Are domain names property or contractual rights, and why do we care?

In Kremen v. Cohen, 337 F.3d 1024 (9th Cir. 2003), the plaintiff registered the domain name sex.com. The registrar transferred the name to a different individual on the basis of a forged letter. The Court reversed the district court’s holding

Some courts have held that that domain names are property. In Kremen v. Cohen, 337 F.3d 1024 (9th Cir. 2003), the plaintiff registered the domain name sex.com. The registrar transferred the name to a different individual on the basis of a forged letter. The Court reversed the district court’s holding that domain names were intangibles not subject to conversion.  The Court held that the registrar was subject to liability “for giving away someone else’s property.” Id. at 1035.

Other courts, however, have concluded that a domain name registration is the product of a contract for services between the registrar and registrant.” Network Solutions, Inc. v. Umbro Int’l, Inc., 259 Va. 759, 770 (2000) (citing Dorer v. Arel, 60 F. Supp. 2d 558, 561 (E.D. Va. 1999)).

If considered property rights, domain names would be subject to state property laws and state property causes of action, such as conversion, would be applicable.  However, if domain names confer only contractual rights, the nature of the protection afforded to the registrant would be quite different. 

Under ICANN rules, a domain name owner must intervene within five days to stop an inter-registry transfer request.  Therefore, whether a domain name is treated as property or as a contractual right can make a huge difference in the remedies available to victims of domain name hijacking who do not intervene within the five-day period prescribed by ICANN.