You cannot convert a domain name Down Under


or, for that matter, a range of internet protocol addresses or and "autonomous" system number.

Puns intended.

Facts

To amplify, some facts are in order.

Mr Hoath registered the domain name dragon.net.au (and obtained associated IP adresses and an AS number).

Two companies he was associated with (Mortgage and ITFirst) operated as ISPs using the domain name etc. One of them, ITFirst,went into voluntary administration and its customers were sold to "Spin". Mr Hoath thought he did a deal with Messrs Stevens and Bal to merge his other business (Mortgage.com.au) with that of "Spin" and Mr Bal's Com-Cen to create E-talk.com.au. Consequently, he provided the registry key for the domain name etc. to the Stevens/Bal interests to assist in the migration of Mortgage's customers to E-talk.

Several months later (June 2001 - dot bomb anyone?), relations between Hoath, Bal and Stevens soured and E-talk fell over too. Stevens and Bal started up E-talk Communications which effectively took over E-talk.com.au. Then the fun really began!

12 Mr Hoath obtained the “registry key” to have the IP range and AS number transferred back to himself. However, on 21 August 2001, Mr Stevens sent a facsimile to APNIC, which, as successor to AUNIC, controlled the registration of IP addresses and AS numbers. Mr Stevens said that Spin had purchased the IP range and AS number from ITFirst. At Spin’s request, APNIC re-delegated the IP range and AS number to Com-Cen.

Com-Cen then on sold its customers to E-talk Communications for a fraction of the monthly revenue they generated and Com-Cen was wound up.

Conversion/detention

White J rejected Mr Hoath's action against the Bal/Stevens parties for the tort of conversion or detinue arising from their use of the domain name, IP addresses and AS number.

In Ferguson v Eakin unreported 1997 (BC9703869), the NSW Court of Appeal held that conversion and detinue could be brought only in respect of tangible property - goods. Rights to use a domain name, IP addresses and an AS number were at best merely choses in action. Therefore, no conversion or detinue. His Honour considered that the looming authority of the Court of Appeal outweighed the contrary view reached in the USA by the 9th Circuit in Kremen v Cohen (here).

Matters did not end there.

Passing off

At the time that Hoath thought he did a deal with Bal and Stevens, his company Mortgage was found to have acquired a valuable reputation and goodwill in the name Dragon Net and the domain name dragon.net.au.

White J characterised the Bal/Stevens' interests as having a licence to use the name Dragon Net and the domain name dragon.net.au while the proposed venture was put in place. When that unravelled in June 2001, the licence terminated.

As Mortgage's reputation and goodwill in the name and the domain name was still subsisting at that time, the continued use of Dragon Net and the domain name dragon.net.au by the Bal/Stevens' interests after June 2001, without a right to do so after that date, was a passing off.

Bal and Stevens were both liable also as joint tortfeasors or accessories.

Misleading or deceptive conduct

The Bal/Stevens' interests were also found liable for misleading or deceptive conduct contrary to s 52 of the Trade Practices Act 1974 as a result of representations made about the domain name. Apparently, they did not favour the court with submissions about these issues.

First, they had represented to the registrar of the domain name that they were the owners of the domain name by acquisition of the assets of ITFirst. That was false and misleading.

Secondly, Com-Cen had modified the Name Status Report to show ITFirst as the owner of the domain name to secure a transfer of the relevant IP and AS numbers by APNIC. That too was false and misleading.

White J held that these representations made to the domain name registrar and APNIC were of a commercial nature and so contraventions of s 52.

An order under s 87 for the transfer of the domain name back to Hoath was made. Damages under s 82 were also awarded but, in Mortgage's case, to be discounted for any award obtained for the passing off.

Other matters

"Bal", "Com-cen", "E-talk"? You're right, they do sound familiar to you. Who were the ISPs and principal found liable for authorising Cooper's copyright infringements in Universal Music v Cooper [2005] FCA 972?

Case is Hoath v Connect Internet Services [2006] NSWSC 158 here.

Posted: Thursday - 17 August, 2006 at 06:23 PM         |

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