As most lawyers can tell you, winning a judgment is great. But it’s only half the battle. The other part of the process, and arguably the more important part, is collecting the amount the court awards. That is often more difficult than it sounds.
One tool lawyers use to satisfy a judgment is “attachment.” And it is pretty much what it sounds like. A court can order that a successful plaintiff take possession of the defendant’s property to help pay off the judgment. In the case of tangible assets it’s pretty clear cut. A house can be foreclosed, a bank account can be garnished. But it’s a little trickier with intangible assets.
A recent case from Minnesota illustrates the point. It found that a domain name is an intangible asset that a successful plaintiff can attach to help satisfy a judgment. The decision is in line with cases from other jurisdictions that have ruled the same way.
The defendant in the case – Systemic Rain,Inc. operated a Web site with the domain name GPLAWN.COM. The plaintiff in the case – Sprinkler Warehouse, Inc., having won a money judgment against Systemic, then sought an order attaching the domain name. Systemic argued the domain name was merely a contract for service and not personal property as defined by Minnesota statutes. In Systemic’s view, it had a contract with a registrar that allowed it to use to that domain. But it was nothing more than that.
In the court’s view, however, the domain name fit squarely within the definition of “intangible personal property.” Intangible personal property is property that has no physical existence and whose value lies chiefly in what it represents. A good example is stock in a company. In its analysis, the court considered the following attributes of a domain name that resembled stock. It found that “[a] domain name registrant enjoys the right to possess, control, and use the domain name, as well as dispose of it as he or she would with other types of property. Specifically, a registrant may use the domain name, or transfer or sell it to another party. Further, all combinations of top-level and second-level domain names are unique, and thus a domain name registrant has the right to exclude others from using that name.”
The court considered the registrant’s ability to buy and sell the domain name a critical factor making it analogous to a stock certificate. In addition, the court noted that the statutory definition of intangible personal was intended to be broad. Broad enough to encompass even an ephemeral domain name.
A domain name on its face may seem worthless or fungible at best. But imagine the amount of marketing dollars and resources that go into building up the public’s awareness and familiarity with it. And imagine the hassle of starting over from scratch if you lose it. It’s probably a good idea to think about how to protect your company’s name from attachment just to be on the safe side.