Court rules that '.ca' domain name is property

Canada

The question of whether a domain name registration constitutes personal property in Canada has been debated for many years. A recent decision of the Ontario Superior Court of Justice provides support for proponents of such a position (Mold.ca Inc v Moldservices.ca Inc (Court File No CV-13-480391)). However, the decision does not provide a definite answer, especially as it relates to a '.ca' domain name registration.

Two individuals set up several corporations to establish a business. The individual defendant registered various '.com' and '.ca' domain names in his own name, rather than in the name of Mold.ca Inc, using the other individual’s money. Sixteen of the registrations related to '.ca' domain names, while the remaining one related to a '.com' domain name.

The relationship between the two individuals eventually fractured. The individual defendant retained the domain name registrations and the passwords for the domain name registrations, and subsequently transferred the domain name registrations to a third-party assignee. Once the other individual discovered that the domain name registrations were not in the name of Mold.ca Inc, it commenced a proceeding under the Canadian Internet Registration Authority (CIRA) Dispute Resolution Policy (CDRP) against the assignee. That proceeding failed because the assignee was not found to be in bad faith.  

Once the CDRP proceeding was dismissed, the domain name registrations were transferred back to the individual defendant, who began using them for a competing business. The corporate plaintiffs brought a motion for summary judgment to obtain transfer of the domain names. 

The Ontario Superior Court of Justice agreed with the plaintiffs’ submissions that this was a “simple matter of property law”. The court said that title to the domain names was property owned by the plaintiffs and that the defendants converted the domain names. The court ordered the defendants to transfer the domain name registrations to the plaintiffs. 

That was consistent with the Ontario Court of Appeal’s 2011 decision in Tucows v Renner, where it was held that domain names are personal property, at least for the purposes of serving a claim in respect of a domain name. In that case, the court held that service of the statement of claim outside Ontario was valid and that the Ontario courts had jurisdiction over the dispute because the domain name at issue was considered intangible personal property located in Ontario.

It is important to note that the domain name registration at issue in the Tucows case was for a '.com' domain name. The question which remained after Tucows was whether domain names could be considered personal property in Canada in other contexts. Some commentators have already asserted that the court’s decision in Mold.ca Inc effectively answered this question in the affirmative. However, it is quite a stretch to take that position, especially in respect of '.ca' domain names.

In registering a '.ca' domain name, a registrant contractually agrees, as a condition of the registration, that it acquires no property right in the domain name. Specifically, the CIRA Registrant Agreement provides that the registrant expressly acknowledges and agrees that the registration of a domain name does not create any proprietary right for the registrant, a registrar, or any other person, in any name used as a domain name, or in any registration. To further support the fact that a '.ca' domain name registration is not to be considered property, the CIRA Registrant Agreement provides that the registrant must not in any way transfer or purport to transfer a proprietary right in any registration or grant or purport to grant as security, or in any other manner encumber or purport to encumber, any domain name registration.

In Mold.ca Inc, the court made no mention of the CIRA Registrant Agreement. It is not clear whether the agreement, or the provisions related to registrant’s express disclaimer of any property right in the '.ca' domain name registrations, were ever brought to the court’s attention.

In the circumstances, it is easy to understand the court’s desire to return the domain name registrations to the plaintiffs. However, the characterisation of the domain name registrations as property, and the finding of conversion, does not appear to be supportable. Rather, the court should have considered the domain name registrations as akin to a licence.

Antonio Turco, Blake Cassels & Graydon LLP, Toronto

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