A domain name is property

For the London Free Press - September 19, 2011 - Read this on Canoe Whether a domain name (such as www.harrisonpensa.com) is property that one owns — or just “a bundle of rights” — has been the subject of legal debate. The Ontario Court of Appeal recently said it is property.

The domain-name-as-property position makes sense in a world where, for example, in the early 2000s, wallstreet.com sold for more than $1 million and wine.com for more than $3 million.

Domain names are registered on a first-come, first-serve basis. The individual or company that registers the name receives the exclusive right to use the name, for which it pays a fee of a few dollars per year.

Registrars accredited by the Internet Corporation for Assigned Names and Numbers act as overlord, allowing domain registrants to use the domain name subject to any restrictions they may impose.

If a domain name is a licence, clauses may be included in a service agreement that might, for example, impose restrictions on assignment. If a domain name is property, such restrictions may be hard to uphold. If a domain name is property, a registrant will have rights relating to the domain name which include the right to use, convey, develop, exclude, bequeath, profit from, assign and dispose of, with or without consideration.

A licence is a special permission to do something on, or with somebody else’s property which, were it not for the licence, could be legally prevented or give rise to legal action.

Conversely, property is the right to control how and by whom a particular thing may be used. If a domain name is a licence, registrants are at the mercy of the registrar to determine how the domain name will be used. If a domain name is property, the registrants are free to use the domain name in any manner they like and cannot be legally prevented from doing so by the registrar.

In the recent Ontario Court of Appeal decision, Tucows.Com Co v. Lojas Renner S.A. (2009), the court settled the licence/property debate, at least in Ontario.

Tucows.Com Co. (“Tucows”) is the registrant of more than 30,000 domain names. Lojas Renner (“Renner”) is a Brazilian subsidiary of JC Penny and has registered the trademark Renner in Brazil and other states. Renner made a complaint to the Internet Corporation for Assigned Names and Numbers regarding Tucows’ registration of the domain name “Renner.” In response, Tucows initiated its own action in Ontario for ownership of the domain name.

The Ontario Court of Appeal examined the traditional common-law attributes of property, specifically whether there exists “a collection of rights over things that can be enforced against others.” The court found the rights associated with a domain name include those rights.

As a result, the Ontario Court of Appeal found the domain name, as a business asset of Tucows, was intangible property.

This decision won’t have dramatic impact on the day-to-day use of domain names, but helps clarify their legal status for many issues ranging from ownership disputes to the right to bequeath them to heirs.