High Court holds that domain name is intangible personal property

This was the first time the English High Court had held that a domain name was a form of intangible personal property.

In Hanger Holdings v Perlake Corporation SA and another [2021] EWHC 81 (Ch) the High Court has considered a dispute about a 2003 agreement under which, among other things, Hanger transferred to Perlake a domain name incorporating the word "blackjack" and associated goodwill. Blackjack is the most popular card game played in casinos worldwide. With the rapid recent growth in online gambling, the domain name www.blackjack.com had acquired value.

Perlake was required to pay Hanger commission but failed to do so. One of the terms of the 2003 agreement provided that Hanger was entitled to terminate it if Perlake committed a material breach. There was a proviso that if the breach was capable of remedy, Hanger was obliged to give written notice specifying the breach and requiring it to be remedied; if Perlake failed to effect a remedy within 30 days of the notice the 2003 agreement would terminate. Thereupon Hanger would be entitled to all rights in the domain name.

It was denied that Perlake committed any breach of the 2003 Agreement, or that if it did, such breach was either material or irremediable. It was also argued that a domain name is not property in which equitable ownership can arise.

The High Court’s decision

The High Court upheld Hanger's claim, holding that, due to the agreement's termination, Hanger had acquired an equitable interest in the domain name and goodwill and was entitled to call for the assignment of the legal interest in those rights to it. Hanger's argument rested on establishing that a domain name was personal property, relying on the decision in OBG Ltd v Allan [2007] UKHL 21, in which Lord Hoffmann said that a domain name may be intangible property. 

The High Court held that a domain name was intangible personal property agreeing with Weiler JA's conclusion that a domain name constitutes property in the Canadian case of Tucows.com Co v Lojas Renner SA [2011] ONCA 548. 

The court also considered the judgment in British Telecommunications plc v One in a Million Ltd [1999] 1 WLR 903. This was a passing off case in which the Court of Appeal ruled that the use of a domain name incorporating the well-known name of a corporation could be restrained at the instigation of the corporation where use of the domain name threatened to represent falsely that it was owned by or associated with the corporation. The injunction granted at first instance, restraining the defendants from using, offering for sale, selling or otherwise transferring the domain names in issue to another party, was upheld. It was argued that this does not square with a domain name being property since the effect of the order of the Court of Appeal would then have been to divest the defendants of property, raising issues of sequestration of assets or a violation of rights in private property contrary to the Human Rights Act 1998.

The court rejected this argument. It said that there was no reason why an injunction restraining the use or transfer of a domain name would engage the Human Rights Act 1998 or raise issues of sequestration of assets if one assumes that a domain name is intangible property. It would make equally little sense in the context of an injunction to restrain the use or transfer of a registered trade mark. Section 22 of the Trade Marks Act 1994 provides that a registered trade mark is personal property.

Published: 2021-01-26T16:00:00

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