WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Membership Inc. and Costco Wholesale Corporation v. Jack Robertshaw

Case No. D2013-2256

1. The Parties

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

The Respondent is Jack Robertshaw of South Park, Pennsylvania, United States of America.

2. The Domain Name and Registrar

The disputed domain name <betterthancostco.com> is registered with GoDaddy.com, LLC (the “Registar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on December 30, 2013. On December 31, 2013, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On December 31, 2013, the Registrar 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 January 8, 2014. In accordance with the Rules, paragraph 5(a), the due date for Response was January 28, 2014. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on January 29, 2014.

The Center appointed William R. Towns as panelists in this matter on February 10, 2014. 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 (“Costco”) provide warehouse club merchandizing and related services, including operating under the COSTCO trademark over 648 membership warehouse stores worldwide, including 461 such stores in the United States of America. The Complainants have used the COSTCO mark since 1983, and hold numerous U.S. trademark registrations for COSTCO and other COSTCO formative marks. The first of the Complainants’ COSTCO registrations was issued by the United States Patent and Trademark Office (USPTO) in March 1985. Today Costco is a large and well-known retailer, offering a wide range of merchandizing and a variety of services to their more than 70 million members worldwide, and 45 million members in the United States. The Complainants also operate online retail websites, associated with <costco.com> and with other Costco formative domain names.

The disputed domain name <betterthancostco.com> was registered by the Respondent on November 6, 2013, according to relevant information contained in the Registrar’s WhoIs database. The disputed domain name currently is being used to redirect Internet users to a website (“www.us.mall.dubli.com”) owned by DubLi, which operates a membership-based online shopping and entertainment portal (the “DubLi Shopping Mall”). On January 30, 2014, the Center received an email communication from, by all appearances, a representative of DubLi, stating that “it does not own the disputed domain name (<betterthancostco.com>) and did not establish such or approve of such being established.”

5. Parties’ Contentions

A. Complainants

The Complainants assert that Costco¹ is a recognized world leader in warehouse club merchandizing and related services, with membership warehouse stores in the United States and Puerto Rico, Australia, Canada, Japan, Republic of Korea, Mexico, Taiwan Province of China, and the United Kingdom of Great Britain and Northern Ireland. The Complainants have submitted evidence of their ownership of numerous U.S. trademark registrations for COSTCO and other COSTCO formative marks, and state that a wholly owned affiliate owns hundreds of COSTCO trademark registrations in other countries around the world. According to the Complainants, Costco currently is the twenty-second largest company in the Fortune 500, the third largest retailer in the United States, and the seventh largest retailer in the world. The Complainants state that by virtue of its size and notoriety Costco has been the subject of regular news and feature coverage in all types of media. In light of the foregoing, the Complainants submit that the COSTCO mark has become famous for the sale of name brand and high quality private label merchandize at low prices in no-frills warehouse-style stores.

The Complainants submit that the disputed domain name is confusingly similar to the COSTCO mark, as it incorporates the Complainants’ well-known and distinctive mark in its entirety. According to the Complainants, the addition of common words such as “better than” does not mitigate the confusing similarity between the disputed domain name and the Complainants’ COSTCO mark. The Complainants further contend that the Respondent has no rights or legitimate interests in the disputed domain name. The Complainants aver that the Respondent has not been authorized or otherwise permitted by Costco to use the disputed domain name, that the Respondent is not commonly known by the disputed domain name, and that the Respondent is not using the disputed domain name in connection with a bona fide offering of goods or services. To the contrary, the Complainants maintain that the Respondent registered and is using the disputed domain name, which is confusingly similar to the COSTCO mark, to divert Internet users to a competitive, commercial website. According to the Complainants, the Respondent’s action evidences a clear intent to disrupt the Costco’s business, deceive consumers, and trade off of Costco’s goodwill by creating an unauthorized association with the COSTCO trademarks.

The Complainants further submit that, should the Respondent claim that the disputed domain name is merely a form of lawful competitive advertising, the Respondent’s contention is wrong on two counts. First, according to the Complainants, the disputed domain name does not meet the requirement that comparative advertising be truthful and not confusing. Second, the Complainants maintain that UDRP panels have held that the use of another’s well-known trademark in a domain name to divert Internet traffic to websites competitive with or harmful to the mark owner does not qualify as good faith comparative advertising.

In view of all of the foregoing, the Complainants contend that the Respondent registered and is using the disputed domain name in bad faith. The Complainants maintain that the circumstances surrounding the Respondent’s registration and use of the disputed domain name establish bad faith registration and use under paragraph 4(b)(iv) of the Policy, as well as under paragraph 4(b)(iii). The Complainants assert that the Respondent must have been aware of the Complainants’ COSTCO mark when registering the disputed domain name on November 6, 2013, given that the Complainants’ mark had long since become famous. The Complainants observe that Costco’s sales in its fiscal 2013 year were USD 102 billion. The Complainants also note that Costco operates 10 warehouse stores in Pennsylvania, including three (3) stores within 30 miles of the Respondent’s location. In addition, the Complainants rely on constructive notice of their rights arising from numerous U.S. trademark registrations for COSTCO dating back to 1985.

B. Respondent

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

6. Multiple Complainants

Neither the Policy nor the Rules expressly provide for the consolidation of multiple complainants, and generally speak in singular terms of a “complainant” when referring to proceedings under the Policy. See MLB Advanced Media, The Phillies, Padres LP v. OreNet, Inc., WIPO Case No. D2009-0985. A number of UDRP panels nonetheless have concluded that consolidation of multiple complainants in a single complaint is permissible if the complainants have a truly common grievance against a respondent, and it would be equitable and procedurally efficient to do so. See WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”), paragraph 4.16 and panel decisions cited therein.

The Complainants have not expressly requested consolidation, nor discussed the criteria relevant to such a request, other than to note that the Complainants’ interests are co-extensive. The Panel notes that the Complainants are companies within the same corporate group, and that the Complaint clearly sets forth a common grievance against the Respondent affecting the Complainants’ rights and interests in a similar fashion.

In such circumstances the Panel finds it would be both equitable and procedurally efficient to allow the Complainants to proceed with a single Complaint. See Costco Wholesale Corporation, Costco Wholesale Membership, Inc. v. Gerardo Suarez, Medicina Mexico, S.A. De C.V., WIPO Case No. D2013-1811; Costco Wholesale Corporation and Costco Wholesale Membership Inc. v. Yezican Industries and Domains By Proxy, Inc., WIPO Case No. D2007-0638.

The Complainants have jointly requested that the disputed domain name be transferred to the Complainant Costco Wholesale Membership, Inc.

7. Discussion and Findings

A. Scope of the Policy

The Policy is addressed to resolving disputes concerning allegations of abusive domain name registration and use. Milwaukee Electric Tool Corporation v. Bay Verte Machinery, Inc. d/b/a The Power Tool Store, WIPO Case No. D2002-0774. Accordingly, the jurisdiction of this Panel is limited to providing a remedy in cases of “the abusive registration of domain names”, also known as “cybersquatting”. Weber-Stephen Products Co. v. Armitage Hardware, WIPO Case No. D2000-0187. See Final Report of the First WIPO Internet Domain Name Process, April 30, 1999, paragraphs 169-177. The term “cybersquatting” is most frequently used to describe the deliberate, bad faith abusive registration of a domain name in violation of rights in trademarks or service marks. Id. at paragraph 170. Paragraph 15(a) of the Rules provides that the panel shall decide a complaint on the basis of statements and documents submitted and in accordance with the Policy, the Rules and any other rules or principles of law that the panel deems applicable.

Paragraph 4(a) of the Policy requires that the complainant prove each of the following three elements to obtain a decision that a domain name should be either cancelled or transferred:

(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 with respect to the domain name; and

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

Cancellation or transfer of the domain name is the sole remedy provided to the complainant under the Policy, as set forth in paragraph 4(i).

Paragraph 4(b) of the Policy sets forth four situations under which the registration and use of a domain name is deemed to be in bad faith, but does not limit a finding of bad faith to only these situations.

Paragraph 4(c) of the Policy in turn identifies three means through which a respondent may establish rights or legitimate interests in a domain name. Although the complainant bears the ultimate burden of establishing all three elements of paragraph 4(a) of the Policy, UDRP panels have recognized that this could result in the often impossible task of proving a negative, requiring information that is primarily, if not exclusively, within the knowledge of the respondent. Thus, the consensus view is that paragraph 4(c) of the Policy shifts the burden of production to the respondent to come forward with evidence of a right or legitimate interest in the domain name, once the complainant has made a prima facie showing. See, e.g., Document Technologies, Inc. v. International Electronic Communications Inc., WIPO Case No. D2000-0270.

B. Identical or Confusingly Similar

The Panel finds that the disputed domain name <betterthancostco.com> is confusingly similar to the Complainants’ COSTCO mark, in which the Complainants have established rights through registration and use. In considering this issue, the first element of the Policy serves essentially as a standing requirement.² The threshold inquiry under the first element of the Policy is largely framed in terms of whether the trademark and the disputed domain name, when directly compared, are identical or confusingly similar. In this case, the disputed domain name incorporates the Complainants’ mark in its entirety. The addition of the common words “better than” in the Panel’s view does not dispel the confusing similarity of the disputed domain name to the Complainants’ mark. There is ample evidence in the record to support a finding that the COSTCO mark is distinctive and has become well-known to the relevant purchasing public.

Accordingly, the Panel finds the Complainants have satisfied the requirements of paragraph 4(a)(i) of the Policy.

C. Rights or Legitimate Interests

As noted above, once the complainant makes a prima facie showing under paragraph 4(a)(ii) of the Policy, paragraph 4(c) shifts the burden of production to the respondent to come forward with evidence of rights or legitimate interests in a domain name. The Panel is persuaded from the record of this case that a prima facie showing under paragraph 4(a)(ii) of the Policy has been made. It is undisputed that the Respondent has not been authorized to use the Complainants’ COSTCO mark. The disputed domain name, however, incorporates the Complainants’ mark in its entirety, and the Respondent is using the disputed domain name to divert Internet consumers to a commercial website where consumers can shop online for products and services offered by competitors of the Complainants.

Pursuant to paragraph 4(c) of the Policy, a respondent may establish rights or legitimate interests in a domain name by demonstrating any of the following:

(i) before any notice to it of the dispute, the respondent’s use of, or demonstrable preparations to use, the domain name or a name corresponding to the disputed domain name in connection with a bona fide offering of goods or services; or

(ii) the respondent has been commonly known by the domain name, even if he has acquired no trademark 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 trademark or service mark at issue.

The Respondent has not submitted a formal response to the Complaint, in the absence of which the Panel may accept all reasonable inferences and allegations in the Complaint as true. See Talk City, Inc. v. Michael Robertson, WIPO Case No. D2000-0009. The Panel has carefully reviewed the record in this case, and finds nothing therein that would bring the Respondent’s registration and use of the disputed domain name within any of the “safe harbors” of paragraph 4(c) of the Policy.

It is apparent that the Respondent was aware of the Complainants’ COSTCO mark when registering the disputed domain name. The Respondent, without the Complainants’ authorization, registered a domain name incorporating the Complainants’ distinctive and well-known COSTCO mark, and has used the disputed domain name to redirect Internet users to the DubLi Shopping Mall website. Internet users, after registering to become a DubLi member (basic membership is free), can shop for products and services offered by competitors of the Complainant – such as Wal-Mart – and receive “Cashback” awards on purchases.

The relationship between the Respondent and DubLi is uncertain based on the record before this Panel. As noted earlier, DubLi contacted the Center by email on January 30, 2014, disclaiming ownership of the disputed domain name and representing that DubLi had not authorized or approved the use of the disputed domain name. Given such representations, it is somewhat troubling to the Panel that in the month following this communication DubLi has not stopped such unauthorized and unapproved use of the disputed domain name with its website. Regardless, in the absence of any explanation by the Respondent, the Panel considers it a reasonable inference from the record as a whole that the Respondent registered the disputed domain name intending to exploit and profit from the goodwill and reputation of the Complainants’ COSTCO mark by diverting Internet traffic to the DubLi Shopping Mall website, even if the precise means of the Respondent’s profit taking has not been identified.

Having regard to all of the relevant circumstances in this case, the Panel finds that the Respondent has not used or demonstrated preparations to use the disputed domain name in connection with a bona fide offering of goods or services, and that the Respondent is not making a legitimate noncommercial or fair use of the disputed domain name without intent for commercial gain to misleadingly divert consumers. Further, there is no indication that the Respondent has been commonly known by the disputed domain name within the meaning of paragraph 4(c)(ii) of the Policy. In short, nothing in the record before the Panel supports a claim by the Respondent of rights or legitimate interests in the disputed domain name.

Accordingly, the Panel finds the Complainants have satisfied the requirements of paragraph 4(a)(ii) of the Policy.

D. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy states that any of the following circumstances, in particular but without limitation, shall be considered evidence of the registration and use of a domain name in bad faith:

(i) circumstances indicating that the respondent registered or acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the Complainants (the owner of the trademark or service mark) or to a competitor of that Complainants, for valuable consideration in excess of the respondent’s documented out-of-pocket costs directly related to the domain name; or

(ii) circumstances indicating that the respondent 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 respondent has engaged in a pattern of such conduct; or

(iii) circumstances indicating that the respondent registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) circumstances indicating that the respondent is using the domain name to intentionally attempt to attract, for commercial gain, Internet users to its website or other online location, by creating a likelihood of confusion with the Complainants’ mark as to the source, sponsorship, affiliation, or endorsement of the respondent’s website or location or of a product or service on its website or location.

The examples of bad faith registration and use set forth in paragraph 4(b) of the Policy are not meant to be exhaustive of all circumstances from which such bad faith may be found. See Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003. The overriding objective of the Policy is to curb the abusive registration of domain names in circumstances where the registrant seeks to profit from and exploit the trademark of another. Match.com, LP v. Bill Zag and NWLAWS.ORG, WIPO Case No. D2004-0230.

For the reasons discussed under this and the preceding heading, the Panel considers that the Respondent’s conduct in this case constitutes bad faith registration and use of the disputed domain name within the meaning of paragraph 4(a)(iii) of the Policy. In the Panel’s assessment, the Respondent plainly was aware of the Complainants’ COSTCO mark when registering the disputed domain name. In the absence of any explanation from the Respondent, the Panel concludes from the record that the Respondent’s primary motive in relation to the registration and use of the disputed domain name was to capitalize on, or otherwise take advantage of, the Complainants’ trademark rights, by creating a likelihood of confusion with the Complainants’ COSTCO mark, with the intent to profit therefrom. See Edmunds.com, Inc. v. Ult. Search Inc., WIPO Case No. D2001-1319.

Accordingly, the Panel finds that the Complainants have satisfied the requirements of paragraph 4(a)(iii) of the Policy.

8. Decision

For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the disputed domain name <betterthancostco.com> be transferred to the Complainant Costco Wholesale Membership, Inc.

William R. Towns
Sole Panelist
Date: February 24, 2014

¹ The Complaint refers to the Complainants collectively as “Costco”. The Complainants assert that for purposes of this dispute under the Policy their interests are “co-extensive.”

² See WIPO Overview 2.0, paragraph 1.2.