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.