Court says domain name counts as property

A Missouri appeals court ruled for the first time that an internet domain name is a form of property subject to the common-law tort of conversion.

The Court of Appeals Southern District on Jan. 27 affirmed a $50,000 judgment in favor of a southern Missouri radio station whose former website name, “kuku.com,” was sold off by the station’s web-hosting provider.

The Ozarks Radio Network had worked with the company, now known as JGR Technologies, since the late 1990s to register domain names for each of its radio stations and to host their websites. In 2011, the company substantially raised the fees charged to the radio network.

When the network refused to pay the fees, JGR seized the domain names and shut down the websites, according to the suit. Kuku.com, which had served as the home page for KUKU-FM in Willow Springs, was sold without authorization to a Chinese buyer for $50,000.

Following a bench trial, a Howell County judge ruled in the network’s favor and ordered JGR and four individual defendants to pay for the value of the site plus interest. On appeal, the defendants argued that an internet domain name is not the type of property capable of supporting an action for conversion.

Judge Jeffrey W. Bates, writing for the Southern District, said the argument is a matter of first impression in Missouri. He followed a 2003 case from the 9th U.S. Circuit Court of Appeals, Kremen v. Cohen, however, which held that domain name was a form of intangible property that could be converted. The case has been followed in numerous jurisdictions.

“We hold that an internet domain name is a form of intangible property that can serve as the basis for a conversion claim in Missouri,” Bates wrote. Judges William W. Francis Jr. and Mary W. Sheffield concurred.

Zane Privette, a lawyer in Willow Springs who represented the radio network, noted that a Minnesota federal court applying Missouri law in a 2014 ruling, Superior Edge Inc. v. Monsanto Co., reached a similar conclusion regarding software source code.

“But there was no case directly on point that said whether an internet domain name, under Missouri law, was property that was subject to conversion,” he said. “That was a lot of the thrust of the appeal.”

Jacob Y. Garrett, an attorney for the JGR Technologies defendants, declined to comment.

The case also was notable as a rare instance in which the victorious plaintiff technically didn’t join the case until after it was tried. The original named plaintiff in the suit was Missouri Ozarks Radio Network Inc., a subsidiary of the Ozarks Radio Network that owns the KUKU station. But during the course of the case, the parties learned that kuku.com had been mistakenly registered with a different station, KKDY in West Plains. That station is owned by Central Ozarks Radio Network Inc., a separate subsidiary.

After the 2017 bench trial, but before judgment was entered, the defendants argued that the wrong party had filed the suit. But the judge allowed MORN to add CORN as a plaintiff, and the judgment was issued in favor of CORN.

The Southern District agreed with the trial judge that the unusual move didn’t prejudice the defendants and noted that they had failed to raise the issue at trial.

“Moreover, not only did Defendants know CORN was not a plaintiff early in the case, it was Defendants who mistakenly associated the domain name with the wrong radio station — KKDY owned by CORN — in the first place,” Bates wrote.

The case is Missouri Ozarks Radio Network Inc. and Central Ozarks Radio Network Inc. v. Baugh et al., SD35569.