In Tucows.com Co. v Lojas Renner S.A. (2011) ONCA 548, August 8, 2011, the Court of Appeal for Ontario has held that a .com domain name owned by an Ontario Corporation is personal property in Ontario. Further the Ontario court has jurisdiction to adjudicate an action for a declaration of ownership of that domain name brought in Ontario against a Brazilian Company claiming prior trade-mark rights.
Tucows.com Co. (“Tucows”) is a technology corporation incorporated in Nova Scotia with it principal office in Toronto. Tucows purchased the domain name renner.com from Mailbank Inc. along with over 30,000 other surname domain names, and is the registrant of that domain name with ICANN. Lojas Renner S.A. (“Renner”) , a subsidiary of J.C. Penney, is a Brazilian company operating a series of retail department stores in Brazil. Renner believes that the domain name infringes on its registered trade-mark and brought a complaint before the World Intellectual Property Organization (“WIPO”) pursuant to its Uniform Dispute Resolution Policy (“UDRP”). Tucows did not respond to the merits of the complaint, but commenced an action in Ontario Superior Court of Justice for a declaration that it has legitimate interests in the domain name and that it had not registered or used the domain name in bad faith. In light of this proceeding the WIPO Administrative Panel decided to exercise its discretion to terminate its own proceeding. Renner then moved in Ontario for a ruling that the Superior Court did not have jurisdiction to hear the matter. The motion was successful at this level but on appeal to the Court of Appeal the motion was dismissed.
In a scholarly analysis of property law, the Court of Appeal concluded that a domain name was intangible property. The court cited U.S. jurisprudence Kremen v. Cohen 337 F. 3d 1024 ( 9th circuit 2003) to conclude that a domain name was intangible property because it satisfied the three part test for the existence of a property right: it is an interest capable of precise definition, it is capable of exclusive possession or control and it is capable of giving rise to a legitimate claim for exclusivity.
The court then went on to consider whether a domain name was personal property within the meaning of the Ontario rules for assuming jurisdiction. Citing Canadian cases relating to fishing licenses and tobacco quotas, the court concluded that personal property must have an element of exclusivity but also must be definable, identifiable by third parties, capable of assumption by third parties and have some degree of permanence or stability. The Court concluded that a domain name had all of these characteristics and thus qualified as personal property pursuant to the Ontario rules.
Finally the Court turned its attention to whether or not this “personal property” was situated in Ontario. The court likened domain names to goodwill . Like goodwill a domain name is part of the intangible property of Tucows’ business. As a business asset of Tucows, the domain name has its maximum contacts with Ontario where Tucows business was located. The connecting factors favouring location of the domain name in Ontario were the location of the registrant, the location of the registrar and the servers as intermediaries.
Thus the domain name was personal property in Ontario and the jurisdiction was proper in Ontario.
The court assumed jurisdiction to adjudicate the ownership question based on its assumption that the domain name was property situated in Ontario. This opens the door to law suits in Ontario to adjudicate rights of ownership for all .com domain names owned by Ontario companies.
In reaching its decision, the Court of Appeal also briefly considered the characterization of domain names in other leading jurisdictions, including the U.K., India and Australia, stating that “[t]he dominant view emerging from international jurisprudence and academic commentary appears to be that domain names are a new type of intangible property.” Based on a detailed analysis of Canadian law and an overview of international common law jurisprudence, the Court of Appeal clarified the issue of property rights in domain names in Canada, and aligned Canadian jurisprudence with other common law jurisdictions.
Link to the Ontario Superior Court motion decision:
Link to the Court of Appeal decision: