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For in rem Jurisdiction, Ninth Circuit Holds That Domain Names Are Located Where the Registry is Located
By Elizabeth Akerman – Edited by Gary Pong

Office Depot, Inc. v. Zuccarini, Case No. 07-16788 (9th Cir., Feb. 26, 2010)
Slip Opinion

The U.S. Court of Appeals for the Ninth Circuit affirmed the decision by the District Court for the Northern District of California to grant DS Holdings’ motion to appoint a receiver to auction off Zuccarini’s domain names and use the proceeds to satisfy an earlier judgment against him.

To arrive at its conclusion, the court held that under California law “domain names are intangible property subject to a writ of execution” and that “domain names are located where the registry is located for the purpose of asserting quasi in rem jurisdiction.” The court also noted in dicta that for in rem jurisdiction, domain names are located where the relevant registrar is located.

The Seattle Trademark Lawyer provides an overview of the case and the Technology & Marketing Law Blog provides an analysis of the decision.

In 2000, Office Depot obtained a judgment against Zucarrini under the Anticybersquatting Consumer Protection Act (ACPA) based on Zucarrini’s registration of “offic-depot.com.” Office Depot subsequently assigned this judgment to DS Holdings. DS Holdings registered the judgment in the District Court of the Northern District of California and sought to satisfy the judgment by placing a levy on Zucarrini’s 190 other “.com” domain names, which were registered with VeriSign. The district court subsequently granted a motion by DS Holdings to appoint a receiver to auction off Zuccarini’s domain names.

Zuccarini had appealed the lower court’s decision, arguing that the Northern District of California was not the proper jurisdiction to place a levy upon his domain names and thus the appointment of a receiver was improper.

Understanding this decision requires an understanding of how the domain name system works. Every computer on the Internet is addressed by a unique Internet Protocol (IP) address. These IP addresses, such as 66.249.91.104, are hard for users to remember. To make the Internet more usable, these IP addresses are mapped to alphanumeric domain names such as www.google.com. Under this system, a domain name registry maintains the mapping from IP address to domain name. VeriSign, a corporation headquartered within the Northern District of California, is the registry that maintains the “.com” domain names. Registrants, such as Zuccarini, own these domain names by purchasing them off registrars. Registrars are intermediaries that keep track of which registrants own which domain names so that the registry can be updated accordingly.

Jurisdiction in this judgment was premised on quasi in rem jurisdiction, allowing the court to assert jurisdiction over Zuccarini’s assets located within the district. The court addressed two questions in reaching its decision: (1) Are domain names property that is subject to a writ of execution? (2) If domain names are property, where are they located for purposes of execution?

To answer the first question, the court affirmed Kremen v. Cohen, 337 F.3d 1024, 1030 (9th Cir. 2003), to support its assertion that under California law “domain names are intangible property subject to a writ of execution.” In addressing the second question, the court recognized that the “location”  of intangible property is context-specific, varying based on the purpose to be served. As California law was silent as to the location of domain names, the court looked to the ACPA, which allows a trademark owner to proceed under in rem jurisdiction against an infringing domain name in a civil cybersquatting action, as authority “for the proposition that domain names are personal property located wherever the registry or the registrar are located.”

As a result of this ruling, it will now be easier to collect judgments from people who own multiple domain names. The procedure for auctioning off their domain names has been greatly simplified. There are many domain name registrars located all over the world, but there is only one domain name registry for each top-level domain, such as VeriSign, for the “.com” domains.  Regardless of how many registrars a registrant chose to use, a single suit can now be brought in the district containing the domain name registry at issue.

Posted On Mar - 4 - 2010 Comments Off

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