Value Web’s hosting services after the Respondent clarified to the Complainant’s counsel that the Complainant did not exist in this industry. The Respondent asserts that company divisions, and company assets can be sold, and there is nothing wrong with that and that it quickly became clear that the Complainant’s counsel was not the person to communicate with and further communication was a waste of time. The Respondent asserts that the Complainant, Costco Wholesale Corp., does not provide web hosting services or any kind of services remotely close to any of the services the Respondent is involved in and that the Complainant does not exist in any of the Respondent’s industries, while the Respondent has existed for years, more than half a decade, and before most of the Complainant’s filings with the U.S. Patent and Trademark Office. The Respondent further asserts that if the Complainant had a legitimate interest in providing hosting services, then the Complainant would have gotten its executives to begin communications regarding the Respondent’s hosting services.

6. Discussion and Findings

Paragraph 4(a) of the Policy states that the domain name holder is to submit to a mandatory administrative proceeding in the event that a third party (complainant) asserts to an ICANN-approved dispute resolution service provider 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 domain name holder 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 Panel can rule in a complainant’s favor only after the complainant has proven that the above-listed elements are present.

A. Identical or Confusingly Similar

Under Paragraph 4(a)(i) of the Policy, the Complainant is required to establish that the Domain Name is identical or confusingly similar to a trademark in which the Complainant has rights. The Panel finds that the Complainant has provided sufficient evidence to establish that it is the owner of and has rights in the mark COSTCO and variations thereof.

A review of the second-level domain of the Domain Name shows that the domain comprises the Complainant’s well-known mark COSTCO as a prefix and the word “hosting.” A review of the Complainant’s trademark registrations used in connection with a wide variety of goods and services, including services directed to telecommunications, computers and the Internet, clearly shows that the word “hosting” can be viewed as being associated with the Complainant. Furthermore, the idea suggested by the Domain Name, in view of the Complainant’s many registered marks and long-time use thereof, is that any possible services or goods offered in association with the Domain Name and any possible site associated with the Domain Name are authorized by or affiliated with the Complainant. In addition, the Complainant offers a new service for website hosting and design through a website operated by an authorized affiliate. Based upon these findings and the evidence submitted, the Panel concludes that the Domain Name is confusingly similar to the Complainant’s mark COSTCO and that Paragraph 4(a)(i) has been satisfied.

B. Rights or Legitimate Interests

Paragraph 4(c) of the Policy sets out circumstances, in particular but without limitation, which, if found by the Panel to be proven based on her evaluation of all of the evidence presented, can demonstrate the holder’s rights to or legitimate interests in the Domain Name. These circumstances include:

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

(iii) the domain name holder 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 trademark or service mark at issue.

No evidence has been presented that, before any notice to the Respondent of this dispute, the Respondent had been using or was making demonstrable preparations to use the Domain Name in connection with any type of bona fide offering of goods or services. Rather the evidence submitted shows that the mark COSTCO was well-known at the time of the Respondent’s registration of the Domain Name, that the Complainant is known for telecommunications, computer and Internet services and that the Respondent registered the Domain Name and is using the Domain Name to direct Internet users to its own website entitled “Web Hosting Wholesale” where web hosting services are being offered for apparent commercial gain. Based upon the evidence submitted, the Respondent’s use cannot constitute a bona fide offering of goods or services. Nor can such apparent commercial use constitute a legitimate noncommercial or fair use of the Domain Name. Moreover, the Respondent has presented no evidence of having any trademark rights in the Domain Name or any portion thereof or being commonly known by the Domain Name or any portion thereof as an individual, business or other organization. The Panel therefore finds that the Respondent has no rights or legitimate interests in the Domain Name and that Paragraph 4(a)(ii) of the Policy has been satisfied.

C. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy states that evidence of registration and use in bad faith by the holder includes, but is not limited to:

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

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

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

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

Based upon the evidence submitted, the Panel finds that the Respondent had knowledge of the Complainant’s mark COSTCO and its rights therein at the time the Respondent registered the Domain Name. This finding is supported by the evidence showing that: (i) the Complainant’s mark COSTCO has a strong reputation and is widely known; (ii) the Complainant owns many trademark registrations used in connection with a wide variety of goods and services, including services directed to telecommunications, computers and the Internet; (iii) the Domain Name comprises the Complainant’s mark COSTCO and the word “hosting” which is descriptive of services of several of the Complainant’s many registrations for the mark COSTCO as well as variations thereof; (iv) the Domain Name was registered well after the first use in commerce by the Complainant of its COSTCO mark; and (v) the Complainant offers a new service for website hosting and design through a website operated by an authorized affiliate. Along with the above finding that the Respondent has no rights or legitimate interests in the Domain Name, the Panel finds that the Respondent registered the Domain Name in bad faith.

The Complainant has further asserted that the Respondent acquired the Domain Name in bad faith primarily for the purpose of diverting Internet users looking for the Complainant to the Respondent’s site for its own commercial benefit and to disrupt the Complainant’s business. To support these assertions, the Complainant has provided evidence of web pages from the Respondent’s website accessible at the Domain Name and the Respondent’s e-mail in reply to the Complainant notifying the Respondent of its unauthorized registration and use of the Domain Name. Based upon the above findings and evidence submitted, the Panel concludes that the Respondent registered and is using the Domain Name to intentionally attempt to attract for commercial gain Internet users to its website by creating a likelihood of confusion with the Complainant’s mark as to the source, sponsorship, affiliation or endorsement of the Respondent’s site or of a product or service on the Respondent’s site. The Panel also finds that the Respondent registered and is using the Domain Name to create initial interest confusion among Internet users who visit the Respondent’s site as to the source, sponsorship, affiliation or endorsement of the site and the products and services offered on the site for its own apparent commercial gain.

Based upon such findings and evidence, the Panel finds that Paragraph 4(a)(iii) of the Policy has been satisfied in that the Respondent has registered and is using the Domain Name in bad faith.

7. Decision

The Panel concludes that: (i) the Domain Name is confusingly similar to the Complainant’s mark COSTCO; (ii) the Respondent has no rights or legitimate interests in the Domain Name; and (iii) the Respondent registered and is using the Domain Name in bad faith. The Panel, therefore, requires that the registration of the domain name <costcohosting.com> be transferred to the Complainant, Costco Wholesale Membership, Inc.

Marylee Jenkins
Sole Panelist

Dated: September 10, 2004