Newsflash – Court of Appeal overturns forfeiture of domain names

22 01 2009

In news to hand, the Kentucky Court of Appeal in a 2 to 1 judgment last night overturned the forfeiture order made by the Court at first instance in the long running 141 Domain Names Case in the State of Kentucky.

It is interesting to note that the majority only examined made two primary findings (apart from standing), (a) that domain names were not gambling devices withing the definition of the legislation; and (b) the forfeiture powers of the Court were limited to situations where there is a criminal conviction, and the legislation did not contemplate forfeiture powers in the absence of a criminal conviction for breaching KRS 528 (the section of the anti-gambling statute).

In our last post we raised doubt over whether domain names could be construed as gambling devices within the definition of Kentucky statute, the Court agreed with our interpretation and said:

…it stretches credulity to conclude that a series of numbers, or Internet address, can be said to constitute a “machine or any mechanical or other device…designed and manufactured primarily for use in connection with gambling.” We are thus convinced that the trial court clearly erred in concluding that the domain names can be construed to be gambling devices subject to forfeiture under KRS 528.100.

If domain names cannot be considered gambling devices, Chapter 528 simply does not give the circuit court jurisdiction over them“.

The dissenting judge took the view that it was best not to look solely at the domains but also the computer systems that were used, and when unified, formed one component of the gambling device. As a consequence the domain names fell within the legislative definition.

In a twist, the State of Kentucky has filed a further appeal against this latest judgment by the Kentucky Court of Appeals. Initial Court documents don’t make it clear what the grounds of the appeal are.

In the meantime, watch this space in one of the most interesting and important domain law cases!

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