Law Times

Page 10 June 2, 2014 • Law Times www.lawtimesnews.com FOCUS Ruling confirms web addresses are personal property By michael mcKiernan For Law Times n Ontario Superior Court judge has ruled the registrant of a do- main name isn't neces- sarily its legal owner in a decision that confirms web site addresses are personal property. e case, Mold.ca Inc. v. Mold- services.ca Inc., involved a dispute between two co-founders of a mould inspection and removal business. Gregg Dalrymple fund- ed the company's startup costs, while Ross Sullivan took care of the information technology side of the business. Sullivan purchased a number of domain names using the com- pany credit card but registered them in his own name. When the business relationship went sour, Sullivan took the domain names with him and transferred them to a third party before re- acquiring them and starting a competing business. Aer a failed attempt to have the domain names transferred back to the company through the Canadian Internet Registra- tion Authority's dispute resolu- tion system, Dalrymple sued Sullivan in court. On a summary judgment motion, Dalrymple's lawyer, John Simpson, argued the domain names were company property wrongly converted by Sullivan. Sullivan meanwhile, claimed they were partnership property that should be subject to division on a final settling of accounts between the partners. "Before me, the issue is a simple matter of property law," wrote On- tario Superior Court Justice David Corbett in his Dec. 30 decision. "Title to the domain names belongs to the corporate plaintiffs. Any claim Mr. Sullivan has on the 'partnership' theory concerns ben- eficial ownership of the plaintiffs, and not each piece of property owned by the plaintiffs." Simpson says his client was "relieved" at the result. Although the Ontario Court of Appeal had found domain names were personal property in its 2011 decision in Tucows.com Co. v. Lojas Renner S.A., it came in the narrow procedural confines of claim service and le open the question of whether the same would apply in other contexts. "ere was some concern that the court would take a very rigid view as to what owner- ship of a domain name actually means," says Simpson. "Ownership is a very nebulous legal concept, and with respect to a domain name, the obvious owner would be the person who regis- tered it. We're pleased the judge was bold enough to look past the easy answer. Here the person who registered it wasn't the person who, under the classic principles of property law, had been possess- ing it. at was the company that was using it for its business." Scott Miller, a senior partner with MBM Intellectual Property Law LLP, says there had seemed to be a reluctance to character- ize domain names as personal property until now. "I think people wanted to treat the Internet as a special class but I'm not sure that is necessary. Judg- es themselves seemed reluctant be- cause the Internet was considered a new world for a long time. But it's not a new world anymore. is was actually a long time coming, I think. It gets us back to basics." He says the decision could also force a rethink from the Canadian Internet Registration Author- ity on its criteria for transferring domain names. Dalrymple failed to convince a Canadian Inter- net Registration Authority panel through its dispute resolution procedure that the domain names should transfer to him because he couldn't prove that they were reg- istered in bad faith. "When you assert bad faith, it's very difficult to actually prove," says Miller. "It should be interesting to see if this signals back to tribunals to soen the stringent requirements they have before they can act." In the meantime, he says Corbett's decision has made the courts a viable route for com- plainants who can't meet the high bar of bad faith. Despite his client's own success in court, Simpson says the deci- sion should serve as a reminder to small businesses of the impor- tance of their domain names and other intangible assets. "Intangible assets can be very valuable and need to be protect- ed in the same way as your phys- ical inventory. ey may well be much more valuable than your physical assets. If you're relying on [search engine optimization], your domain name could be the No. 1 asset. e other thing is that wherever you have people doing business together, there need to be very clear agreements in place between the parties as to who owns what." and it's available to you 24 hours a day. s available y availabl y legal expertise? Looking for Find exactly what you need at www.CanadianLawList.com Starting a business, making a will or buying a house? 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CANADA LAW BOOK ® The decision should serve as a reminder to small businesses of the importance of their domain names, says John Simpson. See Descriptive, page 11 A

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