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NamePros : Heidi Powell .com domain case raises the issue of domains as property

An ongoing thread over at NamePros raises, once again, the issue of whether domain names are property.

Contributing his vast knowledge on the subject of domain law, IP attorney and recent grandfather, John Berryhill, states:

“And here we come to one of my pet peeves – the irrational insistence by some domainers that domain names should be “property” instead of personal service contract rights.

Quite a few states, Virginia being a prominent example, do not consider domain names to be attachable property in bankruptcy. I don’t know whether that’s the case in Washington, and the trustee in his withdrawal motion, noted that the status of a domain name as property is unclear.

If one is in the “domain names are property” camp, then one would have to agree they should be inventoried as assets in bankruptcy.”

In the case of HeidiPowell.com, the most recent action by the celebrity trainer’s lawyer has been to challenge the non-listing of the domain as an asset, during a bankruptcy filed by the domain’s Registrant in 2012.

The celebrity “Heidi Powell” wants to to engage the bankruptcy’s trustee into listing the domain as an asset of value, to be acquired by anyone who has interest.

Would this case set a precedent in how domain names are handled when declaring personal bankruptcy?

John Berryhill further expands on the specifics of this case, painting an alluring example:

“A sweet grandmother has all of her savings invested in Peterson National Bank. My neighbor takes out loans from the Peterson National Bank in the amount of $100,000, defaults, and then goes into bankruptcy. He inventories his assets, excludes his car, and his assets are liquidated to the tune of $50,000.

Who got screwed there? My neighbor? No, he had the benefit of borrowing $100,000, paying back $50,000, and thus shorting the Peterson National Bank, and by extension the sweet granny who had her money there.

But, hey, stuff happens, and that’s why bankruptcy laws are there (for those who can afford it, and as long as we are talking about casino owners and not, say, student loans which can’t be discharged in bankruptcy).

So a few years goes by and I’d like to buy my neighbors car. We can’t reach an agreement, but I find out he excluded it from his bankruptcy inventory. So, I go back to the trustee, say he excluded it, and seek to buy the car from the trustee on behalf of the bankrupt estate.

There is utterly no moral defect in my doing that. None. I can’t even see how you can characterize that as some kind of underhanded behavior in the least. It was my neighbor who didn’t include it in the inventory when he was screwing the Peterson National Bank and all the grannies who save their money there.”

Would it be a different case if the domain was not a personal asset but rather, a corporate asset?

Read the full thread on HeidiPowell.com at NamePros; be prepared to read several pages of interesting content.

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