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Costco Wholesale Membership Inc. , Costco Wholesale Corporation v. Yong Li [2004] GENDND 780 (9 June 2004)

1. The Parties

The Complainants are Costco Wholesale Membership Inc. and Costco Wholesale Corporation, both C/O Sheri L. Flies, Corporate Counsel, of Issaquah, Washington, United States of America represented by Law Office of Mark J. Nielsen, United States of America.

The Respondent is Yong Li of Beijing, China.

2. The Domain Names and Registrar

The disputed domain names <coscto.com> and <costcotires.com> are registered with iHoldings.com Inc. d/b/a DotRegistrar.com.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on April 24, 2004. On April 26, 2004, the Center transmitted by email to

iHoldings.com Inc. d/b/a DotRegistrar.com a request for registrar verification in connection with the domain names at issue. On April 27, 2004, iHoldings.com Inc. d/b/a DotRegistrar.com 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 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 April 29, 2004. In accordance with the Rules, paragraph 5(a), the due date for Response was May 19, 2004. The Respondent did not submit any response. Accordingly, the Center notified the Respondent’s default on May 21, 2004.

The Center appointed Kamen Troller as the sole panelist in this matter on May 27, 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

Costco is one of the largest and best-known retailers in the United States and is leading in warehouse club merchandizing and related services.

The COSTCO trademark is well known for the sale of brand name and high quality private label merchandise at low prices in no frills warehouse-style stores (Complainant’s Exhibit C).

Costco’s stores offer a wide range of merchandise and a variety of services.

The Complainant is the owner of numerous trademark registrations for the COSTCO trademark in a variety of forms, including COSTCO (in stylistic letters), COSTCO WHOLESALE & Design, and COSTCO.COM, for a wide variety of services and various printed publications and other materials in the United States, in China and many other countries (Complainant’s Exhibit D and E).

Costco owns the <costco.com> domain name and maintains an active presence on the Internet (Complainant’s Exhibit H). Moreover, it’s website allows cardholders to locate Costco tire centers, browse the selection of tires offered at Costco’s tire centers, and even purchase tires online (Complainant’s Exhibit I)

The Respondent registered the disputed domain name <costcotires.com> on February 12, 2003, and <coscto.com> on August 8, 2000. The WHOIS information for the domain names lists Yong Li as the registrant

The <costcotires.com> domain name resolves to a portal site for auto parts retailers at “www.usseek.com” (Complainant’s Exhibit J) and the <coscto.com> domain resolves to a portal site for shopping at “www.usseek.com” (Complainant’s Exhibit K). The Domain Names also lead users to a pop-up gambling advertisement.

The Respondent did not submit any statement of defense. To the best knowledge of the Panel, the Respondent did not register <costcotires.com> or <coscto.com> as a trademark in any jurisdiction.

On July 11, 2003, February 18, 2004, and April 6, 2004, the Complainant sent letters to the Respondent by both e-mail and regular mail to the addresses provided for the administrative and technical contacts of the <costcotires.com> domain name and <cosctco.com> domain name notifying the Respondent of Costco’s rights in the COSTCO trademark and demanding that Respondent’s infringing and damaging activity immediately cease. (Complainant’s Exhibit L and M).

The Respondent did not even care to show the slightest reaction, and did not respond to any of demands of Complainant.

5. Parties’ Contentions

A. Complainant

The Complainant contends that each of the three elements specified in paragraph 4(a) of the Policy are applicable to the disputed domain names. More precisely, it alleges that:

(i) the domain names <costcotires.com> and <coscto.com> are confusingly similar to the Complainant’s trademarks “COSTCO” on which the Complainant has rights.

The Complainant contends that the <costcotires.com> domain name consists of Costco’s well-known registered trademark, COSTCO, and the common term, “tires”. Moreover, because the Complainant sells tires and provides tire installation services in most of its warehouse stores and through its “www.costco.com” website, the addition of a common term such as “tires” to the COSTCO trademark exacerbates the confusing similarity between the COSTCO trademark and the Domain Names and increases the risk of confusion between the Domain Names and the COSTCO trademarks.

Furthermore, the Complainant contends that the <coscto.com> domain name is an obvious misspelling of the COSTCO trademark. “Coscto” is not a word or a recognized name. Its only possible use in a domain name is as a trap for consumers searching the Internet for Costco who inadvertently invert the “t” and the “c” when typing the URL for Costco’s website, “www.costco.com”.

(ii) the Respondent has no right or legitimate interest in the domain names; owns no trademark registrations for the Domain Names or any portion thereof, and has not been commonly known by the Domain Names or any portion thereof. The Complainant has not licensed or otherwise permitted Respondent to use its marks or the Domain Names.

(iii) the domain names have been registered and is used in bad faith:

Because of the notoriety of the COSTCO trademark, Respondent must have been aware of Costco’s rights in the COSTCO trademark when he registered the Domain Names and when he put them to use diverting Internet users attempting to find tires and other products for sale through Costco.

The Respondent’s use of the Domain Names to divert Internet traffic to retail websites unrelated to Costco proves Respondent’s intention to disrupt Costco’s business and eventually its intention to sell them to the Complainant or to a third party. Moreover, this confuses and deceives Internet users and provides commercial benefit to Respondent and retail competitors of Costco.

Furthermore, the Respondent has registered <coscto.com>, using misspellings of registered trademarks in order to catch Internet users who make typographical errors in entering the legitimate domain names they are looking for.

Finally, the Respondent has a well-established history of registering domain names that appropriate or mimic well-known, registered trademarks. Many of Respondent’s domain names have been the subject of uncontested UDRP proceedings in which decisions were entered transferring the domain names to complainants.

The Complainant requests the Administrative Panel to issue a decision that the contested domain name be transferred to the Complainant.

B. Respondent

The Respondent did not reply to the Complainant’s contentions; it did not submit any diverting presentation of facts.

6. Discussion and Findings

Procedural matters

In cases where a respondent does not submit a response, paragraph 5(e) of the Rules states that in the absence of exceptional circumstances, the Panel shall decide the dispute based upon the complaint's presentation of facts.

No such exceptional circumstances exist in the present case. The Rule mentioned above shall thus be applied.

Substantive matters

Pursuant to paragraph. 4(a) of the Policy, the Complainant must prove that each of the three elements are present:

(i) the Respondent’s 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 Complainant alleges that the domain names <costcotires.com> and <coscto.com> are confusingly similar to the Complainant’s trademarks “COSTCO”.

Moreover, it contends that Complainant sells tires and provides tire installation services in most of its warehouse stores and through its “www.costco.com” website. Therefore, the addition of a common term such as “tires” to the COSTCO trademark exacerbates the confusing similarity.

Furthermore, it alleges that the <coscto.com> domain name is an obvious misspelling of the COSTCO trademark. Its only possible use in a domain name is as a trap for consumers searching the Internet for Costco who inadvertently invert the “t” and the “c” when typing the URL for Costco’s website, “www.costco.com”.

In the assessment of whether a domain name and a trademark are confusingly similar, all relevant circumstances must be taken into account, in particular, the degree of oral, visual or conceptual similarity between both terms, the similarity of the goods or services they are used for, and the distinctiveness the trademark has either per se or by virtue of the mark’s recognition.

The Panel finds that the domain names and the trademark are confusingly similar, based upon the following factors:

- the Complainant’s trademark “COSTCO” is embodied in the disputed domain name <costcotires.com> and the addition of the generic term such as “tires” is descriptive and does not mitigate the phonetical and visual confusing similarity,

- the Complainant’s trademark “Costco” is visually and phonetically confusingly similar to the disputed domain name <coscto.com>, except for the fact that the “c” and the “t” are inverted. However, the inversion of these letters does not significantly change the overall impression of the mark, as stated in former Administrative Panel Decisions, see for instance “Ticketmaster Corporation v. Yong Li”, WIPO Case No. D2003-0905 the addition of the ending “.com” constitutes a minor difference that does not prevent confusion, as stated in former Administrative Panel Decisions, see for instance in Tchibo Frisch-Röst-Kaffee GmbH v. Hans Reischl, WIPO Case No. D2001-0079 “tschibo”;

- the trademark “Costco” is used for the sale of brand name and merchandise in no-frills warehouse-style store. In addition, the Complainant’s website allows cardholders to locate Costco tire center, browse the selection of tires offered at Costco’s tire center and even purchase tires online. The domain names <coscotire.com> and <coscto.com> resolve to a portal site for auto parts retailers and shopping at “www.usseek.com”. Therefore, the similarity in the goods and services makes no doubt.

Considering these circumstances, the Panel concludes that the domain names <costcotires.com> and <coscto.com> are confusingly similar to the Costco trademarks for which the Complainant has rights.

(b) Absence of rights or legitimate interests

Paragraph 4(c) of the Policy defines the circumstances required for the Respondent to demonstrate “rights to and a legitimate interest in the domain name”, the Respondent only being required to demonstrate one of the following circumstances (in particular and without limitation) to prove its rights to or legitimate interest in the domain name:

(i) before any notice to you 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 (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 are making a legitimate non-commercial 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.

By restraining from submitting a response to the present complaint, the Respondent has not given any indication that any of the above circumstances are present; the facts as presented do not enable the Panel to find any circumstance showing good faith or any right of Respondent.

Based on these considerations, the Respondent has failed to satisfy the conditions of paragraph 4(c) of the Policy. The Panel concludes that the Respondent has no rights or legitimate interests in the domain name.

(c) Bad faith

Paragraph 4(a)(iii) of the Policy requires the Complainant to prove use in bad faith as well as registration in bad faith.

Paragraph 4(b) of the Policy sets forth a non-exclusive list of circumstances each of which shall be evidence that the registration and use of a domain name is in bad faith:

(i) circumstances indicating that you 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 website or location.

The Complainant contends that the Respondent has registered and used the disputed domain names in bad faith for the following reasons:

- Respondent has no legitimate right or business interest to use “Coscto” in its domain names. Respondent’s only conceivable business purposes in registering the Domain Names were to profit from the diversion of Internet users to websites unrelated to Costco and, perhaps, to eventually sell them to Costco or to a third party (paragraph 4 b (i));

- Respondent’s use of the Domain Names to divert Internet traffic to retail websites unrelated to Costco proves Respondent’s intention to disrupt Costco’s business (paragraph 4 b (iii)),

- Respondent’s use of the Domain Names disrupts Costco’s business, and provides commercial benefit to Respondent and retail competitors of Costco (paragraph 4 b (iv)),

Based on these considerations, and the fact that the Respondent did not rebut them, the Panel finds that the Complainant has succeeded in proving that the Respondent has registered and used the domain names in bad faith.

7. Decision

The Panel decides that the domain names <costcotires.com> and <coscto.com> are confusingly similar to Complainant’s trademarks “Costco”, that the Respondent has no rights or legitimate interests in respect of the domain names, and that the Respondent has registered and used the domain names in bad faith.

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 <costcotires.com> and <coscto.com> be transferred to the Complainant.

Kamen Troller
Sole Panelist

Date: June 9, 2004