Canadian Court Rules Domain Names Are Property
Friday, August 5th, 2011
Ruling on appeal gives victory to Tucows, expands scope of domain names as property.
The Court of Appeal for Ontario has ruled in favor of Tucows on its appeal over a domain name dispute, setting a precedent for domain name registrants that their domain names are property.
In 2009, Brazilian company Lojas Renner S.A. (a subsidiary of JC Penney) filed a UDRP against Tucows for the domain name Renner.com. Tucows acquired the domain name when it bought MailBank.
Tucows sued Renner in Ontario court rather than going through the UDRP process. Renner argued that there was no jurisdiction for the case in Ontario and that the domain name wasn’t property. It wanted the case to proceed in UDRP. While a UDRP complainant accepts jurisdiction in the home of either the registrar or registrant (in this case both are the same and in Ontario), that only applies when a case is decided.
A motions judge ruled that there was no “real and substantial connection” between Lojas Renner and Ontario, that the domain name wasn’t personal property, and that an assumption of the case in Ontario would undermine the UDRP process.
The appeals court found essentially the opposite of the motions judge. The three member court ruled that domain names are property.
The court cited a number of reasons domain names are property and surveyed a number of previous cases, including the Sex.com case Kremen v. Cohen.
One point will resonate well with domain name owners:
…Tucows derives income from being the holder of the rights in the domain name renner.com. It has fourteen clients who subscribe to personal e-mail services using the domain name. If the domain name were to be transferred to Renner, it would undoubtedly assist in unlocking the value of Renner’s business. 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.
The court is very senior in Ontario; the only appeal option would go directly to Canada’s Supreme Court.
Tucows is in this case as a registrant, which means the appeals court decision is relevant to domain name investors.