WIPO Arbitration and Mediation Center
ADMINISTRATIVE PANEL DECISION
Costco Wholesale Corporation and Costco Wholesale Membership, Inc. v. Services LLC
Case No.�D2007-0524
1. The Parties
The Complainants are Costco Wholesale Corporation and Costco Wholesale Membership, Inc., Issaquah, Washington, United�States�of�America, (referred to as “the Complainant”), represented by Law Office of Mark J. Nielsen, United�States�of�America.
The Complainant has named two Respondents: Moniker Privacy Services, Pompano Beach, Florida, United�States�of�America, and Services LLC, Roseau, Dominica. Moniker Privacy Services is simply a privacy domain name registration service. The Registrar has confirmed that the registered owner of the domain name is Services LLC, Roseau, Dominica. Accordingly, the Panel will treat Services LLC as the sole Respondent.
2. The Domain Name and Registrar
The disputed domain name is registered with Moniker�Online�Services,�LLC.
3. Procedural History
The Complaint was filed with the WIPO Arbitration and Mediation Center (the�“Center”) on April�5,�2007. On April�10,�2007, the Center transmitted by email to Moniker Online Services, LLC a request for registrar verification in connection with the domain name at issue. On April�13,�2007, Moniker Online Services, LLC transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details for the administrative, billing, and technical contact. The Complainant filed an amendment to the Complaint on April�18,�2007. 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”), 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 April�24,�2007. In�accordance with the Rules, paragraph�5(a), the due date for Response was May�14,�2007. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on May�15,�2007.
The Center appointed J. Christopher Thomas, Q.C. as the sole panelist in this matter on May�23,�2007. 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. The Panel finds that it was properly constituted.
4. Factual Background
Costco is a world leader in warehouse club merchandizing and related services. It has operated membership warehouse stores under the COSTCO trademark and trade name since 1983. Costco currently operates over 500 warehouse stores worldwide, including approximately 373 “Costco” warehouse stores in the United States of America and Puerto Rico and over 130 in Canada, Mexico, the United Kingdom of Great Britain and Northern Ireland, the Republic of Korea, Japan and Taiwan, Province of China. It has more than 50 million authorized cardholders worldwide and more than 36 million authorized cardholders in the United States of America. Costco is one of the largest and best-known retailers in the United States of America, with over USD58 billion in sales in fiscal year 2006. Costco’s stock has been publicly traded since 1985.
“Costco” is a coined name developed by the founders of Costco, and Costco either directly or through a wholly-owned affiliate owns COSTCO trademarks in different countries. Costco owns trademark registrations for the COSTCO trademark in a variety of forms, including COSTCO (in stylized letters), COSTCO WHOLESALE & Design, and COSTCO.COM. Costco obtained its first U.S. trademark registration of COSTCO in 1985 and has received numerous trademark registrations from the United States Patent and Trademark Office for various marks that include the word “Costco”.
Costco owns the domain name and maintains an active presence on the Internet using this domain name as its URL. It sells a wide variety of goods and services through its “www.” website, including items that are not available in its warehouse stores. The “www.” website also features many services offered by Costco, including car insurance and other insurance products.
Costco also operates a retail website for Canadian shoppers at “”. Costco’s operations in the United Kingdom of Great Britain and Northern Ireland, Mexico, Japan, Taiwan, Province of China, and the Republic of Korea also operate COSTCO websites at “”, “www..mx”, “www..jp”, “www..tw” and “www..ko”, respectively.
Costco has offered insurance services, including car insurance, since 1998. Costco has promoted its insurance services on “www.”, in brochures available in Costco warehouse stores, and in articles and advertisements in its monthly magazine, The Costco Connection.
5. Parties’ Contentions
A. Complainant
Costco learned that the disputed domain name resolves to a pay-per-click “link farm” website. The Respondent’s website features links to “Costco”, “Costco Wholesale”, “Costco Insurance” and “Costco Car” that do not take users to Costco’s website but rather to sponsored links that generate pay-per-click revenue for the Respondent, including ones that use Costco’s name without authorization.
On March�2,�2007, Costco sent a letter to the Respondent by email to the address provided in the WHOIS information, notifying the Respondent of Costco’s rights in the COSTCO trademark and demanding that Respondent’s activity cease immediately. The Respondent did not reply and has continued to use the domain name for its own benefit.
i) The domain name is confusingly similar or identical to a trademark or service mark in which the Complainant has rights, Policy�paragraph�4(a)(i)
The Respondent’s domain name is confusingly similar to Costco’s COSTCO trademarks. The domain name consists of Costco’s registered trademark, COSTCO, conjoined with the common terms “car insurance”.
As noted previously, Costco owns numerous registrations for COSTCO trademarks. The addition of common terms such as “car insurance” to the trademark does not mitigate the confusing similarity between the domain name and Costco’s trademarks. The Complainant has long offered a variety of insurance and financial services, including car insurance, and therefore, the addition of common terms such as “car insurance” to the COSTCO trademark makes the contested domain name confusingly similar to the Complainant’s mark.
ii) The Respondent has no rights or legitimate interests in respect of the domain name, Policy�paragraph�4(a)(ii)
The Complainant asserts that the Respondent has no legitimate interest in any domain name, trademark or trade name incorporating, or confusingly similar to, the COSTCO trademark. It further asserts that the Respondent has not used the domain name in connection with a bona fide offering of goods or services, owns no trademark registrations for the domain name or any portion thereof, and has not been commonly known by the domain name or any portion thereof.
Yet the Respondent has registered the domain name, using it to direct Internet traffic to its website. This evidences an intent to disrupt Costco’s business, deceive consumers, and trade off of Costco’s goodwill by creating an unauthorized association between it and the COSTCO trademarks. Accordingly, the Respondent cannot demonstrate any rights or legitimate interest in the disputed domain name.
iii) The domain name was registered and is being used in bad faith, Policy�paragraph�4(a)(iii)
In the Complainant’s view, the Respondent’s choice of domain name was no coincidence. The Respondent registered the contested domain name on January�4,�2005, many years after the COSTCO trademark had become well-known. Due to the notoriety of the COSTCO trademark, the Respondent must have been aware of Costco’s rights in the COSTCO trademark when it registered the domain name and when it diverted Internet users to its website. The Respondent’s registration of the domain name was done in bad faith because it had no legitimate right or business interest in any COSTCO-related domain name. The only conceivable business purposes for registering the domain name was to profit from the diversion of Internet users to websites unrelated to Costco. This is a bad faith registration.
The Complainant submits that the Respondent’s website has a sophisticated, “legitimate” appearance that is calculated to induce Internet users to believe that they have arrived at a website sponsored or authorized by Costco. Though it features links to “Costco”, “Costco Wholesale”, “Costco Insurance” and “Costco Car”, the links on the Respondent’s website are deceptive traps for innocent users that lead them to sponsored links featuring services by companies that have no affiliation with Costco and may in fact be its direct competitors. This confuses and deceives Internet users, damages Costco’s business and provides an illicit commercial benefit to the Respondent by trading on Costco’s reputation and goodwill. This, in the Complainant’s view, clearly establishes bad faith use of the Domain Name pursuant to paragraph�4(b)(iv) of the Policy.
B. Respondent
The Respondent did not reply to the Complainant’s contentions.
6. Discussion and Findings
In order for the Panel to decide to grant the remedy requested by the Complainant under the Policy, it is necessary that the Complainant prove, as required by paragraph�4(a) of the Policy, in respect of the contested domain name, that:
(i) the contested 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 domain name; and
(iii) the domain name has been registered and is being used in bad faith.
A. Identical or Confusingly Similar
The domain name is confusingly similar to the Complainant’s trademarks. The domain name consists of the widely known registered trademark, COSTCO, to which the common terms “car insurance” have been added. The addition of such common terms to the trademark in no way eliminates the confusing similarity between the domain name and Costco’s trademarks. To the contrary, the combination of “car insurance” to the trademark makes the resulting domain name confusingly similar to the trademark. Policy paragraph�4(a)(i) is plainly satisfied.
B. Rights or Legitimate Interests
The Complainant asserts that the Respondent has no legitimate interest in any domain name, trademark or trade name incorporating or confusingly similar to the COSTCO trademark. It further asserts that the Respondent has not used the domain name in connection with a bona fide offering of goods or services, owns no trademark registrations for the domain name or any portion thereof, and has not been commonly known by the domain name or any portion thereof. On the evidence, there is no question whatsoever that the Complainant has satisfied Policy, paragraph 4 (a)(ii).
C. Registered and Used in Bad Faith
The Panel also has no difficulty concluding that the domain name has been registered and is being used in bad faith. A review of the evidence filed in respect to the operation of the Respondent’s website reveals that the Respondent has no legitimate right or business interest in any COSTCO-related domain name. The Respondent’s only conceivable business purposes in registering the domain name appears to have been to profit from the diversion of Internet users to websites unrelated to Costco. The Panel further agrees with the Complaint that the Respondent’s website is intended to deceive innocent users and lead them to sponsored links featuring services by companies that have no affiliation with Costco and may in fact be direct competitors of Costco. In the Panel’s view, the Respondent is employing the site in bad faith to lure Internet users and divert them to other commercial sites for its own commercial gain by use of a domain name that is similar to the Complainant’s mark.
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 name be transferred to the Complainant, Costco Wholesale Membership, Inc.
J. Christopher Thomas, Q.C.
Sole Panelist
Dated: June 6,�2007
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