Domain Registration is Not Property Right
From BNA
An Internet domain name registration is not a property right, but rather a contract for registration services, the New York Supreme Court, Appellate Division, First Department, said June 8 (Wornow v. Register.Com Inc., N.Y. App. Div., No. 3817-3818, 6/8/04).
The court also held, en route to affirming the dismissal of a putuative class action challenging Register.com's automatic renewal of domain name registrations, that there was nothing deceptive in Register.com's terms of use, which provided, among other things:
+ for automatic renewal of domain name registrations and billing to the registrant's credit card;
+ for unilaterial modifications to the registration contract;
* that notice of such modifications would be via e-mail; and
* that the registrant must maintain a valid e-mail address for receiving such notices.
The court observed that its conclusion was consistent with precedent elsewhere holding that a domain name that is not trademarked or patented "is not personal property, but rather a contract right that cannot exist separate and apart from the services performed by a registrar such as defendant." Network Solutions v. Umbro Intl., 529 S.E.2d 80, 86, (Va. 2000), citing Dorer v. Arel, 60 F. Supp.2d 558, 561 (E.D. Va. 1999); Lockheed Martin Corp. v. Network Solutions, 194 F.3d 980, 984-985 (9th Cir. 1999).
The court concluded that General Obligations Law Section 5-903, which makes self-renewing contracts unenforceable absent written notice before renewal, was inapplicable to domain name registrations.
The court also affirmed the lower court's dismissal of plaintiff's allegations that Register.com's online terms of use and provisions for modification of the terms amounted to a deceptive trade practice. Register.com's terms of use reserve to it the right to make modifications to the terms, giving registrants the right to cancel if they are displeased with the modifications. The terms of use also provide that notices to registrants will be made via e-mail.
"Plaintiff asserts that he never received these e-mails, but, so far as appears, that was only because he failed to update his e-mail address with defendant, as required by the agreement," the court said. "We perceive nothing deceptive in defendant's use of e-mail to give notice of modification of an agreement that expressly permitted notice by e-mail."
Jeffrey L. Fazio of Fazio & Micheletti, San Mateo, Calif., represented the plaintiff, Brian Wornow. Kenneth A. Plevan of Skadden, Arps, Slate, Meagher & Flom LLP, New York, represented Register.Com.
2004 NYSlipOp 04776
Decided on June 8, 2004
Appellate Division, First Department
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on June 8, 2004
Nardelli, J.P., Saxe, Sullivan, Marlow, Catterson, JJ.
3817- 3818
v
Register.Com, Inc., Defendant-Respondent, Does 1-100, Defendants.
Fazio & Micheletti, San Mateo, CA (Jeffrey L. Fazio, of the
California Bar, admitted pro hac vice, of counsel), for appellant.
Skadden, Arps, Slate, Meagher & Flom LLP, New York (Kenneth
A. Plevan of counsel), for respondent.
Orders, Supreme Court, New York County (Charles Edward Ramos, J.), entered April 17, 2003 and on or about February 24, 2004, which, in a putative class action arising out of defendant Internet domain name registrar's automatic renewal of plaintiff's domain names registrations, insofar as appealed from as limited by the briefs, granted defendant's motion pursuant to CPLR 3211(a)(1),(7) dismissing plaintiff's causes of action for a declaration that such renewals violated General Obligations Law
§ 5-903, damages and injunctive relief under General Business Law § 349, and damages for breach of contract, breach of the covenant of good faith and fair dealing and conversion, unanimously affirmed, without costs.
We are in accord with authorities holding that a domain name that is not trademarked or patented is not personal property, but rather a contract right that cannot exist separate and apart from the services performed by a registrar such as defendant (see Network Solutions v Umbro Intl., 259 Va 759, 770, 529 SE2d 80, 86, citing Dorer v Arel, 60 F Supp 2d 558, 561; Lockheed Martin Corp. v Network Solutions, 194 F3d 980, 984-985). Accordingly, General Obligations Law § 5-903, which makes automatic renewal provisions unenforceable except upon conditions admittedly not met here, is inapplicable (see Donald Rubin, Inc. v Schwartz, 160 AD2d 53, 56-58; Prial v Supreme Ct. Uniformed Officers Assn., 91 Misc 2d 115, 117). Inasmuch as plaintiff argues that section 5-903 was part of the parties' agreement as a matter of law, and that his cause of action for breach of contract therefore stands or falls with his cause of action for a declaratory judgment, we deem the cause of action for declaratory judgment to be unnecessary, and decline to make a declaration.
Nor does plaintiff state a cause of action for deceptive trade practices. Based on the [*2]complaint, documentary evidence and plaintiff's concessions in opposing defendant's motion to dismiss, it appears that the parties entered into an agreement for the registration of domain names submitted by plaintiff to defendant; that the agreement could be unilaterally modified by defendant and unilaterally canceled by plaintiff once notified of any such modification; that all notices required by the agreement could be given by e-mail; and that plaintiff was required to keep his e-mail address with defendant up to date, but failed to do so. It further appears that defendant modified the agreement so as to provide for automatic renewal of domain name registrations for a one-year period; notified plaintiff by e-mail of each expiring registration and of his right to cancel the agreement; and also notified plaintiff by e-mail of each completed renewal and of his right to revoke it by contacting defendant via its toll-free telephone number or by a hyperlink that would automatically credit the charge to plaintiff's credit card. Plaintiff asserts that he never received these e-mails, but, so far as appears, that was only because he failed to update his e-mail address with defendant, as required by the agreement. We perceive nothing deceptive in defendant's use of e-mail to give notice of modification of an agreement that expressly permitted notice by e-mail.
The conversion cause of action was properly dismissed on the ground that the $34.99 per renewal charged to plaintiff's credit card is not specifically identifiable (cf. Republic of Haiti v Duvalier, 211 AD2d 379, 384-386). We note that plaintiff's cause of action for money had and received survived the motion to dismiss and is pending. The cause of action for breach of the covenant of good faith and fair dealing implied in the parties' agreement was properly dismissed on the ground that plaintiff received the full benefit of that agreement, namely, the
registration of his domain names (see Aventine Inv. Mgt. v Canadian Imperial Bank of Commerce, 265 AD2d 513, 514).
M-2197 - Wornow v Register.Com, Inc.
Motion seeking leave to enlarge record denied.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: JUNE 8, 2004
CLERK
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