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NETWORK SOLUTIONS, INC. v. UMBRO INTERNATIONAL, INC., et al.



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NETWORK SOLUTIONS, INC.

v.

UMBRO INTERNATIONAL,
INC., et al.


April 21, 2000

Record No. 991168

NETWORK SOLUTIONS, INC.

v.

UMBRO INTERNATIONAL, INC., ET AL.

FROM THE CIRCUIT COURT OF FAIRFAX COUNTY

M. Langhorne Keith, Judge

Present: Carrico, C.J., Lacy, Hassell, Keenan,
Koontz, and Kinser, JJ., and Compton, Senior Justice


OPINION BY JUSTICE CYNTHIA D. KINSER

 

I. INTRODUCTION

In this case of first impression, we address
the issue whether a contractual right to use an Internet domain
name can be garnished. In doing so, we "apply traditional
legal principles to [a] new avenue of commerce," Intermatic
Inc. v. Toeppen
, 947 F. Supp. 1227, 1229 (N.D. Ill. 1996),
and conclude that such a contractual right is "the product
of a contract for services," Dorer v. Arel, 60 F.
Supp.2d 558, 561 (E.D. Va. 1999), and hence is not subject to
garnishment. Accordingly, we will reverse the judgment of the
circuit court holding that the domain name registrations at issue
in this appeal are garnishable.

II. FACTS AND PROCEEDINGS

In 1997, appellee Umbro International, Inc.
(Umbro), obtained a default judgment and permanent injunction in
the United States District Court for the District of South
Carolina against 3263851 Canada, Inc., a Canadian corporation
(the judgment debtor), and also against a Canadian citizen who
owns the judgment debtor. Umbro Int’l, Inc. v. 3263851
Canada, Inc.
, No. 6:97-2779-20, slip op. at 5, 8 (D.S.C. Dec.
31, 1997). That proceeding involved the judgment debtor’s
registration of the Internet domain name
[1] "umbro.com." In its order, the district court
permanently enjoined the judgment debtor from further use of the
domain name "umbro.com" and awarded judgment to Umbro
in the amount of $23,489.98 for attorneys’ fees and
expenses. Id. at 8.

Umbro subsequently obtained a Certification of
Judgment for Registration in Another District from the district
court in South Carolina. Umbro then filed that document in the
United States District Court for the Eastern District of
Virginia, which, in turn, issued an Exemplification Certificate. See
28 U.S.C. ? 1963. Using that Certificate and a copy of the
district court’s judgment, Umbro obtained a writ of fieri
facias from the Circuit Court of Fairfax County and instituted a
garnishment proceeding that is the subject of this appeal.

In the garnishment summons, Umbro named Network
Solutions, Inc. (NSI), as the garnishee and sought to garnish 38
Internet domain names that the judgment debtor had registered
with NSI. Accordingly, Umbro asked NSI to place those domain
names on hold and to deposit control of them into the registry of
the circuit court so that the domain names could be advertised
and sold to the highest bidder.

NSI answered the garnishment summons, stating
that it held no money or other garnishable property belonging to
the judgment debtor. Instead, NSI characterized what Umbro sought
to garnish as "standardized, executory service
contracts" or "domain name registration
agreements." NSI also asserted that 8 of the 38 domain names
listed in the garnishment summons either were not then, or never
had been, subject to a domain name registration agreement between
NSI and the judgment debtor.
[2]

Umbro subsequently filed a motion for NSI to
show cause why it had not deposited control of the judgment
debtor’s domain names into the registry of the circuit
court. NSI opposed that motion and the garnishment on the grounds
that the writ of fieri facias does not attach to the judgment
debtor’s contractual rights that are dependent on
unperformed conditions, that the judgment debtor’s domain
name registration agreements with NSI are contracts for services
and thus not subject to garnishment, that domain name services do
not have a readily ascertainable value, and that the domain name
services are not similar to patents and other forms of
intellectual property.

In opposing the garnishment, NSI submitted an
affidavit from its director of business affairs, who stated that
domain names cannot function on the Internet in the absence of
certain services being provided by a domain name registrar such
as NSI. He further stated that NSI performs these domain name
registration services pursuant to a standard domain name
registration agreement.

After a hearing on Umbro’s show cause
motion, the circuit court determined that the judgment
debtor’s Internet domain name registrations are
"valuable intangible property subject to garnishment."
In a letter opinion, the court concluded that the judgment debtor
has a possessory interest in the domain names registered with
NSI. The court further found that there are no unperformed
conditions with regard to the judgment debtor’s contractual
rights to use the domain names, that NSI is not being forced to
perform services for entities with whom it does not desire to do
business, and that the domain names are a "new form of
intellectual property."

Accordingly, the court ordered NSI to deposit
control "over all of the [j]udgment [d]ebtor’s Internet
domain name registrations into the [r]egistry" of the court
for sale by the sheriff’s office. Because of the intangible
nature of the domain names, the court directed the sheriff’s
office to sell the domain names in whatever manner it
"deem[ed] appropriate" after consultation with Umbro,
and to notify NSI as to the name of the successful bidder for
each domain name. According to the court’s order, NSI then
had to "transfer the domain name registration" to the
successful bidder "as soon as commercially practicable
following NSI’s receipt of a properly completed registration
application for the domain name from the winning bidder."
This appeal followed.

Before analyzing NSI’s assignments of
error, we will discuss the Internet, the nature of domain names,
and our statutory garnishment proceedings.

III. THE INTERNET AND DOMAIN
NAMES

The Internet, which began as a United States
military computer network called ARPANET, is now a "vast and
expanding," Intermatic, 947 F. Supp. at 1230,
worldwide network of interconnected computers, Reno v.
American Civil Liberties Union
, 521 U.S. 844, 849-50 (1997).
Anyone connected to the Internet can access an exponentially
expanding wealth of information through an array of communication
methods such as electronic mail, electronic mailing list services
known as listservs, chat rooms, newsgroups, and the World Wide
Web (the Web). Id. at 851. The Web is probably the most
widely known and utilized method of communication on the
Internet. Id. at 852. In simple terms, the Web consists of
information or documents presented on "pages"
[3] of graphics, text and/or sound. Lockheed Martin
Corp. v. Network Solutions, Inc.
, 985 F. Supp. 949, 951 (C.D.
Cal. 1997), aff’d, 194 F.3d 980 (9th Cir. 1999); Intermatic,
947 F. Supp. at 1231. Pages may "contain ‘links’[
[4]] to other pages either within the same set of data
files (‘Web site’) or within data files located on
other computer networks." Lockheed Martin, 985 F.
Supp. at 951. See also Robert L. Tucker, Information
Superhighway Robbery: The Tortious Misuse of Links, Frames,
Metatags, and Domain Names
, 4 Va. J.L. & Tech. 8, ? 6
(Fall 1999)
<http://vjolt.student.virginia.edu/graphics/vol4/v4i2a8-tucker.html>.

Each method of communicating on the Internet
depends on the use of a unique domain name, also known as a
"fully qualified domain name," Intermatic, 947
F. Supp. at 1230, to locate a specific computer or network, Lockheed
Martin
, 985 F. Supp. at 951. Domain names have been compared
to trademarks, addresses, or telephone numbers, but domain names,
addresses, and telephone numbers, unlike some trademarks, are
unique. MTV Networks, A Division of Viacom Int’l, Inc. v.
Curry
, 867 F. Supp. 202, 204 n.2 (S.D.N.Y. 1994); Adam Chase,
A Primer on Recent Domain Name Disputes, 3 Va. J.L. &
Tech. 3, ? 2 (Spring 1998)
<http://vjolt.student.virginia.edu/graphics/vol3/vol3_art3.html>.

Each "host" computer that is
"more-or-less permanently" connected to the Internet is
assigned its own "Internet Protocol" (IP) number or
address, which specifies the location of the computer. Tucker, supra,
? 12. See also Intermatic, 947 F. Supp. at
1230. The IP number is comprised of four groups of numbers, with
each group separated by a decimal point called a "dot."
Tucker, supra, ?? 12-13. See also Lockheed
Martin
, 985 F. Supp. at 952; Panavision Int’l, L.P.
v. Toeppen
, 945 F. Supp. 1296, 1299 (C.D. Cal. 1996), aff’d,
141 F.3d 1316 (9th Cir. 1998). For example, the IP number for
this Court is 208.210.219.101.

Because Internet users can more readily
remember a name as opposed to a lengthy sequence of numbers
composing an IP number, each individual computer or network also
has an alphanumeric name called a "domain name." Lockheed
Martin
, 985 F. Supp. at 952; Panavision, 945 F. Supp.
at 1299; Chase, supra, ? 2; Tucker, supra, ? 12.
Reading from right to left, each portion of a domain name
identifies a more specific area on the Internet, and as with IP
numbers, is separated by a "dot." For example, in this
Court’s domain name, courts.state.va.us, "us" is
the top-level domain,
[5] and is a country
code or identifier which signifies that the domain name is
registered in the United States. See Sally M. Abel, Trademark
Issues in Cyberspace: The Brave New Frontier
, 5 Mich.
Telecomm. & Tech. L. Rev. 91, 93 n.4 (1999); Kenneth
Sutherlin Dueker, Trademark Law Lost in Cyberspace: Trademark
Protection for Internet Addresses
, 9 Harv. J.L. & Tech.
483, 492 n.50, 494-95 n.59 (1996); Stuart D. Levi, The Domain
Name System & Trademarks
, 563 PLI/Pat 449, 453 (1999).
"[V]a," the second-level domain,
[6]
indicates a sub-network used in the Commonwealth of Virginia;
"state," the third-level domain, describes a
sub-network used by the state government of Virginia; and
"courts" further indicates a computer used by
Virginia’s judiciary. See Lockheed Martin, 985
F. Supp. at 952; Dueker, supra, at 492-93.

If an Internet user knows the domain name for a
particular Web site, such as this Court, the user can type the
name into a Web browser,
[7]
and access that site directly without having to conduct what may
be a time-consuming search. Panavision, 945 F. Supp. at
1299. See also MTV, 867 F. Supp. at 204 n.2
(noting absence of "satisfactory Internet equivalent of
telephone company white pages or directory assistance").
Even when a user does not know the specific domain name for a Web
site, the user can often deduce the name and still find the site
without performing a search. Most businesses on the Internet use
the "com" top-level domain. See Lockheed
Martin
, 985 F. Supp. at 952. Thus, a user could intuitively
find a company’s Web site by typing into a Web browser the
corporate or trade name, such as "umbro.com."
[8]Because
the second-level domain name, i.e., "umbro" in the
example, must be exclusive, a company would obviously want to use
its recognized name in the second level of its Internet domain
name. See id. See also Panavision,
945 F. Supp. at 1299 ("businesses frequently register their
names and trademarks as domain names"); supra note 6.
The advantage of having such a domain name thus explains the
value that is attached to some domain names and the reason why
litigation has occurred between trademark owners and domain name
holders.
[9] Id. See
also Intermatic, 947 F. Supp. at 1233.

NSI’s role in the Internet domain name
system is to manage certain domain name registrations. Lockheed
Martin
, 985 F. Supp. at 953. At one time, NSI held the
exclusive right, pursuant to a contract with the National Science
Foundation, to assign Internet domain names using the top-level
domains "gov," "com," "org,"
"net," and "edu," see id., but
it now shares that right with other domain name registrars, Jason
R. Berne, Court Intervention but not in a Classic Form: A
Survey of Remedies in Internet Trademark Cases
, 43 St. Louis
U. L.J. 1157, 1168 (1999); Levi, supra, at 456; Register.com
- Domain Name Registration Services
(visited Apr. 12, 2000)
<http://www.register.com>. NSI charges an initial
registration fee of $70 for each new domain name. The
registration is valid for two years and may be renewed on a
yearly basis for a fee of $35 per year.
[10]

In assigning the second-level domain names, NSI
performs basically two services. NSI first compares applications
with a database of existing domain names to prevent the
registration of identical second-level domain names. NSI then
matches the domain name to the corresponding IP number for the
desired Web site. Lockheed Martin, 985 F. Supp. at 953.
Domain names are available essentially on a first-come,
first-serve basis. MTV, 867 F. Supp. at 204 n.2; Chase, supra,
? 5.

NSI performs these services pursuant to domain
name registration agreements. NSI does not independently verify a
registrant’s right to use a domain name, but does require a
registrant to make certain representations and warranties, such
as certifying that the registrant has the right to use the domain
name and that such use does not interfere with the rights of
another party. Panavision, 945 F. Supp. at 1299.

A registrant also agrees to be bound by
NSI’s "Domain Name Dispute Policy." In accordance
with that policy, when litigation arises with regard to the
registration and use of a domain name, NSI deposits control over
the domain name into the registry of a court by furnishing the
plaintiff in such litigation with a "registry
certificate."
[11] In such instances,
NSI agrees to be bound by the provisions of any temporary or
final court orders regarding the disposition of a domain name
without being named a party to the litigation, provided the
domain name registrant is named as a party. The terms of the
"Domain Name Dispute Policy" also authorize NSI, in its
sole discretion, "to revoke, suspend, transfer or otherwise
modify a domain name registration upon thirty (30) calendar days
prior written notice, or at such time as [NSI] receives a
properly authenticated order from a court . . .
requiring the revocation, suspension, transfer or modification of
the domain name registration."

NSI has also developed a procedure that allows
a new domain name registrant to acquire a previously registered
domain name with the consent of the former registrant of that
name. The old registrant relinquishes its domain name
registration, and the new registrant agrees to be bound by the
terms of NSI’s current "Domain Name Registration
Agreement" and "Domain Name Dispute Policy." NSI
requires the old and new registrants to execute a form agreement
titled "Registrant Name Change Agreement[,] Version 3.0
— Transfers" in order to effect this change.

IV. GARNISHMENT PROCEDURES

Under Virginia law, a judgment creditor can
enforce a judgment for money by requesting the clerk of the court
where the judgment was rendered to issue a writ of fieri facias
and then by delivering that writ to a "proper person"
of the court for execution. Code ? 8.01-466. See also
Code ? 8.01-465.2 (foreign judgment properly filed with
clerk is subject to same procedures as judgments rendered by
circuit court). The writ commands the officer "to make the
money therein mentioned out of the goods and chattels of the
person against whom the judgment is." Code ? 8.01-474.
See also Code ? 8.01-478 ("writ of fieri
facias may be levied on the goods and chattels of the judgment
debtor"). When property of a judgment debtor is not capable
of being levied on, as in the case of intangible personal
property, such property is nevertheless subject to the execution
lien upon delivery of the writ to a sheriff or other officer.
Code ? 8.01-501; Virginia Nat’l Bank v. Blofeld,
234 Va. 395, 399, 362 S.E.2d 692, 694 (1987).

Garnishment, like other lien enforcement
remedies authorizing seizure of property, is a creature of
statute unknown to the common law, and hence the provisions of
the statute must be strictly satisfied. See Long v.
Ryan
, 71 Va. (30 Gratt.) 718, 724 (1878); Mantz v. Hendley,
12 Va. (2 Hen. & M.) 308, 315 (1808). As pertinent here, a
judgment creditor can institute garnishment proceedings if
"there is a liability" on a third person to the
judgment debtor. Code ? 8.01-511. Accord Blofeld,
234 Va. at 399, 362 S.E.2d at 694. "Liability" in this
context means a "legal obligat[ion]", "enforceable
by civil remedy," "a financial or pecuniary
obligation," or a "debt." Black’s Law
Dictionary 925 (7th ed. 1999). Accord Webster’s Third
New International Dictionary 1302 (1993)(an "amount that is
owed . . . [;] pecuniary obligations . . .[;] debts").

"[A] proceeding in garnishment is
substantially an action at law by the judgment debtor in the name
of the judgment creditor against the garnishee, and therefore the
judgment creditor stands upon no higher ground than the judgment
debtor and can acquire no greater right than such debtor
. . . possesses." Lynch v. Johnson, 196 Va.
516, 521, 84 S.E.2d 419, 422 (1954). A garnishment summons does
not create a lien itself, but, instead, is "a means of
enforcing the lien of an execution placed in the hands of an
officer to be levied." Knight v. The Peoples Nat’l
Bank of Lynchburg
, 182 Va. 380, 392, 29 S.E.2d 364, 370
(1944).

V. ANALYSIS

In its first assignment of error, NSI asserts
that the circuit court erroneously concluded "that Internet
domain names are a new form of intellectual property, separate
and apart from the domain name services provided by NSI, in which
the judgment debtor has a possessory interest." NSI argues
that the registration services agreement is the only source of
rights acquired by a registrant and that a "registrant
receives only the conditional contractual right to the exclusive
association of the registered domain name with a given IP number
for a given period of time." In NSI’s words, a domain
name is "simply a reference point in a computer database
. . . [or a] vernacular shorthand for the registration
services that enable the Internet addressing system to recognize
a particular domain name as a valid address." Thus, NSI
contends that such services are not subject to the execution lien
of a writ of fieri facias.

In response, Umbro contends that, when NSI
processes a registrant’s application and assigns a specific
domain name to the registrant under NSI’s first-come,
first-serve policy, that registrant acquires the right to use the
domain name for an initial period of two years, to exclude others
from using the name, and to effect a transfer of the name by
using NSI’s "Registrant Name Change Agreement."
Thus, Umbro posits that NSI not only agrees to associate a
particular domain name with an IP number, thus making the domain
name an operational Internet address, but also grants to the
registrant the exclusive right to use a unique domain name for a
specified period of time. That contractual right, according to
Umbro, is the intangible property in which the judgment debtor
has a possessory interest and that is subject to garnishment.

Initially, we must point out that NSI
acknowledged during oral argument before this Court that the
right to use a domain name is a form of intangible personal
property.
[12] That position is
consistent with the one NSI took in Network Solutions, Inc. v.
Clue Computing, Inc.
, 946 F. Supp. 858 (D. Colo. 1996).
There, in order to "assign registration and use" of a
domain name "as determined by the [c]ourt," NSI
initiated a statutory interpleader action pursuant to 28 U.S.C.
? 1335. Id. at 860. That statute requires that a
plaintiff have possession or custody of money or property
in which adverse parties claim conflicting interests. Id.
However, NSI’s acknowledgement is not dispositive of this
appeal. Likewise, we do not believe that it is essential to the
outcome of this case to decide whether the circuit court
correctly characterized a domain name as a "form of
intellectual property."
[13]

Irrespective of how a domain name is
classified, we agree with Umbro that a domain name registrant
acquires the contractual right to use a unique domain name for a
specified period of time. However, that contractual right is
inextricably bound to the domain name services that NSI provides.
In other words, whatever contractual rights the judgment debtor
has in the domain names at issue in this appeal, those rights do
not exist separate and apart from NSI’s services that make
the domain names operational Internet addresses. Therefore, we
conclude that "a domain name registration is the product of
a contract for services between the registrar and
registrant." Dorer, 60 F. Supp.2d at 561. A contract
for services is not "a liability" as that term is used
in ? 8.01-511 and hence is not subject to garnishment. See
Sykes v. Beal, 392 F. Supp. 1089, 1094-95 (D. Conn. 1975)
(analyzing garnishment of services and concluding that automobile
insurer’s duty to defend is not garnishable); cf. J.
Maury Dove Co., Inc. v. New River Coal Co.
, 150 Va. 796, 827,
143 S.E. 317, 327 (1928) (where "contract contains mutual
obligations and liabilities, or involve[s] a relation of personal
confidence," one party cannot assign it without consent of
other party); McGuire v. Brown, Guardian, 114 Va. 235,
242, 76 S.E. 295, 297 (1912) (holding contract for personal
services is not assignable).

If we allow the garnishment of NSI’s
services in this case because those services create a contractual
right to use a domain name, we believe that practically any
service would be garnishable. For example, if a satellite
television customer prepaid the fee for a particular channel
subscription, Umbro’s position would allow garnishment of
the subscription service. We also are concerned that a decision
to uphold the garnishment at issue would be opening the door to
garnishment of corporate names by serving a garnishment summons
on the State Corporation Commission since the Commission
registers corporate names and, in doing so, does not allow the
use of indistinguishable corporate names. See Code
?? 13.1-630 and –631. Cf. Gue v. The Tide
Water Canal Co.
, 65 U.S. 257, 263 (1860) (a "franchise
being an incorporeal hereditament, cannot . . . be
seized under a fieri facias"). Without statutory changes, we
are not willing to allow such results in Virginia simply because
in today’s case we are dealing with "a unique and
wholly new medium of worldwide human communication" known as
the Internet. Reno, 521 U.S. at 850 (quoting American
Civil Liberties Union v. Reno
, 929 F. Supp. 824, 844 (E.D.
Pa. 1996)).

Nevertheless, Umbro attempts to draw a
distinction between the judgment debtor’s contractual right
to use the domain names, which came into existence after NSI
screened its database to guard against registering identical
names and matched the judgment debtor’s domain names to the
corresponding IP numbers, and NSI’s services that continue
to make those domain names operational Internet addresses. We are
not persuaded by Umbro’s argument, although at least two
jurisdictions have made a similar distinction with regard to
telephone numbers.

The court in Georgia Power Co. v. Security
Inv. Properties, Inc.
, 559 F.2d 1321 (5th Cir. 1977), found
such a distinction. In discussing the principle that a bankruptcy
court cannot exercise summary jurisdiction over property unless
the debtor or trustee has actual or constructive possession of
the property in question, the court observed that "for a
business, . . . telephone numbers constitute a unique
property interest, the value of which increases as the number
becomes widely known through publication in guidebooks, posting
on billboards, and imprinting on publicity items." Id.
at 1324. The court then distinguished the property interest in
such numbers "from a subscriber’s rights to the
telephone utility’s service." Id. See also
Darman v. Metropolitan Alarm Corp., 528 F.2d 908, 910 n.1
(1st Cir. 1976) (approving sale of telephone numbers in order to
increase value of bankruptcy estate and noting distinction
between "a subscriber’s rights derived from a contract
for telephone service and a subscriber’s possible claim to a
possessory interest in the telephone number"). However,
other courts have reached different results. See Slenderella
Sys. of Berkeley, Inc. v. Pacific Tel. & Telegraph Co.
,
286 F.2d 488, 490 (2nd Cir. 1961) (finding that telephone numbers
were neither property of, nor in possession of, bankrupt
subscribers); Rothman v. Pacific Tel. & Telegraph Co.,
453 F.2d 848, 849-50 (9th Cir. 1971)(following decision in Slenderella),
cert. denied, 406 U.S. 919 (1972).

We are cognizant of the similarities between a
telephone number and an Internet domain name and consider both to
be products of contracts for services. See Dorer,
60 F. Supp.2d at 561. In our opinion, neither one exists separate
from its respective service that created it and that maintains
its continued viability.

Our view is not changed by the fact that NSI
has developed a policy whereby control of Internet domain names
is deposited with a court when the domain names are the subject
of litigation and, as a part of that policy, agrees to abide by
the terms of any court order regarding the domain names. That NSI
routinely follows that procedure, in which the end result
requires practically the same actions by NSI as those which would
be required of it under the terms of the circuit court’s
order in this case, does not mean that NSI’s Internet domain
name services should be subject to garnishment.

By our decision today, we do not suggest that
contractual rights can never be garnished. We recognized
otherwise in Lynch. There, a judgment creditor attempted
to garnish a sum due and payable under the terms of a fire
insurance policy. The judgment creditor claimed that only the
judgment debtor was to be indemnified by the insurance policy,
that there was a present liability on the part of the insurance
company to pay the judgment debtor for the insured loss, and that
the funds held by the insurance company were garnishable. Lynch,
196 Va. at 521, 84 S.E.2d at 422. This Court determined that the
judgment creditor’s position would be correct if the
judgment debtor had the right to demand payment from the
insurance company for his sole benefit. Id. However, the
Court concluded that because of an agreement between certain
parties, which was made contemporaneously with a deed of
conveyance, the insurance proceeds stood "in the place of
the destroyed property," and that none of the several
persons whose interests in the property were insured, including
the judgment debtor, was individually entitled to any of the
insurance proceeds. Id. at 525, 84 S.E.2d at 424.

Similarly, while applying Virginia law, the
United States Court of Appeals for the Fourth Circuit allowed a
judgment creditor to garnish money that a builder owed to a
judgment debtor under the builder’s contract with the
judgment debtor. United States v. Harkins Builders, Inc.,
45 F.3d 830, 835 (4th Cir. 1995). In its discussion of
garnishment proceedings under Virginia law, the court stated, and
we agree, that "where the property is in the form of a
contract right, the judgment creditor does not ‘step into
the shoes’ of the judgment debtor and become a party to the
contract, but merely has the right to hold the garnishee liable
for the value of that contract right." Id. at 833.
Notably, in Lynch and Harkins, the property that
each judgment creditor sought to garnish was a sum of money due
under a contract, not the performance of services by a garnishee.

VI. CONCLUSION

Under Code ? 8.01-511, a garnishment
summons may be issued with respect to "a liability on any
person other than the judgment debtor." In a garnishment
proceeding, "[o]rdinarily, the only adjudicable issue is
whether the garnishee is liable to the judgmentdebtor, and if so,
the amount due." Butler v. Butler, 219 Va. 164, 166,
247 S.E.2d 353, 354 (1978). In the present case, the only
"liability" due on the part of NSI is the provision of
its Internet domain name services to the judgment debtor. Code
? 8.01-511. Although, as Umbro points out, domain names are
being bought and sold in today’s marketplace, we are not
willing to sanction the garnishment of NSI’s services under
the terms of our present garnishment statutes. To do so would
allow Umbro to "step into the shoes" of the judgment
debtor. Harkins, 45 F.3d at 833. Even though the Internet
is a "new avenue of commerce," Intermatic, 947
F. Supp. at 1229, we cannot extend established legal principles
beyond their statutory parameters. See Bickle v.
Chrisman’s Adm’x
, 76 Va. 678, 691 (1882)
(garnishment "cannot be enforced beyond [its] statutory
authority").

For these reasons, we will reverse the judgment
of the circuit court, dismiss the garnishment summons, and enter
final judgment in favor of NSI.
[14]

Reversed and final judgment.

 


SENIOR JUSTICE COMPTON, with whom CHIEF JUSTICE
CARRICO joins, dissenting.

 

Relying heavily on decisions of federal trial
courts, the majority concludes that a domain name registration is
the product of a contract for services between the registrar and
the registrant. The majority goes on to decide that such a
contract is not subject to garnishment because it is not "a
liability," as the term is used in Code ? 8.01-511
("On a suggestion by the judgment creditor that, by reason
of the lien of his writ of fieri facias, there is a liability on
any person other than the judgment debtor," garnishment
proceedings may be instituted). I disagree that the registration
is a contract for services not subject to garnishment.

NSI, the garnishee, correctly acknowledges that
the right to use a domain name is a form of intangible personal
property. Code ? 8.01-501 clearly provides for an execution
lien on intangible personal property, that is, property not
capable of being levied upon. Virginia Nat’l Bank v. Blofeld,
234 Va. 395, 399, 362 S.E.2d 692, 694 (1987). That lien attaches
to the extent the judgment debtor has a possessory interest in
the intangible property subject to the writ. International
Fidelity Ins. Co. v. Ashland Lumber Co.
, 250 Va. 507, 511,
463 S.E.2d 664, 666-67 (1995).

Therefore, the question becomes whether the
judgment debtor has a possessory interest in the domain names it
registered with NSI. In my opinion, the trial court correctly
ruled that the judgment debtor, by virtue of the domain name
registration agreements with NSI, has a current possessory
interest in the use of the domain names, that is, a contractual
right to the exclusive use of the names it has registered with
NSI.

However, NSI contends that the judgment
debtor’s contractual rights are not subject to garnishment
because they allegedly are contingent, dependent on unperformed
conditions, or are like personal services. The majority
erroneously has bought into this idea.

NSI’s contractual obligation to the judgment
debtor already is presently due, not contingent or akin to a
personal service agreement. The judgment debtor has submitted its
registration forms and paid the registration fees. NSI has
completed the registration of the judgment debtor’s Internet
domain names under NSI’s "first come, first served"
policy, and the judgment debtor acquired the right to the
exclusive use of the domain name for an initial period of two
years.

Because NSI has received everything required to
give the judgment debtor the exclusive right to use the domain
names it registered, the contractual right, a valuable asset, is
the intangible personal property in which the judgment debtor has
a possessory interest. This right is a "liability"
within the meaning of Code ? 8.01-511 and is subject to
garnishment.

In my view, contrary to the majority’s
conclusion, this right exists separate and apart from NSI’s
various services that make the domain names operational Internet
addresses. These services, as the trial court correctly ruled,
are mere conditions subsequent that do not affect the garnishment
analysis.

Consequently, I would affirm the judgment of
the trial court.

 

 

FOOTNOTES:

[1] An explanation and discussion of an "Internet
domain name," as well as related terms, appears infra
at pages __-__.

[2] Umbro now seeks to garnish 29 domain name registrations
by the judgment debtor with NSI.

[3] "Pages" are computer
data files. Intermatic, 947 F. Supp. at 1231.

[4] A "link" is a graphic,
text or combination of the two that an Internet user may select,
generally with a computer’s mouse, and that provides an
"avenue to other documents" on the Internet. Reno,
521 U.S. at 852. See also Intermatic, 947 F.
Supp. at 1232.

[5] Top-level domains indicate a
broad class to which the domain name belongs. For example,
"edu" represents educational institutions,
"gov" is reserved for federal government entities, and
"net" is reserved to networks. The top-level domain
"com," short for "commercial," is a catch-all
domain, and is generally available to registrants who have no
special attributes which would qualify them to use another
top-level domain. Tucker, supra, ? 13. Top-level domains
are assigned by a domain name registrar, such as NSI. Sally M.
Abel, Trademark Issues in Cyberspace: The Brave New Frontier,
5 Mich. Telecomm. & Tech. L. Rev. 91, 93 (1999).

[6] All second-level domains are
unique, and frequently contain the corporate or trade name of the
domain name holder. Lockheed Martin, 985 F. Supp. at 952.
Second-level domains are selected and requested by the domain
name registrant. Abel, supra, at 93.

[7] A Web browser is a computer
program that allows a user of an Internet-connected computer to
access content on the Web. See Reno, 521 U.S. at
852; Jason R. Berne, Court Intervention but not in a Classic
Form: A Survey of Remedies in Internet Trademark Cases
, 43
St. Louis U. L.J. 1157, 1167 & n.71 (1999).

[8] When an Internet user enters a domain name in his or
her browser, the browser sends the request through the Internet
in a process administered by a computer termed a "top-level
server." Top-level servers maintain a registry of each
domain name active in a given top-level domain and match requests
for domain names to IP numbers in their registries. Intermatic,
947 F. Supp. at 1231; Berne, supra, at 1167.

[9] Much of the litigation regarding domain names has
focused on trademark infringements. We cite to several of those
cases and related law review articles in this opinion, but none
of those cases squarely addresses the question before us.

[10]NSI has recently begun to register domain names for up
to ten years. NSI – Catalog — Web Address Registration
(visited Apr. 12, 2000)
<http://www.networksolutions.com/catalog/domainname/>.

[11] The record in this case does not
contain any "registry certificate" that was filed in
the litigation in the federal district court in South Carolina,
but it does contain a "Declaration" by NSI’s
"Internet Business Manager," which was filed in that
litigation. The "Declaration" contains essentially all
the elements of a "registry certificate."

[12] Congress recently passed the
"Anticybersquatting Consumer Protection Act." This
amendment to Section 43 of the Trademark Act of 1946, 15 U.S.C.
? 1125, et. seq., authorizes an in rem civil
action against a domain name in the judicial district in which
the domain name registrar is located. The amendment also states
that the remedies in such an action are limited to an order
"for the forfeiture or cancellation of the domain name or
the transfer of the domain name to the owner of the mark." Id.
at ? 1125(d)(2)(A) and (D)(i). Finally, the amendment
requires the registrar of the domain name to deposit with the
court "documents sufficient to establish the court’s
control and authority regarding the disposition of the
registration and use of the domain name." Id. at
? 1125(d)(2)(D)(i)(I). While it could be argued that this
legislation supports the position that Internet domain names are
intangible property since the amendment provides for an in rem
proceeding, the language of the amendment does not address the
relationship between an operational Internet domain name and its
attendant services provided by a registrar such as NSI.

[13] Historically, certain types of
intangible, intellectual property have not been subject to levy
and sale under execution. See Ager v. Murray, 105
U.S. 126, 131 (1881) ("debtor’s interest in the
patent-rights . . . cannot be taken on execution at law"); Stephens
v. Cady
, 55 U.S. 528, 531 (1852) (copyright "is not the
subject of seizure or sale by means of" an execution, but it
"may be reached by a creditor’s bill"); Stutzman
v. C.A. Nash & Son, Inc.
, 189 Va. 438, 446, 53 S.E.2d 45,
49 (1949) ("there is no property in a trade-mark" aside
from its use in a trade or business). But see McClaskey
v. Harbison-Walker Refractories Co.
, 138 F.2d 493, 500 (3rd
Cir. 1943) (allowing judgment creditor to reach judgment
debtor’s patent by using writ of fieri facias).

[14] We do not need to address
NSI’s remaining assignment of error.

 

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