Costco Wholesale Membership, Inc. v. Hong Chen
Claim Number: FA1904001840846
Complainant is Costco Wholesale Membership, Inc. (“Complainant”), represented by Craig A. Beaker of Perkins Coie, Washington, USA. Respondent is Hong Chen (“Respondent”), Virginia, USA.
REGISTRAR AND DISPUTED DOMAIN NAME
The domain name at issue is <costgofood.com>, registered with GoDaddy.com, LLC.
The undersigned certifies that he has acted independently and impartially and to the best of his knowledge has no known conflict in serving as Panelist in this proceeding.
Steven M. Levy, Esq. as Panelist.
Complainant submitted a Complaint to the Forum electronically on April 29, 2019; the Forum received payment on April 29, 2019.
On April 29, 2019, GoDaddy.com, LLC confirmed by e-mail to the Forum that the <costgofood.com> domain name is registered with GoDaddy.com, LLC and that Respondent is the current registrant of the name. GoDaddy.com, LLC has verified that Respondent is bound by the GoDaddy.com, LLC registration agreement and has thereby agreed to resolve domain disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).
On April 30, 2019, the Forum served the Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of May 20, 2019 by which Respondent could file a Response to the Complaint, via e-mail to all entities and persons listed on Respondent’s registration as technical, administrative, and billing contacts, and to postmaster@costgofood.com. Also on April 30, 2019, the Written Notice of the Complaint, notifying Respondent of the e-mail addresses served and the deadline for a Response, was transmitted to Respondent via post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts.
A timely Response was received and determined to be complete on May 17, 2019.
An Additional Submission was received from the Complainant on May 22, 2019.
On May 23, 2019, pursuant to Complainant's request to have the dispute decided by a single-member Panel, the Forum appointed Steven M. Levy, Esq. as Panelist.
Having reviewed the communications records, the Administrative Panel (the "Panel") finds that the Forum has discharged its responsibility under Paragraph 2(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the "Rules") "to employ reasonably available means calculated to achieve actual notice to Respondent" through submission of Electronic and Written Notices, as defined in Rule 1 and Rule 2.
Complainant requests that the domain name be transferred from Respondent to Complainant.
A. Complainant
Complainant is a multi-billion dollar global retailer that owns and operates a chain of retail stores in the United States under the trademark COSTCO. The stores offer consumer household products under a variety of nationally known third-party brands as well as Complainant’s own private label brand KIRKLAND. These product categories include groceries and snacks, personal care items for adults and children, clothing and accessories, and cosmetics, among others. Complainant has rights in the COSTCO mark dating back to 1984 through its use in commerce and its registration of the mark with the United States Patent and Trademark Office (“USPTO”). Respondent’s <costgofood.com> domain name, registered on September 10, 2014, is confusingly similar to Complainant’s mark, as it misspells Complainant’s COSTCO mark by replacing the second letter “c” with the visually similar letter “g” and adds both the descriptive term “food” and the “.com” generic top-level domain (“gTLD”). The Respondent also filed two United States trademark applications for the mark COSTGOFOOD however, these have become abandoned after Complainant filed an opposition proceeding against one of the applications and the USPTO rejected the other application on the ground that there is a likelihood of confusion with Complainant’s COSTCO mark.
Respondent has no rights or legitimate interests in the <costgofood.com> domain name. Respondent is not commonly known by the disputed domain name, nor has Complainant authorized, licensed, or otherwise permitted Respondent to use the mark. Respondent also does not use the disputed domain name in connection with a bona fide offering of goods or services or a legitimate noncommercial or fair use. Rather, Respondent uses the domain name to divert users away from Complainant and to Respondent’s competing website, all for commercial gain. Many of the products sold at Respondent’s website are in similar categories as those sold by Complainant and the site also claims to offer Complainant’s KIRKLAND branded products for sale.
Respondent registered and uses the <costgofood.com> domain name in bad faith as Respondent offered to sell the domain name to Complainant. Further, Respondent uses the resolving domain to pass itself off as Complainant in order to commercially benefit from confused Internet users looking for Complainant and its products. Additionally, given Respondent’s registration of a domain name that is highly similar to the COSTCO mark, as well as the active use of the resolving domain to pass itself off as Complainant and sell competing consumer products, it is implausible that Respondent did not have actual knowledge of Complainant’s rights prior to registering the domain name.
B. Respondent
Complainant does not have rights to the claimed mark. The <costgofood.com> domain name is not identical or confusingly similar to the COSTCO trademark as it is comprised of generic terms, namely “cost,” “go,” and “food”.
Respondent does have rights and legitimate interests in the <costgofood.com> domain name, and Complainant has failed to provide sufficient evidence to support its prima facie case. Respondent’s domain name consists of common, generic, dictionary terms. The terms in the domain name are descriptive of selling food at a low cost – which is Respondent’s legitimate business model. Further, there is no likelihood of confusion between the marks, and the logos at issue are distinct from each other. Additionally, Respondent has used the domain name in connection with its company, COSGO LLC, and chose the domain to reflect its business of selling wholesale organic food products and other merchandise. Moreover, Complainant has not demonstrated nor argued that Respondent registered the domain name with the intent to infringe on Complainant’s rights.
Respondent did not register and use the domain name in bad faith. Contrary to Complainant’s assertion, Respondent never attempted to sell the <costgofood.com> domain name to Complainant, and Complainant provided no evidence to support this assertion. Further, Complainant offers no evidence to support its likelihood of confusion argument, and there is no evidence that Respondent attempted to disrupt Complainant’s business. Additionally, the domain name is composed solely of three common dictionary words.
Finally, Respondent argues that Complainant’s claim should be barred by the doctrine of laches and it also requests that the Panel make a finding of reverse domain name hijacking.
C. Additional Submissions
Complainant made an additional submission to note that Respondent’s <costgofood.com> domain name, though comprised of individual generic and descriptive terms, is more than the sum of its parts when considered as a whole. Further, while Respondent argues that the terms are descriptive of its organic, low-cost wholesale business, the terms do nothing to give users that impression. Further, Respondent’s website shows that it engages in the sale of other products as well, ones which cannot be organic (e.g., baby bottles, pacifiers, etc.) Additionally, even if the individual words making up the domain name are generic, Respondent intentionally chose to combine the terms “cost” and “go” to create a term that is visually similar to Complainant’s COSTCO mark with intent to profit off the resulting user confusion. Moreover, Respondent ignores the fact that Respondent engages in the exact same line of business as Complainant, namely the sale of a wide range of consumer products.
(1) the domain name registered by Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and
(2) Respondent has no rights or legitimate interests in respect of the domain name; and
(3) the domain name has been registered and is being used in bad faith.
Paragraph 15(a) of the Rules instructs this Panel to "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."
Paragraph 4(a) of the Policy requires that Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:
(1) the domain name registered by Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and
(2) Respondent has no rights or legitimate interests in respect of the domain name; and
(3) the domain name has been registered and is being used in bad faith.
Complainant claims rights in the COSTCO trademark through its longstanding use as well as its registration of the mark with the USPTO, certificates of which are submitted into evidence. Registration of a mark with the USPTO sufficiently confers a complainant’s rights in a mark for the purposes of Policy ¶ 4(a)(i). See Humor Rainbow, Inc. v. James Lee, FA 1626154 (Forum Aug. 11, 2015) (stating, “There exists an overwhelming consensus amongst UDRP panels that USPTO registrations are sufficient in demonstrating a complainant’s rights under Policy ¶ 4(a)(i) and its vested interests in a mark. . . . Due to Complainant’s attached USPTO registration on the principal register at Exhibit 1, the Panel agrees that it has sufficiently demonstrated its rights per Policy ¶ 4(a)(i).”). Accordingly, the Panel finds that Complainant has established rights in the COSTCO mark for the purposes of Policy ¶ 4(a)(i).
Complainant next argues that Respondent’s <costgofood.com> domain name is confusingly similar to Complainant’s COSTCO mark, as it misspells the mark by replacing the second letter “c” with the letter “g” and adds both the descriptive term “food” and the “.com” gTLD. Misspelling of a complainant’s mark and adding various terms and a gTLD generally does not sufficiently distinguish a domain name for the purposes of Policy ¶ 4(a)(i). See Vanguard Trademark Holdings USA LLC v. Shuai Wei Xu / Xu Shuai Wei, FA 1784238 (Forum June 1, 2018) (“Respondent arrives at each of the disputed domain names by merely misspelling each of the disputed domain names and adding the gTLD ‘.com.’ This is insufficient to distinguish the disputed domain names from Complainant’s trademark.”); Coupang Corporation v. [unknown holder], FA 1832821 (Forum Apr. 16, 2019) (ccoupang.com and coupangfood.com held confusingly similar to Complainant’s COUPANG mark). Where a relevant trademark is recognizable within a disputed domain name, the addition of other terms, particularly those that are relevant to a complainant’s field of business, does not prevent a finding of confusing similarity under the first element. See Bloomberg Finance L.P. v. Nexperian Holding Limited, FA 1782013 (Forum June 4, 2018) ( bloombergvoice.com found confusingly similar to Complainant’s BLOOMBERG mark as used for a news reporting service). The Panel notes that the word “food” is directly relevant to the Complainant’s sale of grocery and snack items and therefore finds that the <costgofood.com> domain name is confusingly similar to the COSTCO mark under Policy ¶ 4(a)(i).
While Respondent contends that the <costgofood.com> domain name is comprised of common and generic terms and as such cannot be found to be confusingly similar to Complainant’s mark, the Panel finds that such a determination is not necessary under Policy ¶ 4(a)(i) as this portion of the Policy considers only whether Complainant has rights in the COSTCO mark and whether the disputed domain name is identical or confusingly similar to Complainant’s mark in its appearance, sound, and/or meaning. See Precious Puppies of Florida, Inc. v. kc, FA 1028247 (Forum Aug. 10, 2007) (examining Respondent’s generic terms arguments only under Policy ¶ 4(a)(ii) and Policy ¶ 4(a)(iii) and not under Policy ¶ 4(a)(i)); see also The Dannon Company Inc., Compagnie Gervais Danone v. Muhammad Bashir Ibrahim, WIPO Case No. D2016-2270 (WIPO Dec. 19, 2016) (confusing similarity, under Policy ¶ 4(a)(i), is commonly tested by comparing the mark and the disputed domain name in appearance, sound, meaning, and overall impression.”).
Complainant must first make a prima facie case that Respondent lacks rights and legitimate interests in the disputed domain name under Policy ¶ 4(a)(ii). Should it succeed in this effort, the burden then shifts to Respondent to show that it does have rights or legitimate interests. See Advanced International Marketing Corporation v. AA-1 Corp, FA 780200 (Forum Nov. 2, 2011) (finding that a complainant must offer some evidence to make its prima facie case and satisfy Policy ¶ 4(a)(ii)); see also Neal & Massey Holdings Limited v. Gregory Ricks, FA 1549327 (Forum Apr. 12, 2014) (“Under Policy ¶ 4(a)(ii), Complainant must first make out a prima facie case showing that Respondent lacks rights and legitimate interests in respect of an at-issue domain name and then the burden, in effect, shifts to Respondent to come forward with evidence of its rights or legitimate interests”).
Complainant contends that Respondent has no rights or legitimate interests in the <costgofood.com> domain name as Respondent is not commonly known by the disputed domain name, nor has Complainant authorized, licensed, or otherwise permitted Respondent to use the mark. Pertinent information on this question includes the WHOIS record for the disputed domain name, assertions by a complainant regarding the nature of its relationship with a respondent, claims made in a response, and other evidence in the record that is relevant to this issue. See Amazon Technologies, Inc. v. Suzen Khan / Nancy Jain / Andrew Stanzy, FA 1741129 (Forum Aug. 16, 2017) (finding that respondent had no rights or legitimate interests in the disputed domain names when the identifying information provided by WHOIS was unrelated to the domain names or respondent’s use of the same); see also Google LLC v. Bhawana Chandel / Admission Virus, FA 1799694 (Forum Sep. 4, 2018) (concluding that Respondent was not commonly known by the disputed domain name where “the WHOIS record identifies the Respondent as “Bhawana Chandel,” and no information in the record shows that Respondent was authorized to use Complainant’s mark in any way.”). The WHOIS record for the <costgofood.com> domain name identifies the registrant as “Hong Chen”. Although the Response includes the statement, “Respondent is CEO COSGO LLC”, no evidence is submitted to support this and this entity is not mentioned in the WHOIS record. As such, there is no evidence in the present case to indicate that the Respondent is known by any name other than “Hong Chen”. Further, there is nothing in the record to suggest that the Complainant authorized Respondent to use the COSTCO mark for any purpose. Accordingly, the Panel finds that Respondent is not commonly known by the <costgofood.com> domain name under Policy ¶ 4(c)(ii).
Complainant next argues that Respondent uses the disputed domain name to divert users away from Complainant and to Respondent’s competing websites for commercial gain. Using a confusingly similar domain name to compete with a complainant can evince a failure to make a bona fide offering of goods or services or a legitimate noncommercial or fair use under the Policy. See Vanguard Trademark Holdings USA LLC v. Dan Stanley Saturne, FA 1785085 (Forum June 8, 2018) (“Respondent’s use of the disputed domain name does not amount to a bona fide offering of goods or services or a legitimate noncommercial or fair use” where “Respondent is apparently using the disputed domain name to offer for sale competing services.”). Complainant provides screenshots of the webpages that resolve (or have resolved) from the disputed domain name. A screenshot dated February 23, 2018 shows a page that states “Welcome to costgofood.com” and displays the categories “Retail & Wholesale, Infants & Moms, Nutrition & Healthcare, Bath & Skincare, Food, Household Supplies, and Clothing, Shoes”. This site also features a banner at the top offering various packaged nut snacks and stating “KIRKLAND Signature. All Kirkland’s Best Here. SHOP NOW”. As noted above, KIRKLAND is one of the Complainant’s private label brands for products sold at its COSTCO stores. Specific products appear to be offered for sale on the site such as nutritional supplements, baby cream, shampoo, lip balm, sunglasses, and others. Another screenshot is submitted dated April 17, 2019 in which the disputed domain name redirects users to the website <westwinglife.com> that displays the categories “Baby & Child, Health & Beauty, Personal Care, and Classic Luxury”. This site purports to offer specific products for sale including baby cups, bowls, and spoons, creams, and pacifiers. As such, the Panel finds that use of the confusingly similar <costgofood.com> domain name to offer products that are identical or similar to those offered by the Complainant is not a bona fide use of the domain, particularly where there is no indication on Respondent’s websites to indicate that Respondent is a distributor for the Complainant’s goods. See Oki Data Americas, Inc. v. ASD, Inc., D2001-0903 (WIPO Nov. 6, 2001). As such, Respondent lacks rights and legitimate interests under Policy ¶ 4(c)(i).
Finally, Respondent asserts what appears to be an argument that it is making a descriptive fair use of the disputed domain name. This is based on its position that “[t]he terms ‘COST GO FOOD’ is clearly descriptive of selling food at a low cost…” The Response goes on to say that “the key factor is whether a respondent registered and is using a domain name to describe his product/business or to profit from the generic value of the word without intending to take advantage of a complainant’s rights in that word.” The Panel finds this unconvincing as the phrase “cost go food”, though comprised of individual words that each have a generic/dictionary meaning, does not, as a whole, clearly convey a generic or descriptive message. This phrase is not commonly used by the public to indicate the sale of food products and it also does not even indicate whether the cost of said food products is low or high. Further, even assuming, arguendo, that the phrase has some descriptive meaning in relation to the sale of food products, as noted above, the majority of products offered at the websites to which Respondent has resolved the domain appear to be other than food items (Respondent has not submitted any screenshots of its websites into evidence and so the Panel has only those submitted by the Complainant to rely upon). In sum, the confusing similarity with the COSTCO mark combined with the facts that Respondent offers many non-food items on its sites and the disputed domain is not a phrase that would, as a whole, be understood as describing a quality of its activities, leads this Panel to hold that Respondent is not making a fair use and thus, that it lacks rights and legitimate interests in the domain name under Policy ¶ 4(c)(iii).
In light of the above, the Respondent has not shown that it has rights or legitimate interests in the disputed domain name under Policy ¶ 4(a)(ii).
Complainant argues that Respondent had actual knowledge of Complainant’s rights in the COSTCO mark at the time of registering the <costgofood.com> domain name. Actual knowledge of a complainant's rights in a mark prior to registering a confusingly similar domain name can evince bad faith under Policy ¶ 4(a)(iii). See iFinex Inc. v. xu shuaiwei, FA 1760249 (Forum Jan. 1, 2018) (“Respondent’s prior knowledge is evident from the notoriety of Complainant’s BITFINEX trademark as well as from Respondent’s use of its trademark laden domain name to direct internet traffic to a website which is a direct competitor of Complainant”). Complainant contends that Respondent’s knowledge can be inferred given Respondent’s registration of a domain name that is highly similar to the COSTCO mark, as well as the active use of the resolving domain to pass itself off as Complainant and sell competing consumer products. The Panel agrees with Complainant and notes that the promotion of Complainant’s house brand KIRKLAND products on Respondent’s website provides further evidence that Respondent was aware of Complainant and its COSTCO mark. The Panel thus finds that Respondent registered the disputed domain name in bad faith under Policy ¶ 4(a)(iii).
In further support of its bad faith assertion, Complainant makes numerous mentions of its claim that Respondent offered to sell the domain name to Complainant “for monetary compensation”. Offering to sell a confusingly similar domain name for an amount in excess of out-of-pocket expenses can evince bad faith under Policy ¶ 4(b)(i). See Deutsche Lufthansa AG v. Kenechukwu Okoli, FA 1821759 (Forum Jan. 13, 2019) (“The domain name’s website listed the domain name for sale for $9,150. Respondent also contacted Complainant directly to offer the domain name for sale. Doing so suggests bad faith registration and use of the <lufthansamiles.com> domain name pursuant to Policy ¶ 4(b)(i).”). Complainant points to correspondence between itself and Respondent to further this assertion, however the copy of the emails it submitted into evidence makes no mention of any sale offer and consists only of a message from Complainant’s attorney to the Respondent setting forth a list of requests. This Panel will not speculate as to whether there is additional correspondence in that email exchange which was inadvertently omitted from Complainant’s exhibit. As such, the Panel finds that there is insufficient evidence in the record to support Complainant’s claim that Respondent offered the disputed domain name for sale.
Complainant further claims that Respondent uses the disputed domain name to pass itself off as Complainant in order to commercially benefit from confused Internet users looking for Complainant and its products. Using a confusingly similar domain name to trade upon the goodwill associated with a complainant for commercial gain can evince bad faith under Policy ¶ 4(b)(iv). See Bittrex, Inc. v. Wuxi Yilian LLC, FA 1760517 (Forum Dec. 27, 2017) (finding bad faith per Policy ¶ 4(b)(iv) where “Respondent registered and uses the <lbittrex.com> domain name in bad faith by directing Internet users to a website that mimics Complainant’s own website in order to confuse users into believing that Respondent is Complainant, or is otherwise affiliated or associated with Complainant.”); see also Xylem Inc. and Xylem IP Holdings LLC v. YinSi BaoHu YiKaiQi, FA1504001612750 (Forum May 13, 2015) (“The Panel agrees that Respondent’s use of the website to display products similar to Complainant’s, imputes intent to attract Internet users for commercial gain, and finds bad faith per Policy ¶ 4(b)(iv).”). Here, Complainant provides a screenshot of the webpages that have resolved from the disputed domain, first the <costgofood.com> domain itself and then a redirect to the domain <westwinglife.com>. In both cases, these websites purport to offer products and services in identical or similar categories as those offered by Complainant under its COSTCO mark, e.g., personal care items for adults and children, personal accessories, and snacks. Accordingly, the Panel agrees that Respondent attempted to benefit commercially from confusion with Complainant’s mark in bad faith under Policy ¶ 4(b)(iv).
In light of the above, the Complainant has satisfied its burden of proof in demonstrating that the disputed domain name has been registered and used in bad faith under Policy ¶ 4(a)(iii).
Doctrine of Laches
Respondent argues that it has used the <costgofood.com> domain name continuously since September 2014, and that “Complainant waited at least five years from its knowledge of Respondent’s registration and use of the disputed domain name before challenging Respondent’s rights and interests in the name.” Respondent asserts that Complainant’s delay has cemented Respondent's business reliance upon the disputed domain name to conduct crucial online operations and constitutes an implied authorization for that use of the name by Respondent. In its Additional Submission, Complainant argues that latches is not a valid defense and that, in any event, it did not delay in protecting its COSTCO mark. Rather, Complainant claims that it only learned of Respondent’s domain name when Respondent filed trademark applications for the name COSTGOFOOD. At that time, Complainant engaged Respondent in settlement negotiations, which were ultimately unsuccessful.
It has become well accepted that the doctrine of laches is strongly disfavored as a defense to claims under the Policy. See, e.g., Hebrew Univ. of Jerusalem v. Alberta Hot Rods, D2002-0616 (WIPO Oct. 7, 2002) (“The remedy available in an Administrative Proceeding under the Policy is not equitable. Accordingly, the defense of laches has no application.”); see also Drown Corp. v. Premier Wine & Spirits, FA 616805 (Forum Feb. 13, 2006) (finding that the laches defense was inappropriate under the Policy and that the time frame within which the complainant brought the proceeding was of no consequential value); see also Disney Enters. Inc. v. Meyers, FA 697818 (Forum June 26, 2006) (“Respondent’s efforts at arguing related equitable defenses such as estoppel and acquiescence are equally misplaced as these legal arguments are not contemplated by the Policy. Moreover, recognition of these arguments in accordance with Respondent’s desires requires the Panel to make a legal determination regarding the continuing validity of Complainant’s DISNEY mark. Such action is beyond the scope of the UDRP proceeding and if Respondent desires such an outcome it should avail itself of the proper judicial proceedings by which such a result might be accomplished.”). However, prior decisions under the Policy recognize that there may be rare instances when laches does apply – particularly where a domain owner relies, to its detriment, upon a complainant’s long delay in bringing the action. N.Y. Times Co. v. Name Admin. Inc. (BVI), FA 1349045 (Forum Nov. 17, 2010) (the panel expressly recognized laches as a valid defense where the Complainant stood by without explanation and watched the Respondent actively build a business using the disputed domains for more than six years). However, here, there is no indication in the record that the Complainant stood by without explanation or that the Respondent actively built its business around the <costgofood.com> domain name. The Complainant’s statement that it had no knowledge of the disputed domain until Respondent’s trademark applications came to its attention is plausible and the Respondent submits no evidence of Complainant’s prior knowledge, or of business development before it was put on-notice of the present dispute. As such, the Panel declines to apply the doctrine of laches in this case.
Reverse Domain Name Hijacking
Respondent alleges that Complainant has acted in bad faith and is engaging in reverse domain name hijacking by initiating this dispute. As the Panel finds that Complainant has satisfied all of the elements of Policy ¶ 4(a), the Panel finds that Complainant has not engaged in reverse domain name hijacking. See World Wrestling Fed’n Entm’t, Inc. v. Ringside Collectibles, D2000-1306 (WIPO Jan. 24, 2001) (“Because Complainant has satisfied [all of] the elements of the Policy, Respondent’s allegation of reverse domain name hijacking must fail”); see also Gallup, Inc. v. PC+s.p.r.l., FA 190461 (Forum Dec. 2, 2003) (finding no reverse domain name hijacking where complainant prevailed on the “identical/confusingly similar” prong of the Policy).
Having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be GRANTED.
Accordingly, it is Ordered that the <costgofood.com> domain name be TRANSFERRED from Respondent to Complainant.
Steven M. Levy, Esq., Panelist
Dated: May 28, 2019
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