A Minnesota Appellate Court recently weighed in on an emerging question in the online world – is a domain name and the Web site associated with it subject to a garnishment order? The court said yes, meaning successful plaintiffs now have an additional asset to look to for collection purposes.
A civil lawsuit has three basic elements – liability, damages and collectability. Liability assigns responsibility – i.e., did the defendant breach the contract? Damages simply means what amount is the plaintiff due for the breach. But the third factor, collectability, may be the most important. That is, can you collect the damage award? It’s great to get a big damage award, but the euphoria can fade pretty quickly if the defendant doesn’t have the money to pay it.
The trial court ruled the domain and Web site were not subject to a garnishment order, and Sprinkler appealed. On appeal, the court held domain names are property, in that they are well-defined interests and the right to use them is transferable and subject to claims of exclusivity. In addition, the court found domain names are also subject to intellectual property protection. And in the appellate court’s view, given that Minnesota law subjects to garnishment any tangible or intangible property of any kind not specifically exempt, there was no reason the domain name and Web site couldn’t be used to satisfy a judgment.
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