khaosworks | "Prosecution is applying for the web site to be forfeited..."

Federal agents routinely seize property allegedly used in the commission of a crime, anything from a drug dealer's car or speedboat to a hacker's computer.

In a series of raids in recent weeks, the Justice Department has extended such grabs to property that might seem esoteric but worry civil libertarians - Internet domain names.

In one case, the government took over Web sites that it said peddled bongs, roach clips, rolling papers and other paraphernalia used in the consumption of illegal drugs.

Prosecutors also acquired, in a plea agreement, a site called isonews.com whose owner was charged with selling special chips that let pirated titles run on videogame consoles.

...

Among issues that remain unresolved in the courts is whether a domain name constitutes property, or a contract the owner has with the domain name registrar - the company that provided the name. If the former, a domain name could indeed be seized like a car, house or computer.

In the past, domain name registrars have sued to ensure that their offerings are not considered property. Otherwise, Overly said, ``they would find themselves at the heart of no end of litigation.''

The registrars involved in the head shop investigation either declined to comment or did not return telephone calls.

Domain transfers have in the past occurred as a result of criminal or civil cases, but Overly said the courts would ultimately decide the issue.

Now this is interesting... from a purely legal standpoint that is, whether or not there is settled law as to what domain names actually are. We speak of buying and selling domain names like indeed they were property in themselves, but are they only just contracts? But then again, domain name registrations can be shifted between registries at the application of the owner - does that constitute the breaking and reforming of a new contract or simply moving the custodianship of the domain from one bailee to another?

Legal geek mind working overtime...

Flat | Top-Level Comments Only

From:

the-magician.livejournal.com

Domain names are effectively rented out by a top level authority for each geographic domain, and for the gTLD (global Top Level Domains, e.g. com, net, org) then the responsibility for them comes from the ICANN who have appointed Verisign to actually run the name server machines and do the admin work. Verisign has authorised a number of registrars who actually sell the names (including a division of Verisign) and send in change records to Verisign to update the main database with DNS addresses etc. And then the domains themselves are hosted by Internet Service Providers.

An analogy with car licence plate numbers in the UK. The government is responsible for car licence plate numbers (the Driver and Vehicle Licensing Authority - DVLA), and anyone can apply to buy a licence plate number either through DVLA Retail or from the garage that sells them a new car, or by purchasing it through a specialist plate dealer. In any of these situations, the number plate is/was still issued by the DVLA and you are buying the right to use it on a vehicle (even if you don't attach it to a vehicle, you can keep the registration by paying 80 pounds a year to keep it in your name, otherwise it reverts back to the DVLA for resale). But to actually use the number plate you have to buy a car to put the plate on.

So,
ICANN/Verisign = DVLA
Car dealer/specialist number plate dealer = someone like register.com (a registrar)
Putting it on a car = having an ISP host your domain name

It gets confusing because Verisign can perform all three functions, but the functions are legally distinct and can reallocated.

Many of my domains are registered through Easyspace.com ... they pay Verisign a fee ($6/year) and send in change records as necessary if I change my phone number or "sell the domain" to someone else. They charge me, say, £15 a year for sending me reminders that the domain is about to expire, providing a web page to update my details etc. and they also provide "free" email forwarding and web forwarding (with ads) so that I can use that domain name without having to pay an ISP to host it (check out www.eastercon.co.uk for an example) So that's what they provide for their (15-6)=$9/year.

Finally I have two domains (smof.com and magician.co.uk) actually hosted by my ISP (cix.co.uk) which gives them webspace etc.

So, the theory goes, domain names are "owned" by ICAAN (by fiat of the US government), the top level name servers are owned and run by Verisign (by contract with ICAAN, and in the recent renewal they agreed to split off the responsibility for .ORG to a separate company). Many Registrars act as brokers (and there is a hierarchy of those too) which take in domain registrations and send the updates (with cash) to Verisign. ISPs host the domains but the domain remains the "property" of the person who "bought" it.

Whether a person can "sell on" a domain name is going to be spelled out in their contract (for example, a Sri Lankan domain name can only be used by an individual or company actually resident in Sri Lanka (or at least that's close enough to the facts) so if a Sri Lankan bought, say, MI.LK (LK is the Sri Lankan ISO?3166? code) they couldn't then sell it to the UK Milk Marketing Board or the "Got Milk?" campaign in the US)) but if I, for example, bought a car number plate from a dealer, then it really still belongs to the DVLA and I'm just buying a right to use it.

This still doesn't answer the question of, under _US_ federal and state law, whether a domain name is considered a contract or property. When a company is sold to another company, I don't know what the situation is with respect to contracts that the first company had outstanding (support contracts, purchasing contracts etc.) ... and I suspect that may depend on the wording of the particular contract (e.g. ReallySmall Ltd. has a support contract with Microsoft for all their IT support for a fixed price of 10,000 dollars a year. They are bought by Glaxo SKB, this does not give Glaxo a support contract with Microsoft for 10k I'd suspect ... on the other hand ReallySmall Ltd. has a contract with Peru to provide 1,000 cheese graters at 10 dollars each ... after the GSK buyout, does GSK have a contract to provide cheese graters?)

Ok, I'm confused ... help? :-)

From:

teddywolf.livejournal.com

I think a close analogue could be found in telephone numbers.

I have a phone number. It's the number assigned to me by my phone company (well, OK, I got to request mine) and I pay a certain amount to use it. But, the number itself belongs to the phone company.

If I choose to change from one company to another for telephone, the company still owns the number. If my company has an arrangement with the other phone company then the other phone company can rent the number from my company, but my company still owns the number. If I move to a new area and need a new number, the old number goes back to the company.

And so on.

Interesting things you can find out working for a phone company.

From: (Anonymous)

... I doubt a custodian would be a bailee. A bare trustee maybe, but almost certainly not a bailee. Besides, can you have a bailment of a chose in action?

In any event why couldn't they just argue that the REGISTRATION is a chose in action (ie. the right existing as between the registry and the person duly registered) which is perfectly capable of being seized?

I mean, if they can seize bank balances (and I'm sure they can), which are again choses in action between banker and customer, the domain name should be relatively simple.

From:

khaosworks.livejournal.com

Ah, that's the point, isn't it? You can't be the bailee of a chose in action - so if it's a chose in action, it's not real property. The issue is what is a domain name; real property that can be seized, or a chose in action that can't.

As to seizure of bank balances - not a terribly good analogy. The seizer of bank balances in civil actions are a species of property that is allowable to be seized under a writ of seizure as a matter of common law as a means of enforcement of the judgment. Forfeiture, the criminal equivalent, is also a procedure created by statute. The legislation I'm familiar with has to create specific legislation to seize bank accounts (proceeds under the Misuse of Drugs Act, say). Blanket forfeiture provisions, which say things like to the effect of any property associated with the offence can be forfeited, are usually assumed to be limited to real property or paraphenalia, like burglars' tools, weapons, etc.

So if a domain name is going to be deemed a chose in action, then it can't be seized as a matter of course under blanket provisions, but needs specific legislation to allow such forfeiture.

From: (Anonymous)

Then we've answered the question. If a domain name is a right in personam, it can't be seized. If it is a right in rem, but only a chose in action (ie. intangible property), it still can't be seized in the absence of specific legislative intent.

What a silly position. The point about bank balances is well made. But let's take other examples of choses in action. Can shares (essentially rights as against a company) be seized? Or is this sui generis as well?

I am all in favour of seizing domain names (or choses in action) - to me the only issues should be (1) is it worth anything and (2) is it easy to sell (or otherwise realise its value).

From:

khaosworks.livejournal.com

I suspect that shares are sui generis - depending on how freely transferable they may be. Say, negotiable bonds, which are almost as good as cash, would be considered in the same class as cash. But shares in a specific person's name would probably need to be legislated separately.

I think the correct position is that a domain name is a creature of contract between the individual and the Registry. Consider that the name is, in effect, leased to the "owner" for a agreed-on term of years and if at the end of that term the owner doesn't pay up, the right to that name is revoked. That alone makes the idea of seizure problematic, as the real owner and arbiter of who owns that domain name is actually the Registry.

What you really want, in a criminal case (and drawing on the case that the article discusses), is to impose a penalty that prevents them from using it to advertise their illegal wares. Seizing a domain is not necessary, and doesn't get to the heart of the matter. What does is if legislation says that an allowable punishment for the offence includes disqualification from using that domain name or even operating a web site for a specified length of time.