On the Duality of Internet Domain Names: propertization and its discontents

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On the Duality of Internet Domain Names: propertization and its discontents

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3 N.Y.U. JOURNAL OF INTELL. PROP. & ENT. LAW 1 (2013)

Domain names may have substantial economic and social value. They are often the object of dispute, whether based on allegations of abuse, or in contests over ownership. There is a recent judicial trend, particularly in the Court of Appeals for the Ninth Circuit, toward characterizing domain names as “property” (and more specifically, “intangible property”) subject to rules of sale and transfer typical of personal property. This judicial characterization identifies “alienability” as a fundamental characteristic of domain names. This sets up a real or potential conflict with jurisdictions or forums where domain names have been judicially or administratively characterized as “contract rights” based on the legal relationship between the domain name registrant and the registrar. Pursuant to the contract rights characterization, sales and transfers of domain names are subject to rules flowing from the Internet Corporation for Assigned Names and Numbers (ICANN) that govern the relationship among registries, registrars and registrants, and prescribe certain representations and warranties in connection with sales and transfers. This includes subjecting domain name registrants to alternative dispute settlement under the Uniform Domain Name Dispute Resolution Policy (UDRP). Several recent decisions among Ninth Circuit courts applying the federal Anticybersquatting Consumer Protection Act (ACPA), on one side, and administrative panels applying the UDRP, on the other, call attention to the possibility for different dispute settlement outcomes depending on whether domain names are treated as freely alienable property or contract rights incorporating various obligations on transferors and transferees. In this article, the author, an experienced administrative panelist for the WIPO Arbitration and Mediation Center, analyzes the legal bases used to characterize Internet domain names, and suggests that it may not be necessary to draw a line between “intangible property” and “contract rights”. Domain names may be treated as both. There is nothing unique about attaching conditions to the transfer of intangible property. For example, US law that authorizes assignment and transfer of trademarks conditions the transfer on associating the goodwill of the business. Similarly, domain names in transfer may be treated as intangible property conditioned with contract representations and warranties made pursuant to ICANN rules. The UDRP and ACPA provide for flexible assessment of the rights and legitimate interests of domain name registrants. These rules have allowed UDRP panels to consider the circumstances prevailing when a domain name transfer takes place, whether between related or unrelated parties, and this type of flexibility should appropriately take account of rights of transferors and transferees. Given the different contexts in which the UDRP and ACPA were adopted, and in which they are implemented, it should be expected that jurisprudential conflicts will from time to time arise and require attention. This article calls attention to one such conflict and proposes to resolve it through recognition that the legal character of the domain name need not be limited to a single class of subject matter.