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Costco Wholesale Corporation and Costco Wholesale Membership Inc. v. Mohammad Hassan [2005] GENDND 1810 (5 October 2005)

World Intellectual Property Organization

WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Corporation and Costco Wholesale Membership Inc. v. Mohammad Hassan

Case No. D2005-0823

1. The Parties

1.1 The Complainant is Costco Wholesale Corporation and Costco Wholesale Membership Inc., Issaquah, United States of America, represented by the Law Office of Mark J. Nielsen, United States of America.

1.2 The Respondent is Mohammad Hassan, Corona, California, United States of America.

2. The Domain Name and Registrar

2.1 The disputed domain name <priceclubbd.com> is registered with Tucows.

3. Procedural History

3.1 The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on August 1, 2005; a hard copy of the Complaint was received by the Center on August 3, 2005. On August 2, 2005, the Center transmitted by email to Tucows a request for registrar verification in connection with the domain name at issue. On August 8, 2005, Tucows 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”).

3.2 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 August 19, 2005. In accordance with the Rules, Paragraph 5(a), the due date for Response was September 8, 2005. The Respondent did not submit any Response. Accordingly, the Center notified the Respondent’s default on September 9, 2005.

3.3 The Center appointed Jay Simon as the sole Panelist in this matter on September 21, 2005. 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.

3.4 The Complaint and the formal documents were transmitted electronically to the Panel on September 21, 2005, and a hard copy, with attached exhibits, was forwarded by courier to the Panel on the same day.

4. Factual Background

4.1 Complainant is a warehouse club and operates about 336 warehouse club stores in the United States of America and the Commonwealth of Puerto Rico under the name “Costco”. Complainant operates additional warehouse club stores in several countries including Mexico, the United Kingdom of Great Britain and Northern Ireland, Republic of Korea, Japan and Taiwan, Province of China.

4.2 Shopping in Complainant’s warehouse stores is through membership in Complainant’s shopping club which issues membership cards to shoppers. Complainant has more than 44 million authorized cardholders worldwide, of which more than 33 million are in the United States. Complainant’s sales in 2004 were in excess of U.S. $47 billion.

4.3 Complainant is more than a grocery supermarket offering a variety of products including foods, beverages, household paper products, clothing, personal care products, nutritional supplements, computers and home furnishings, appliances both large and small, jewelry, holiday decorations, tools, garden supplies, automotive supplies, and sports equipment. Many of these products are brand name products.

Complainant, in its warehouse stores, also offers a variety of services including photo processing, optical and hearing aid services, pharmacy, bakery, delicatessen and take out food, tire installation, auto, home and health insurance, commercial and mortgage lending, etc.

4.4 Complainant’s predecessor company, The Price Company, was the first U.S. company to operate a membership warehouse club store and operated its first warehouse store under the PRICE CLUB name in San Diego, California in 1976. The Price Company expanded its operations in the United States and also into Canada and Mexico. In 1993, the Price Company merged with Complainant, at which time the Price Company had annual sales of U.S. $7.6 billion.

4.5 Complainant owns the domain name <priceclub.com>, which name resolves to Complainant’s ”www.costco.com” website.

4.6 Complainant admits that most of its United States warehouse stores originally opened by The Price Company now bear Complainant’s COSTCO marks on outside signage.

4.7 Complainant owns trademark registrations from the United States Patent and Trademark Office for various COSTCO and PRICE CLUB marks, the latter as early as 1982. A partial listing of Complainant’s PRICE CLUB marks includes the following, all of which are in full force and effect. Through a wholly owned affiliate, Complainant also owns trademark registrations for COSTCO and PRICE CLUB marks in many other countries.

Country	Mark	International Class	Reg. No. (Date)
United States	PRICE CLUB	29	1,334,543 (7 May 1985)
	PRICE CLUB	37	1,413,638 (14 October 1986)
	PRICE CLUB	39	1,427,837 (2 February 1987)
	PRICE CLUB	39	1,548,653 (18 July 1989)
	PRICE CLUB & Design	42	1,185,120 (5 January 1982)
	PRICE CLUB	42	1,976,638 (28 May 1996)
	PRICE CLUB	42	1,720,985 (29 September 1992)
Mexico	PRICE CLUB	NC	20077 (20 September 1996)
CTM	PRICE CLUB	35, 37, 39, 42	1119114 (27 November 2000)

4.8 Respondent registered the disputed domain name on June 24, 2004.

4.9 Respondent resides in Southern California and, is a Costco cardholder since 2003.

4.10 On April 20, 2005, Complainant sent a letter, by email and courier, to a Bangladesh company, Price Club Wholesale, that uses the disputed domain name (Respondent is a managing director of Price Club Wholesale), requesting that Respondent and Price Club Wholesale cease all infringing activity of Complainant’s mark. An officer of Price Club Wholesale responded to Complainant’s letter and refused to cease any of its uses of Complainant’s marks and inquired about Complainant’s registrations in Bangladesh. In an April 25, 2005 email Complainant, again, contested use of its marks by Price Club Wholesale. No response was received.

4.11 Respondent did not file a Response in these proceedings and was notified of its default by the Center.

5. The Parties Contentions

A. Complainant

5.1 Complainant contends that its activities as a warehouse store as well as its registrations of COSTCO trademarks and PRICE CLUB trademarks, the latter as a result of the merger with the Price Club, establish Complainant’s rights in both sets of marks. Complainant has submitted evidence that the PRICE CLUB mark remains well recognized and is known to many of its card holders.

5.2 Complainant contends that the disputed domain name is confusingly similar to Complainant’s PRICE CLUB trademark in that the disputed domain name consists of Complainant’s registered trademark and “bd”, which is the ICANN-approved country code for Bangladesh, and that the addition of “bd” to its mark does not mitigate the confusing similarity between the disputed domain name and Complainant’s mark.

5.3 Complainant further contends that the confusing similarity is exacerbated by the fact that its warehouse stores operate in a number of different countries and sells goods to purchasers in various countries, including via the internet.

5.4 Complainant contends that Respondent has no rights or legitimate interests in the disputed domain name, and that Complainant has not licensed or otherwise permitted Respondent to use Complainant’s marks or its domain name.

5.5 Complainant further contends that Respondent has not used the disputed domain name in connection with a bona fide offering of goods or services, owns no bona fide trademark registrations for the disputed domain name, and has not been lawfully known by the disputed domain name.

5.6 Complainant contends that Respondent has registered and is using the disputed domain name in bad faith and that by virtue of Respondent’s location and its Costco membership card, Respondent must have been aware of Complainant’s rights in the PRICE CLUB trademark when Respondent registered the disputed domain name.

5.7 Complainant further contends that Respondent’s registration of the disputed domain name was part of a scheme to use Complainant’s trademarks to deceive consumers and vendors and to divert internet traffic to Respondent’s website where brand name products, presumably including products similar to or the same as products sold by Complainant.

5.8 Complainant further contends that Respondent is using the disputed domain name to create a likelihood of confusion with Complainant’s mark as to the source, sponsorship, affiliation or endorsement of Respondent’s website.

5.9 Complainant requests that this Panel transfer the disputed domain name to Complainant, in particular to Costco Wholesale Membership, Inc., one party of the Complainant entity.

B. Respondent

5.10 Respondent has failed to respond to the Complaint and has not otherwise actively participated in these proceedings.

6. Discussion and Findings

6.1 The Policy as effected by the Rules and the Supplemental Rules provides specified remedies to trademark rights holders against registrants of domain names where the rights holder (Complainant) proves each of the following elements:

(a) the domain name is identical or confusingly similar to a trademark or service mark in which Complainant has rights;

(b) the registrant (Respondent) has no rights or legitimate interests in respect of the domain name; and

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

6.2 Complainant has the burden of proof, by a preponderance of the evidence, respecting each element of Paragraph 6.1.

6.3 Respondent, having failed to respond in these proceedings, is in default and in accordance with Paragraph 14(b) of the Rules, “the Panel shall draw such inferences… as it considers appropriate”.

6.4 Before considering the findings of this Panel, there are two issues that require discussion even though Respondent has defaulted in these proceedings. One relates to the geographic scope of a registered trademark and the rights that may be obtained in a mark outside the country of registration. The other issue relates to the plethora of evidence submitted by Complainant regarding its rights in COSTCO trademarks.

(a) Regarding geographic scope, it is of course axiomatic that a trademark is registered and, therefore, protected in the country of registration. This does not mean, for the purposes of the Policy that a mark cannot be recognized outside of the country of registration. If a mark has widespread recognition, a complainant can have rights, i.e., common law rights, in the mark beyond its country of registration. Further, a domain name is an address and because it is available worldwide on the Internet it is not limited by geography or field of use. See First American Funds, Inc. v. Ult. Search, Inc., WIPO Case No. D2000-1840. Also, the effect of a domain name is felt not only in the country where a registrant resides or from where the registrant does business, but is felt, because of the internet, around the world. See Skipton Building Society v. Peter Colman, WIPO Case No. D2000-1217.

(b) Regarding the evidence submitted by Complainant showing its rights in the COSTCO family of trademarks, this evidence is mainly irrelevant to these proceedings. The disputed domain name relates to Complainant’s rights in PRICE CLUB marks and confusing similarity must relate to the mark for which Complainant seeks protection.

(c) This Panel finds that Complainant has rights in the PRICE CLUB marks adequate to bring this proceeding. This Panel further finds that the PRICE CLUB marks are of long standing and remain in use at this time even though Complainant’s warehouse stores are now referred to as COSTCO stores.

A. Identical or Confusingly Similar (Paragraph 4(a)(i) of the Policy)

6.5 The differences between Complainant’s mark and the disputed domain name are slight and insignificant: the addition of “bd” after the mark, lack of a space between PRICE and CLUB, and of course, the “.com”. The use of “.com” has been held in many prior cases to be of no significance, see Pomellato S.p.A. v. Richard Tonetti, WIPO Case No. D2000-0493. Also, the addition of “bd” to PRICECLUB does not change the overall impression of a mark to an internet user such that the user would believe that the disputed domain name does not reflect back to Complainant. See Time Warner Inc. and EMI Group plc v. CPIC Net, WIPO Case No. D2000-0433. The omission of the space is similarly of no significance; see Tarjeta Naranja S.A. v. MrDominio.com and Alejandro San Jorge, WIPO Case No. D2001-0295.

6.6 Further, it appears to this Panel that the addition of “bd” to the mark, the “bd” being the country code for Bangladesh, that Respondent is intentionally using Complainant’s mark to confuse internet users into believing that the disputed domain name somehow reflects back to Complainant in Bangladesh.

6.7 This Panel is also mindful of the seminal decision in EAuto, L.L.C. v. Triple S Auto Parts d/b/a Kung Fu Yea Enterprises, Inc., WIPO Case No. D2000-0047, to the effect that when a domain name incorporates, in its entirety, a mark in which a complainant has rights, a sufficient similarity between the mark and the domain name is created such that the domain name is confusingly similar to the mark.

6.8 This Panel finds that the disputed domain name is confusingly similar to marks in which Complainant has rights, e.g., U.S. Reg. No. 1,548,653.

B. Lack of Rights or Legitimate Interests (Paragraph 4(a)(ii) of the Policy)

6.9 Paragraph 4(c) of the Policy lists three non-exclusive methods for determining whether a respondent has rights or legitimate interests in a disputed domain name.

6.10 In respect of demonstrating a respondent’s lack of rights or legitimate interests in a disputed domain name, the burden of proof rests with Complainant. However, the Complainant having made the necessary assertions, it is incumbent upon the Respondent to come forward with evidence of its rights or legitimate interests in the disputed domain name, the Respondent being uniquely possessed of this evidence, if such evidence exists. Respondent has failed to present any evidence regarding its rights or legitimate interests in the disputed domain name, and such failure is tantamount to admitting the truth of Complainant’s assertions; see Do the Hustle, LLC v. Tropic Web, WIPO Case No. D2000-0624.

6.11 Complainant asserts that Respondent is not licensed or otherwise permitted to use Complainant’s marks or the disputed domain name. Respondent having not replied to the Complaint, the assertions made by Complainant must be accepted as factual.

6.12 Respondent’s use of the disputed domain is to attract internet users to its website for the purpose of selling goods and services through the warehouse store of Price Club Wholesale. Thus, Respondent’s use of the disputed domain is not fair use and is not non-commercial.

6.13 Respondent registered the disputed domain name on June 24, 2004, and Complainant has acted diligently in pursuing its remedies under the Policy. Thus, there is no evidence that Respondent was commonly known by the disputed domain name.

6.14 Of course, Respondent has used the disputed domain name prior to the institution of these proceedings. This Panel, however, believes that Respondent’s use of the disputed domain name is not a bona fide use. From the uncontested evidence submitted by Complainant, Respondent’s use of the disputed domain name is for the promotion of a warehouse store, offering goods and services similar to those offered by Complainant. Respondent’s use of the disputed domain name appears to be trading off the goodwill developed by Complainant over many years.

6.15 Complainant’s PRICECLUB marks have been registered for a number of years. Respondent lives in Southern California and is a card holder in Complainant’s warehouse club stores, and Complainant has submitted evidence that a member of the management team of Price Club Wholesale has 12 years experience in the grocery warehouse merchandizing industry in the United States including work in a warehouse store in Southern California at just about the time when Costco and The Price Club merged, i.e., 1993. It strains credibility to believe that Price Club Wholesale and Respondent were not aware of the PRICE CLUB marks. Respondent’s activity was with constructive knowledge and presumptively actual knowledge of Complainant, its activities and its trademarks. The presumption has not been rebutted and Respondent’s use of the disputed domain name is not a legitimate use thereof. See Pitney Bowes v. Mike Ostanik, WIPO Case No. D2000-1611; Sanrio Company Ltd. and Sanrio, Inc. v. Neric Lau, WIPO Case No. D2000-0172.

C. Registration and Use in Bad Faith (Paragraph 4(a)(iii) of the Policy)

6.16 Paragraph 4(b) of the Policy indicates several non-exclusive methods for showing bad faith registration and use of domain name. Paragraphs 4(b)(iii) and 4(b)(iv) of the Policy state:

(iii) You (Respondent) have registered the domain name primarily for the purpose of disrupting the business of a competitor;

(iv) By using the domain name, you (Respondent) have intentionally attempted to attract, for commercial gain, Internet users to your website…, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your website…of a product or service on your website…

6.17 In The Channel Tunnel Group, Ltd. v. John Powell, WIPO Case No. D2000-0038, the Panel determined that the respondent was clearly aware of complainant’s rights in its mark, and the respondent added a feature to the domain name to differentiate if from complainant’s mark and that by doing so respondent “clearly recognized its potential to cause confusion” with complainant’s rights. This Panel has noted in Paragraph 6.15, above, that it is more than likely that Respondent was aware of Complainant’s rights in the Price Club family of trademarks. Such awareness is certainly indicia of bad faith registration under Paragraph 4(b)(iii) of the Policy, but it is open to question as to whether Respondent registered the disputed domain name “primarily for the purpose of disrupting” Complainant’s business.

6.18 Nevertheless, this Panel believes that the uncontested evidence submitted by Complainant satisfies Paragraph 4(b)(iv) of the Policy, and that Respondent registered the disputed domain name intentionally for the purpose of misleading internet users regarding the source, sponsorship, etc. of its website. Thus, Respondent’s website shows a warehouse club store in Bangladesh offering products similar to those offered by Complainant.

6.19 This Panel finds that Respondent by registering a confusingly similar domain name, more than likely with knowledge of Complainant’s marks and rights, and offering products through a warehouse club store has registered and used the disputed domain in bad faith.

6.20 When, as here, a disputed domain name is confusingly similar to a mark in which a complainant has rights and that domain name has the ability to divert internet users looking for the complainant to a respondent’s website for the pecuniary gain of a respondent, bad faith use of the disputed domain name is established, i.e., the confusingly similar domain name causes confusion regarding the sponsorship, affiliation, endorsement, etc. of Respondent’s website. See, for example, Ticketmaster Corporation v. Yong Li, WIPO Case No. D2003-0905.

6.21 The Panel finds it necessary to distinguish the case of “21” Club Inc. v. 21 Club, WIPO Case No. D2000-1159, and cases cited therein. In that case, the respondent resided in China and registered <21club.net>, a domain name identical to the complainant’s mark. The Panel refused to transfer the disputed domain name to the complainant finding an absence of bad faith registration. The Panel determined that complainant’s mark was known extensively in the United States, possibly in Europe and other parts of the western world, but was not known in China at the date of registration of the domain name. Worldwide recognition could not be presumed.

6.22 The facts of this case are significantly different. Respondent here is a COSTCO cardholder in Southern California, a member of the management team of Price Club Wholesale worked in the warehouse store business in Southern California where Price Club warehouse stores originated, and the addition of “bd”, the country code for Bangladesh, all suggest (conclusively, in the absence of any evidence to the contrary) that Respondent was well aware of Complainant’s marks prior to the registration of the disputed domain name, and intentionally sought to attract internet users to what they would think was the Bangladesh counterpart of Complainant’s warehouse stores.

6.23 This Panel finds that the disputed domain name was registered and used in bad faith by Respondent.

7. Decision

7.1 For all the foregoing reasons, in accordance with Paragraph 4(i) of the Policy and Paragraph 15 of the Rules, this Panel orders that the domain name <priceclubbd.com> be transferred to Complainant, and specifically to Costco Wholesale Membership, Inc.

Jay Simon
Sole Panelist

Dated: October 5, 2005