WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Membership, Inc. and Costco Wholesale Corporation v. Beanfans

Case No. D2014-0380

1. The Parties

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

The Respondent is Beanfans of Taipei, Taiwan, China.

2. The Domain Name and Registrar

The disputed domain name <costcotw.info> is registered with GoDaddy.com, LLC. (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on March 11, 2014. On March 12, 2014, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On March 12, 2014, the Registrar 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. In response to a notification by the Center that the Complaint was administratively deficient, the Complainants filed an amendment to the Complaint on March 19, 2014.

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 the Respondent of the Complaint, and the proceedings commenced on March 20, 2014. In accordance with the Rules, paragraph 5(a), the due date for Response was April 9, 2014. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on April 10, 2014.

The Center appointed Susanna H.S. Leong as the sole panelist in this matter on April 22, 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 Wholesale Membership, Inc. and Costco Wholesale Corporation, are in the business of providing warehouse club merchandizing and related services. The Complainants have operated membership warehouse stores under the COSTCO trademark and trade name since 1983. They currently operate 649 warehouse stores worldwide, including 462 “Costco” warehouse stores in the United States and Puerto Rico and 184 in Australia, Canada, Japan, Republic of Korea, Mexico, Taiwan, and the United Kingdom of Great Britain and Northern Ireland (“United Kingdom”).

The mark COSTCO is a coined name developed by the founders of the Complainants. The Complainants own 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 Complainants obtained their first United States trademark registration for COSTCO in 1985 and have continued to expand and maintain a large portfolio of COSTCO trademark registrations in the United States and many other countries. The Complainants have received numerous trademark registrations from the United States Patent and Trademark Office for various marks that include the word “Costco”.

The Complainants own the <costco.com> domain name and maintain an active presence on the Internet using this domain name as their URL. The Complainants operate online retail websites for their members in the United States, Canada and the United Kingdom, offering a wide range of goods and services through their “www.costco.com”, “www.costco.ca” and “www/costco.co.uk” websites. The Complainants’ operations in the Mexico, Japan, Republic of Korea, Taiwan, and Australia have informational websites at “www.costco.com.mx”, “www.costco.co.jp”, “www.costco.co.kr”, “www.costco.com.tw”, and “www.costco.com.au”, respectively, that provide shoppers with information about membership, products and services, and warehouse store locations and hours.

The Complainants are well established in Taiwan, having opened their first warehouse store there in 1997. They currently operate ten warehouse stores in Nei Hu, Kaohsiung, Shih Chih, Chung Ho, TaiChung, Hsinchu, Tainan, North Kaohsiung (Dashun), TaoYuan and Chiayi. Beginning in 1997, COSTCO trademark adopted a Chinese equivalent of the COSTCO mark for use in Taiwan, China and Hong Kong – 好市多. These characters are pronounced as “how she dough” and are written in English as “Hao Shih Do” and will be referred to herein as HAO SHIH DO. HAO SHIH DO is the Chinese equivalent of COSTCO and is used to mean “Costco” whenever and wherever the COSTCO trademark is to be written in Chinese characters. Through Price Costco International, Inc., a wholly owned subsidiary, the Complainants have registered the COSTCO and HAO SHIH DO marks in Taiwan, China and Hong Kong for a variety of goods and services, including especially retail store services.

The Respondent registered the disputed domain name on June 23, 2011.

5. Parties’ Contentions

A. Complainant

The Complainants contend that the disputed domain name is identical to their well-known and distinctive COSTCO trademarks on the following grounds:

1. The <costcotw.info> domain name consists of the well‐known registered trademark, COSTCO, and “tw”, the country code abbreviation for Taiwan.

2. The addition of a country code abbreviation such as “tw” to the COSTCO trademark does not mitigate the confusing similarity between the disputed domain name and the COSTCO trademarks. This is supported by numerous prior UDRP decisions involving the COSTCO trademarks.

3. Because the Complainants have operated in Taiwan since 1997 and have ten warehouse stores in Taiwan that sell a wide variety of products, the addition of “tw”, the country code for Taiwan, to the COSTCO trademark exacerbates the confusing similarity between the COSTCO trademarks and the disputed domain name and increases the risk of confusion between the disputed domain name and the COSTCO trademarks.

The Complainants contend that the Respondent has no rights or legitimate interests in respect of the disputed domain name on the following grounds:

1. 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 disputed domain name in connection with a bona fide offering of goods or services, owns no trademark registrations for the disputed domain name or any portion thereof, and has not been commonly known by the disputed domain name or any portion thereof.

2. The Complainants have not licensed or otherwise permitted the Respondent to use their marks or the disputed domain name.

3. 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.

4. Nevertheless, the Respondent registered the disputed domain name and uses it to direct Internet traffic to its website. The Respondent’s action evidences a clear intent to disrupt the Complainants’ business, deceive consumers, and trade off of the Complainants’ goodwill by creating an unauthorized association between it and the COSTCO trademarks.

The Complainants contend that the disputed domain name was registered and is being used in bad faith on the following grounds:

1. The Respondent’s choice of domain name was not a coincidence. COSTCO is a trademark coined by Costco’s founders in 1983 and lawfully registered and used only by the Complainants. The Complainants received trademark registrations for the COSTCO trademark as early as 1985. The COSTCO trademark became famous a long time ago as its sales grew rapidly from USD 4.1 billion in 1990 to USD 102 billion in fiscal year 2013. The Respondent registered the disputed domain name <costcotw.info> on June 23, 2011, many years after the COSTCO trademark had become famous. Furthermore the Complainants have operated in Taiwan since 1997 and currently have ten warehouse stores there with over 2 million authorized cardholders. Because of the notoriety of the COSTCO trademark in Taiwan, the Respondent must have been aware of Complainants’ rights in the COSTCO trademark when it registered the disputed domain name and when it put it to use diverting Internet users to its website. The Respondent’s prior awareness of the COSTCO trademark is confirmed by his use of the HAO SHI DUO mark on the website at the disputed domain name. Awareness of another’s rights in a mark or domain name at the time of registration is evidence of bad faith registration.

2. The Respondent’s registration of the disputed domain name was done in bad faith because it had no legitimate right or business interest in any COSTCO‐formative domain name. The Respondent’s only conceivable business purposes in registering the disputed domain name was to profit from the diversion of Internet users to his own retail website unrelated to and in competition with the Complainants. This is unmistakably bad faith registration of the disputed domain name.

3. The Respondent’s use of the disputed domain name to divert Internet traffic to a retail website in direct competition with the Complainants proves the Respondent’s intention to disrupt the Complainants’ business by diverting potential customers of the Complainants to the Respondent’s retail website.

4. The Respondent uses the disputed domain name to divert Internet users looking for the Complainants to a retail website for its own commercial benefit. This 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. In addition, even if all the branded products for sale on the Respondent’s website are genuine, any consumer criticism of the Respondent’s website or other negative publicity on conventional media and social media sites will undoubtedly harm the Complainants’ excellent reputation.

5. In view of the uniqueness and fame of the COSTCO trademark and the Respondent’s intention to register and use a domain name based on the COSTCO trademark purely for his own commercial gain, the Respondent’s use of the disputed domain name is inescapably in bad faith. The Respondent does not use the disputed domain name in any legitimate, good faith manner, and there is no legitimate, good faith use of the disputed domain name possible by the Respondent.

B. Respondent

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

6. Discussion and Findings

In accordance with paragraph 4(a) of the Policy, in order to succeed in this proceeding and obtain the transfer of the disputed domain name, the Complainants must establish that each of the three following elements is satisfied:

1. the disputed domain name is identical or confusingly similar to a trademark or service mark in which the Complainants have rights;

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

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

Paragraph 4(a) of the Policy clearly states that the burden of proof lies with the complainant to establish that all these three elements are satisfied in this proceeding.

Furthermore, pursuant to paragraph 15(a) of the Rules, the Panel shall decide the Complaint on the basis of the statements and documents submitted and in accordance with the Policy, the Rules and any rules and principles of law that it deems applicable. Moreover, in accordance with paragraph 14(b) of the Rules, if a party, in the absence of exceptional circumstances, does not comply with any provision of, or requirement under the Rules of any request from the Panel, the Panel shall draw such inferences therefrom, as it deems appropriate.

On the basis of the evidence introduced by the Complainants and, in particular, with regard to the content of the relevant provisions of the Policy (paragraphs 4(a), (b), (c)), the Panel concludes as follows:

A. Identical or Confusingly Similar

The Complainants have adduced evidence to demonstrate that they have registered trademark rights and continue to have such rights in the COSTCO trademarks for warehouse club merchandizing and related services in many countries in the world. Furthermore, the Panel finds that the Complainants have registered trademark rights in COSTCO including its Chinese equivalent 好市多 in Taiwan, the country in which the Respondent appears to reside. The Panel finds that the Complainants’ mark COSTCO is a well-known mark for warehouse club merchandizing and related services offered by the Complainants.

In assessing the degree of similarity between the Complainants’ trademarks and the disputed domain name, the Panel shall have regard to the degree of visual, aural or conceptual similarity between them and where appropriate, evaluate the importance to be attached to these different elements. The issue of degree of similarity between the Complainants’ trademark and the disputed domain name is to be considered from the perspective of the average consumer of the goods or services concerned in this case, and the average consumer is the Internet user seeking to purchase or download information about the Complainants’ products.

The disputed domain name consists of the Complainants’ COSTCO trademarks in its entirety, the country code abbreviation “tw” and the generic Top-Level Domain (gTLD) suffix “.info”. The Panel accepts the Complainant’s evidence that COSTCO is an invented word mark which is unique to the Complainants and their business. The Panel is of the view that the most prominent and distinctive part of the disputed domain name is the term “Costco” which for all intents and purposes is identical to the Complainants’ registered COSTCO marks. Given that the Complainants have substantial business operation in Taiwan, the addition of the country abbreviation “tw” to the disputed domain name is not a distinguishing factor. The Panel agrees with the Complainants that on the contrary, it exacerbates the confusing similarity between the COSTCO trademarks and the disputed domain name and increases the risk of confusion between the disputed domain name and the COSTCO trademarks. It is well accepted by prior UDRP panels that, the addition of suffixes such as “.info”, “.mobi”, “.com” or “.net” may be disregarded for purposes of determining whether a domain name is confusingly similar to a trademark.

Bearing in mind the following factors, in particular: (a) the widespread reputation and high degree of recognition of the Complainants’ COSTCO trademarks; and (b) the distinctive character of the Complainants’ COSTCO trademarks, the Panel therefore finds that the disputed domain name is identical or confusingly similar to the COSTCO trademarks in which the Complainants have rights.

The Panel finds for the Complainants on the first part of the test.

B. Rights or Legitimate Interests

Based on the following reasons, the Panel finds that the Respondent has no rights or legitimate interests in the disputed domain name:

(1) there is no evidence of a legitimate use by the Respondent of the disputed domain name or reasons to justify the choice of the term “Costco” in its business operations;

(2) there is no evidence to show that the Complainants have licensed or otherwise permitted the Respondent to use their trademarks or to apply for or use any domain name incorporating the COSTCO trademarks;

(3) there is no indication whatsoever that the Respondent is commonly known by the disputed domain name and/or is using the disputed domain name in connection with a bona fide offering of goods or services;

(4) the Complainants and their COSTCO trademarks enjoy a widespread reputation and high degree of recognition in the market for warehouse club merchandizing and related services and is a registered trademark in many countries all over the world, including Taiwan. Consequently, in the Panel’s view, in the absence of contrary evidence from the Respondent, COSTCO is not a mark that traders could legitimately adopt other than for the purpose of creating an impression of an association with the Complainants.

The Panel notes the overall burden of proof on this element rests with the Complainants. However, it is well established by previous UDRP panels that once a complainant establishes a prima facie case that a respondent lacks rights or legitimate interests in a domain name, the burden of production shifts to the respondent to rebut the complainant’s contentions. See WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Second Edition (“WIPO Overview 2.0”), paragraph 2.1. Based on the above reasons, the Panel finds that the Complainants have therefore established a prima facie case that the Respondent has no rights or legitimate interests in the disputed domain name and thereby shifted the burden to the Respondent to produce evidence to rebut this presumption.

According to paragraph 4(c) of the Policy, a respondent may establish its rights or legitimate interests in a domain name, among other circumstances, by showing any of the following elements:

“(i) before any notice to you [Respondent] of the dispute, your 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) you [Respondent] (as an individual, business, or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or

(iii) you [Respondent] are 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 Panel notes that the Respondent has not provided evidence of circumstances of the type specified in paragraph 4(c) of the Policy, or evidence of any other circumstances giving rise to a right to or legitimate interest in the disputed domain name. The Panel further notes that the Respondent has failed to submit a Response to the Complaint filed against it. In particular, the Respondent has failed to make submissions to demonstrate that it has rights or legitimate interests in the disputed domain name.

In accordance with the Rules, paragraph 14, the Panel thus draws such inferences as it considers appropriate, which are that the Complainants have therefore established a prima facie case that the Respondent has no rights or legitimate interests in the disputed domain name, and the Respondent appears to be unable to adduce evidence of any rights to or legitimate interests in the disputed domain name.

The Panel finds for the Complainant on the second part of the test.

C. Registered and Used in Bad Faith

Paragraph 4(b) of the Policy sets out four circumstances which, without limitation, shall be evidence of the registration and use of a domain name in bad faith, namely:

“(i) circumstances indicating that the respondent has registered or 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 the complainant, for valuable consideration in excess of the respondent’s documented out-of-pocket costs directly related to the domain name; or

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

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

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

The above circumstances are indicative of registration and use of a domain name in bad faith but they are by no means exhaustive. Evidence of other circumstances adduced before the panel can also constitute registration and use of a domain name in bad faith by a respondent in appropriate cases.

One important consideration in the Panel’s assessment of whether the Respondent has registered and is using the disputed domain name in bad faith is prior knowledge on the part of the Respondent of the Complainants’ rights in the trademark concerned. In this day and age of the Internet and advancement in information technology, the reputation of brands and trademarks transcend national borders. Taking into account the worldwide reputation of the Complainants and their COSTCO trademarks, as well as the market presence of the Complainants in numerous countries including Taiwan, the Panel finds that it is highly unlikely that the Respondent would not have had actual notice of the Complainants’ trademark rights at the time of the registration of the disputed domain name. Furthermore, the Complainants’ goods and services are widely available on the Internet via their official website “www.costco.com” and their many other websites and Internet addresses as stated above. A simple search on the Internet reveals the presence of the Complainants’ trademark and domain names. Therefore, the Panel finds that it is not conceivable that the Respondent would not have had actual notice of the Complainants’ trademark rights at the time of the registration of the disputed domain name. Furthermore, the Complainants have adduced evidence to show that the website which disputed domain name points to displays the use of the Chinese equivalent of the Complainants’ COSTCO trademarks, i.e., 好市多. This implies knowledge of the Complainants’ COSTCO trademarks on the part of the Respondent. Consequently, it would have been pertinent for the Respondent to provide an explanation of its choice in the disputed domain name, failing which the Panel draws the conclusion that the disputed domain name was registered in bad faith with intent to create an impression of association with the Complainants and their products.

Where the Respondent has chosen to register a disputed domain name that is identical or confusingly similar to the Complainants’ trademarks and where the trademarks in question have through substantial use acquired worldwide fame, reputation and notoriety, a reasonable conclusion is that the trademark is not one that traders could legitimately adopt other than for the purpose of creating an impression of an association with the Complainants. This is particularly the case if the Complainants’ mark is an invented word with no other meaning and is unique to the Complainants and their business. In such cases, the burden on the Respondent to show that the choice of the disputed domain name was made legitimately and in good faith for the genuine offering of goods or services on the Internet is a very heavy one. There is no evidence that the Respondent has used or intends to use to the disputed domain name for purposes of bona fide offering of goods and services over the Internet. On the contrary, the Complainants have adduced evidence to show that the disputed domain name is being used to divert Internet traffic to a retail website in direct competition with the Complainants’ website. There is evidence to support that contention that the Respondent’s use of the disputed domain 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. In this regard, the Panel finds that the Respondent has not provided any plausible explanation to refute this contention.

Based on the above, the Panel finds that the Complainants have adduced evidence and proved that by using a confusingly similar disputed domain name, the Respondent has intentionally attempted to attract, for commercial gain, Internet users to the Respondent’s website under paragraph 4(b)(iv) of the Policy. The Panel finds that given the widespread fame of the Complainants’ COSTCO trademarks and a lack of plausible explanation for the choice of incorporating the Complainants’ famous trademark in the disputed domain name, the unauthorized use of the Complainants’ Chinese equivalent好市多mark on the website at the disputed domain name, and the attempt to divert Internet traffic to a retail website in direct competition with the Complainants’ website are certainly relevant factors indicating bad faith registration and use.

Thus, the Panel finds for the Complainant on the third part of the test.

7. 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 <costcotw.info> be transferred to the Complainants.

Susanna H.S. Leong
Sole Panelist
Date: May 6, 2014