The Domain Names’ Value. What Do You Get When Register Domain Name?

June 20, 2007

What does a “domain name” mean in the legal world? Is it a word or combination from letters and numbers that should ease Internet users when they surf the web? Is it just a virtual address that anyone uses for their web site? Just because it is not fancy to say “My website is… let’s say 87.65.37.163.

Some people say the domain names are just aimed to be a packing of a technical web standart. Others say domains are property. In a web poll conducted from Internet Commerce Association (ICA) 43% of the respondents said they see domains as “property”. Another 50% however still define them as “renewable contract right”. Five percent from those who participated to the survey say that the domains belong to the supporting registry. According to 3% of the respondents “domains are inventory”.

I’ve read in the news today that Phil Corwin, a representative of the ICA said during the SedoPro conference in New York that the domain name industry has created wealth within the last decade. According to him the industry may face new law that would impose tax over domain names the same way the legislators in Washington did for private equity profits.

Domain Names. Property or Llicense?

This is one of the main issues related to domain names that both legislators and business will need to set. There is no answer for now. The resolution is a key to different controversial points. One of them is that the domain name registars use to keep the best registered, expired and sometimes even new domains for their own use, without releasing them for free registration.

Companies like VeriSign and Sedo control over ten thousands of expired domains and do not release them on the market. The ICA also warned that Internet Corporation for Assigned Names and Numbers (ICANN) has already paved the way for backroom deals with some domain registry companies.

My personal view is that being or not being taxed, a domain name is better to be defined as a property. The concept that any domain is a temporary licence or inventory that belongs to the registry does not make sense. If it is like that, then all popular web names and trademarks are inoperative and truly virtual.