• March 25, 2016

March 25, 2016 (update):  So spoke the Minnesota Supreme Court this week: “A domain name is intangible personal property subject to garnishment.”

May 8, 2015 (Original post by Minnesota IP-focused lawyer, Paul Godfread): The Minnesota Supreme Court recently agreed to hear an appeal dealing with whether domain names and websites are “property” under a Minnesota garnishment statute, Minn. Stat. § 571.73. Can it be that we don’t know yet? Many businesses are run entirely online and the domain name and website would be the “stuff” that makes the business go.

In Sprinkler Warehouse v. Systematic Rain, Sprinkler obtained a default judgment against Systematic in Texas and docketed that judgment in Scott County, Minnesota. The question before the district court and Court of Appeals was whether a domain name and a website itself are “property” subject to garnishment under Minnesota law. The district court held that they were not property and the Court of Appeals reversed. The opinion of the Court of Appeals analyzed the domain name and website separately, but concluded that both were property under Minnesota’s garnishment statute.

A domain name is the portion of the name of a website that appears in your browser after “www.” or after the “@” in your email address. We could theoretically navigate the internet by typing in the actual IP addresses, but this would be tedious and confusing. Domain names are registered on a first-come first-serve basis by any one of a number of domain name registries. But what you get when you register a domain name roughly equates to having the whole world know that yourdomain.com should lead you to a particular computer. Though this “right to have a name point to a computer of your choosing” is a bit abstract, the Court of Appeals noted that other courts[1] have found that domain names are property. Minnesota’s garnishment statute was written so that “all property” would be subject to garnishment

As to whether the website itself is property, the Court of Appeals focused its analysis on whether the code, text, or pictures could be copyrightable and therefore constitute property. But this seems to miss some categories of potential property that would not be protected by copyright. For example, copyright would not protect mere facts, but a database or user logs might be valuable and capable of ownership as property, even if they wouldn’t qualify for copyright protection. What if the website includes licensed content where a third party owns the copyright, but the website owner a has right to display that content that could be transferred? So while helpful, it doesn’t seem like a whether a website is property subject to garnishment should be tied to whether it is also protected by copyright.

The Court of Appeals decision finding that both the domain name and website were “property” is convincing though perhaps too narrow in its reasoning as to why the website might be considered property. What we might hope for from the Minnesota Supreme Court is a clear rule of law as to how to analyze all sorts of intangible property that clearly has value, but doesn’t feel like traditional property.

Paul Godfread practices trademark, copyright, and business law. You can visit his website at www.godfreadlaw.com. You can follow him on twitter @paulgodfread.

[1] Office Depot, Inc. v. Zuccarini, 596 F.3d 696, 702 (9th Cir. 2010).

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