By Elizabeth Oliveira, Sedo’s Legal TeamThe Kentucky Court of Appeals has ruled that the state of Kentucky’s seizure of 141 domain names which took place in October of 2008 was not lawful as the domain name are not “gambling devices” according to the state law definition. Though the Governor of Kentucky has appealed this decision to the state’s Supreme Court, the decision of the Court of Appeals is a positive turn of events for domain owners. To recap the case, on October 16, 2008 the Kentucky Circuit Court for Franklin County ordered the seizure of 141 domain names, forcing registrars to forfeit the registrations of these domains to the state of Kentucky. This order was the result of the Circuit Court’s holding that internet domain names are a form of physical property located within the state and therefore subject to in rem jurisdiction of the courts. In overruling the lower court’s decision the Court of Appeals determined that the statute only permits forfeiture of unlawful “gambling devices” with devices meaning tangible objects. Since domain names are not tangible the Court of Appeals ruled that the lower court lacked jurisdiction to make a seizure order. The domain community responded swiftly to the action taken by the state and the lower court. Groups such as the Internet Commerce Association (ICA), which submitted amicus briefs, provided guidance and reasoning which was reflected in the majority and concurring opinions of the Appellate Court decision.
There is continued concern in the domain community that the state Supreme Court could overrule the Appellate Court decision or that the Kentucky state legislature could amend its gambling statute to include domain names within the definition of gambling devices. However, on its face, the Appellate Court’s conclusion is a very positive statement for the domain industry.
Source: Sedo.com -- Reprinted with permission -- February 10, 2009