Don't gamble with your domain names
My friend, Phil Corwin of Butera & Andrews
sent me a copy of the just issued opinion
in Commonwealth of Kentucky v. 141 Internet Domain Names
, which allowed the Commonwealth of Kentucky to seize 141 different domain names they claimed were "gambling devices" in use in Kentucky. This decision of the Franklin Circuit Court held that domain names are property and in rem jurisdiction could be held over a domain name so long as the connections between the domain name and the forum are sufficient to justify the exercise of jurisdiction. This holding is, clearly, far more expansive from that of Office Depot, Inc. v. Zuccarini
, 2007 WL 2688460 (N.D. Cal. 2007), which held
that the proper loci for in rem jurisdiction over a domain name were the locations of the registry and the registrar.
The context for 141 Internet Domain Names
is fairly interesting. Kentucky law allows law enforcement to immediately, and without process, seize gambling devices used in illegal gambling. Leaving aside the somewhat interesting question of how a domain name qualifies as a gambling device, law enforcement officials in Kentucky identified 141 domain names used to host websites offering gambling, and which Kentucky residents could access. They asked the Franklin County Court for an ex-parte seizure order, which the court granted. The court ordered the various related domain name registrars to turn over to the Commonwealth of Kentucky the registrations for the names, but allowed the other information related to the domain names to remain unchanged. This meant the domain names continued to work. The matter was then set for further hearing.
Lawyers appeared representing the interests of nine of the names. In addition, a number of associations representing domain name registrars, on-line gamblers, and on-line gambling sites, appeared and provided the court with briefs. And they raised a number of issues including the question of whether domain names are property subject to seizure and whether the court in Franklin County could exercise in rem jurisdiction over the names.
With respect to the property issue, the court followed Kremen v. Cohen
, 337 F.3d 1024 (9th Cir. 2003) in holding that domain names are in fact a form of property.
The court also held that it could exercise in rem jurisdiction over the domain names. First, it stated that in rem jurisdiction could be exercised wherever the domain names were located. It then rejected the schema used in the Anticybersquatting Consumer Protection Act, that domain names have a dual situs, located where the registry and the registrars are located.
Instead, the court crafted a presence test based on an interweaving of in rem jurisdiction principles and rules addressing specific in personam jurisdiction over defendants based on the presence of a website. Basically, the court held that because the websites allowed Kentucky residents to gamble, and the relevant websites were accessed through the domain names, the domain names were located in Kentucky. The analysis did not make any sense to me, but there it is.
So, I'm not sure where all this is going to go. The court did give the domain name owners the option to avoid the forfeiture order by blocking access to Kentucky residents and I suspect that would be the smart thing for them to do. Better than losing the domain name. On the other hand, I think I smell an appeal.
I also wonder what Kentucky would do with the names. Resell them? That seems a little hypocritical. Under the state statute governing seizure of gaming devices, they are supposed to destroy them. How do you do that? I have no idea. I suppose you could accomplish the same thing by just sitting on the registrations. Of course, the domain name registrars might be able to refuse to renew the names. Wouldn't that be fun.