Are domain names real property? Thoughts from Domainfest 2008

By : David Snead

The second day of domainfest 2008 concluded with a two hour live auction of domain names. At the start of today’s auction “sex.la” had the highest minimum required bid (surprise surprise). This auction in particular, and domainfest in general, got me to thinking about whether domain names should be considered to be real property, similar to real estate, or intellectual property, similar to trademarks and copyrights. Based on the chats I’ve had in the exhibit hall, and at other conferences, it seems that domainers like the idea of giving domain names some, if not all, of the attributes of real property. On the other hand, Big IP has been firm in its assertion that domain names should be considered to be intellectual property only. While using either of these analytical frameworks would add a certain amount of legal certainty, I think that using either framework, exclusive of the other would be a missed opportunity to create law that reflects the particular place that the Internet occupies in society.

Why do I hold this opinion? Based on my experience, and that of other lawyers active in the domain space, the law applied to domain name disputes has diverged significantly from the reality of domains today. While typosquatters and cybersquatters still exist, the era of “nikke.com” has long passed. Ignoring this, Big IP still treats the domain name space as their own province based on the cybersquatting era.

To illustrate this, one needs no better than the questions posed to my legal panel this morning. The vast majority of them dealt with how to deal with requests from the general public to buy a domain name. Why is this such a pressing legal issue that no fewer than three different permutations of this question were posed to the panelists? The short answer is that the ACPA, and panel decisions under the UDRP, have given great weight to “excessive” requests for compensation for domain names, particularly when a domain name isn’t being put to “productive” use. As a result, domain name owners have had to develop elaborate ways of answering questions about the value of their domains without triggering a presumption that they are in violation of the law. This presumption, and other presumptions, like a parked domain is not being put to productive use, illustrate for me the application of a tortured interpretation of intellectual property law to domain names.

I can’t think of another area of the law where similar presumptions operate. Using the real estate analogy, do we force a sale for a “reasonable price” on a person who has purchased a parcel of land in anticipation that it might be a good place for a shopping mall?

Other than as a simple rubric for legal analysis, however, real estate doesn’t work very well for domain names. The Internet isn’t Oklahoma in the 1880s. The Internet is more of a public/private partnership in which societal concerns, and facilitation of commerce may need to be given priority over private gain and speculation limited to provide opportunities for more robust use.

As the linchpin of Internet functionality, the law needs to recognize that domain names cannot be subject to one legal theory exclusive of others. Rather creative judges and legislators must recognize the importance of domain names both as a cradle of Internet innovation, and a natural extension of current trademarks.