WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Corporation, Costco Wholesale Membership, Inc. v. Kwang W. Choi

Case No. D2010-0854

1. The Parties

The Complainants are Costco Wholesale Corporation and Costco Wholesale Membership, Inc. of Issaquah, Washington, United States of America (together the “Complainants” or “Costco”), represented by Law Office of Mark J. Nielsen, United States of America.

The Respondent is Kwang W. Choi of Los Angeles, California, United States of America and Daejeon, Republic of Korea.

2. The Domain Names and Registrar

The disputed domain names <babycostco.com> and <familycostco.com> are registered with Netpia.com Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on May 27, 2010. On May 27, 2010, the Center transmitted by email to Netpia.com, Inc. a request for registrar verification in connection with the disputed domain names. On May 28, 2010, Netpia.com. Inc. transmitted by email to the Center its verification response, confirming that the Respondent is listed as the registrant of the disputed domain names and providing contact details for the Registrant. 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”).

Based on Netpia.com, Inc.'s confirmation that the language of the registration agreement for the disputed domain names is Korean, the Center on May 28, 2010 issued a Language of Proceeding notification, inviting comment from the parties. The Complainant submitted a request that English be the language of the proceeding on May 30, 2010. The Respondent did not respond to the Center's Language of Proceeding notification. On June 3, 2010, the Center notified the parties of its preliminary decision to 1) accept the Complaint as filed in English; 2) accept a Response in either Korean or English; and 3_ appoint a panel familiar with both languages mentioned above, if available and also advised the parties that in accordance with paragraph 11 of the Rules, the Panel has the authority to determination the language of the proceeding.

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 June 3, 2010. In accordance with the Rules, paragraph 5(a), the due date for Response was June 23, 2010. The Respondent did not submit any response. Accordingly, the Center notified the Respondent's default on June 24, 2010.

The Center appointed Thomas P. Pinansky as the sole panelist in this matter on July 12, 2010. 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

The Complainants have operated under the Costco name since 1983. The Complainants sell a wide range of merchandise, including without limitation, a variety of infant care products and other family-oriented products, both through their stores and online.

In 1985, the Complainants obtained the first United States trademark registration for COSTCO and since then, the Complainants and related entities have expanded and now maintain a large portfolio of COSTCO trademark registrations in the United States and many other countries. (See Complaint, Exhibits D & E).

The Complainants currently operate seven stores in the Republic of Korea (“Korea”) and opened their first store in Yangpyung in 1994. Currently, there are over one million authorized Costco cardholders in Korea.

The disputed domain names were registered to Kwang W. Choi. According to the “WhoIs” record, the domain name <babycostco.com> was registered sometime on or around December 9, 2006 and the domain name <familycostco.com> was registered sometime on or around November 15, 2007.

The disputed domain name <babycostco.com> currently resolves to a retail web site at “www.babycostco.com,” which offers for sale a broad range of infant care products and the disputed domain name <familycostco.com> currently resolves to a web site at “www.honaminside.com,” which describes a Korean province and prominently displays links to many commercial web sites.

5. Parties' Contentions

A. Complainants

The Complainants allege that the disputed domain names are confusingly similar to the Complainants' COSTCO trademarks, because they consist of the Complainants' well-known registered trademark COSTCO together with the common terms “baby” and “family.”

The Complainants submit that the Respondent has no legitimate interest in the disputed domain names, has not used the disputed domain names in connection with a bona fide offering of goods or services, owns no trademark registrations for the disputed domain names or any portion thereof, and has not been commonly known by the disputed domain names or any portion thereof. Further, the Complainants have not licensed or otherwise permitted the Respondent to use their marks or the disputed domain names.

The Complainants contend that the Respondent registered the disputed domain names many years after the COSTCO trademark had become famous. Because of the notoriety of the COSTCO trademark, the Respondent, say the Complainants, must have been aware of the Complainants' rights in the COSTCO trademark at the time the disputed domain names were registered. Further, the Respondent's registration of the disputed domain names was done in bad faith because it had no legitimate right or business interest in any COSTCO-formative domain name.

In addition, the Respondent continues to use the disputed domain names to divert Internet users looking for the Complainants' web sites to the Respondent's own web sites for the Respondent's own commercial benefit. The Respondent's use of the disputed domain names to divert Internet users to its web sites also unfairly associates the famous COSTCO trademark with the Respondent's business operations at “www.babycostco.com” as well as “www.honaminside.com” and thereby deceives Internet users as to an implicit association between the Complainants and the Respondent. The Complainants say that the Respondent's use of the disputed domain names confuses and deceives Internet users, damages the Complainants' business and reputation, and provides an illicit commercial benefit to the Respondent by trading on the Complainants' reputation and goodwill. Lastly, claim the Complainants, the Respondent does not use the disputed domain names in any legitimate, good faith manner, and there is no legitimate, good faith use of the disputed domain names possible by the Respondent.

B. Respondent

The Respondent did not reply to the Complainants' contentions.

6. Discussion and Findings

A. Selection of Language

The Complainant was filed in the English language. It is noted that the language of the registration agreement for the disputed domain names is Korean.

According to paragraph 11 of the Rules, the language of the administrative proceeding shall be the language of the registration agreement unless the Panel decides otherwise. The spirit of paragraph 11 is to ensure fairness in the selection of language by giving full consideration to the parties' level of comfort with each language, the expenses to be incurred and the possibility of delay in the proceeding in the event translations are required and other relevant factors.

In the present case, although the registration agreement for the disputed domain names was made in the Korean language, it appears that the Respondent is located in Los Angeles, California, United States of America as confirmed by Netpia.com, Inc. for the domain name <babycostco.com> registration. Moreover, both of the disputed domain names consist of English words “baby” and “family” combined with the Complainants' trademark. It is also noteworthy that the Center in preliminary deciding to proceed with acceptance of the Complaint in English nevertheless communicated with the parties in both English and Korean, indicated that it would accept a Response in either English or Korean and that it would (and has) appointed a panel familiar with both English and Korean.

On the other hand, the Complainants do not appear to be able to communicate in Korean and therefore, if the Complainants were to have the documents submitted translated into Korean, the administrative proceeding would be unduly delayed and the Complainants would have to incur substantial expenses for translation. Therefore, in consideration of the above circumstances and in the interest of fairness to both parties, the Panel hereby decides, under paragraph 11 of the Rules, that English shall be the language of the proceeding in this case. See Deutsche Messe AG v. Kim Hyungho, WIPO Case No. D2003-0679.

B. Substantive Elements of the Policy

Paragraph 4(a) of the Policy requires the Complainants to prove each and all of the following three elements in order to prevail in these proceedings:

(i) the disputed domain names are identical or confusingly similar to a trademark or service mark in which the Complainants have rights;

(ii) the Respondent has no rights or legitimate interests in respect of the disputed domain names; and

(iii) the disputed domain names have been registered and are 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,” and under paragraph 14(b) the Panel shall “draw such inferences therefrom as it considers appropriate.”

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

C. Identical or Confusingly Similar

Previous UDRP panels have held that the addition of common terms to a registered trademark and registration of the result as a domain name does not necessarily mitigate the confusing similarity between the domain name and the included mark (EAuto, L.L.C. v. Triple S. Auto Partsd/b/a Kung Fu Yea Enterprises, Inc., WIPO Case No. D2000-0047 and Parfums Christian Dior v. 1 Netpower, Inc., WIPO Case No. D2000-0022).

In fact, previous panel decisions have applied this reasoning to trademarks registered by the Complainants: Costco Wholesale Corporation, Costco Wholesale Membership. Inc. v. Windsurfing Direct Limited, WIPO Case No. D2010-0505; Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Yur Bar, WIPO Case No. D2009-1414; Costco Wholesale Corporation and Costco Wholesale Membership Inc. v. Nathniel Ho / EDF RTD, WIPO Case No. D2009-0782; Costco Wholesale Corporation, Costco Wholesale Membership, Inc. v. Cindy Chau, WIPO Case No. D2008-1283; Costco Wholesale Membership Inc. and Costco Wholesale Corporation v. Almantas Kakareka and Hostmaster Oneandone, 1&1 Internet, Inc., WIPO Case No. D2007-1833; Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Jogn Dinway/Hosting Media, WIPO Case No. D2007-1426; Costco Wholesale Corporation and Costco Wholesale Membership Inc. v. Yezican Industries and Domains By Proxy, Inc., WIPO Case No. D2007-0638; Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Yong Li, WIPO Case No. D2004-0296; and Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Henry Chan, WIPO Case No. D2004-0218.

This Panel therefore finds that the addition within the disputed domain names of the common dictionary terms “baby” and “family” do not mitigate the confusing similarity of the domain names to the Complainants' trademark and other rights in COSTCO.

Accordingly, the Panel finds that the Complainants have established element 4(a)(i) of the Policy.

D. Rights or Legitimate Interests

Guidance in relation to establishing rights or legitimate interests is provided in paragraph 4(c) of the Policy. Three circumstances are identified: (i) bona fide prior use; (ii) common association with the domain name; and (iii) legitimate non commercial use. The Complainants have made a prima facie case that the first two circumstances do not apply. The Respondent did not exercise its right to respond in these proceedings, and, thus, has failed to rebut the prima facie case made by the Complainants (or advance any other argument supporting rights or legitimate interests) (see, among others, LEGO Juris A/S v. Chung Hong Phil, WIPO Case No. D2009-1288; Universal City Studios, Inc. v. David Burns and Adam-12 Dot Com, WIPO Case No. D2001-0784; see also International Hospitality Management - IHM S.p.A. v. Enrico Callegari Ecostudio, WIPO Case No. D2002-0683). The Panel finds that the third circumstance does not apply, as the disputed domain names have been used commercially.

Accordingly, the Panel finds that the Complainants have established element 4(a)(ii) of the Policy.

E. Registered and Used in Bad Faith

Guidance regarding establishing bad faith is provided in paragraph 4(b) of the Policy. Four (non-exhaustive) circumstances are identified where the respondent's intention in registering a domain name may provide evidence of bad faith. These intentions may be summarized as follows: (i) to sell the domain name to the rights-holder at a profit; (ii) to prevent the rights holder registering a domain name; (iii) to disrupt the business of a competitor; and (iv) to divert Internet traffic. The Complainants refer primarily to the latter two circumstances. The Respondent has not submitted any counter-arguments.

Given the fame of the Complainants' marks, including in Korea and with Korean consumers, bad faith can be presumed such that the Respondent was aware or should have been aware of the Complainant's well-known marks and claims of rights thereto. Furthermore, any trademark check of the records of the patent and trademark offices in various jurisdictions would have made the Complainant's registration known to the Respondent. The Panel therefore finds that the Respondent intentionally attempted to attract, for commercial gain, Internet users to its web sites (and hence divert Internet traffic) by creating a likelihood of confusion with the Complainants' marks.

Accordingly, the Panel finds that the Complainants have established element 4(a)(iii) of the Policy.

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 names <babycostco.com> and <familycostco.com> be transferred as requested to the Complainant Costco Wholesale Membership, Inc.

Thomas P. Pinansky
Sole Panelist

Dated: July 21, 2010