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10|17|2008 03:45 pm EDT

Are Domain Names Considered Property or Not?

by Adam Strong in Categories: Legal Issues

I was up late last night cruising through the 44 page docket from the case involving the 141 gambling domain names seized by the state of Kentucky.  This is a landmark case in my opinion and I wanted to read some of the fine print.  It’s pretty clear that this case will be setting some major precedent regarding jurisdiction and domain name use, but there was something else that caught my eye in the document. The groups involved in the case made several points in their efforts to have the case dismissed, but a discussion on domain names being considered property is the one that made me look twice.

The court discusses the issue of domains as property on about page 12 of the docket.

“The Opposing Groups and Lawyers . . . collectively assert that domain names are akin to a telephone number or a business or residential address only; that domain names are but a combination of letters and numbers, which serves as a mnemonic aid, nothing more. They argue that domains are not property, but are rights in a service contract.”

The docket continues for 3 pages discussing this argument and the court reaches the final conclusion

“the Defendants 141 Domain Names are property, and therefore subject to this Court’s in rem jurisdiction or to possible civil forfeiture”

It’s no surprise that the court ruled that domains are property.  What is surprising is who was among this “Opposing Groups and Lawyers”.  According to page 4 of the docket Network Solutions (NSI) and the Internet Commerce Association (ICA) were lumped in to this group.   The ICA, a group consisting of mostly domainers and domain companies, and NSI, a domain name registrar have joined with other gambling industry groups such as PPA, IGC, and IMEGA to present arguments in this case.  Recognizing these entities are not actually plaintiffs defendants, the court grouped them all together and classified them as “Opposing Groups and Lawyers” and did provide for their views to be considered. These views are expressed in this case as “domains are not property”.

It isn’t 100% clear that every member of the “Opposing Groups and Lawyers” view things this way but the phrase “collectively assert” certainly makes it sound like all of the groups had agreed on this argument.

Does the ICA and NSI think domains aren’t property now ?  That argument can be made but it doesn’t seem like one that would come from either group.  In a previous incarnation of the ICA website, the organization states that one of ICA’s issues is that “Domains be recognized as private property and domain owners have the rights of private property owners”.  This exact text was not to be found on the latest version of the ICA site, so it is possible they have completely changed their views on this issue.

Is NSI now claiming domains aren’t property as well ?  In the very case that is referenced in the Kentucky docket, Network Solutions all but concedes that domains are property.  In page 10 of the case the court points out that Network Solutions recognizes and acknowledges domains are property

The preliminary question, then, is whether registrants have property rights in their domain names. Network Solutions all but concedes that they do.This is no surprise, given its positions in prior litigation. See Network Solutions, Inc. v. Umbro Int’l, Inc., 529 S.E.2d 80, 86 (Va. 2000) (“[Network Solutions] acknowledged during oral argument before this Court that the right to use a domain name is a form of intangible personal property.”); Network Solutions, Inc. v. Clue Computing, Inc., 946 F. Supp. 858, 860 (D. Colo. 1996) (same).

There’s nothing to point to other than convenience or a missed opportunity as a reason NSI and ICA are linked to this poor argument.  Whether they conveniently switched their stances isn’t clear, but they also didn’t stop the argument from being made. Both NSI and ICA should know that the courts have previously recognized domains as property.  The gambling groups can be excused from ignorance on this matter as it may not be their strong suit, but one would think that this is where the ICA and NSI cold have helped the collective effort.

Joining with this group to argue a point that has been clarified and/or not preventing the argument from being presented could be considered negligent.  Arguing against something that you are on record for supporting also seems foolish. Hopefully, at a minimum they both can clarify why this was argued or why the change of stance was taken here.

ICA and NSI should still be commended for their efforts to fight a case that has the potential to change domain ownership responsibilities as we know it. Few outside of the gambling companies and those involved in the domain space realize the importance of this case and how it has the potential to impact their business.  Let’s hope they can make a stronger case.

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