Should Domain Names Be Regarded as Property?

This appears to be the $64,000 question of the moment. There is no doubt that domain names are valuable assets. In some respects, domain names may be even more valuable than trademarks. Not only may a domain name identify the source of goods or services, it can also identify the location (virtual, of course) of the source as well. Just last year, the domain name was sold for nearly $10,000,000.00. Well, the actual cash amount of the sale was $9,999,950.00. No chump change that.

There are those who have analogized domain names, comprised of a series of letters and numbers, to street addresses, telephone numbers and even stock exchange ticker symbols. They argue that domain names are simply a mnemonic aid and nothing more than a right in a service contract.

On the other hand, there are those who argue that domain names are property. Parties go to court and before administrative bodies to obtain them. Courts and administrative bodies order domain names be transferred from one party to another. Additionally, the “Anticybersquatting Consumer Protection Act” (ACPA) passed by Congress a decade ago contains jurisdictional provisions authorizing an in rem civil action against a domain name which suggests that it is property. Typically, an in rem action is brought to determine the status of particular property.

However, other statutes and case law are unclear on this issue thus far. For instance, courts in California have recognized a property right in domain names, but Virginia has declared them to be a contractual right. One of the most ballyhooed cases dealing with the issue of property rights in domain names was the 2003 case involving . In that case, Kremen v. Cohen, the Ninth Circuit Court held that a domain name is a form of intangible property which can support a California state law claim for the tort of conversion. The Court opined that a domain name represents an interest of precise definition, is subject to exclusive possession or control and a registrant has a legitimate claim to exclusivity. On the other end of the spectrum, however, is a New York Appellate Court that ruled that a domain name is not property unless it is registered as a trademark.

The one group you would assume would have a clear position on this issue would be domainers. However, this is not entirely true. There is presently a pending case in Kentucky which will be the focus of my next blog post. This particular case illustrates pretty clearly “the good and the bad” associated with a determination as to property rights in domain names…



P.S. My intent to publish blog posts on a daily basis was a bit ambitious. Weekly blog posts are probably more realistic starting out...

Deb