Kentucky Uphold Domain Seizure, Part 2: Our Take: Who is At Risk: What To Do Now
Thursday afternoon Judge Thomas Wingate issued a ruling that he would not dismiss the case brought against domain owners which included seizure of their names. A forfeiture hearing has been scheduled for November 17th.
have read the decision in full.
The court found it had jurisdiction over the 141 domains seized by the commonwealth.
The court found that Domains names by virtue of of “its scarcity and desirability, domain names have economic value.
Domain names are “property” subject the the courts jurisdiction and subject to civil forfeiture.
However, and here is the important part, the court made the distinction between domains that were “parked” and domains that were used to operate a gambling site.
“”"”The court recognizes that as to any of the 141 defendants domain names that identify websites as informational only, the seizure order must be rescinded.”"
However the court found that “Internet gambling operators and their domain names are present in Kentucky.”
So if you have a parking page the Commonwealth has no jurisdiction but if your operating a site, then your doing business in the state and your subject to its jurisdiction.
The court then found a domain name to be a gambling device included in the language of Kentucky Statue because “domain names are designed to attract players”. “”Internet domain names…create and maintain a virtual casino, and contain the vice at which the statute is directed.”
The court went on to say the “domain names have been designed to reach our state” as the operators of the domain could have blocked, filter or deny access based on geographical location, such as the Commonwealth of Kentucky.
The court also dismissed the argument that a domain name’s presence is where it is owned or housed, essentially ruling that Internet domain issues are matters which individual states, even “municipalities” have a right to adjudicate.
Another scary part of this ruling is that domain names are not only subject to in rem jurisdiction, but that control can be seized, without the basic due process of notice and hearing by any municipality.
The courts ruling is basically if you operate a gambling site and block Kentucky then you can keep your domain and if you don’t then you will forfeit the domain.
The court will hold another hearing on November 17th to see if the domain operators have complied with the blocking order. Those who have will get their domains back. Those who don’t will forfeit the domains to the state.
Interestingly the Judge’s order said nothing on the question of damages that the state wanted. Te judge made no ruling on damage, fines or recouping money made by sites operating in Kentucky.
So what does all this mean?
In my opinion the judge made up law to come to the conclusion the Governor of Kentucky wanted him to come to. The ruling of the judge makes little sense. He concludes that domains are property although a long line of cases says its not.
The question now becomes will anyone subject to this order appeal the ruling, or will they simply block Kentucky and allow this ruling to stand?
The one savings grace from this opinion is that informational domains cannot be seized.
However sites “doing business” can be.
Who is at risk for a similar action?
In my opinion all Geo Sites and Adult sites top the list.
If a state can regulate the internet so can a county, city, town, or as the judge said any “municipality”.
A municipality can pass a law saying its unlawful to have a domain confusingly similar to the name of the municipality, county, city, state, etc, and then seize domains as being in violation of the law.
Adult sites and are also very vulnerable in our opinion. For just one example, if it’s against the law of a city or county to sell adult toys and the city finds a site selling adult toys, they can seize the domain.
Any domain that might have run afoul of the “Snowe Bill” might also be subject to seizure by some jurisdiction at some point. Those would include domains confusingly similar to government agencies or services, on a national or regional basis
You know have to ask yourself what next jurisdiction will act, and what will they do.
What is the cost of defending yourself in one of these proceedings (tens of Thousands of Dollars) even if you get your domains back and the real question becomes, what is the benefit of having a US based registrar?
I cannot answer these questions for you.
I cannot advise you how you should conduct your business.
All I can tell you is what we have done.
Last month we moved all our domains to an “offshore” registrar, NameVault.com
If you look at our whois record for any of our domains you will see they reflect the registrar Namevault.
NameVault.com is a ICANN accredited registrar which is located in the Bahamas.
We believe that this registrar represents the only true “offshore” registrar solution.
We are also pleased to note that Namevault.com is now the 6th fastest growing registrar in the world as ranked by Icann.
If you want to contact them you can at email@example.com
You will have to make your own decision.
We came to the conclusion that there is no advantage of using a US based registrar as it seems the US is the only country seeking to regulate the internet on a daily basis.
The ICA which filed a brief in this case responded to the decision as follows:
“The Internet Commerce Association is extremely disappointed in the decision issued by the Court this afternoon. This is a dangerous decision not just for domain name investors and developers but for all who value commerce and free speech on the Internet. The Court has incorrectly held that domain names are a form of property subject to in rem jurisdiction anywhere on the face of the Earth where their associated websites may be viewed on a computer screen. Even worse, it has endorsed the seizure of domain names absent notice and hearing, violating basic principles of due process. If the logic of this decision was broadly adopted then Internet commerce and speech would be at risk on a global basis. For example, U.S. companies conducting legal business activities in this nation could be subject to seizure orders for their domain names issued by foreign courts for lack of compliance with local law and regulation merely because their websites can be viewed abroad. Even more worrisome, the courts of totalitarian regimes could issue seizures orders against domain names used to spread truth and advocate freedom to their repressed populations. The remedy proposed by the court – geographic blocking so that none of the subject websites can be viewed from within Kentucky – is infeasible for individual domain names which could be subject to different laws and regulation in thousands of jurisdictions worldwide.
“The ICA does appreciate that Judge Wingate has indicated that he will continue to let us participate in this case as friends of the court. Given the high stakes for freedom, commerce, and the rights of domain name owners, the ICA plans to remain actively engaged in this critically important litigation.”