Originally posted 2009-06-18 00:02:03. Republished by Blog Post Promoter
Evan Brown reports on a California appellate case holding that, in that state at least, a domain name is not something a judgment creditor can have “turned over” as an asset of the debtor:
The provision in California law allowing turnover of property limits itself to tangible property that can be “levied upon by taking it into custody.” Looking to the case of Network Solutions, Inc. v. Umbro International, Inc., 529 S.E.2d 80 (Va. 2000), the court held that a domain name registration is not property, but merely supplies the intangible contractual right to use a unique domain name for a specified period of time. Even if the registration were property, it was not something that could be taken into custody.
It’s easy to miss this part of the equation quoted by Evan: “a domain name registration . . . merely supplies the intangible contractual right to use a unique domain name for a specified period of time.” In other words, it’s a license with an option to renew.
Of course, there’s no reason the California “turnover” statute has to limit assets subject to execution to tangible ones, though you have to think there’s some political reason that it actually does. There are certainly plenty of people, and plenty of interested non-natural persons, in that state who understand the value of income streams and other benefits that may inure from holding a license or other intangible interest. In fact, it may well be the case that those same people–do I have to spell it out?–are the ones who, if this decision stands, may find themselves in Sacramento asking the legislature there to amend the statute so it specifically applies to domain names.
Ah, you ask, what good will that do a judgment creditor if the Network Solutions is still an accurate description of the interest controlled by a domain nomain holder? No matter how California law treats it, you can’t shackle a domain name and cart it over to some place it doesn’t really want to be, now can you?