WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Costco Wholesale Membership Inc., Costco Wholesale Corporation v. Henry Chan
Case No. D2004-0218
1. The Parties
The Complainants are Costco Wholesale Membership Inc. and Costco Wholesale Corporation of Issaquah, Washington, United States of America represented by Law Office of Mark J. Nielsen of Seattle, Washington, United States of America.
The Respondent is Henry Chan of Nassau, Bahamas.
2. The Domain Names and Registrar
The disputed domain names and are registered with iH Inc. d/b/a DotR.
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on March 20, 2004. On March 22, 2004, the Center transmitted by email to iH Inc. d/b/a DotR a request for registrar verification in connection with the domain names at issue. On March 22, 2004, iH Inc. d/b/a DotR 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"), 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 29, 2004. In accordance with the Rules, Paragraph 5(a), the due date for Response was April 18, 2004. The Respondent did not submit any response. Accordingly, the Center notified the Respondent's default on May 3, 2004.
The Center appointed Erica Aoki as the sole panelist in this matter on May 11, 2004. 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 recognized world leaders in warehouse club merchandizing and related services and operate over 318 warehouse stores in the United States, including Puerto Rico and 113 warehouses in other countries such as Canada, Mexico, the United Kingdom, Korea, Japan and Taiwan, under the name COSTCO.
The Complainants' warehouse stores offer a wide range of merchandise, including fresh, frozen and prepared food, beverages, household paper products, clothing, personal care products, nutritional supplements, computers and home electronic 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 variety of services such as photo processing, optical and hearing aid services, pharmacy, bakery, deli and take-out food, tire installation, business delivery, automobile, home and medical insurance, commercial and mortgage lending services, telecommunications, payroll processing, credit card processing, business equipment leasing, automobile dealership referral services, and travel services.
The Complainants have registered COSTCO as trademark and trade name since 1983, in the United States and have trademark registrations in a number of countries. The Complainants own the trademark registrations for the trademark COSTCO in a variety of forms, including COSTCO HOME, COSTCO WHOLESALE & Design, and COSTCO.COM.
The Complainants maintain a website at "" and many of their stores in other parts of the world maintain the websites at "www.costco." followed by the relevant ccTLD (with or without a generic SLD). These include the websites of the Mexico and United Kingdom stores at ".mx" and "", respectively.
Complainants allege that Respondent has actually used the domain names and to link indirectly to third party websites in order to profit from the traffic misdirected to these sites and to create the opportunity to extort payment from the rightful owner.
The disputed domain names are directed to a search engine and portal at "" operated by an entity called . The "" website also causes numerous "pop-up" and "pop-under" advertisements to be displayed when it is accessed. offers a revenue program which pays domain name owners "50% of all revenues generated from searches, popunders, popups, and exit popups" in respect of users directed to its website through the participants' domain name.
The Respondent has registered over 18,000 domain names, many of which are based on well-known brand or trading names, and a number of which correspond to mistyping which may be expected of such names. The Respondent has been found to have registered and used domain names in bad faith by at least three other administrative panels.
5. Parties' Contentions
A. Complainants
1. Respondent's and domain names are confusingly similar to Complainants' COSTCO trademark in which the Complainants have rights;
2. Respondent does not have any rights or legitimate interests in the and domain names;
3. Respondent registered and used the and domain names in bad faith.
B. Respondent
Respondent failed to submit a Response in this proceeding.
6. Discussion and Findings
The Complainants were able to show the requirements specified under Paragraph 4(a) of the Policy:
(i) that the domain name registered by the Respondent is identical or confusingly similar to a trademark or service mark in respect of which the Complainants have rights; and
(ii) that the Respondent has no rights or legitimate interests in respect of the domain name; and
(iii) that the domain name has been registered and used in bad faith.
Under the Paragraph 15(a) of the Rules, this Panel must "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."
In view of Respondent's failure to submit a Response, the Panel shall decide this administrative proceeding on the basis of Complainant's undisputed representations pursuant to Paragraphs 5(e), 14(a) and 15(a) of the Rules and draw such inferences as it considers appropriate pursuant to Paragraph 14(b) of the Rules.
A. Identical or Confusingly Similar
Based on the facts presented by Complainants, this Panel finds that the domain names and are confusingly similar to a mark in which Complainants have rights under Policy Paragraph 4(a) (i). Complainants have shown rights in the trademark COSTCO through use and registration in the United States and other parts of the world.B. Rights or Legitimate Interests
The Policy indicates that a registrant may have a legitimate interest in a domain name if it was making use of the domain name in connection with a bona fide offering of goods or services prior to notice of the dispute. The Respondent is in default and thus has made no affirmative attempt to show legitimate rights and interests in the domain names.
The Respondent is in no way connected with Complainants and has no authorization to use any of Complainants' COSTCO trademarks.
There is no evidence that Respondent is or was commonly known by the domain names as an individual, business or other organization.
The sole use of the domain names by Respondent is to diverted traffic on the Internet to gain revenues for the diverted traffic. The Panel, therefore, finds that the Respondent has no rights or legitimate interests in the domain names, under Policy Paragraph 4(a) (ii).C. Registered and Used in Bad Faith
The Policy also indicates that a registrant may have a legitimate interest in a domain name if it is making fair use of the domain name.
For the purposes of Paragraph 4(a) of the Policy, the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and used of a domain name in bad faith:
(i) circumstances indicating that you [Respondent] have registered or you have 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 that Complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or
(ii) you have 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 you have engaged in a pattern of such conduct; or
(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or
(iv) by using the domain name you have intentionally attempted to attract, for commercial gain, Internet users to your 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 your website or location or of a product or service on your web site or location.
Based on the undisputed allegations of Complainants, Respondent's registration of the domain names are in order to divert Internet users seeking information about the Complainants' to website at "," and to share in revenues obtained from the diverted traffic. The Respondent is evidently carrying on an operation of plundering the reputation of well-known marks. This exploitation of third party's reputations is an abuse of their rights.
The and pages linked to the website may create a likelihood of confusion as to source, sponsorship, affiliation or association, and there is sufficient evidence to support a finding that Respondent violated Paragraph 4(b)(iv) of the Policy. Accordingly, the Panel finds that Respondent has registered and is using the domain names 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 names, and be transferred to the Complainant, Costco Wholesale Membership, Inc.
Erica Aoki
Sole Panelist
Dated: May 18, 2004
Full & Egal Universal Law Academy