Appeals court set to rule on Kentucky effort to seize domain names

Computerworld - The Kentucky Court of Appeals is expected to issue a ruling soon on whether a state court can order the seizure of Internet domain names that are registered in another state or country. The appeals court is deliberating whether to uphold a lower court's approval of a state plan to seize Internet domain names belonging to 141 online gambling sites.

Jennifer Brislin, a spokeswoman for the Kentucky Justice and Public Safety Cabinet, said that the agency sought to shut down the gambling sites last year to protect Kentucky citizens from an "illegal, unregulated and untaxed industry." The state argued that the sites promoted online gambling activities that are illegal in Kentucky.

"We think we should have the ability to exercise our laws when illegal business is being conducted inside the borders of our state," Brislin said. "Our only goal is to have these sites blocked within our borders. In no way do we want to be the owners of these domain names."

In an amicus brief filed in the appeals court, Matthew Zimmerman, senior staff attorney at the Electronic Frontier Foundation (EFF) a San Francisco-based advocacy group, called the Franklin County Circuit Court's ruling "unconstitutional and made without jurisdictional authority."

"The principle that the State of Kentucky is trying to convince the court of is that if a local jurisdiction doesn't like the content of a Web site they can issue an order forcing a domain name registrar or other intermediary" to take the site down," Zimmerman said. "One can easily imagine a repressive regime somewhere saying it doesn't like the [content] on a site, and ordering 'middlemen' to take it down."

Zimmerman said that he expects the three-judge Kentucky Court of Appeals panel to issue a ruling later this month. The lower court order has been stayed until the appeals court rules.

Judge Thomas Wingate of the state's Franklin County Circuit Court in September 2008 ordered the domain registrars of each of the 141 domains to transfer ownership of the sites to the "account of the Commonwealth" without any configuration changes.

Wingate's order was immediately challenged by lawyers representing various Web sites on the grounds that domain names are not tangible property and thus cannot be seized by the state. The site owners also questioned whether a state court has authority over 141 domain names registered in other states.

After reviewing the challenges, Wingate in October upheld his initial order, ruling that domain names are intangible property but can be owned, controlled and sold like any other property. "Property is about the relationship of people with respect to things, both tangible and intangible," the judge wrote.