Minnesota has joined California as states in which the federal courts have found domain names garnishable under state law. Decisions in Virginia and the District of Columbia, to date, have been inconsistent.
Sprinkler Warehouse, Inc. (“Warehouse”) brought copyright infringement claims against competing sprinkler firm Systematic Rain, Inc. (“Rain”) for using its copyrighted materials on its website, resulting in a $156,000 default judgment in Texas. Warehouse sought to enforce the judgment via a writ of garnishment issued on Rain’s Chief Executive Officer in Minnesota (“CEO”).
The CEO denied holding any property on behalf of Rain and Warehouse objected, noting that Rain’s website and domain name (registered in CEO’s name) were corporate property and subject to attachment.
The district court held that the domain name and associated website were not property subject to garnishment, and Sprinkler appealed.
The Minnesota Court of Appeals held that domain names are property and assets with measurable value. In doing so, it agreed with the Ninth Circuit that domain names are well-defined interests and that the right to use them is transferable and subject to claims of exclusivity.
Domain names are also subject to intellectual property protection, and the court said the federal Anticybersquatting Consumer Protection Act, 15 U.S.C. § 1125(a), treats them as property.
The court found that domain names and websites are subject to garnishment. Regarding the latter, the court reasoned that a website is a combination of a source document, multimedia content and the scripts that operate them, and those elements are copyright-protected to the extent they are sufficiently original to qualify as works of authorship. A website as a whole may also be copyright-protected if its overall arrangement is sufficiently original.
While elements of a website may not be copyright-protected due to lack of originality or because they are in the public domain, the court said the portions of a website that are copyright-protected constitute property. Such federally recognized intellectual property interests may be subject to attachment.
The case was returned to the lower court with instructions to determine ownership of the domain name and associated website.
The decision may assist terrorism victims in litigation currently underway in the District of Columbia who are seeking attachment of country-code top level-domains belonging to state sponsors of terrorism. The U.S. District Court for D.C. held last year that ccTLDs were not attachable under D.C. law. That ruling is currently being appealed
Consult with an experienced Internet Law Attorney with any technology-based litigation questions or concerns.
Richard B. Newman is an advertising law attorney at Hinch Newman LLP with extensive experience assisting clients with marketing campaigns, including telemarketing and direct marketing. He provides strategic guidance on online marketing, ROSCA and other consumer protection laws and regulations.
Information conveyed in this article is provided for informational purposes only and does not constitute, nor should it be relied upon, as legal advice. No person should act or rely on any information in this article without seeking the advice of an attorney.