WIPO Arbitration and Mediation Center

ADMINISTRATIVE PANEL DECISION

Costco Wholesale Corporation and Costco Wholesale Membership, Inc. v. Kenneth Terrill

Case No. D2010-2124

1. The Parties

Complainants are Costco Wholesale Corporation and Costco Wholesale Membership (collectively, “Complainant”) of Issaquah, Washington, United States of America, represented by Law Office of Mark J. Nielsen, Seattle, Washington, United States of America.

Respondent is Kenneth Terrill of Escondido, California, United States of America.

2. The Domain Name and Registrar

The disputed domain name <costcoreversemortgage.com> (“Disputed Domain Name”) is registered with GoDaddy.com, Inc.

3. Procedural History

The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on December 9, 2010. On December 9, 2010, the Center transmitted by e-mail to GoDaddy.com, Inc. a request for registrar verification in connection with the Disputed Domain Name. On December 9, 2010, GoDaddy.com, Inc. transmitted by e-mail to the Center its verification response confirming that 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(a) and 4(a), the Center formally notified Respondent of the Complaint, and the proceedings commenced on December 10, 2010. In accordance with the Rules, paragraph 5(a), the due date for Response was December 30, 2010. Respondent did not submit any response. Accordingly, the Center notified Respondent’s default on January 4, 2011.

The Center appointed Douglas M. Isenberg as the sole panelist in this matter on January 10, 2011. 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

Complainant states that it is “the twenty-fourth largest company and the fourth largest retailer in the Fortune 500”; that it is “one of the largest and best‐known retailers in the United States, with US$76 billion in sales in fiscal year 2010”; that it “has operated membership warehouse stores under the COSTCO trademark and trade name since 1983”; and that it “currently operates over 577 warehouse stores worldwide, including over 400 COSTCO warehouse stores in the United States and Puerto Rico and over 150 in Australia, Canada, Japan, Korea, Mexico, Taiwan, and the U.K.”; that it “has more than 60 million authorized cardholders worldwide and more than 40 million authorized cardholders in the United States.”

Complainant further states that “’Costco’ is a coined name developed by the founders of Costco”; that Complainant “obtained its first U.S. trademark registration of COSTCO in 1985 and has continued to expand and maintain a large portfolio of COSTCO trademark registrations in the United States and many other countries” (a U.S. list of which was provided as an annex to the Complaint); that at least three of Complainant’s U.S. trademark registrations cover financial services (namely, U.S. Reg. Nos. 2,299,958; 2,302,095, and 2,306,055) and that Complainant is the registrant of the domain name <costco.com>.

Complainant further states that the Disputed Domain Name was registered on April 2, 2005, and “resolves to a web site operated by Respondent that is devoted to advising people about and originating reverse mortgage loans at “www.houserichandcashpoor.com”.”

5. Parties’ Contentions

A. Complainant

Complainant contends, in relevant part, as follows:

- The Disputed Domain Name is confusingly similar to Complainant’s COSTCO trademark because, among other things, “[t]he addition of a common term such as ‘reverse mortgage’ to the COSTCO trademark does not mitigate the confusing similarity between the Domain Name and Costco’s COSTCO trademarks.”

- Respondent does not have rights or legitimate interests in respect of the Disputed Domain Name because Complainant “has not licensed or otherwise permitted Respondent to use its marks or the Domain Name”; “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”; and “Respondent’s action evidences a clear 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.”

- The Disputed Domain Name was registered and is being used in bad faith because “Respondent must have been aware of [Complainant’s] rights in the COSTCO trademark when it registered the Domain Name and when it put it to use diverting Internet users to its web site”; “Respondent’s only conceivable business purpose in registering the Domain Name was to profit from the diversion of Internet users to his own mortgage lending web site unrelated to Costco”; and “Respondent uses the Domain Name to divert Internet users looking for [Complainant’s] mortgage lending services to his web site for his own commercial benefit.”

B. Respondent

Respondent did not reply to Complainant’s contentions. However, on January 11, 2011, Complainant sent an e-mail to the Center stating, in full, as follows:

As I have stated previously there is no dispute here. I will transfer the domain name to them if someone would be kind enough to tell me where they want it transferred.

A name server they would like it transferred to would be nice. The domain is locked by GoDaddy so I can not [sic] do anything with it any way.

I am not opposing this nor have I ever. From the first time I was contacted I have agreed to the transfer if someone would just tell me what name server they want it transferred to.

6. Discussion and Findings

Pursuant to the Policy, Complainant is required to prove the presence of each of the following three elements to obtain the relief it has requested: (i) the Disputed Domain Name is identical or confusingly similar to a trademark or service mark in which the Complainant has rights; (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. Policy, paragraph 4(a).

A. Identical or Confusingly Similar

Based upon the trademark registrations cited by Complainant, it is obvious that Complainant has rights in the COSTCO trademark, and Respondent does not dispute the validity of the COSTCO trademark.

As to whether the Disputed Domain Name is identical or confusingly similar to the COSTCO trademark, the relevant comparison to be made is with the second-level portion of the domain name only (i.e., “costcoreversemortgage”), as it is well-established that the top-level domain name (i.e., “.com”) should be disregarded for this purpose.

This Panel agrees with Complainant’s argument that “[b]ecause [Complainant] offers a wide variety of financial services, including mortgage loans, the addition of a common term such as ‘reverse mortgage’ to the COSTCO trademark exacerbates the confusing similarity between the COSTCO trademark and the Domain Name and increases the risk of confusion between the Domain Name and the COSTCO trademarks.” See, e.g., Playboy Enterprises International, Inc. v. John Taxiarchos, WIPO Case No. D2006-0561 (citing Yellow Corporation v. MIC, WIPO Case No. D2003-0748 (“when a domain name is registered which is a well-known trademark in combination with another word, the nature of the other word will largely determine the confusing similarity”)).

Furthermore, as Complainant notes, a number of previous panels under the Policy have found that the addition of other words to the COSTCO trademark in a domain name is not sufficient to negate confusing similarity. See, e.g., Costco Wholesale Membership Inc. , Costco Wholesale Corporation v. Yong Li, WIPO Case No. D2004-0296 (“the addition of the generic term such as ‘tires’ is descriptive and does not mitigate the phonetical and visual confusing similarity”) (transfer of <costcotires.com>).

Accordingly, the Panel finds that Complainant has proven the first element of the Policy.

B. Rights or Legitimate Interests

Complainant has argued that Respondent does not have rights or legitimate interests in respect of the Disputed Domain Name because Complainant “has not licensed or otherwise permitted Respondent to use its marks or the Domain Name”; “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”; and “Respondent’s action evidences a clear 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.”

Under the Policy, “a complainant is required to make out an initial prima facie case that the respondent lacks rights or legitimate interests. Once such prima facie case is made, respondent carries the burden of demonstrating rights or legitimate interests in the domain name. If the respondent fails to do so, a complainant is deemed to have satisfied paragraph 4(a)(ii) of the UDRP.” WIPO Overview of WIPO Panel Views on Selected UDRP Questions, paragraph 2.1.

Accordingly, as a result of Complainant’s submissions and without any evidence from Respondent to the contrary, the Panel is satisfied that Complainant has proven the second element of the Policy.

C. Registered and Used in Bad Faith

Whether a domain name is registered and used in bad faith for purposes of the Policy may be determined by evaluating four (non-exhaustive) factors set forth in the Policy: (i) circumstances indicating that the registrant has registered or the registrant has 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 the registrant’s documented out-of-pocket costs directly related to the domain name; or (ii) the registrant has 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 the registrant has engaged in a pattern of such conduct; or (iii) the registrant has registered the domain name primarily for the purpose of disrupting the business of a competitor; or (iv) by using the domain name, the registrant has intentionally attempted to attract, for commercial gain, Internet users to the registrant’s 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 registrant’s website or location or of a product or service on the registrant’s website or location. Policy, paragraph 4(b).

In this case, Complainant appears to argue that bad faith exists pursuant to, inter alia, paragraph 4(b)(iv) of the Policy. The Panel agrees. Numerous previous decisions under the Policy have found bad faith where, as here, a domain name registrant is using a disputed domain name in violation of the first two elements of the Policy in connection with a website that offers services competitive with those offered by the complainant under the relevant trademark. See, e.g., Hilton Worldwide, Hilton Hotels Corporation, HLT Domestic IP LLC and HLT International IP LLC v. Steve Alek, Niagara Falls Corp, WIPO Case No. D2010-1063 (“[t]he inevitable conclusion is that Respondent registered the domain names in full knowledge of Complainants’ rights and reputation and in the expectation that it could profit from the identity or confusing similarity between those trademarks and the respective domain names”).

Accordingly, the Panel is satisfied that Complainant has proven the third element of the Policy.

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 <costcoreversemortgage.com> be transferred to Complainant Costco Wholesale Membership, Inc., as requested in the Complaint.

Douglas M. Isenberg
Sole Panelist
Dated: January 24, 2011