An IDNForums.com member recently asked me a good question and I took the time to answer it. I thought that I would share my answer here, although I have of course removed the specifics from the situation and changed some facts to keep things confidential. Accordingly, the domains etc. referred to below are made-up for illustrative purposes only. If anyone has any thoughts on this I would like to hear them. In particular, I am still on the look out for a case that pits a foreign language domain name against an ASCII transliteration.
Your question to me was whether your Chinese language domain name, which you have owned since 2001, meaning EXCITEMENT, is safe from a UDRP if you never offer to sell it or put ads on the site, considering that there is a well established web site owned by a large company that has the ASCII Chinese transliteration equivalent, and they have been around since before you registered the Chinese character version.
The UDRP covers Chinese language dot coms (See this Verisign FAQ). Pursuant to the UDRP, any claimant would under would have to meet the three-part test:
1. Whether the domain name is confusingly similar;
2. Whether the registrant has a legitimate interest in the domain name; and
3. Whether the registrant registered and used the domain name in bad faith.
There does not appear to be any consensus or conclusion regarding how the three part test applies to IDN’s when it comes to foreign language equivalents of ASCII trademarks (See for example this article, and see also this one).
In my opinion, a UDRP Panel hearing an IDN case involving foreign language equivalents of a trademark, would first determine whether in fact the Complainant owns an alleged trademark that pre-existed the disputed domain name.
I would start by checking out the trademark registry in China and performing a thorough search for both the ASCII transliteration version and the Chinese language equivalent.
I would be somewhat surprised if the operator of EXCITEMENT.COM (Chinese language) did not have a trademark registered before your domain registration. Even if they didn’t however, it is my opinion that they would likely be found to have held “common law trademark rights” prior to your domain name registration based upon extensive use of the domain name. I come to this conclusion based upon the fact that they had operated the site for some time before your registration (see archive.org).
Accordingly, the next step would be for the Panel to determine if the disputed (Chinese language) domain name was confusingly similar with ASCII Chinese transliteration. This is where the law is unsettled in particular. Nevertheless, it is my opinion that the Panel would apply the doctrine of foreign equivalents and thereby determine that the disputed domain name and the common law trademark are confusingly similar.
The Panel would then look to see if you had a legitimate interest in the domain name. In order to show a legitimate interest, the best evidence is your actual use of the domain name. I realize that the Chinese transliteration EXCITEMENT.COM portal covers a lot of topics, it being a general search portal full of content, but there is still plenty of room to build a web site for all kinds of things, for example, a web site development company. You would be well advised however to ensure that there are no conflicting trademarks in connection with your use of the domain name. Not using a domain name is sometimes considered “passive holding” and shows a lack of legitimate interest and sometimes bad faith. Furthermore, PPC links are always problematic, even though some Panels treat them as a legitimate use.
In this part of the test, you would also show that your domain name is a common word, meaning "excitement". You would argue that you have a legitimate interest in any descriptive, common dictionary word. You would also show how the term, "excitement" and the Chinese transliteration equivalent are used by numerous companies for all kinds of goods and services and the Complainant does not enjoy any kind of monopoly on the term. You would also point out that they have sat on their rights, if any, by not trying earlier to take the domain name.
Then it comes to whether you registered and used the domain name in bad faith. The Panel might look to what other domain names you have registered to see if there is a pattern of registering trademarks or other domain names that try and take advantage of someone’s ASCII domain name. They would want to see if you targeted this domain name because you likely knew about the ASCII site, or whether this dictionary term was just one amongst many other dictionary terms that you registered, thereby showing that you likely registered it because it is a common term, not because of the trademark owner’s web site.
So, in conclusion, not offering to sell and not using PPC is a good idea, but developing is the best idea. Furthermore, you need to make sure that your background is clear of any evidence that could be used to show a pattern of registering infringing domain names, and also clear of any evidence that could indicate that you targeted the ASCII web site.