Non-ASCII character may be sufficient to render generic mark distinctive

In Sanutri AG v Hello Domain (Case D2010-0554, June 8 2010), a World Intellectual Property Organisation (WIPO) panel has ordered the transfer of the domain name 'céré' to Sanutri AG.
Since 2003, it has been possible to register domain names containing characters outside of the basic Latin alphabet (also called non-ASCII characters) across a number of generic top-level domains and country-code top-level domains at the second level.
Sanutri is a Swiss company involved in the sale of dietary food. It markets its products under the brand names Gerblé, Céréal, Gerlinéa and Milical. Sanutri is the owner of several registrations for the trademark CÉRÉAL, including a Community trademark, an international trademark and a French trademark registered as early as 1980. It also operates websites at 'céré' and 'céré'.
Sanutri filed a complaint under the Uniform Domain Name Dispute Resolution Policy (UDRP) with WIPO against Hello Domain, a company based in the United States, seeking the transfer of the domain name 'céré'. The domain name was registered on August 30 2007. Sanutri sent a letter to Hello Domain advising that it would initiate legal action if Hello Domain failed to transfer the domain name to it. Hello Domain never replied to this letter.
To achieve the transfer of a domain name under the UDRP, a complainant must establish that:
  • the domain name registered by the respondent is identical, or confusingly similar, to a trademark or service mark in which the complainant has rights;
  • the respondent has no rights or legitimate interests in respect of the domain name; and
  • the domain name has been registered and is being used in bad faith.
Addressing the first limb of the UDRP, Sanutri claimed that the domain name was identical, or confusingly similar, to its CÉRÉAL marks. In response, Hello Domain alleged that the domain name was "no more than a common word in widespread use in a descriptive sense". It referred to the definition of the term 'céréal' in dictionaries, worldwide company registries and trademark databases, and noted that the word 'céréal' appeared in dictionaries and returned 5,817 company names and 312 trademark records.
Hello Domain also argued that it had used the website at 'céré' to redirect to '', a website containing a directory of domain names put up for sale by Hello Domain. Thus, there could be no confusion between this website and Sanutri. It further stated that it was in the business of purchasing and selling generic domain names, which is a legitimate business under the UDRP. Hello Domain finally requested a finding of reverse domain name hijacking against Sanutri.
The panel considered that whether or not the term 'céréal' also had some generic connotation, this did not affect the fact that the domain name was identical, or confusingly similar, to Sanutri's trademark. Therefore, it found that the first limb of the UDRP had been satisfied.
Turning to the second limb of the UDRP, Sanutri asserted that Hello Domain did not have any rights in the domain name. According to Sanutri, Hello Domain was not referred to, or known under, the term 'céréal'. Hello Domain replied by quoting two cases issued under the UDRP to the effect of demonstrating that the business of selling generic domain names was not only legitimate under the UDRP, but had also been considered sufficient to demonstrate a legitimate interest.
The panel considered that no evidence was presented that the term 'céréal' appeared in any English dictionary or that it had any other meaning in another language, since Hello Domain referred only to the term 'cereal' without the non-ASCII character 'é'. The panel pointed out that the term 'céréal' clearly had close phonetic and visual similarities to the English term 'cereal', as well as the term 'céréale' (French for 'cereal'), but was not identical to either of those terms.
Although the panel acknowledged that the use of the non-ASCII character 'é' in place of the ASCII character 'e' could be said to have little or no significance, this was of relevance when considering whether the domain name was identical, or confusingly similar, to Sanutri's mark. However, this was insufficient to determine whether rights in a domain name could exist because of a similarity with a term in another language. The panel also took the view that it could not be said that the term 'céréal' was merely descriptive.
In the view of the panel, Hello Domain had not argued that it had rights in the term 'céréal', but had simply said that it had registered a generic English term. According to the panel, a respondent may demonstrate rights or legitimate interests in registering common dictionary words, but this could not apply to terms that were merely similar to dictionary terms. In this regard, the panel declared that there was no evidence that Hello Domain had rights or legitimate interests in the domain name.
Finally, Sanutri sought to establish the third UDRP requirement by submitting that the domain name had been registered and was being used in bad faith. According to Sanutri, the only objective for Hello Domain's acquisition of the domain name was for resale. Sanutri quoted the following statement displayed on the website at the domain name: 
"Domains for sale at US$789 (€580) each.
Special Investors: 20 domains at US$8,000 (€5,600).
If someone is interested in buying the whole portfolio, please send us an offer".
Sanutri provided no evidence that the domain name was actually sold on this website.
Paragraph 4(b)(iv) of the UDRP sets out, as an example of evidence of registration and use of a domain name in bad faith, the fact that:
"the domain name was acquired 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] documented out-of-pocket costs directly related to the domain name."
The website found at 'céré' had been used to sell domain names and the domain name 'céré' itself was also advertised for sale. In the absence of any evidence to support Hello Domain's argument that the domain name had a descriptive meaning in English, and noting that the domain name was identical to Sanutri's registered mark, the panel considered the issue of whether the domain name had been registered and was being used in bad faith as per Paragraph 4(b) of the UDRP.
The panel also took note of the fact that the domain name was advertised for sale. Even though Hello Domain did not approach Sanutri directly, the panel found that Sanutri had established that the domain name had been registered and was being used in bad faith. The transfer of the domain name was thus ordered.
UDRP decisions relating to domain names containing non-ASCII characters clearly demonstrate that registering a domain name containing a non-ASCII character is not sufficient to prevent a finding of confusing similarity (eg, please see "Domain name with non-ASCII character transferred to owner of identical mark").
However, in the present case, the panel established that non-ASCII characters may be sufficient to turn a generic term into a distinctive trademark. Respondents will thus have difficulties arguing that they have rights or legitimate interests when they amend common dictionary words with non-ASCII characters and register them as domain names.
Although the panel correctly found that the first two requirements of the UDRP had been satisfied, it could be argued that Sanutri had not sufficiently demonstrated that the domain name had been registered and was being used in bad faith. Another panel may have decided that the third requirement of the UDRP had not been satisfied and could have denied transfer. Thus, it is always crucial for complainants to substantiate their arguments with solid evidence and to provide as much detail as possible to satisfy the three criteria of the UDRP.

David Taylor, Hogan Lovells, Paris

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