October 11, 2007
Domain Names: contract right or something more
Judge Illston, U.S. District Court Judge for the Northern District of California, recently issued an interesting decision about the nature of a domain name as an asset and, of tangential interest, where that asset is located. In Office Depot, Inc. v. Zuccarini, 2007 WL 2688460 (N.D. Cal. 2007), Judge Illston appointed a receiver to take control over and liquidate domain names owned by the infamous cybersquatter, John Zuccarini. On the way, she held that a domain name is property and that property can be located where the domain name's registry and registrar are located.
DS Holdings (the holder of Office Depot's judgment against Zuccarini) sought appointment of a receiver to sell Zuccarini's domain names. Zuccarini objected, holding that the domain names were not located in California and, thus, under California law, the District Court for the Northern District of California was not the proper forum for the receivership request. The Court noted this raised a two part question. First, is a domain name property? Second, where is that property located?
A Virginia court, in 2000, held that a domain name is really nothing more than a contract between the domain name holder and the domain name registrar. However, Judge Illston followed the applicable 9th Circuit law holding that a domain name constitutes a form of intangible property right, as set forth in Kreman v. Cohen, 337 F.3d 1024 (9th Cir. 2003). (see Warren E. Agin, I'm a Domain Name. What Am I? Making Sense of Kremen v. Cohen, 14 J. BANKR. L. & PRAC. 3 (2005)).
But where is that asset located? Domain names are managed through central registries - and there is only one central registry for each top level domain (ie .com, .org, etc.) The registry for Zuccarini's domain names was Verisign, located in California. However, domain name owners don't deal directly with the registry. They deal with domain name registrars, who are delegated the job of contracting with the domain name owners. And, typically, one goes to the domain name registrar to enforce or effect a transfer of ownership. For Zuccarini's domain names, the registrars were in Virginia, Washington, Germany and Israel. So, what is the proper forum? Judge Illston considered a number of options, but in the end held that the domain name exists in the location of both the registrar and the registry. Motion to appoint a receiver granted.
DS Holdings (the holder of Office Depot's judgment against Zuccarini) sought appointment of a receiver to sell Zuccarini's domain names. Zuccarini objected, holding that the domain names were not located in California and, thus, under California law, the District Court for the Northern District of California was not the proper forum for the receivership request. The Court noted this raised a two part question. First, is a domain name property? Second, where is that property located?
A Virginia court, in 2000, held that a domain name is really nothing more than a contract between the domain name holder and the domain name registrar. However, Judge Illston followed the applicable 9th Circuit law holding that a domain name constitutes a form of intangible property right, as set forth in Kreman v. Cohen, 337 F.3d 1024 (9th Cir. 2003). (see Warren E. Agin, I'm a Domain Name. What Am I? Making Sense of Kremen v. Cohen, 14 J. BANKR. L. & PRAC. 3 (2005)).
But where is that asset located? Domain names are managed through central registries - and there is only one central registry for each top level domain (ie .com, .org, etc.) The registry for Zuccarini's domain names was Verisign, located in California. However, domain name owners don't deal directly with the registry. They deal with domain name registrars, who are delegated the job of contracting with the domain name owners. And, typically, one goes to the domain name registrar to enforce or effect a transfer of ownership. For Zuccarini's domain names, the registrars were in Virginia, Washington, Germany and Israel. So, what is the proper forum? Judge Illston considered a number of options, but in the end held that the domain name exists in the location of both the registrar and the registry. Motion to appoint a receiver granted.
Labels: domain names, kremen, umbro
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