For using others’ material, Minnesota firm loses its website

The Minnesota Court of Appeals declared today that a company can lose its website and domain name, overruling a lower court which had said websites cannot be garnished.

The Court ruled in the complaint a Texas lawn sprinkler firm brought against Shakopee-based Systemic Rain, which operated the GPLAWN.COM website.

The Texas firm, Sprinkler Warehouse, won a $156,000 suit against the Minnesota company because it had used copyrighted material on its website without permission. The owner of the website, James Palm, insisted he had no earnings to garnish.

Today, the Court of Appeals said he does. The website and domain name. In so doing, the court ruled that domain names and websites constitute “property” subject to garnishment.

“It is important to note that not all parts of a website are necessarily property of the website owner,” Chief Judge Edward Cleary wrote in his opinion today(pdf). “Some portions of the website may not be unique enough to merit copyright protection, and are merely in the public domain. Also, some portions of a website may actually belong to a third party and may merely be licensed to the website owner for use on the website. Only the copyright-protected portions of a website that belong to the judgment debtor can be considered the judgment debtor’s property.”

Up until today, no Minnesota court has ever ruled that copyrighted websites are property subject to being seized and sold to satisfy court awards.

How that would happen is still anyone’s guess. Cleary made a point in his ruling of noting his concern that the ruling could be misused. He suggested the Minnesota company turn over the website and domain name to a court receiver for sale, with the proceeds applied to satisfy the original court judgement against it.

  • joetron2030

    It will be interesting to see how this plays out now that a ruling has been made.

  • BJ

    Funny, a domain is pretty much worthless. It looks to be a template you can buy for about $20.

    • joetron2030

      A domain name is cheap until you have a running business tied to it. When that’s your primary vehicle for advertising and interfacing with the public, that domain name and the contents of that site gain tremendous value.

      The biggest failure a business can make in this regard is to lose ownership of that domain name. There are businesses out there that make money by buying up expired domain registrations and squatting on them to resell them later on to whomever wants it.

      • BJ

        >businesses out there that make money by buying up expired domain registrations

        Yeah that is a bit of a urban legend, while there are and some people do. Setting up a new website with the same template and database of products, then getting search engines to find it again, isn’t ‘that’ hard. I’m not saying it doesn’t suck. How many people ‘know’ that GPLAWN.COM is the place to go for sprinkler equipment?

        >until you have a running business tied to it.

        That depends on the domain and what the business is. If the brand and product or service are tied to the domain then yes very important. kayak.com or hotels.com they are completly tied to the domain name. My former employer owned about 80 domains, each had landing pages that brought you to the main page. All the names were similar, and google search usually brought you to the ‘main’ website, but none of them had much value beyond the ones that had the product name in them, even those not so much.

        These days 2-3 months of work building the search engine back up and you are back in business.