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California Supremes To Decide If Domains Are Property
Richard W.M. Jones writes "Are domain names property like plots of land? The California
Supreme Court has been
asked to rule in the case of
sex.com which was
transferred using a forged letter to Network
Solutions.
Wired news also has the story."
What exactly are domain registrars selling if not property? If the Supreme Court decides that domain names are not property, it'd be fun to start a class action against ... hmmm... Verisign to recover the millions spent on domain names which are apparently not actually "property" at all.
Sig for sale or rent. One previous user. Inquire within.
Umm... in that case you'd be buying a service from Verisign. I don't think the class action would get anywhere.
thank God the internet isn't a human right.
Thinking about it, we're only renting domains. We pay for a term of usage for the domain, say 2, 4, 10 or 100 years. I consider myself the 'owner' of my domain though. Its mine, I paid for it, I can do what I want with it.
but what kind of property are domain names? Intellectual property? Trademarks? Or plain old real-estate type of property? This ruling will be an ideal acid test to see how the (U.S.) laws perceived domain names to be.
IMHO, it's interesting because it is very hard to specifically categorize domains as property in the sense of the word. It's intangible and value (or price if you prefer to put it that way) differ for every single domain. In the past the value of domain names are judged by the popularity of the site using the name, catchiness of the name, and whether the name is associated with any popular goods or services.
I'll be keeping a watch on this one.
Welley Corporation - SLM Scammers
First of all, the supreme court has not yet accepted the case. Don't hold your breath:
Attorneys said it typically takes the California Supreme Court about three months to decide whether to hear a case. A ruling could take more than a year.
Second, this is not an issue of whether domain names are property, but whether they're tangible property - the kind to which "traditional property conversion laws should apply".
The appeals court seems to be bouncing this to the CSC because they're afraid of laying down a precedent in this area. Too much of a hot-button issue, I suppose.
It's Slashdot's evil twin... SlashNOT
I was puzzled at first at why Network Solutions was a defendant...
IANAL, but it looks like the claim against Network Solutions is that they changed the ownership after recieving a letter from a random third party saying essentially "He sold it to me, give it so me". The letter should have been ignored. Only the OWNER of the domain can tell Network Solutions to transfer the ownership.
The judge commented in a footnote:
It's a bit as if Judge Reinhardt sent a letter to the DMV saying, "Judge Kozinski wants you to transfer title to his Lamborghini to me. He'd write to you himself, but he's out of stamps."
-
- - You can't take something off the Internet! That's like trying to take pee out of a swimming pool.
There selling the service of linking the domain name to an ip address. (or a DNS server anyhow).
There not really selling a domain name, you can't take it away with you i.e. it's useless without a TLD entry.
I can run slashdot.org on my home inntranet and even provide alternade DNS services if I want, no-one 'owns' slashdot.org.
thank God the internet isn't a human right.
Can someone explain why this case goes the property route at all ?
As I understand it, the domain name was obtained using forgery and other fraudulent methods. Does it even matter whether the domain name is property?
Assorted stuff I do sometimes: Lemuria.org
Reading the opinion, the question presented is quite different from the suggestion in the heading. The California Supreme Court is being asked by the 9th Circuit whether, under California law, the tort of conversion applies to intangible personal property.
Conversion is a theft-tort related to the taking and use of personal property of another, even if the property is later returned. An example might be joyriding your car, returning it in perfect condition to the place you were.
It is an old tort, steeped in common law. At common law, it did not apply to anything but physical, tangible personal property. Then came the bank note cases, and the bond cases and the stock cases -- here, where only paper was converted, the argument is that the damages were the value of the paper (the personal property that was tangible) rather than the value of the instrument (the intangible obligation represented by the property).
Under the old rules, conversion didn't give a remedy for the conversion of a contract right or other intangible. Most states have poked holes in that, primarily in negotiable instrument cases. The question is whether California permits an action for conversion for the imposition on the contract rights of another, in this case, a domain name.
The facts entailed the obviously fraudulent taking of a domain name and Varisign's failure to make a single phone call, taking a ridiculous (laughable) forgery instead. The jury found conversion, among other things, and a massive judgment -- and now the case is on appeal.
Of course it is a massive judgment -- the domain is sex.com!
When I was involved with settling an estate a couple years ago, I would have been grateful to have some legal answers about what to do with the three domains owned by the deceased. None of the lawyers and tax accountants involved had any idea how to handle that situation, and the service through which they were registered didn't have an answer either. If domain names are governed under some kind of property law, it will greatly help in these situations.
Where's the forest? And what are all these trees doing here?
If they declare it to be property in California, what them figure out a way to asses it, tax it, ...annually. Ouch
3000 dead over past 2 years, still no free Palestinians, still
I consider using a domain name consists of renting the use of a name from a TLD.
These rents are managed by organisations (companies in some countries though that could be non-profit orgs).
Now, you don't own a name, you just have rented its excusivity for some time.
If it's being hijacked, then your exclusivity has been infringed.
Now, the names are to be used on a first come first served basis which also includes the priority to renew an existing domain...
Finally, if domain names were properties, then they'd be bought forever, until then these rather seem to be licensed... or rented if you prefer.
Trolling using another account since 2005.
I completely agree. However, a leasehold agreement seems to fit better with me - you tend to pay upfront for a 2 year lease which you have first refusal on renewal. You can sell on the remaining term of your lease to 3rd parties at any time.
I would say a domain is a property, and should be considered the same as a highstreet store (a mall shopfront if you prefer). The "owner" of the shop has leased the property, and for all reasonable purposes can treat it as if they own it. With a bricks&mortars lease you know when you've been evicted, but when you lose your domain, the first you know of it may be when people stop coming into your store.
The agreement between you and the registrar is that they will direct people to your web site, and will continue to do so until your agreement ends or you tell them otherwise. Anything else is a breach of the agreement on their part. If a they act on a letter from a 3rd party saying "I now own this site, give it to me" then that's a breach of their agreement with you. Whether the 3rd party committed fraud is between the registrar and the 3rd party - now that's a court case I would like to see, I'm sure even judges like to see a nice farce now and then!
Second, this is not an issue of whether domain names are property, but whether they're tangible property - the kind to which "traditional property conversion laws should apply".
Not quite, the question here is whether the contract rights to the domain name -- which are undoubtedly personal property rights -- are subject to a tort of conversion under California law when interfered with by another person.
the question isn't nearly so interesting -- it isn't so much about domain names and property as it is about how california law treats intangibles.
If the court decides that domains aren't property, then every registrar out there can be done for false advertising, as they are stating that you are buying property, then everyone that has a domain registered can claim that they did not get what was advertised. Sounds like a nice big class action suit.
If on the other hand the court decides that the domains are property, then we get into an interesting grey area of trespass etc.
IANAL, but I would guess that the reason the court was asked to sort out this distinction is that the original owner needs to be able to work out whether they are arguing about theft of property by deception, or something else if it is a service. It's like the distinction if someone steals your cable box vs someone hooks into your service.
The letter was ludicrous -- it purported to be from an internet services vendor explaining that they wanted the third party to tell NSI, since they didn't have internet access. Hmmmmmm....
Yet NSI, through their unreaonable conduct, transferred the domain name anyway. Breach of contract? Sure. Conversion? That's the issue.
the reason why NSI was a defendant is that they were there. The plaintiff will NEVER collect a cent against the judgment proof individual, who is a big sleaze. NSI, or varisign, on the other hand is quite collectible.
What happens, say, when the domain name isn't stolen, but is being held by someone, when another company wants it?
In the UK, I believe there was a case where someone had legitimately bought www.marks-and-spencer.co.uk (Marks & Spencer is a department store chain, for those who don't know). However, Marks & Spencer decided that they wanted the name, filed legal action and got the name.
The question is, though, was this legitimate? Arguably, if the initial owner of the site was attempting to profit from the name, or pass off as the real thing, then M&S should inherit the name. However, if they aren't doing such actions which are illegal under current law, there is no reason why the name should be transferred to M&S.
Slightly off-topic perhaps, but it raises a lot more interesting questions. In my opinion, standard law should cover this kind of situation - what would happen if someone managed to steal a profitable company's telephone number?
Like car accidents, most hardware problems are due to driver error.
Since when did they started selling property? Last time I checked it looked mre like renting domains on a permanent first-refusal basis. If you miss one payment you don't own anything at all, and there is an infinite stream of payments that the registrar will want to (and will :) charge you.
unfinished: (adj.)
IANAL, but the type of property (i.e., tangible, intangible, or intellectual) has some impact on the way the original owner can recover his loses. It also affects how third parties should treat the transaction. For example, certain types of property can be transferred by oral contract, other types require a written contract. I believe most, if not all, states require a written contract for real estate transactions. In contrast, movies deals involving intellectual property are routinely based upon oral contracts and handshakes. Therefore, the degree to which Verisign is responsible, the due diligence that Verisign should have taken, and thus how much they are legally responsible for the original owner's loses are at stake.
I assume money is some sort of property. Regular ol' "stuff" kind of property. Like my computer or my car, or even this chair I'm sitting on.
But last time I checked, about 98% of money exists only as bits in a computer somewhere. Not paper currency or anything, just bits.
Which is basically what domain names are. Bits in a computer. So it seems to stand to reason that domain names are regular ol' property.
--
#include <malloc.h>
free(your.mind);
Do people have a right to their phone number ? As long as they pay the bills can another organisation grab hold of their phone number and start taking orders ?
This for me is a direct link with domain names. If previous cases have covered phone number theft or transfer then surely they will be taken into consideration. After all a phone number is associated with a person or company rather than a physical location, you move house and you can often take your number with you, move out of the same TLA or sub-domain (area code) and you have to get a new number.
As ever with the internet, this isn't actually new, but the lawyers will make money arguing that it is.
An Eye for an Eye will make the whole world blind - Gandhi
This is an extremely interesting case because afaik, domain names are currently held to be much like phone numbers -- you don't own one, you more or less rent it.
But while reading the pdf, I noticed that the name of the guy who is the plaintif in this sex.com lawsuit is "Gary Kremen."
Oh, the jokes...
My
Limekiller
A "Hell Yeah" they're property. You pay money for the domain and the domain is registered in your name. It should be treated no differently than any other property. The physical property associated with the domain name is that little SERVER that's the actual target in the DNS records. While the owner of the domain doesn't actually OWN the server, this shouldn't matter. When you RENT a P.O. Box, its your property (the contents, at least and it cannot be opened without a court order) until you either turn over the keys or stop paying for it.
Cruising the internet on my TI-99/4A @ a whopping 300 baud!
This is the logical way to go, because people are building entire companies - on which the welfare and custom of many thousands of people depend (i.e. the employees and the customers).
Without legal recognition of your ownership of that domain name, you may as well build your business on quicksand.
I couldn't disagree more. There definately should be a grace period...there is a grace period if your mortgage is late, and believe me you get plenty of reminders in that case. In the case of doamin names I think a 30 day hold period is reasonable. During this 30 day period the domain is delisted from the root servers so its unreachable (which would be a big sign to the owner something is seriously wrong)...I had friend who nearly lost his domain because his registration expired...however all the information network solutions had in his record was out of date so they couldn't reach him...not an ideal situation...and admittedly soewhat his fault. The biggest problem is even if a domain does become abandoned Network Solutions sometimes doesn't release it for reregistration immediately which is in and of itself wrong.
Power Corrupts,Absolute Power Corrupts Absolutely, leaving one person(group)in charge is absolutely corrupt.
You answered your own question. If domain names aren't property, Verisign is still selling a service.
For example, imagine if you pay me $10 to stand on a street corner for an hour and tell anyone who asks about Soporific that his Slashdot uid is 595477. 5 people come up and ask about you, and I answer them all. There's no property I've sold there (and I certainly have no control over your Slashdot handle or its uid), but I've still performed a service.
Now imagine you pay $70 to Verisign so that during the next two years, when anyone asks about soporific.com, they tell those people what the IP addresses for some DNS servers that happen to answer questions about soporific.com.
Two fairly similar services, which don't require the notion of property to work. Of course all that being said, I do believe that domain names are a sort of property. It's just that Verisign's legitimacy isn't predicated on them having to be property.
An analogy: if I lease a car for 3 years (off course I would not be that stupid :-) and it is stolen, I would call the police and complain that my car was stolen. I paid for the exclusive rights to use the car and someone stole/took away those rights.
-Mark
--there are two issues here, one is fraud with the letter, the other one is "what is a domain?".
There's been several good analogies in the thread, here's mine: Domains are "more similar" to a government allowed frequency monopoly that the FCC grants to a broadcaster. Broadcaster pays x amount of money per year for this license, and also must follow a set of rules. In this case switch FCC as a governmental agency to a private company that has similar powers "subcontracted" to them. We do this now in a big way inside the US in the prison system, a lot of them are privately owned and run (wackenhut for instance). I don't like that, but it's current reality,a very important public governmental *thing* being subbed out to a private definetly for-profit concern can lead to a lot abuses, IMO.
Where it is different is that there isn't any total exclusivity to this particular subcontractor,although they are *very big and very known and quite well used*, all they have going for them is inertia and size, as other forms of registration exist-albeit small and not used much-and it's international in scope, just not within a single state or nation.
The FCC can "grant" a license to someone to broadcast on such and such freq, outside their jurisdiction in another nation that doesn't mean a thing, and two signals can and frequently are on the same freq, or pointing at a similar place to follow the analogy. Happens all the time in radio. There's various international *almost-rules* but in fact there is no absolute enforcement short of warfare.
here's another way to look at it
The basic reality is, although it *appears* to be a property rights issue as to the word address represented as the domain "name", the "rights" involved don't actually exist because the REAL property itself doesn't exist, only the temporarily placed digital SIGN that POINTS TO where a temporarily installed digitial numeric address exists, and it's quite possible to have any number of signs, all saying different things, that will point to the same address.
If it was REAL property you could own it forever if you chose to, like a trademark, car, or house. It would be unique, and "yours".
The IP number and actual computer where the content is hosted, and any copyrighted content served therein and from is the real "property" in the classic sense of property, the sign giving directions to it is just an advertising and direction finding convenience and a separate thing, although still a "sort-of" property,it isn't absolute in any sense, it can never be "owned" forever, therefore isn't property in any other sense compared to any other sort of property in past historical common law.
These signs-pointing-to the real property have varying levels of advertising effectiveness in attracting "travelers" on the road that are looking for addresses to stop at. In that case the signs themselves are a separate piece of "sort of property" from the IP address and content served, and the people who build and set out the signs-the domain registrars-own all of them as if you don't pay them off you lose it, so you never "own" them as property, you temporarily lease them with limited rights. And you can still put your own signs out and use other sign companies if you want to, just one has currently more advertising impact.
So there's two pieces of property-so now you have to ask which is more valuable and who actually owns each piece of property. The website creator and host sort out with themselves who owns what over there, but any "word" domain name you can't ever, ever "own" unless you "do it yourself" with your own domain server, and it still can't stop anyone from doing it themselves and copying the same wording and pointing at their property, so it gets down to who has a better advertising company and who will use your advertising directions over some other fellow's constructs. Both are legal in other words, no one over the other in toto is possible, although currently it is more highly probable that one will get used a lot more than the other.
Now how you contract that with another sign pointing company because you realise doing it yourself isn't real effective and you want to go with the current entrenched "bigdog" in the sign pointing business is a variable, if you choose to keep renting their advertising signs that give directions to your 'real' property that you can own forever that's an easier issue. In that case you have a tort action if they fail to fulfill their side of the contract, so that part to me seems like a slam dunk for the website originator and whomever paid the loot first to the sign pointing company that stuck the signs out. That's really easy to see. In this particular case the sign pointing company screwed up because they were lamers and didn't verify who was who effectively,so they should lose in the first case, BUT, they themselves have a civil tort-potential against the letter sender, who also may suffer an additional criminal action if the state (and feds actually) chooses to prosecute.
Law gets easier to understand if you first sort out the differences between dealing in "real property" and "commerce" and tangibles you can own forever and temporary intangibles.
Common law on conversion originally only applied to tangible property - not just real estate, but horses and cooking pots and later cars and computers - but not to intangibles. As Werdna says, in most states that's changed. Kozinski argues, and IANAL but it looked convincing to me, that California law has really settled the issue solidly that conversion can apply to intangibles, or at least to intangibles that have some connection to tangibles like paper, so there's no issue here.
The big deal for Verisign is that conversion is a tort, and since they lost, they have to pay up, and since Cohen, who actually ripped off the domain name, has skipped out of the country and hidden or spent most of the money, they may have to pay the whole $65 million to Kremen and try to get it back from Cohen if they can. They already lost the part about giving back the domain name, but that didn't bother them so much.
The amount of money actually is a bit surprising - this case started in 1995, before the Boom, before business.com sold for $150K in 1997, and before Altavista.com sold for $3M in 1998. The plaintiff Kremen had registered the name, but hadn't actually used it for anything yet and didn't know it was gone for about 8 months. Meanwhile, Cohen, who had ripped it off, had figured out how to turn it into a highly profitable business, and after several years of litigation, he'd made a big enough pile of money on it that the court awarded the plaintiff $65M as well as giving him the name back (that was either ~$20M in actual damages and ~$40M in punitive damages, or maybe the other way around.) He and Verisign appealed, in Cohen's case partly because he said the judgement was way out of line for an asset was only worth so much because he'd built it up himself, and in September 2002, the court handed him his ass for even trying to appeal because he'd fled and hidden the money, and they told Verisign to give Kremen the name back, but the conversion issue is still not decided, so Verisign doesn't know how much of it they'll have to pay.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
and what you have is no free market at all, just a have and have nots world where things are taken at will by those who abuse the system
Whereas what we have at present is a have and have nots world where things are taken at will by those with money to pay lawyers through the incentive of litigation for profit.
Both alternatives are bad, but the first is in general only taken up by "bad" people (in the sense of anti-social) and hence is generally frowned upon and hence is somewhat self-limiting.
In contrast, the second is painted as seeking justice despite going orders of magnitude too far in terms of financial redress, and since the benefit is obtained via the legal system, the practice is given a sheen of respectibility. The whole thing is inherently questionable (and often questioned), yet it continues to gain ground despite the distortions it creates in so many areas --- we tend to discuss mainly how the disease affects "intellectual property", patents and trademarks here on Slashdot, but of course the effect is vastly wider than that.
Without compensatory damages, there would be no downside to enagage in wrongdoing
And with that sledgehammer argument (which is valid) you justify seeking 65 million in damages for stealing a domain? There's the problem displayed in glowing neon lights.
"The question of whether machines can think is no more interesting than [] whether submarines can swim" - Dijkstra
Both alternatives are bad, but the first is in general only taken up by "bad" people (in the sense of anti-social) and hence is generally frowned upon and hence is somewhat self-limiting.
All meaningful experience to the contrary. Having dealt with businesses working in less law-centric nations, I can assure you that anti-social commercial conduct, at least, is not at all self-limiting. To the contrary, graft and worse simply becomes part of the culture. Moreover, modern products are, and have become, far safer in a world of negligence and products liability.
The whole thing is inherently questionable (and often questioned), yet it continues to gain ground despite the distortions it creates in so many areas --- we tend to discuss mainly how the disease affects "intellectual property", patents and trademarks here on Slashdot, but of course the effect is vastly wider than that.
This is probably because redress for meaningful harm is more important to society than the "questions" you raise. Commerce depends upon the enforceability of contracts, and if damages were not available, no meaningfully enforceable promises would exist. Likewise with real damages caused due to negligence -- the idea is to give incentive to do the right thing, and discincentive to fail. Your trust in avoiding public scrutiny for loss of face isn't terribly reliable -- even in nations where social face is considered tremendously important.
And with that sledgehammer argument (which is valid) you justify seeking 65 million in damages for stealing a domain? There's the problem displayed in glowing neon lights.
If you say so. It does seem like a lot of money to me, but I have several clients who would suffer millions of dollars of actual damage a day in lost revenues if they were torn from the internet. I don't know the facts of the case, but I do know that two fairly well-monied entities litigated (in this case a far bigger defendant than plaintiff) the question of damages, and that the verdict was also subject to post-trial review, which did not reduce the verdict. It might be more reasonable than you think.