TECHNOLOGY LAW CORNER

Are Domain Names ‘Personal Property’?

In a recent decision (Tucows.com Co. v. Lojas Renner S.A.), the Ontario Court of Appeal allowed the appeal by Tucows in a case involving the right to keep the domain name “renner.com” in light of the registered trademark “Renner” owned by Lojas Renner (“Renner”).

The issue centered on whether domain names could be considered “personal property” such that service outside Ontario could be effected in respect of the personal property. For service to be validated in Ontario, there needs to be a “real and substantial” connection between a defendant and Ontario. The Court held that a “real and substantial” connection could exist in respect of “personal property” in Ontario.

Tucows is a technology business incorporated under the laws of the province of Nova Scotia, with its principal office in Toronto, Ontario. It is the owner of the domain name “renner.com” and it is the registrar of the domain name “renner.com.” Renner operates a series of retail department stores in Brazil and is the owner of the registered trademark “Renner” in Brazil and in various countries around the world.

The issue on appeal was whether the service of Tucows’ statement of claim on Renner outside the jurisdiction of Ontario was valid, such that the dispute could be heard in Ontario. Renner had selected the World Intellectual Property Organization (WIPO) Arbitration and Mediation Center as the entity that would resolve the dispute.

Procedural History

The motions judge set aside the service of the statement of claim and stayed the action on the grounds that there was no real and substantial connection between the defendant and Ontario. Specifically, the judge held that a domain name is not “personal property” within the meaning of rule 17.02 of the Rules of Civil Procedure for Ontario.

Additionally, being intangible property, it is not property located in Ontario as required by the same said rule. The mere fact that a domain name is registered through a corporation that carries on business in Toronto does not give the domain name a physical existence in Ontario.

The Court of Appeal for Ontario set aside the order of the motions judge.

The Court held that the domain name “renner.com” is “personal property” in Ontario within the meaning of rule 17.02(a). Tucows has a bundle of rights in the said domain name that would constitute “personal property” within the meaning of rule 17.02(a).

To arrive at a decision, the Court first provided relevant background on the nature of a domain name. It then canvassed judicial and academic consideration of whether a domain name constitutes property, and, finally, considered the attributes of “personal property” under rule 17.02(a) and whether a domain name satisfies those attributes such that a proceeding regarding a domain name could be captured by the rule.

View From the United States

The view from most international jurisprudence and academic commentary, including the United States, appears to be that domain names are a new type of intangible property. In Kremen v. Cohen, 337 F.3d 1024 (9th Cir. 2003) (“Kremen”), the United States Court of Appeals, Ninth Circuit, held that a domain name is intangible property because it satisfies the three-part test for the existence of a property right.

With respect to domain names, the three-part test concludes the following: Domain names are an interest capable of a precise definition; domain names are capable of exclusive possession or control; and they are capable of giving rise to a legitimate claim for exclusivity.

In the United States, the Anticybersquatting Consumer Protection Act, 15 U.S.C. 1125(d) (2006) (“ACPA”) allows the court to take jurisdiction against cybersquatters who cannot be located. The courts had cited the fact that Congress enacted legislation for granting in rem judgment as evidence that Congress intended domain names to be treated as a type of property.

However, in Kremen, the Ninth Circuit held that a domain name is intangible property — not because the ACPA indicated that Congress intended domain names to be considered as property, but because domain names meet the test for whether property rights do indeed exist.

Conclusion Pursuant to the Ontario Court of Appeal: As a result, through a consideration of the location of the registrant of the domain name, as well as the location of the registrar and the servers as intermediaries, the Court of Appeal in Ontario agreed with the American jurisprudence that for the purposes of rule 17.02(a), the domain name “renner.com” is personal property located in Ontario.

Rosario Cartagena

Rosario Cartagena is an intellectual property lawyer at Heydary Hamilton.

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