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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Membership Inc. and Costco Wholesale Corporation v. Almantas Kakareka and Hostmaster Oneandone, 1&1 Internet, Inc.

Case No. D2007-1833

1. The Parties

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

Respondents are Almantas Kakareka, and Hostmaster Oneandone, 1&1 Internet, Inc., both of United States of America.

2. The Domain Name and Registrar

The disputed domain name <costcofeedback.com> (“Domain Name”) is registered with Schlund + Partner AG.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on December 11, 2007. On December 13, 2007, the Center transmitted by email to Schlund + Partner a request for registrar verification in connection with the domain name at issue.

On December 13, 2007, Schlund + Partner, transmitted by email to the Center its verification response disclosing registrant and contact information for the disputed Domain Name which differed from the named Respondent and contact information in the Complaint. On December 17, 2007, the Center sent an email communication to Complainants providing the registrant and contact information disclosed by the Registrar and inviting Complainants to submit an amendment to the Complaint. Complainants filed an amendment to the Complaint on December 18, 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 Respondents of the Complaint, and the proceedings commenced on December 28, 2007. In accordance with the Rules, paragraph 5(a), the due date for Response was January 17, 2008. Respondents did not submit a response. Accordingly, the Center notified Respondents’ default on January 21, 2008.

The Center appointed John R. Keys, Jr. as the sole panelist in this matter on January 28, 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

Complainants operate over 520 warehouse club merchandizing stores around the world, including 388 Costco stores in the United States of America. Costco is a large, well-known retailer in the United States of America with over $61 billion in sales in 2007. The company’s stock is publicly traded.

Complainants own numerous registrations for the trade and service marks COSTCO, COSTCO WHOLESALE & Design, and COSTCO.COM. The marks relate to retail and wholesale services covering a broad range of consumer goods and services.

The earliest registration of the COSTCO mark, No. 1,318,685, is dated February 5, 1985. There are some 27 COSTCO registrations in the United States of America dated from 1985 through October 30, 2007 (see No. 3,324,704) and another 12 registrations for COSTCO WHOLESALE dated from September 1, 1998 (No. 2,186,805) through August 19, 2003 (No. 2,752,119). Complainants have two registrations for COSTCO.COM, No. 2,440,636, dated April 3, 2001, and No. 2,545,922, dated March 12, 2002, and some 18 other USPTO registrations of various formative marks using the word “costco”.

Respondents registered the Domain Name, <costcofeedback.com>, on February 3, 2007. All but one of Complainants’ marks registered in the United States of America were registered prior to the date on which Respondents registered the Domain Name.

Respondents’ Domain Name resolves to a forum hosting website located at a different domain name, <big-forum.com>, which includes “porn” forums and features at the top of the home page a drawing of a nude woman and advertisements and links for porn websites.

5. Parties’ Contentions

A. Complainant

The Domain Name is Confusingly Similar to Complainants’ Trademarks

Complainants contend that they have been operating membership warehouse club merchandizing stores under the COSTCO trademark and trade name since 1983. Complaints contend further that they own established legal rights in the COSTCO trade and service mark and that the mark, which is a coined name, is famous in connection with the sale of brand name and high quality private label merchandise at low prices in no-frills warehouse-style stores.

Complainants contend that the Domain Name is confusingly similar to its registered and famous COSTCO trademark. The addition of the common term “feedback” to the registered mark does not mitigate the confusing similarity between the Domain Name and Complainants’ trademark. Use of the word “feedback” in fact exacerbates the likelihood of confusion because it suggests the site is a place for Costco customers to provide feedback to the company, which it is not, thus rendering the Domain Name deceptive.

Respondents Have No Legitimate Interests in the Domain Name

Complainants contend that Respondents have no legitimate interests in the Domain Name. Costco has not licensed or otherwise permitted Respondents to use their trademarks or the Domain Name.

Complainants contend that Respondents are not using the Domain Name in connection with a bona fide offering of goods or services. Respondents registered and are using the Domain Name to divert Internet traffic to their website, evidencing a clear intent to disrupt Complainants’ business, deceive consumers, and trade on Complainants’ goodwill by creating an unauthorized association between Respondents and the COSTCO trademarks.

Registration and Use in Bad Faith

Complainants contend that Respondents registered and are using the Domain Name in bad faith.

Respondents registered the Domain Name on February 3, 2007, long after Complainants began using and registered their trademarks and after those marks had become famous. Respondents, Complainants contend, must have been aware of Complainants’ rights in their COSTCO mark when Respondents used “costco” in registering the Domain Name and used it to divert traffic to their own website. This evidences bad faith.

Complainants contend that Respondents also acted in bad faith by registering the Domain Name with the intent to disrupt Costco’s business by diverting Internet traffic away from Complainants and exposing Internet users seeking a Costco website to pornographic images and advertisements.

Complainants further note that use of the Domain Name is unnecessary to the operation of Respondents’ website which is actually located at the website, “www.BIG-Forum.com”. Thus, the sole purpose of the Domain Name is to provide an alternative means of driving Internet traffic to Respondents’ website, “www.BIG-Forum.com”site.

Complainants contend further that Respondents have “intentionally attempted to attract, for commercial gain, Internet users to [their] website . . . by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation or endorsement of [its] website or location or of a product or service on [its] website”. Respondents’ only conceivable business purpose in registering the Domain Name was to profit from the diversion of Internet traffic to Respondents’ website.

Such use of the Domain Name, Complainants contend, also constitutes bad faith use. The diversion of Internet users from Costco to Respondents’ website, which includes pornographic materials and advertisements, provides commercial benefit to Respondents, confuses and deceives Internet users, damages Costco’s business, and trades unlawfully on Costco’s reputation and goodwill.

Finally, Complainants contend that Respondents do 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 Respondents.

B. Respondents

Respondents did not reply to Complainants’ contentions.

6. Discussion and Findings

Respondents did not respond to the Complaint, therefore the Panel first considers whether Respondents have been given adequate notice of the proceeding. The evidence indicates the Center sent the Complaint in electronic form, by facsimile, and in hard copy by courier service to the addresses provided in Respondent’s registration information, and it appears that the Complaint was in fact delivered. The Panel concludes that the Center discharged its responsibility under the Rules to notify Respondents of the Complaint and the administrative proceeding.

Where a respondent does not respond to the complaint, the panel must decide the dispute based upon the complaint, Rules, paragraphs 5(e) and 14(a). The panel is to decide the complaint on the basis of the statements and documents submitted, in accordance with the Policy, the Rules and any principles of law the panel deems applicable, Rules, paragraph 15(a). Under paragraph 14(b) of the Rules, Respondents’ failure to answer entitles the Panel to “draw such inferences therefrom as it considers appropriate”.

Under paragraph 4(a) of the Policy, Complainant must prove each of the following three elements of its case in order to obtain the requested relief:

(i) Respondents’ Domain Name is identical or confusingly similar to a trademark or service mark in which Complainants have rights;

(ii) Respondents have no rights or legitimate interests in respect of the Domain Name; and

(iii) Respondents’ Domain Name was registered and is being used in bad faith.

The Panel considers each element in order.

A. Identical or Confusingly Similar

Complainants clearly possess legal rights in the COSTCO trademarks by reason of their longstanding and extensive use of the marks in commerce, by registrations of the marks in the United States of America on the Principal Register of the USPTO, and by registration of the marks in other countries. See Costco Wholesale Membership, Inc., Costco Wholesale Corporation v. Jogn Dinway/Hosting Media, WIPO Case No. D2007-1426; Costco Wholesale Membership, Inc., Costco Wholesale Corporation v. Henry Chan, WIPO Case No. D2004-0218; Uniroyal Engineered Products, Inc. v. Nauga Network Services, WIPO Case No. D2000-0503.

The Panel finds that the Domain Name, <costcofeedback.com>, is confusingly similar to Complainants’ COSTCO trademarks.

First, the Domain Name incorporates Complainants’ trademark in its entirety with correct spelling. Complainant’s trademark and the distinctive, dominant component of the Domain Name are the same.

Second, the addition to Complainants’ trademark of the generic or descriptive word “feedback” does not obviate the likelihood of confusion. “Generally, a user of a mark may not avoid likely confusion by appropriating another’s entire mark and adding descriptive or non-distinctive matter to it.” 3 J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competition § 23:50 (4^th ed. 2005). See General Electric Company v. CPIC NET and Hussain Syed, WIPO Case No. D2001-0087; Eastman Chemical Company. v. Manila Industries, Inc., NAF Case No. FA 450806; Pioneer Hi-Bred International, Inc. v. Manila Industries, Inc., NAF Case No. FA 444468. The principle that likelihood of confusing similarity cannot be avoided by the addition of descriptive content has been found to include the addition of entire words to a famous trademark. See The Coca-Cola Company v. Gamlebyen Invest AS, WIPO Case No. D2000-1677 (“Coca Cola” and “cocacoladrinks” held confusingly similar); America Online, Inc. v. Anson Chan, WIPO Case No. D2001-0004, citing Sporty’s Farm LLC. v. Sportsman’s Market. Inc., 202 F. 3d 489, 497-98 (2d. Cir. 2000); Yahoo! Inc. v. CPIC NET and Syed Hussain, WIPO Case No. D2001-0195; America Online, Inc., v. Yeteck Communication, Inc., WIPO Case No. D2001-0055.

In addition, a number of previous WIPO UDRP panels have found specifically that the addition of such 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 (<costcofurniture.com> and <costcohome.com> found confusingly similar to COSTCO mark); Costco Wholesale Membership, Inc., Costco Wholesale Corporation v. Yong Li, WIPO Case No. D2004-0296 (descriptive term “tires” in <costcotires.com> does not mitigate confusing similarity); Costco Wholesale Membership, Inc., Costco Wholesale Corporation v. Jogn Dinway/Hosting Media, WIPO Case No. D2007-1426.

Here, the addition of the word “feedback” to Complainants’ COSTCO mark strongly suggests a website 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. See Costco Wholesale Membership, Inc., Costco Wholesale Corporation v. Yong Li, WIPO Case No. D2004-0296 (descriptive term “tires” in <costcotires.com> increases confusion); Media West-GSI, Inc., Gannett Satellite Information Network, Inc., and Gannett Co., Inc. v. Cupcake City and null John Zuccarini a/k/a John Zuccarini, WIPO Case No. D2001-0235 (addition of “sports” and “weather” to name of newspaper caused confusion); Capital Broadcasting Company, Inc. v. Private, WIPO Case No. D2000-1609 (addition of “weather” heightened confusion with television call letter mark).

Complainants have established confusing similarity of the Domain Name and Complainants’ trademarks, the first element of their case.

B. Rights or Legitimate Interests

Complainants make a sufficient prima facie case that Respondents possess no rights or legitimate interests in the Domain Name. Respondents have no apparent connection to Complainants, and Complainants have not authorized Respondents to use the trademarks in the Domain Name or in any other way.

Further, the evidence shows that Respondents are not using the Domain Name in connection with a bona fide offering of goods or services. The evidence on record demonstrates that Respondents are using the COSTCO name and trademark intentionally to divert Internet traffic from Complainants to a website, “www.BIG-Forum.com”, which has nothing to do with Complainants, their stores, or their business. Respondents are thus creating a false impression of association or sponsorship between Complainants and Respondents’ website which is deceptive to the Internet user and presumptively harmful to Complainants’ reputation and goodwill. This cannot be considered a bona fide offering of services by Respondents. See Sanrio Company Ltd v. Neric Lau, WIPO Case No. D2000-0172 (interests in the domain name not legitimate where there is no authorized association with trademark owner); Telstra Corporation v. Nuclear Marshmallows, WIPO Case No. D2000-0003.

Respondents, in default here, come forward with no evidence of their own to counter Complainants’ prima facie case and have not, therefore, established that they have rights or legitimate interests in the Domain Name.

Complainants have established that Respondents have no rights or legitimate interests in the Domain Name, the second element of their case.

C. Registered and Used in Bad Faith

Based upon the multiple registrations and fame of the COSTO trademarks, the Panel finds that Respondents had actual and constructive knowledge of the marks when they registered the Domain Name. See 15 U.S.C. § 1072; Cellular One Group v. Paul Brien, WIPO Case No. D2000-0028 (Respondent had prior constructive or actual knowledge of Complainant’s trademark because the mark was registered); Waterman, S.A.S. v. Brian Art, WIPO Case No. D2005-0340 (finding bad faith registration and noting that complainant’s mark was well-known); Marconi Data Systems, Inc. v. IRG Coins and Ink Source, Inc., WIPO Case No. D2000-0090 (registration of a mark puts a respondent on constructive notice); Microsoft Corporation v. Party Night, Inc. d/b/a/ Peter Carrington, WIPO Case No. D2003-0501 (“It is not reasonable to expect the Respondent to register the disputed Domain Names if the Respondent had no knowledge of the Complainant’s trademark and services in connection thereto”). Prior WIPO UDRP panels have held that actual or constructive knowledge of complainant’s rights in trademarks is a factor indicating bad faith registration. Ticketmaster Corporation v. Spider Web Design, Inc., WIPO Case No. D2000-1551); The Channel Tunnel Group Ltd. v. John Powell, WIPO Case No. D2000-0038.

Substantial authority exists to the effect that registration of a domain name that is confusingly similar to a famous trademark by any entity that has no relationship to that mark is itself sufficient evidence of bad faith registration and use. Sporty’s Farm L.L.C. v. Sportsman’s Market, Inc., 202 F.3d 489, 498 (2d Cir. 2000); Pepperdine University v. BDC Partners, Inc., WIPO Case No. D2006-1003; Veuve Clicquot Ponsardin, Maison Fondйe en 1772 v. The Polygenix Group Co., WIPO Case No. D2000-0163 (use of a name connected with such a well-known product by someone with no connection with the product suggests opportunistic bad faith). The Panel finds that Respondents registered the Domain Name, which is confusingly similar to famous trademarks belonging to Complainants, with actual and constructive knowledge of Complainants’ rights in the marks and that, as discussed above, Respondents have no demonstrated relationship to or legitimate interest in any of Complainants’ marks. The Panel thus concludes that Respondents registered the Domain Name in bad faith.

Having reached this conclusion, it is unnecessary for the Panel to determine whether, as Complainants contend, Respondents’ purpose was to disrupt the business of a competitor, which seems a problematic argument here.

With regard to the issue of bad faith use, the Policy provides that bad faith exists, inter alia, where the respondent “has intentionally attempted 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 [its] website or location or of a product or service on their website or location”. Policy, paragraph 4(b)(iv). In the present case, this appears clearly to be what Respondents are doing. Respondents are using the COSTCO mark, trading on its established goodwill, to attract and divert Internet users to Respondents’ website by creating a false impression that the site is affiliated with or sponsored by Costco. The fact that the website contains advertising, from which Respondents likely benefit, supports the inference that the purpose of Respondents’ diversion of traffic from Complainants to themselves is Respondents’ own commercial gain. See Ticketmaster Corporation v. Yong Li, WIPO Case No. D2003-0905; Costco Wholesale Membership, Inc., Costco Wholesale Corporation v. Henry Chan, WIPO Case No. D2004-0218; Costco Wholesale Membership, Inc., Costco Wholesale Corporation v. Yong Li, WIPO Case No. D2004-0296. The fact that Respondents’ website features pornographic material and may thus damage or detract from Complainants’ reputation and goodwill only strengthens the conclusion that Respondents’ actions constitute bad faith use of the Domain Name. Costco Wholesale Membership, Inc., Costco Wholesale Corporation v. Jogn Dinway/Hosting Media, WIPO Case No. D2007-1426; Angus Sholto-Douglas, Kwandwe Private Game Reserve v. Sergey Fedorov, WIPO Case No. D2006-1184.

Complainants have established bad faith registration and use of the Domain Name, the third and final element of their case.

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, <costcofeedback.com>, be transferred to Complainants.

John R. Keys, Jr.
Sole Panelist

Dated: February 11, 2008