WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Membership Inc. and Costco Wholesale Corporation v. Domain Admin, Whois Privacy Corp.

Case No. D2020-1032

1. The Parties

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

The Respondent is Domain Admin, Whois Privacy Corp., Bahamas.

2. The Domain Name and Registrar

The disputed domain name <costco-pharmacy.com> is registered with Internet Domain Service BS Corp (the “Registrar”).

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on April 27, 2020. On April 29, 2020, the Center transmitted by email to the Registrar a request for registrar verification in connection with the disputed domain name. On April 29, 2020, 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 and 4, the Center formally notified the Respondent of the Complaint, and the proceedings commenced on May 4, 2020. In accordance with the Rules, paragraph 5, the due date for Response was May 24, 2020. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on May 25, 2020.

The Center appointed Ian Blackshaw as the sole panelist in this matter on June 4, 2020. 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 are a recognized world leader in warehouse club merchandizing and related services. The Complainants have operated membership warehouse stores under the COSTCO trademark and trade name since 1983. The Complainants currently operate 785 warehouse stores worldwide, including 546 COSTCO warehouse stores in the United States and Puerto Rico and 239 in Australia, Canada, China, France, Iceland, Japan, the Republic of Korea, Mexico, Spain, Taiwan Province of China, and the United Kingdom. The Complainants have more than 95 million authorized cardholders worldwide and more than 58 million authorized cardholders in the United States. The Complainants’ stock has been publicly traded since 1985. The Complainants had USD 149 billion in sales in fiscal year 2019 and are currently the 15th largest company in the Fortune 500, and second largest retailer in the world. As a result of size and notoriety, the Complainants and their products have been the subject of regular news and feature coverage in all types of media. The Complainants have become famous for the sale of brand name and high-quality private label merchandise at low prices in warehouse‐style stores. Evidence has been provided to the Panel.

The Complainants’ warehouse stores offer a wide range of merchandise, including fresh, frozen and packaged food, beverages, nutritional supplements, over‐the‐counter pharmaceuticals, prescription pharmaceuticals, personal care products, 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.

The Complainants also offer 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, mortgage lending, online training, telecommunications, payroll processing, credit card processing, financial planning, online investing, overnight delivery, and travel services. Some of these services are provided by the Complainants, but many of them are provided by third parties selected by and authorized by the Complainants to provide services to their cardholders in association with the COSTCO trademark. The Complainants provide information about these services in their warehouse stores, in the monthly publication, The Costco Connection, which has a monthly circulation of over 8 million in the United States, and at the “www.costco.com” website, which provides links to access or apply for these services or obtain information about them.

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 the first United States trademark registration of 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 (“USPTO”) for various marks that include the word “costco”. A complete list of active trademark registrations for the COSTCO trademarks in the United States has been provided to the Panel. The status of all these registrations can be confirmed at the website of the USPTO. Through a wholly-owned affiliate, the Complainants also own hundreds of trademark registrations for COSTCO marks in other countries around the world.

Among the Complainants’ registrations, the following are some of the registrations that cover the Complainants’ pharmacy services in the United States. True copies have also been provided to the Panel of the current TSDR Status pages from the website of the USPTO for the registrations listed below:

The Complainants also own the <costco.com> domain name and maintain an active presence on the Internet using this domain name as its Uniform Resource Locator (“URL”). A print of the home page of the Complainants’ United States website, as of April 3, 2020, has been provided to the Panel. The Complainants operate online retail websites for members in the United States, Canada, Mexico, the United Kingdom, the Republic of Korea and Taiwan Province of China offering a wide range of goods and services through the “www.costco.com”, “www.costco.ca”, “www.costco.com.mx”, “www.costco.co.uk”, “www.costco.co.kr”, and “www.costco.com.tw” websites. In the fiscal year 2019, the Complainants’ sales through “www.costco.com”, “www.costco.ca”, “www.costco.com.mx”, “www.costco.co.uk”, “www.costco.co.kr”, and “www.costco.com.tw” websites were approximately USD 5 billion. The Complainants’ operations in Japan, Australia, China, Spain, France, and Iceland have informational websites at “www.costco.co.jp”, “www.costco.com.au”, “www.costco.com.cn”, “www.costco.es”, “www.costco.fr”, and “www.costco.is”, respectively, that provide shoppers with information about membership, products and services, and warehouse store locations and hours.

The disputed domain name was registered on June 5, 2003. It resolves to a webpage displaying pay-per-click links.

5. Parties’ Contentions

A. Complainant

The Complainants make the following assertions:

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

The Complainants have learned that the disputed domain name currently resolves to a “link farm” website that refers users of the site to the Complainants’ competitors who sell pharmaceutical products. A screen shot of the home page of the Respondent’s website, as of April 25, 2020, has been provided to the Panel.

The disputed domain name is confusingly similar to the Complainants’ COSTCO trademarks. The disputed domain name consists of the well‐known registered trademark, COSTCO, and the common term, “pharmacy”.

As mentioned above, the Complainants own numerous registrations for COSTCO trademarks. The addition of a common term such as “pharmacy” to the COSTCO trademark does not mitigate the confusing similarity between the disputed domain name and the COSTCO trademarks.

In addition, previous UDRP panels have uniformly found that the addition of common terms to the COSTCO trademark is not sufficient to negate confusing similarity between the domain names and the COSTCO trademark.

Because the Complainants offer pharmacy services and sell a wide variety of over‐the‐counter pharmaceutical products, the addition of a common term such as “pharmacy” to the COSTCO trademark exacerbatesthe confusing similarity between the COSTCO trademark and the disputed domain name and increasesthe risk of confusion between the disputed domain name and the COSTCO trademarks.

The Respondent has no rights or legitimate interests in the disputed domain name.

The Respondent has no legitimate interests 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.

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

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

The Respondent registered and is using the disputed domain name in bad faith.

The Respondent’s choice of the disputed domain name was not a coincidence. COSTO is a trademark coined by the Complainants’ founders in 1983 and lawfully registered and used only by them. The Complainants 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 USD 149 billion in the fiscal year 2019. The disputed domain name was registered on June 5, 2003, many years after the COSTCO trademark had become famous. Because of the notoriety of the COSTCO trademark, the Respondent must have been aware of the Complainants’ rights in the COSTCO trademark when it registered the disputed domain name and when it put it to use diverting Internet users to a “link farm” website.

The Complainants’ many registrations also constitute constructive notice in the United States of its rights in the COSTCO trademark. Awareness of another’s rights in a mark or domain name at the time of registration is evidence of bad faith registration.

A domain name owner has registered a domain name in bad faith if it did so in circumstances suggesting that the respondent has “intentionally attempted to attract, for commercial gain, Internet users to [its] 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 [its] website or location or of a product or service on [its] website or location.” Policy, paragraph 4(b)(iv). 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 a “link farm” website unrelated to the Complainants. This is unmistakably bad faith registration of the disputed domain name.

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

The Respondent uses the disputed domain name to divert Internet users looking for the Complainants to a “link farm” 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. This clearly establishes bad faith use of the disputed domain name pursuant to paragraph 4(b)(iv) of the Policy.

It appears that the disputed domain name is being offered for sale, which is yet another way for the Respondent to profit from the bad faith registration and use of the disputed domain name.

The Respondent’s use of the disputed domain name as the URL for a “link farm” website also constitutes bad faith use of the disputed domain name. Other UDRP panels have concluded that “operation of commercial link services, designed to lure Internet users and divert them to other commercial sites by use of domain names identical or similar to complainant’s trademark” are not a legitimate use of a domain name and constitute bad faith registration and use under paragraph 4(b) of the Policy.

In view of the uniqueness and fame of the COSTCO trademark and the Respondent’s transparent intention to register and use the disputed domain name based on the COSTCO trademark purely for its 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, having been duly notified of the Complaint and of these proceedings, did not reply to the Complainants’ contentions or take any part in these proceedings.

6. Discussion and Findings

To qualify for cancellation or transfer of the disputed domain name, the Complainants must prove each of the following elements of paragraph 4(a) of the Policy, namely:

(i) the disputed 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 in respect of the disputed domain name; and

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

In accordance with 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.

In accordance with paragraph 14(a) of the Rules, in the event that a party, in the absence of exceptional circumstances, does not comply with any of the time periods established by the Rules or the Panel, the Panel shall proceed to a decision on the Complaint; and under 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 or any request from the Panel, the Panel shall draw such inferences as it considers appropriate.

In accordance with paragraph 10(d) of the Rules, the Panel shall determine the admissibility, relevance, materiality and weight of the evidence.

In previous UDRP decisions in which the respondents failed to file a response, the panels’ decisions were based upon the complainants’ reasonable assertions and evidence, as well as inferences drawn from the respondents’ failure to reply. See The Vanguard Group, Inc. v. Lorna Kang, WIPO Case No. D2002-1064; and also Köstritzer Schwarzbierbrauerei v. Macros-Telekom Corp., WIPO Case No. D2001-0936.

Nevertheless, the Panel must not decide in the Complainant’s favor solely based on the Respondent’s default. See Cortefiel, S.A. v. Miguel García Quintas, WIPO Case No. D2000-0140. In the present case, the Panel must decide whether the Complainants have introduced elements of proof, which allow the Panel to conclude that their allegations are true.

A. Identical or Confusingly Similar

It is well established in previous UDRP decisions that, where the disputed domain name incorporates a complainant’s registered trademark in its entirety, this may be sufficient to establish that the disputed domain name is identical or confusingly similar for the purposes of the Policy. See Magnum Piering, Inc. v. The Mudjackers and Garwood S. Wilson, Sr., WIPO Case No. D2000-1525.

In the present case, the disputed domain name essentially incorporates the Complainants’ COSTCO registered trademark, and this makes the disputed domain name confusingly similar to the Complainant’s well-known and widely-used COSTCO registered trademark.

The Panel agrees with the Complainants’ assertion, for the reasons and based on the previous UDRP decisions mentioned above, that the addition of the term “pharmacy” as part of the disputed domain name is purely descriptive and does not add any distinguishing feature and thereby prevent the disputed domain name from being confusing similar to the Complainants’ well-known and widely-used registered trademark COSTCO.

The addition of the Top-Level Domain “.com” is irrelevant in determining whether the disputed domain name is confusingly similar to the Complainants’ COSTCO registered trademark; this being for Internet registration purposes only. See Blue Sky Software Corp. v. Digital Sierra, Inc. and Abdullah Khan, WIPO Case No. D2000-0165.

In view of the above, the Panel finds that the disputed domain name is confusingly similar to the Complainants’ well-known and widely-used COSTCO registered trademark, in which the Complainant has demonstrated, to the satisfaction of the Panel, that it has prior rights in and prior commercial use of the same.

The first element of the Policy, therefore, has been met.

B. Rights or Legitimate Interests

In order to determine whether the Respondent has any rights or legitimate interests in respect of the disputed domain name (paragraph 4(c) of the Policy), attention must be paid to any of the following circumstances, in particular, but without limitation:

- whether there is any evidence of the Respondent’s use of, or demonstrable preparations to use, the disputed domain name or a name corresponding to the disputed domain name in connection with a bona fide offering of goods or services before any notice to the Respondent of the dispute;

- whether the Respondent (as an individual, business, or other organization) has been commonly known by the disputed domain name, even if the Respondent has acquired no trademark or service mark rights;

- whether the Respondent is making a legitimate noncommercial or fair use of the disputed domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.

There is no evidence before the Panel to show that the Respondent was acting in pursuance of any rights or legitimate interests with respect to registering the disputed domain name. On the contrary, if the Respondent had any such rights or legitimate interests, the Respondent would have reasonably been expected to assert them, which the Respondent clearly has not done so, by not replying to the Complaint or taking any part in these proceedings. See Belupo d.d. v. WACHEM d.o.o., WIPO Case No. D2004-0110.

There is no evidence either before the Panel that the Respondent has been authorized or licensed by the Complainants to use the Complainants’ well-known and widely-used COSTCO registered trademark. In fact, in the view of the Panel, the adoption by the Respondent of a domain name confusingly similar to the Complainants’ well-known and widely-used COSTCO registered trademark, which the Panel considers, as asserted above by the Complainant, would appear not to be by mere chance but by design, inevitably leads to confusion on the part of Internet users and consumers seeking information about the Complainants and their products and services.

Further, the Panel finds that the Respondent is consequentially trading unfairly on the Complainants’ well-known and widely-used COSTCO registered trademark and also the valuable goodwill that the Complainants have established in that trademark through the Complainants’ extensive prior commercial use, as evidenced above, without any right or legal justification for doing so.

Also, the Panel finds no evidence that the Respondent has used or undertaken any demonstrable preparations to use the disputed domain name in connection with any bona fide offering of goods or services.

Likewise, no evidence has been adduced that the Respondent has commonly been known by the disputed domain name; nor, for the reasons mentioned above, is the Respondent making a legitimate noncommercial or fair use of the disputed domain name.

Therefore, for all the above reasons, the Panel concludes that the Respondent has neither rights nor legitimate interests in the disputed domain name.

C. Registered and Used in Bad Faith

Regarding the bad faith requirement, paragraph 4(b) of the Policy lists four examples of acts, which constitute prima facie evidence of bad faith. However, this list is not exhaustive, but merely illustrative. See Nova Banka v. Iris, WIPO Case No. D2003-0366.

Paragraph 4(b)(iv) of the Policy is particularly relevant to the present case and provides that there is evidence of bad faith in the following circumstances:

“(iv) by using the domain name, [the respondent has] intentionally attempted to attract, for commercial gain, Internet users to [its] website or other online 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 on [its] website or location.”

Based on the evidence provided on the record, the Panel considers that the Respondent, by registering the disputed domain name incorporating the Complainants’ well-known and widely-used COSTCO registered trademark, is trading unfairly on the Complainants’ valuable goodwill established in such trademark.

The incorporation of the Complainants’ well-known and widely-used registered trademark COSTCO in the disputed domain name, in the view of the Panel, is bound to lead to confusion on the part of consumers and Internet users seeking information about the Complainants and their products and services marketed under their well-known and widely-used COSTCO registered trademark.

Also, the effect of such conduct on the part of the Respondent is to mislead Internet users and consumers into thinking that the Respondent is, in some way or another, connected to, sponsored by or affiliated with the Complainants and their business; or that the Respondent’s activities are approved or endorsed by the Complainants. None of which the Panel can find, on the basis of the evidence provided on the record, is, in fact, the situation. Such misleading consequences, in the view of the Panel, are indicative of bad faith on the part of the Respondent. See Columbia Insurance Company v. Pampered Gourmet, WIPO Case No. D2004-0649.

Again, in the absence of any explanation to the contrary by the Respondent, of which none is forthcoming on the record, the Panel agrees with the Complainants’ contention that the Respondent did not register and use the disputed domain name by coincidence or chance; but, as noted above, appears to have been – or, at least, should have been – fully aware of the notoriety of the Complainants and their business activities carried on internationally, as well as its well-known and widely-used COSTCO registered trademark and its extensive prior commercial use.

Also, the Respondent’s use of the disputed domain name to divert Internet traffic to a website containing pay-per-click links in direct competition with the Complainants shows that the Respondent, by registering the disputed domain name, intended to disrupt the Complainants’ business by diverting potential customers of the Complainants to the Respondent’s website, which, pursuant to paragraph 4(b)(iii) of the Policy, also constitutes prima facie evidence of bad faith on the part of the Respondent.

Furthermore, the use by the Respondent of a privacy service is further evidence of the Respondent’s bad faith. See WIPO Overview of WIPO Panel Views on Selected UDRP Questions, Third Edition (“WIPO Overview 3.0”), section 3.6; see also, e.g., Compagnie Générale des Etablissements Michelin v. Balticsea LLC, WIPO Case No. D2017-0308.

Finally, the failure of the Respondent to answer the Complaint or take any part in the present proceedings, again, in the view of the Panel, is another indication of bad faith on the part of the Respondent. See Bayerische Motoren Werke AG v. (This Domain is For Sale) Joshuathan Investments, Inc., WIPO Case No. D2002-0787.

Therefore, taking all these particular facts and circumstances into account, and for all the above-mentioned reasons, as well as the arguments advanced by the Complainants in their contentions, as set out above, and also based on the previous UDRP cases cited above, the Panel concludes that the Respondent has registered and is using the disputed domain name in bad faith.

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 <costco-pharmacy.com> be transferred to the Complainant Costco Wholesale Membership, Inc.

Ian Blackshaw
Sole Panelist
Date: June 12, 2020