“What’s in a name? That which we call a rose by any other name would smell as sweet.”

April 30, 2021

By Alfred Weiss

Internet domain names and the common law

Introduction

Although the internet has been around for some 30 years now, the common law has not always kept pace with tech developments.  One such example concerns internet domain names.  Although ubiquitous in our daily lives, the legal status of internet domain names remains uncertain.  This article (i) introduces the reader to the concept of an internet domain name; (ii) highlights that the direction of travel of the common law is seemingly towards a more settled understanding of the legal nature of an internet domain name; (iii) raises some practical issues that arise in litigation concerning internet domain names.

What is an internet domain name?

For non-tech savvy lawyers, a useful starting point for acquiring an understanding of the nature of an internet domain name is the judgment of Weiler J sitting in the Court of Appeal for Ontario, in Tucows.com Co. v Lojas Renner S.A. 2011 ONCA 548.

A domain name has two parts.  The first part is the Internet Protocol (IP) number or the numerical technical layer used to make communications between computers possible.  IP numbers are allocated through regional internet registries and are independent of individual users.  The second part of the domain name is the distinctive readable address in the Uniform Resource Locators (URLs) and is what we usually think of as a domain name.  Both parts are functionally necessary.  An internet user wishing to access a web page does so by entering the domain name URL into a browser, or software programme used for viewing information on the internet, and the underlying corresponding IP numbers take a person to that web page.[1]

The original role of a domain name was to provide an address for computers on the internet.  As the internet’s role in facilitating the carrying on of commercial activity evolved and grew, a domain name, which is easy to remember, came to be used to identify and distinguish a business itself as well as to facilitate the ability of consumers to navigate the internet.  A domain name must, of necessity, be unique and, where a domain name is used in connection with business, the value of maintaining an exclusive identity has become critical. [2]

The registrant of a domain name has a service contract with a registrar.  A domain name, however, can infringe upon trademarks or copyrights in a way that other service contracts cannot.[3]

The direction of travel: how the common law views the legal status of a domain name

In England and Wales there is still no appellate authority that conclusively determines the legal status of a domain name.

However, recent first instance decisions have been prepared to treat internet domain names as a new form of intangible property.

A useful starting point is the judgment of Lord Hoffman in OBG Ltd v Allan [2008] 1 A.C.1, ¶101, where he reviewed a Canadian authority that found that a domain name was intangible property that could be converted, and observed that whilst the notion that one can convert intangible property was foreign to English law, he had ‘no problem’ with the notion that a domain name was intangible property.

Weiler J, reviewing Canadian and international jurisprudence, relied in part on Lord Hoffman’s comments in OBG Ltd v Allan, in concluding that a domain name was intangible property:

“[63]…The registered owner of the domain name has the right to exclusively direct traffic to the domain name’s corresponding website and to exclude anyone else from using the same name. The ability to exclude others from the enjoyment of, interference with or appropriation of a specific legal right was held by Cory J. in Bouckhuyt, as a necessary incident of property. Unlike the situation of the tobacco quota in Bouckhuyt, renewal of the registration of a domain name at the end of any term for which it has been licensed is not subject to an unfettered discretion but to the UDRP and the UDRP Rules.

[64] While the decisions in Kremner, Saulnier and Bouckhuyt and the academic commentators all emphasize exclusivity of a right as an essential aspect of property, other judicial decisions, such as National Provincial Bank Ltd. v. Ainsworth, [1965] A.C. 1175, [1965] 2 All E.R. 472 (H.L.), hold that other requirements must also be met. In National Provincial Bank, Lord Wilberforce stated, at pp. 1247-48 A.C., that, “[b]efore a right or an interest can be admitted into the category of property, or of a right affecting property, it must be definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability”. A domain name also satisfies this definition of property.

[65] I have already discussed what a domain name is. To summarize, a domain name is an intangible or ideational thing consisting of two parts, one being numerical and the other being a distinctive readable address that enables an Internet user to access a web page. The rights that Tucows has in the domain name <renner.com> have been identified by Renner. Before the WIPO tribunal, Renner sought to have Tucows’s registration set aside and to assume it. Tucows’s ownership of the domain name has a degree of permanency; it has owned the domain name since 2006.

[66] Thus, based on the above definitions from Canadian and other common law jurisprudence, Tucows has a bundle of rights in the domain name <renner.com> that constitutes “personal property” within the meaning of rule 17.02(a). [page584] (c) A domain name can be considered to be property in Ontario for the purposes of rule 17.02(a)”.

 For lawyers tasked with demonstrating to English courts that domain names are intangible property, it is helpful to note that Weiler J’s analysis was recently adopted by the High Court.  In Hanger Holdings v Perlake Corp SA [2021] EWHC 81 (Ch), HHJ Hacon, sitting as a Deputy High Court Judge, found the analysis of Weiler JA in Tucows.Com entirely persuasive and agreed that a domain name is intangible personal property[4].   This was a case in which HHJ Hacon went on to find that the claimant had an equitable interest in the relevant domain name.

In Brake v Guy [2021] EWHC 671 (Ch), a case concerning alleged misuse of confidential information arising from an alleged abuse of email accounts, HHJ Paul Matthews (sitting as a Judge of the High Court) found that the rights in an internet domain name constituted a chose in action or bundle of choses in action.[5]  The registrant of the domain name was held to be the legal owner, and the person on whose behalf and on whose instructions the domain name was registered was the beneficial owner.  When the beneficial owner subsequently failed to inform a purchaser that she had an interest in the domain name and allowed the purchaser to believe he was acquiring the rights to domain name, the Court held that she was estopped as against the purchaser from asserting her rights as against him.[6]

The above cases suggest that the common law, showing its famous flexibility, is adapting to the concept of an internet domain name.  Whilst a decision from the appeal courts conclusively determining the issue of whether an internet domain name is a form of intangible property is awaited, the direction of travel indicates that the English courts are receptive to the notion that an internet domain name is intangible property.

Some practical considerations concerning litigating domain names

There are a number of obvious reasons why domain names generate litigation, including: because the misuse of a domain name by a third party may give rise to a trademark infringement in respect of any trade mark that exists in the domain name; because a third party with control of a domain name can mischievously or criminally use it to direct email traffic to and from that domain and misuse a domain as a vehicle for fraud; because the domain name may have an intrinsic value that a third party may wish to make use of, arising out of the domain name’s association with the commercial activities of a business even if there is no trademark in the domain name, and because it provides a means of controlling email traffic to and from a business’s website.

The registrars of domain names do provide their own arbitration services, which it is understood by the writer are relatively inexpensive and well used, and often are ‘without prejudice’ to any litigation rights.

However, the use of such arbitration services may be of no assistance where there is a true urgency to preventing a third party from misusing a domain name.

It is therefore often necessary to apply to court for urgent injunctive relief.

One of the difficulties with domain names is establishing who ‘owns’ a domain name.  Clearly this has ramifications if one is contemplating injunctive proceedings as it is necessary to demonstrate to the Court that one has an interest in the domain name that requires protection.

Sometimes there is a contract that determines rights in the domain name.  More frequently however, in the writer’s experience, businesses create domain names without there being great legal certainty as to what is being created and who owns it.  It must be remembered that so far as the registrar is concerned, absent any order from the Court or other conclusive information, the person who ‘owns’ the domain name is the person who has registered it.  This may not be the same as the person who claims to hold the beneficial interest in the domain name.  A classic scenario is where an employee of a business creates a domain name using their own personal account with the registrar.  In those circumstances, it may appear to the registrar that the ‘owner’ of the domain name is the employee, not the business.  The business may believe it is the owner.   Any application to Court needs to carefully explain in evidence the nature of the interest that is asserted in the domain name, as such an interest may be quite distinct to the question of the name of the account holder to which the domain name is registered.

In the notional scenario described above, if there is a dispute between the employer and the business, and the business wishes to obtain ‘control’ of the domain whilst it establishes its ownership of the domain name, it is crucial to obtain an injunction that provides clarity as to what steps need to be taken in order to transfer that control.

An example of what can go wrong in that sort of scenario is the case of The Original Alternative Limited v Andrew Bayley [2019] EWHC 3629 (Ch), HHJ Keyser QC (sitting as a Judge of the High Court).  An interim injunction had been obtained requiring the defendant to “take all such steps as are within his power or control, and as may be necessary, to allow the claimant to control: (a) the internet domain www.[  ] (the domain)”.

The defendant subsequently maintained that giving control simply required him to direct the domain to the claimant’s website.  The claimant maintained that giving control meant that the claimant controlled where the domain was directed: that it had control of the domain rather than simply giving the person in control information which he then has the ability to comply with[7].  The defendant’s repeated non-compliance with the order ultimately resulted in his committal for contempt.  It did not however achieve what the claimant had wanted, which was to be able to use and manage the domain name without the defendant’s involvement, pending trial or further order.

In the writer’s experience, on an application for injunctive relief involving an internet domain name, it is often necessary to bear in mind the practicalities.   One has to think about what the client wants to achieve.  If the client wants to prevent a third party from using a domain pending trial, then if the domain name is registered to an account held by the party being injuncted, in order for the applicant to the injunction to obtain ‘control’ over the domain, it is necessary for the domain name to be transferred from the account held by the party being injuncted, to an account held by the applicant.  This should not cause irremediable prejudice to a defendant pending the final determination of an underlying claim, because if for any reason the injunction needs to be discharged, the administrative process of registering the domain name with a different account with the registrar can be performed extremely quickly.  It needs to be borne in mind however that it cannot be assumed that judicial notice will be taken of such matters, and any application needs to properly describe in evidence why the proposed mechanism for ‘transferring’ the domain name is a suitable one.

Conclusions

The common law appears to be catching up with the concept of an internet domain name, and a number of first instance judges in England and Wales have recently been prepared to accept that an internet domain name is intangible property.

In those circumstances, where there is an urgent need to prevent a wrong being committed by the misuse of a domain name, the situation may in principle be suited to an application for urgent injunctive relief.  Any such application and resulting order needs to be carefully worded to ensure the applicant does not achieve a pyric victor.

 

ALFRED WEISS[8]

[1] Tucows.com ¶42.

[2] Tucows.com ¶44.

[3] Tucows.com ¶45.

[4] Hanger Holdings ¶74.

[5] Brake v Guy ¶201.

[6] Brake v Guy ¶208.

[7] The Original Alternative Ltd ¶17.

[8] Alfred Weiss is a Commercial Litigation, Commercial Fraud, and Employment Specialist.  He recently successfully obtained urgent injunctive relief for his clients in a case concerning the disputed ownership of an internet domain name.