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.
thanks for posting.
I wonder if this will change the treatment of domain names by tax authorities, CRA in Canada.
Interesting, though as it’s a Canadian court it’s not going to have any binding impact on courts in other jurisdictions
Andrew Allemann says
@ Michele – I dunno, the Canadian dollar is worth more than the U.S. dollar now. Perhaps it’s time to start paying attention to these guys.
@Andrew – so I’ve heard 🙂
On a more serious note, however, the more court decisions there are the better. The way an Irish court would view a Canadian decision is as “guiding” or something (not a lawyer and it’s years since I did law)
George Kirikos says
Excellent work by Tucows’ legal team.
Dave Zan says
This decision stated something specific, though:
“The domain name is personal property in Ontario [b]within the meaning of rule 17.02(a).[/b]”
Just that some people might get the impression that domain names are property [b]no matter what[/b] the situation. If anything, courts in other jurisdictions will only consider similar decisions in other places, won’t they?
Only court have law given power to take someones PROPERTY, unless law defines other institution.
SO F**K YOU ICANN RETARDED PANELISTS
This is very bad for domain investors and domain owners in general. It means that if someone gets a money judgement against you they can take away your domain names.
Andrew Allemann says
@ anon – they can already do that. Ask John Zuccarini.
The registrant, as listed in the admin contact would be the owner of the domain name. Any other legalities would be dictated by the registrants contract with anyone they gave rights to.
This seems rather obvious.
Allan at DOWMEDIA says
JS and Dave Zan – As a former news reporter in Canada (and a domainer since 1999), my understanding of Canadian law is that other “Provincial” courts and the federal courts including the Supreme Court of Canada routinely refer to judgements from other jurisdictions “inside” Canada within the framework of the Canadian Constitution, the Charter of Rights and Freedoms and prior to their entry into force – precedents from judgements within the framework of the British North America Act. Regarding the taxation question, I think you’d find that if you are deemed a resident of Canada for tax purposes, you’d be repsonsible for taxation on all income dereived from your domain names – regardless of whether a domain name is considered “property”. It’s the income they look at – not how it was derived (with a few rare exceptions like winning a lottery). Happy New Year – Allan.
Allan at DOWMEDIA says
Forgot to add my thumbs-up to this court’s decision.