Turning a Paige on Domain Name Ownership
An unreported decision from the United States Bankruptcy Court for the District of Utah, Paige v. Search Market Direct, Inc.
, 2009 WL 2591335 (Bankr. D. Utah 2009), provides a fresh look at how to determine ownership of a domain name.
In a case with an unbelievably complex fact pattern (you read it - I just don't have that kind of time), the salient issue was whether the debtor, Mr. Paige, or a company he owned, was the true owner of the domain name "freecreditscore.com" when Mr. Paige filed his bankruptcy case in 2005. At the time of the filing, the name was registered to neither Mr. Paige nor his company - it was registered to a Mr. Conklin (Mr. Conklin did not claim ownership to the name).
Judge Thurman held that because Mr. Paige exercised dominion and/or control over the domain name both prior to and after the bankruptcy filing, that he was the correct owner of the domain name and, thus, the name was property of the bankruptcy estate.
Judge Thurman then addressed whether the domain name could be converted under Utah law. The bankruptcy trustee had argued that a domain name is a form of intangible personal property, subject to a claim for conversion under the 9th Circuit decision in Kremen v. Cohen
(applying California law). The defendants argued that the domain name rights were limited to the contract with the registrar. Judge Thurman rejected both arguments. He noted that Utah courts had previously rejected the concept that intangible personal property could be converted. But, following a thread of reasoning so subtle that even I have difficulty understanding it, Judge Thurman held that a domain name is in fact a form of TANGIBLE personal property, and could, thus, be converted.
I will just repeat these two quotes: "...like web pages and software, domain names can be perceived by the senses..." and "unlike a mere idea that can only be stored in a person's mind, domain names can and do have a physical presence on a computer drive."
On the other hand, it is an unreported decision. And I do have to hand it to Judge Thurman for his understanding that general common law principles should be applied to the concept of domain name ownership, rather than a strict examination of domain name registry records.
Labels: domain names, kremen v cohen
According to the Associated Press
, the company that previously purchased the domain name "sex.com" for an estimated $14 million in 2006, has been placed into an involuntary bankruptcy on the eve of a scheduled foreclosure sale of the domain name. Domain name owner Escom, LLC financed the purchase through a secured loan from Domain Capital, LLC. When Escom failed to make its payments, Domain Capital, LLC called the loan and scheduled a foreclosure auction of the domain name. On March 17, three creditors filed a Chapter 11 involuntary in the Central District of California, case no. 10-13001, to stop the auction sale. Counsel for the petitioning creditors is listed as a Mark Chassman.
Labels: domain names, sex.com
The first thing we do, let's hire all the lawyers
Anyone who has worked on patent prosecutions knows how the work generally gets done and billed. First, you hire a trusted U.S. firm to handle the overall prosecution effort. Then, that firm lines up the various other firms it works with to handle international work. The local firm coordinates and supervises the international work and also monitors the costs. Fees and costs incurred by the foreign firms are charged back to the primary prosecution firm, which passes the charges along to the client. Generally, these charges are fairly limited - perhaps a few hundred dollars or maybe just a couple of thousand dollars.
This structure serves a number of purposes. First, it makes sure the lead patent prosecution firm is comfortable with how the international work is being handled. Second, it eliminates the need for the client to deal with multiple firms - most of which are performing minor technical tasks that the client does not understand. Third, it allows the lead firm to work with the client to coordinate strategy and translate the foreign activity into terms the client can understand. Overall, the system works pretty well.
Not so fast, according to Judge Tchaikovsky of the U.S. Bankruptcy Court for the Northern District of California. In In re Lipid Sciences, Inc., 2010 WL 234840 (Bankr. N.D. Cal.), Judge Tchaikovsky denied a fee application filed by patent counsel to a Chapter 7 trustee. Pointing out that the fee application included as costs the fees of foreign patent counsel, the Judge stated "this portion of the costs is entirely inappropriate. Fees may be paid only to court appointed professionals." In her view, each of the foreign counsel would have to be separately retained by the Chapter 7 trustee and file their own fee applications.
This may be correct as a matter of law, but all I can say is good luck getting a firm in London or maybe China to jump through those hoops for what might only be a couple of hundred bucks.
Labels: leslie tchaikovsky, patent counsel
Judge Bufford likes Websites
In In re S & B Surgery Center, Inc
., 421 B.R. 546 (Bankr. C.D. Cal. 2009), Judge Samuel L. Bufford addressed the question of whether a creditors' committee MUST maintain an information website in order to comply with bankruptcy code section 1102(b)(3).
The BAPCPA added, at section 1102(b)(3), an affirmative obligation for creditors committees to provide access to case information to their constituencies. In the Refco
decision the Bankruptcy Court for the Southern District of New York laid out how a creditor's committee should use a website to satisfy the section 1102(b)(3) requirement, and identified twelve features the website should contain.
In S & B Surgery Center, the creditors committee sought to provide a telephone number that creditors could call for information. They argued that maintaining a Refco compliant website would be too expensive and the number of creditors in the case did not warrant the expense. Judge Bufford disagreed, and held that the committee should maintain a website to provide information to the creditors.
Judge Bufford did not require that the website meet all twelve of the Refco factors, so long as the needs of the creditors were met. This leaves open the possibility that a creditors committee in a smaller case could use much cheaper options (read free), such as a Google Groups site (or maybe even a Facebook page) to communicate basic information about the case.
Labels: creditors committee, facebook, google groups, judge bufford, refco
You've been served
BBC News reported
a couple of months ago about a British court allowing service of a court order using Twitter. Twitter is, for those who do not yet know, an on-line network allowing users to post short messages that are then broadcast to a list of subscribers. In the particular case, a political blogger named Donal Blarney sought an order enjoining another user of the Twitter service. Because the target of the court injunction had not yet actually been identified, the court allowed the injunction to be served via a posting on Twitter. The posting gave notice of the court order and, because twitter postings are very limited in length, contained a link to the order itself.
Would similar tactics work in the U.S. Bankruptcy Court? Perhaps in limited circumstances. Fed. R. Civ. P. 5(b)(2)(D) and Fed. R. Bankr. P. 7005 allow service by "electronic means" when the recipient has previously consented in writing. Service is effective on transmission. This rule was designed to allow service by e-mail through the ECF system, but there really is no reason why other means could not be used as well. The catch is, of course, getting that advance written consent.
Labels: service of process, subpoena, twitter
A little bit off-topic post about Kindles
I came across the following article yesterday: E-BOOK TRANSACTIONS:
AMAZON “KINDLES” THE COPY OWNERSHIP DEBATE, 12 YALE J.L. & TECH. 147
(2009). It struck a chord, mostly because it cites fairly extensively to an article I wrote back in 2005 on the law surrounding transactions in electronic information. (A Framework for Understanding Electronic Information Transactions, 15 Albany Law Journal of Science & Technology 277 (2005)) I had been under the distinct impression that no one had really read the article, so I was pleased to see that I was, once again, wrong.
This article, written by Yale law school student Michael Seringhaus, posits that Amazon's sale of e-books for use on the Kindle should be classified as a sale of a book rather than a license of information. It also suggests potential ways of applying technological solutions, rather than legal solutions, to enforce single-copy ownership of an e-book.
I, in the meanwhile, have e-mailed Mr. Seringhaus' article off to my Kindle, where I will be able to read it at my leisure along with other law review articles, Westlaw advance sheets, and other miscellaneous documents that I do not have time to read at my desk. As it turns out, the Kindle is well suited for this purpose because you can e-mail a pdf or Word document (as well as many other types of documents) to an e-mail address Amazon provides you, and the document is automatically transferred wirelessly to the Kindle device.
Labels: copyright, Kindle
Chapter 11 Trustee appointed in SCO Bankruptcy
Every now and then I'm reminded that the SCO bankruptcy remains pending. You might recall SCO as the company that sued Novell and a number of other companies claiming that it owned copyrights to code found in the LINUX open source operating system. Almost two years ago, SCO filed a Chapter 11 petition
in order to protect the company while the litigation continued. SCO is represented by Laura Davis Jones of Puchulski Stang Ziehl & Jones, LLP.
In May, the U.S. Trustee's Office in Delaware filed a motion to convert
the long-standing Chapter 11 case to Chapter 7. Declining to institute such a drastic remedy, Judge Gross instead ordered
a Chapter 11 bankruptcy trustee appointed. More detailed information about the decision can be found here on Groklaw
. Although the order has not been appealled, a trustee has not yet been appointed.
Meanwhile, Steven Vaughan-Nichols' blog in Computerworld reports
that SCO actually won a minor victory of sorts in its litigation with Novell, as the Court of Appeals reverses a prior summary judgment decision against SCO.
Labels: linux, SCO Group, unix
Supreme Court Denies Cert in NCP Marketing Case - Kennedy and Breyer Signal Preference for Actual Test
About a month ago the U.S. Supreme Court denied certiorari in the NCP Marketing Case. A link to the denial is here
. Robert Eisenbach provides a detailed analysis of why this is significant in a March 26, 2009, post
on his In the Red
In a nutshell, the NCP Marketing case dealt with the ability of a debtor to assume a trademark license. The bankruptcy court held that the license had been terminated pre-petition, and therefore could not be assumed. It also stated, in dicta, (and in my opinion incorrectly) that the trademark license was not assignable as a matter of common law and therefore, under applicable law in the 9th circuit, not assumable. Appeals ensued and the decision was affirmed at each step.
What makes the denial of certiorari in this case interesting is that two justices, Kennedy and Breyer, felt the need to issue a statement on the matter. While they agreed that denial of certiorari was appropriate in this particular case, they welcomed the opportunity to hear a case on the issue of whether the actual test or the hypothetical test is the correct test for analyzing section 365(c). And, from Judge Kennedy's comments, it seemed likely that they would support adoption of the actual test.
I would note that these are only two justices and they are among those more likely to support the policy driven reasons for adopting the actual test as opposed to the strict statutory construction theories behind the hypothetical test. On the other hand, only four Justices are needed to grant certiorary and it seems likely that Kennedy and Breyer would not have signaled their interest in taking a case on this issue if they expected the outcome to go against their viewpoints.
Labels: actual test, hypothetical test, ncp marketing, trademark license
Article on IP Licenses and Bankruptcy
Two Seattle bankruptcy lawyers, Marc Barreca
and John Knapp
of Cairncross & Hemplemann
, recently teamed up to author a useful article
on the current state of intellectual property licenses and bankruptcy.
The article provides an introduction to the basic legal issues. With each topic, the article lists a number of useful practice tips. The practice tips might be the best part of the article, since they are easy to understand (even when the underlying legal concepts are not), and provide practical, not legalistic, advice. Some of these tips address issues relevant to the initial license negotiations, while others focus on what to do when the other party to the license actually files a bankruptcy petition.
Labels: bankruptcy, john knapp, license, marc barreca
Cable giant Charter Communications
, Inc. filed a chapter 11 petition on Friday in the Southern District of New York. According to the firm's press release
, the company has already negotiated a restructuring plan, which it filed along with its other first day motions.
Labels: charter communications