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Tech Bankruptcy
April 13, 2010
  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.

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Warren E. Agin is a partner in Swiggart & Agin, LLC, a boutique law firm in Boston, Massachusetts focusing on the needs of technology companies. Mr. Agin heads its bankruptcy department. The author of the book Bankruptcy and Secured Lending in Cyberspace (3rd Ed. West 2005), Mr. Agin also chaired the ABA's E-commerce and Insolvency Subcommittee from 1999 to 2005, co-chaired the Boston Bar Association's Internet and Computer Law Committee (2003-2005), and served on the American Bar Association's Standing Committee on Technology and Information Services (2008-2011). Mr. Agin currently co-chairs the Editorial Board of Business Law Today. A contributing editor to Norton Bankruptcy Law and Practice, 3d, and co-author of its chapter on intellectual property for the past fifteen years, he is author of numerous legal articles and addresses on topics of technology, internet and bankruptcy law.

Turning a Paige on Domain Name Ownership
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