The internet is about to go through some radical change, and I wonder if anyone is prepared for what is about to happen?
The good old days of enforceable phishing, domain tasting and cybersquatting may be at an end.
We are entering a time where enforcement is going to have to be vigilant across a host of new extensions such as .xxx, .nike, and perhaps something more fitting such as .lawsuits for example.
New enforcement will need to be be applied across a host of legal jurisdictions, where domain names could have the effect of being appreciated and depreciated as is physical property; a situation where property law and intellectual property could collide head on and where domains could possibly be repossessed for debt?
Could we see a $9.00 domain name appreciate in value to point where it is attached to a company’s assets and when said company goes bankrupt or deep into debt, the appreciated domain name is then repossessed for payment?
Imagine what would happen in the cases of a financial misstep by Dell or Google, and they lose their .com?
In any case, the real likelihood now exists that going forward the United States will have no ability to interviene on any one’s behalf.
In fact, depending on the registrar or registry, the distinct possibility of having to fight your case in a foreign court, in a country where property ownership is illegal could be the case, so the quagmire grows and so does the enforcement of these issues.
In the news recently, the United States has said it will relinquish some control over the way the network is run and allow foreign governments more of a say in the future of the system.
This should appease some of the anti-American critics, embolden the globalists who want all countries running all things, and terrify those who realize what this truly means.
Aside from simple control issues, the legal front has been fighting a massive battle this week over what kind of “property” is a domain name?
To this end, a court has ruled that, sex.com could not be sold recently because of payment claims against the owner in the bankruptcy hearing.
This could have the unintended consequence of setting a precedent to pull the domain out of the intellectual property world into the property world.
But this case has deep roots going back 10 years:
Back in 2000 a Virginia court ruled In Network Solutions Inc. v. Umbro International Inc. that, Umbro sought to garnish domain names owned by another company in order to collect money that was owed to Umbro.
To this end, Umbro filed a garnishment against Network Solutions. The intent was to receive the domain names to sell to the highest bidder as payment against the debt owed.
The lower court ruled that “domain names are a type of intangible property that can be “garnished” and sold to satisfy the amount owed” under Virginia’s garnishment statute.
The Virginia Supreme Court however, reversed the lower court, decision, ruling instead that the rights to a domain name were “intertwined” with services from Network Solutions.
They felt that registering the domain name, represented a contract for services, rather than intellectual property.
Based upon these findings, the court concluded that since the domain name was instead a contract for services, it was not subject to seizure nor court ordered sale under Virginia’s garnishment statute.
This was a dangerous first step towards changing the way we enforce and own domain names.
Then more recently, a court has ruled that a domain name is physically located where its registrar or registry is located.
This is thanks to a notorious cybersquatter named John Zuccarini who avoided prosecution for a while by being impossible to find.
Eventually, the FTC ordered that thousands of his sites should be shut down and Zuccarini was fined $1.9 million.
In 2007, he was fined yet again by the FTC for typosquatting on domain names that kids were likely to visit which redirected to hardcore pornography websites. (sickening)
Before that, about 10 years ago, a suit involved Office Depot, and Zuccarini’s registration and use of offic-depot.com.
Office Depot won the lawsuit, but was unable to collect its judgment, due to the inability to nail down a physical location of Zuccarini.
Office Depot then utilized a company called DS Holding which was granted by a court, in Northern California, the ownership of some of Zuccarini’s other domains to help pay the judgment.
Zuccarini appealed claiming that the court in California had no jurisdiction over his domain names. Again the fixed location, or lack thereof, was problematic in a court of law.
One of the unintended consequences of this case essentially established that domain names are considered property of some sort.
Consider once again the domain “sex.com”, what could this mean if ”intellectual property” becomes just “property” and all of the once inapplicable laws suddenly come into play.
The “intellectual” property rights to “sex.com” were to be auctioned off last Thursday.
Interested parties needed $1 million just to get to the bidding stage.
This was taking place all in the wake of Escom, the previous owner, having just went into foreclosure for unpaid debts.
The auction has apparently been postponed based upon an involuntary bankruptcy filing in California that was filed after 5 p.m. Wednesday just before the auction.
In 2006 Escom paid $14 million for sex.com when it bought the site, with the help of some partners.
Those partners; Washington Technology Associates, iEntertainment Inc. and AccountingMatters.com, blocked the auction this past week, claiming that Escom owes them more than $10 million.
This three letter .com has had a lawsuit curse with regard to its business partners since inception. (no pun or semi-pun intended)
The founder of Match.com, first registered sex.com in 1994, and the first sex.com ownership lawsuit was filed in 1995 by an “ex-partner” as well.
Partner suits aside, and back to the Office Depot, and Zuccarini lawsuit, consider the following:
A second effect of that ruling is that jurisdiction could be based / assigned for legal purposes, where the registrar / registry of that domain is located.
Because VeriSign is in Northern California this set the California jurisdiction for that case.
The lawsuit stated that jurisdiction is where the registry is located. At the time of the “Office Depot” lawsuit, registry and registrar were one in the same.
Fast forward to 2010 and now we have different registrars so essentially the judgement of the case as it is written also applies to the registry.
The ramifications could be staggering.
You may want to consider where your court will be located before using a certain registry / registrar for your domain names.
Rulings of this nature have the effect of possibly making every domain owner subject to some of the more radical legislation that is always, seemingly, coming from California is something to consider.
California courts are already overly burdened, and when you factor in the taxation problems that California has been suffering and the IOUs for refunds due, the immigration issues, etc, the possibility of jurisdiction lawsuits could definitely be on the horizon.
I can only envision the enforcement challenges of ”who has the rights to delegate domains” in the (for example) .google or .dell name-space.
What will challenges look like? Special interest groups wanting their space on .google and what will requirements look like for DNS, restrictions, etc? How will this be applied and what jurisdiction will hear the case based upon the assorted registries?
Then, let a lawsuit arise in a fundamentally Islamic jurisdiction over issues that could be deemed controversial under sharia law but fairly common in say, California.
I suppose we should wait and see, and as the quote goes “Hope for peace but prepare for war”.
If you do not feel you are properly prepared for war in cyberspace, and need help with your online reputation management; Metamend has dedicated, experienced industry professionals who can help you stay ahead of the new wave of online threats and help keep your online identity safe.
Have a question and need quick answers? 
