Domain Name Deemed Tangible Property (Web Pages Too) in Utah

There's a passage in T.S. Eliot's 1922 essay "The Perfect Critic" that goes like this:

The vast accumulations of knowledge -- or at least of information -- deposited by the nineteenth century have been responsible for an equally vast ignorance. When there is so much to be known, when there are so many fields of knowledge in which the same words are used with different meanings, when every one knows a little about a great many things, it becomes increasingly difficult for anyone to know whether he knows what he is talking about or not.

I feel like that a lot, especially when it comes to cyberlaw. There are so many fields of law, each with their own specialized but overlapping vocabularies, each attempting to advance their own policy objectives, some shaped by frequent contemporary debate, some resting undisturbed for decades, all being applied in a haphazard fashion to the internet. The internet is reportedly 40 years old this week, yet the legal profession's take on it is not yet out of beta.

Consider domain names and web pages, two basic components of the internet. What exactly are they, in the eyes of the law? No one can say for sure. The Virginia Supreme Court ruled in Network Solutions Inc. v. Umbro International Inc., 529 S.E. 2d 80 (Va. 2000), that a domain name was a mere contractual right under Virginia law, not a property right subject to garnishment. A few years later, a federal appellate court, Kremen v. Cohen, 325 F.3d 1035 (9th Cir. 2003), held that a domain name was intangible property, the wrongful disposal of which by another could constitute "conversion." Under California law.

As for web pages, the creative expression displayed on a web page is protected by the Copyright Act. Other theories like trade dress, patent, state-law misappropriation are speculative at best.

Into this void two very interesting opinions were recently dropped by federal courts located in Utah. The first one, Margae Inc. v. Clear Link Technologies LLC, No. 2:07-cv-916 (D. Utah, May 5, 2009), held that under Utah law web pages were tangible property subject to protection under Utah's conversion doctrine. To reach this conclusion that court looked to a Utah tax law decision and the court's own sense of what a web page is like:

[A] web page has a physical presence on [a] computer drive, causes tangible effects on computers, and can be perceived by the senses. ... Further, Web pages can be physically restricted by the use of passwords and other security measures. In fact, the "conversion" alleged here is that Clear Link has "locked out" Margae's access to web pages.

Last month, in Jubber v. Search Market Direct Inc., No. 06-2299 (Bankr. D. Utah, Aug. 19, 2009), a bankruptcy case, the court said that domain names -- just like web pages -- are tangible property:

Based on the reasoning in Margae, which the Court elects to follow, the Court determines that like web pages and software, domain names can be perceived by the senses and access to them can be physically restricted by the use of passwords and other security measures. ... [The] Court concludes that like web pages and software, the Domain Name at issue is a type of tangible property that is capable of conversion.

(It was important for the court to find that domain names and web pages are tangible property, because under Utah's formulation of the conversion doctrine, intangible property cannot be converted.) I haven't given much thought (save for skepticism) to the implications of these rulings, other than to note that they seem relevant only to situations in which a party has lost control of a website -- either by loss of access to the server or by transfer of the domain name registration. These folks already had computer fraud and business tort remedies, and presumably contract remedies; now they have a property law claim as well. At least in Utah and California.

Comments

[Marc Trachtenberg]

The other implication is that they can likely be levied to satisfy a judgment. I just did this in California to get a portfolio 800 of squatted domain names to satisfy a judgment for Chris Bosh.