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Will Domains as Property Come Back to Bite ?

Posted on the 03 March 2017 by Worldwide @thedomains

Will domains as property come back to bite ?

Back in December of 2013, we published a post that was actually a comment by John Berryhill. The comment in itself was worthy of its own post and we published it. John was explaining why domain investors should not want domains to be considered property.

John has been actively posting on Namepros lately with regards to the battle for The Grandma vs the Fitness Trainer has been getting a lot of exposure. Joseph Peterson from has been trying to help shine as much light on the topic as possible. Others have chimed in such as

John pointed out the specifics of the case and why again domain investors should be wary of domains as property.

The whole thread at Namepros is an interesting read, here is where John mentions domains as property.

Okay, so, I took a look-see a the recent flurry of filings in Washington, and here is the state of play:

The fitness trainer had originally offered $10k to the bankruptcy trustee. As I noted above, it is the responsibility of the trustee to collect what he can on behalf of the creditors. The creditors, in this instance, are US taxpayers, since the underlying debt was to the US Dept. of Education.

After an initial round of filings in the re-opened case, the trustee was inclined to sell it back to Granny Powell for the same $10k, subject to an exemption of $7k or thereabouts, and also noting that the status of domain names as property in bankruptcy is unclear.

So… the fitness trainer has upped her offer to $20k, and provided the trustee with a brief to the effect that domain names should be considered property in bankruptcy in the State of Washington.

There are some problems with that brief, which I may go into when I have more time, but I’d like to point out what matters here.

For years, there has been this cult-like insistence that it would be somehow “good” for domainers if domain names were considered to be “property” instead of incidents to service contracts with registrars. One of the reasons for this insistence goes back to the Kremen v. Cohen case, in which a highjacked domain name was recovered on a conversion claim (the civil form of theft). The reason it was important in that case was because the uncreative lawyers who filed it, framed it AS a conversion claim, instead of any of a number of other legal claims that might have been used to recover the domain name. But because the domain name at issue was, domainers latched onto “domain names should be property” as an almost magic incantation that would universally benefit them.

Also, for years, I’ve pointed out that this insistence was going to bite someone in the ass someday, and now it has. Because if you want domain names to be property, then they are subject to assignment in divorce, various liens, bankruptcy, and property tax. If you are “buying” them from registrars, then you are also rooting for the payment of sales tax. Why domainers want those things, I have no idea. Personally, I don’t have an opinion either way. But what I do not like, in any event, are shallow arguments – even if I agree with the conclusion.

Now, the “is it property” question seems to have been admitted thus far. Rather than take the clear position that it was not property subject to bankruptcy, the debtor’s counsel filed a brief to the effect that “yes, it’s property, but wasn’t worth much” as discussed above. Well, regardless of what anyone thought it was worth, the trustee has an offer to sell it for $20,000.

So what this appears headed toward is a bidding war between whatever the fitness trainer is willing to offer, and whatever Grandma Powell is able to raise by donations.

But I want to be really clear about one point here – if you are in the “domain names should be property camp” then you are rooting for the fitness trainer’s position to prevail in this thing.

All that said, the thread title here refers to a “thief”. Thieves generally don’t offer to pay for things.

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