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WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Corporation and Costco Wholesale Membership Inc. v. Nathniel Ho / EDF RTD

Case No. D2009-0782

1. The Parties

Complainants are Costco Wholesale Corporation and Costco Wholesale Membership Inc. ("Complainant"), of Issaquah, Washington, United States of America ("United States" or "U.S.") represented by Law Office of Mark J. Nielsen, United States.

Respondent is Nathniel Ho / EDF RTD, of London, United Kingdom of Great Britain and Northern Ireland ("UK").

2. The Domain Name and Registrar

The disputed domain name <costco-drugs.com> is registered with eNom.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on June 12, 2009. On June 15, 2009, the Center transmitted by email to eNom a request for registrar verification in connection with the disputed domain name. On June 16, 2009, eNom transmitted by email to the Center its verification response disclosing the registrant and contact information for the disputed domain name which differed from the named Respondent and contact information in the Complaint. The Center sent an email communication to Complainant on June 18, 2009 providing the registrant and contact information disclosed by the Registrar, and inviting Complainant to submit an amendment to the Complaint. On June 18, 2009, eNom transmitted by email to the Center its verification response disclosing a new registrant and contact information for the disputed domain name which differed from the named Respondent and contact information in the Complaint. The Center after receiving the corresponding confirmation from eNom, Inc., sent another email communication to Complainant on June 23, 2009 providing the new registrant and contact information disclosed by the Registrar, and inviting Complainant to submit an amendment to the Complaint. Complainant filed an amendment to the Complaint on June 24, 2009. 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" 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 Respondent of the Complaint, and the proceedings commenced on July 1, 2009. In accordance with the Rules, paragraph 5(a), the due date for Response was July 21, 2009. Respondent did not submit any response. Accordingly, the Center notified the Respondent`s default on July 23, 2009.

The Center appointed Ross Carson as the sole panelist in this matter on August 4, 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.

4. Factual Background

Complainant has operated membership warehouse stores under the COSTCO trademark and trade name since 1983. Complainant currently operates over 555 warehouse stores worldwide, including over 407 COSTCO warehouse stores in the United States and Puerto Rico and over 148 in Republic of Korea, Japan, Taiwan, Province of China, Canada, Mexico, and the United Kingdom of Great Britain and Northern Ireland. Complainant has more than 57 million authorized cardholders worldwide and more than 40 million authorized cardholders in the United States. Complainant is one of the largest and best-known retailers in the United States, with over USD 70 billion in sales in fiscal year 2008. Complainant`s stock has been publicly traded since 1985. Complainant is the twenty-ninth largest company and the fifth largest retailer in the Fortune 500. As a result of its size and notoriety, Complainant has been the subject of regular news and feature coverage in all types of media. The COSTCO trademark has become well-known for the sale of brand name and high quality private label merchandise at low prices in no-frills warehouse-style stores.

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. Complainant obtained its first U.S. 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 including the UK. Complainant has received numerous trademark registrations from the United States Patent and Trademark Office for various marks that include the word COSTCO. Among the COSTCO registrations, the following are some of Complainant`s registrations that cover Complainant`s pharmacy services and its retail and wholesale store services (including the sale of pharmaceuticals and personal care products) in the United States.

Mark Filing Date Registration No.

COSTCO March 20, 1995 1,976,242

COSTCO WHOLESALE

& Design March 5, 1997 2,244,972

COSTCO.COM January 18, 2000 2,440,636

COSTCO (stylized) March 24, 2000 2,481,924

Complainant`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.

Complainant 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 Complainant itself, but many of them are provided by third parties carefully selected by Complainant and authorized by Complainant to provide services to COSTCO cardholders in association with the COSTCO trademark. Complainant provides information about these services in its warehouse stores, in Complainant`s monthly publication, The Costco Connection (which has a monthly circulation of over 6 million in the U.S.), and at its "www.costco.com" web site, which provides links to access or apply for these services or obtain information about them.

Complainant owns the <costco.com> domain name and maintains an active presence on the Internet using this domain name as its URL. Complainant offers a wide variety of goods and services (including pharmacy services) through its "www.costco.com" web site. In fiscal year 2008, Complainant`s sales through its "www.costco.com" web site exceeded USD 2 billion. Complainant also operates a retail web site for Canadian shoppers at "www.costco.ca" Complainant`s operations in the United Kingdom, Mexico, Japan, Taiwan, Province of China and 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.

The domain name in dispute was registered by Respondent on July 13, 2008. The domain name in dispute operated by Respondent resolves to a retail web site bearing the name, "www.costco-drugs.com". A wide variety of prescription pharmaceuticals and related consumer products are offered for sale through this web site.

5. Parties` Contentions

A. Complainant

A.1 Identical or Confusingly Similar

Complainant states that as found in paragraph 4 above it is the owner of many trademark registrations throughout the world for or including the trademark COSTCO registered in relation to the services of operation of warehouse stores which offer a wide variety of services including pharmacy services. The trademark has been widely used in many countries throughout the world and is a well known trademark in relation to the services for which it is registered and used.

Complainant submits that Respondent`s <costco-drugs.com> domain name is confusingly similar to Complainant`s registered trademarks for or including COSTCO. The <costco-drugs.com> domain name consists of Complainant`s well-known registered trademark, COSTCO and the common term, "drugs", 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. See Pixtar Investments, Inc. v. Dennis Hoffman, WIPO Case No. D2000-0253 ("the domain name in issue -- <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").

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 Membership Inc., Costco Wholesale Corporation v. Henry Chan, WIPO Case No. D2004-0218 ("the 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("the 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 Dinnia y/ Hosting Media, WIPO Case No. D2007-1426 ("the addition of such terms as "usa" and "info" does not mitigate the confusing similarity between the domain name in dispute [<usacostco.info>] and the COSTCO Trademarks").

A.2 No Rights or Legitimate Interests in respect of the Domain Name

Complainant submits that there is no evidence to suggest that, before any notice to Respondent of the dispute, Respondent made use of the domain name in connection with a bona fide offering of goods or services.

Complainant further states that there is absolutely no evidence that Respondent is or has ever used the domain name in any legitimate noncommercial or fair use basis. There is no evidence that Respondent, as an individual, business, or other organization, has ever been known by the name "Costco" or any name similar thereto.

Complainant states that Respondent is not the licensee of Complainant and is, in no way, authorized to use Complainant`s trademark COSTCO. Furthermore, Respondent is not authorized to market any products or services bearing said trademark, to use or apply for registration of a domain name on behalf of Complainant, to represent the Complainant, or to act on its behalf. Complainant has no affiliation with Respondent other than this action. (See Crédit Industriel et Commercial S.A v. Betjinghongshanhushuizushangmaoyouxiangongsi, WIPO Case No. D2007-1818, (hereinafter the "Beijinghong Case") and Credit Industriel et Commercial S.A. v. XUBO, WIPO Case No. D2006-1268, both finding that these factors are enough to show respondent has no rights or legitimate interests in respect of the domain name).

Complainant further submits that 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. Respondent registered the domain name in dispute and uses it to direct Internet traffic to its web site offering pharmaceuticals for sale. Respondent`s action evidences a clear intent to disrupt Complainant`s business, deceive consumers, and trade off of Complainant`s goodwill by creating an unauthorized association between it and Complainant`s COSTCO trademarks. See Sanrio Co. Ltd. v. Neric Lau, WIPO Case No. D2000-0172 ("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").

A.3 Registration in Bad Faith

Complainant states that Respondent`s choice of the domain name in dispute was not a coincidence. COSTCO is a trademark coined by Costco`s founders in 1983 and lawfully registered and used only by Complainant. Complainant 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 USD 4.1 billion in 1990 to more than USD 70 billion in 2008. Respondent registered the <costco-drugs.com> domain name on July 13, 2008, many years after the COSTCO trademark had become famous. Because of the notoriety of the COSTCO trademark, Respondent must have been aware of Complainant`s rights in the COSTCO trademark when it registered the domain name in dispute and when it put it to use diverting Internet users to its web site. See, The Channel Tunnel Group Ltd. v. John Powell, WIPO Case No. D2000-0038 (prior knowledge of complainant`s registered trademark was a key factor in panel`s finding of bad faith).

Complainant further submits that Respondent`s registration of the domain name in dispute was done in bad faith because it had no legitimate right or business interest in any COSTCO formative domain name. Respondent`s only conceivable business purposes in registering the domain name in dispute was to profit from the diversion of Internet users to its own retail web site unrelated to Costco.

A.4 Used in Bad Faith

Complainant states that Respondent uses the domain name in dispute to divert Internet users looking for COSTCO pharmaceutical services to a retail pharmaceutical web site operated by Respondent for its own commercial benefit. This confuses and deceives Internet users, damages Complainant`s business and reputation, and provides an illicit commercial benefit to Respondent by trading on Complainant`s reputation and goodwill. Respondent`s use of the domain name in dispute for a web site selling prescription pharmaceuticals also puts Complainant`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. Complainant`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 in dispute pursuant to paragraph 4(b)(iv) of the Policy.

Complainant further submits that 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". Policy, paragraph 4(b)(iii). Respondent`s use of the domain name in dispute to divert Internet traffic to a retail web site in direct competition with Complainant proves Respondent`s intention to disrupt Complainant`s business by diverting potential Complainant customers to Respondent`s retail web site.

B. Respondent

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

6. Discussion and Findings

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".

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

(1) 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

(2) the Respondent has no rights or legitimate interests in respect of the domain name; and

(3) the domain name has been registered and is being used in bad faith.

The fact that Respondent did not submit a Response does not automatically result in a decision in favor of the Complainant. The failure of the Respondent to file a Response results in the Panel drawing certain inferences from the Complainant`s evidence. The Panel may accept all reasonable and supported allegations and inferences following there from in the Complaint as true. Charles Jourdan Holding AG v. AAIM, WIPO Case No. D2000-0403.

A. Identical or Confusingly Similar

Pursuant to paragraph 4(a)(i) of the Policy the Complainant must establish rights in a trademark and secondly that the domain name in dispute is identical to or confusingly similar to the trademark in which the Complainant has rights.

Complainant has established that it is registered as the owner of registered trademarks for and including COSTCO registered on the Principal Register in the United States of America in relation to the goods and services described in paragraph 4 above. Complainant is the owner of United States Registration No. 2,440,636 for the trademark COSTCO.COM for a long list of goods and services including "ordering and retail pharmacy services featuring prescription pharmaceutical preparations via online electronic communications". Complainant is also the owner of trademark registrations for or including COSTCO registered in many other countries including the United Kingdom. Complainant`s registered trademarks were registered many years prior to the date of registration of the domain name in dispute on July 13, 2008.

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. Yong Li, WIPO Case No. D2004-0296 (June 9, 2004) ("[I]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.").

The inclusion of the top level domain descriptor ".com" in the domain name in dispute does not affect a finding of confusingly similar. UDRP Panels have repeatedly held that the specific top level of the domain name such as ".org", ".net" or ".com" does not affect the domain name for the purpose of determining whether it is identical or confusingly similar (see Magnum Piering, Inc. v. The Mudjackers and Garwood & Wilson, Sr., WIPO Case No. D2000-1525 holding that confusing similarity under the Policy is decided upon the inclusion of a trademark in the domain name; and Rollerblade, Inc. v. Chris McCrady, WIPO Case No. D2000-0429 finding that the top level of the domain name such as ".net" or ".com" does not affect the domain name for the purpose of determining whether it is identical or confusingly similar).

The domain name in dispute comprised of Complainant`s trademark COSCO in combination with the descriptive term "drugs" and the top level domain descriptor ".com" is confusingly similar to Complainant`s COSTCO trademark.

B. Rights or Legitimate Interests

Pursuant to paragraph 4(a)(ii) of the Policy, Complainant must prove that Respondent has no rights or legitimate interests in respect of the domain name in dispute.

Respondent is not affiliated with Complainant and has never been authorized by Complainant to use Complainant`s registered trademark or any trademarks confusingly similar thereto.

The unauthorized use by Respondent of the domain name in dispute which is confusingly similar with Complainant`s trademark COSTCO in association with the offer of pharmaceuticals online is not a legitimate use of the domain name. The web pages associated with the domain name in dispute <costco-drugs.com> display pharmaceutical products offered for sale online by Respondent in association with the domain name in dispute. Respondent registered the domain name in dispute and uses it to direct Internet traffic to its web site offering pharmaceuticals for sale. Respondent`s action evidences a clear intent to deceive consumers, and trade off of Complainant`s goodwill by creating an unauthorized association between it and Complainant`s COSTCO trademark. See Sanrio Co. Ltd. v. Neric Lau, WIPO Case No. D2000-0172 ("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").

It is difficult for a complainant to prove the negative that a respondent does not have any rights or legitimate interests in a domain name in dispute. Respondent was given the opportunity by way of reply to demonstrate any rights or legitimate interests in the domain name in dispute pursuant to paragraph 4(c) of the Policy. Previous decisions under the UDRP have found it sufficient for a complainant to make a prima facie showing that a respondent does not have any rights or legitimate interests in the domain name in dispute. Once this showing is met, the burden of proof shifts to the respondent to demonstrate its rights or legitimate interests in the disputed domain name. Here, Respondent did not file a Response nor avail itself of the benefits of paragraph 4(c) of the Policy.

The Panel finds that Complainant has proven on a balance of probabilities that Respondent does not have any rights or legitimate interests in the domain name in dispute.

C. Registered and Used in Bad Faith

Pursuant to paragraph 4(a)(iii) of the Policy Complainant must prove that the domain name in dispute has been registered and used in bad faith.

C.1 Domain Name Registered in Bad Faith

COSTCO is a trademark coined by Complainant`s founders in 1983. Complainant received trademark registrations for the COSTCO trademark as early as 1985, and the COSTCO trademark became well-known as its sales grew rapidly from USD 4.1 billion in 1990 to more than USD 70 billion in 2008. Respondent registered the domain name <costco-drugs.com> on July 13, 2008, many years after the COSTCO trademark had become well known in relation to pharmaceuticals.

The domain name at issue, <costco-drugs.com>, consists of Complainant`s registered trademark COSTCO in combination with the generic term "drugs" and the top level domain descriptor ".com". It is difficult to conceive how Respondent could have created the domain name in dispute without prior knowledge of Complainant`s registered trademark for COSTCO. Respondent was invited to file a Response. Respondent`s failure to explain any reason for choosing the domain name <costco-drugs .com> strengthens the Panel`s inference that Respondent registered the domain name in dispute with knowledge of Complainant`s internet pharmaceutical services being offered in association with Complainant`s trademark COSTCO.

The Panel finds that Respondent registered the domain name in dispute in bad faith.

C.2. Domain Name Used in Bad Faith

Complainant is the owner of United States Registration No. 2,440,636 for the trademark COSTCO.COM for a long list of goods and services including "ordering and retail pharmacy services featuring prescription pharmaceutical preparations via online electronic communications". Complainant has used the trademark COSTCO.COM in association with online pharmaceutical services since prior to 1995. Respondent registered the domain name in dispute and uses it to direct Internet traffic to its web site offering pharmaceuticals for sale. Respondent`s action evidences a clear intent to deceive Internet users, and trade off of Complainant`s goodwill by creating an unauthorized association between it and Complainant`s COSTCO trademark.

Respondent is using the confusingly similar domain name <costco-drugs.com> to attract Internet users to Respondent`s web site for commercial gain by creating a likelihood of confusion with Complainant`s trademark as to source, sponsorship, affiliation or endorsement of Respondent`s web site constituting bad faith use under paragraph 4(b)(iv) of the Policy.

The Panel finds that Respondent is using the domain name in dispute 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 domain name <costco-drugs.com> be transferred to Complainant.

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Ross Carson
Sole Panelist

Dated: August 17, 2009