Flat Broke and Busted, But Can I Keep My Domain Name? Domain Name Property Interests in the First, Fifth, and Eleventh Circuits

Journal of Intellectual Property Law Volume 11 | Issue 1 Article 11 April 2016 Flat Broke and Busted, But Can I Keep My Domain Name? Domain Name Property Interests in the First, Fifth, and Eleventh Circuits Steven Blackerby Follow this and additional works at: https://digitalcommons.law.uga.edu/jipl Part of the Intellectual Property Law Commons Recommended Citation Steven Blackerby, Flat Broke and Busted, But Can I Keep My Domain Name? Domain Name Property Interests in the First, Fifth, and Eleventh Circuits, 11 J. Intell. Prop. L. 117 (2016). Available at: https://digitalcommons.law.uga.edu/jipl/vol11/iss1/11 This Notes is brought to you for free and open access by Digital Commons @ Georgia Law. It has been accepted for inclusion in Journal of Intellectual Property Law by an authorized editor of Digital Commons @ Georgia Law. Please share how you have benefited from this access For more information, please contact . Blackerby: Flat Broke and Busted, But Can I Keep My Domain Name? Domain Name FLAT BROKE AND BUSTED, BUT CAN I KEEP MY DOMAIN NAME? DOMAIN NAME PROPERTY INTERESTS IN THE FIRST, FIFTH, AND ELEVENTH CIRCUITS I. INTRODUCTION In April 2000, the Virginia Supreme Court issued an opinion that has become a cornerstone in the law governing domain names. In Network Solutions, Inc. v. Umbro International,Inc. the court ruled that a creditor could not reach an Internet domain name through a garnishment proceeding because a domain name is too inextricably linked to a contract for services. Ultimately, the court reasoned that a domain name cannot exist "separate from its respective service that created it and that maintains its continued viability."2 The decision sparked a flurry of scholarly commentary and debate concerning whether other jurisdictions would follow the Virginia approach and the ruling's effect on other areas of the law involving domain names.3 Most notably, commentators have considered Umbro with respect to whether a creditor can use a domain name as a security interest under UCC Revised Article 94 and whether a domain name 5should be considered an asset of the debtor's estate in a bankruptcy proceeding. In their analyses, however, these commentators have largely overlooked an interesting portion of the Umbro opinion in which the Virginia Supreme Court hinted that the First and Fifth Circuits might have decided the issue differently. 1 529 S.E.2d 80, 54 U.S.P.Q.2d (BNA) 1738 (Va. 2000). Id at 87. 2 E.g., Marjorie Chertok & Warren E. Agin, Resrtar.com: Identji'ng Securing andMaximi~qng the Liquidation of Cber-Assets in Bankrupty Proceedings,8 AM. BANKR. INST. L. REV. 255, 273-80 (2000); Brent R. Cohen & Thomas D. Laue, Acquiring and Enforcing Securip Interests in CyberrpaceAssets, 10 J. BANKR. L. & PRAC. 423, 429-30 (2001); Francis G. Conrad, Dot.coms in Bankrupty Valuations under Title 11 or www.snipehunt in the dark.notrorg/noassets.com,9 AM. BANKR. INST. L REV. 417, 430-31 (2001); William H. Kiekhofer, III &Jeffrey C. Selman, BankruptgTandLicensing,in PLI's PATENT AND HIGH TECHNOLOGY LICENSING at 279,337-41 (PLI Patents, Copyrights, Trademarks and Literary Property Course Handbook Series No. 652, May 2001);Johnathan Krisko, U.C.C.RtrisedArice 9: Can Domain Names ProvideSecuriyforNew Economy Businesses?,79 N.C. L. REV. 1178,1185-86 (2001); Xuan-Thao N. Nguyen, CyberproperyandJudidalDissonance:The Troubk with DomainName Classification, 10 GEO. MASON L. REv. 183, 199-204 (2001); Keith Shapiro, Dolcom Bankruptdes, Address Before the American Bankruptcy Institute Sixth Annual Rocky Mountain Bankruptcy Conference (Feb. 810, 2001), in WL 020801 ABI-CLE 89. ' See, e.g., Cohen & Laue, supra note 3, at 433-35; Kiekhofer & Selman, supra note 3, at 333-45; Krisko, spra note 3, at 1186. s See, e.g., Chertok & Agin, supranote 3, at 273-76; Shapiro, supranote 3. Published by Digital Commons @ Georgia Law, 2016 1 Journal of Intellectual Property Law, Vol. 11, Iss. 1 [2016], Art. 11 J.INTELL PROP.L [Vol. 11:117 Although the Umbro court insisted that a domain name is too "inextricably bound to the domain name services" and thus indistinguishable as a property interest separate from the contracted services, the court went on to note that "at least two jurisdictions have made such a similar distinction with regard to telephone numbers." 6 If the Umbro court is correct in its assessment, then it stands to reason that those two jurisdictions might accept a domain name/telephone number analogy and therefore distinguish a domain name as a property interest separate from the services provided under the registration agreement. The two jurisdictions to which the Umbro court referred are the First and Fifth Circuits. The Fifth Circuit, said the Umbro court, recognized a property interest in telephone numbers in GeorgiaPower Company v. Security Investment Properties,Inc.7 According to the Umbro court, Security Investment stands for the proposition that "for a business,... telephone numbers constitute a unique property interest, the value ofwhich increases as the number becomes widely known."' Because Security Investmentwas decided before the Fifth Circuit split, this assessment by the Umbro court also should apply to the Eleventh Circuit. The Umbra court based its conclusion that the First Circuit would hold likewise on one First Circuit case, Darman v.MetropolitanAlarm Corporation.' The Umbro opinion devotes little time to Darman; it merely cites the case and summarizes it, saying that it "approv[ed] [the] sale of telephone numbers in order to increase [the] value of [a] bankruptcy estate and not[ed] [a] distinction between 'a subscriber's rights derived from a contract for telephone service and a subscriber's possible claim to a possessory interest in the telephone number.' "" As of the date of this writing, neither the First, Fifth, nor Eleventh Circuits have had a reported case involving the property status of Internet domain names in the context of a bankruptcy or proceeding in any other context. Thus, while the Umbra opinion hints at how those Circuits would decide such a case, real uncertainty exists about how those courts actually would approach the issue. Still, what is certain is the likelihood that if the issue arises in any of those three jurisdictions, then one party would surely argue, as Umbro did, that domain names are analogous to telephone numbers and, therefore, that Security Investment or Darman should control. If and when a party advances this argument in the First, Fifth, or Eleventh Circuit, the court must complete a two-part inquiry. First, the court must 529 S.E.2d at 87. 559 F.2d 1321 (5th Cir. 1977). Network Solutions, Inc. v. Umbro Int'l, Inc., 529 S.E.2d 80,87,54 U.S.P.Q.2d (BNA) 1738, 1744 (Va. 2000) (quoting Georgia Power Co. v. Sec. Inv. Props., Inc., 559 F.2d 1321, 1324 (5th Cir. 6 1977)). 9 528 F.2d 908 (1st Cit. 1976). "I Umbro, 529 S.E.2d at 87 (quoting Darman, 528 F.2d at 910 n.1). https://digitalcommons.law.uga.edu/ji (...truncated)