[arin-ppml] Borders sells their /16 block

Benson Schliesser bensons at queuefull.net
Wed Dec 7 16:12:33 EST 2011

Hi, John.

Thanks for your summary. I was going to ask for ARIN's view based on counsel, for comparison and reference, on the grounds that I'm not a lawyer etc. May I assume that your summary fits that description?

The citation that you requested is from the Nortel-Microsoft sale. I found the documents at http://chapter11.epiqsystems.com/NNI/docket/Default.aspx?RelatedID=291990 in case somebody wants to read for themselves. The text that I'm interpreting [1] is finding G on the 4th page of the final order dated 4/26/2011. It says: "The Seller has the exclusive right to use the Internet Numbers and the exclusive right to transfer its exclusive right to use the Internet Numbers."

To my knowledge, the order doesn't say whether an agreement with ARIN was required, merely that one existed. Nor does it, to my knowledge, elaborate on the underlying philosophical source of these rights. This has all been discussed on PPML already.  If the Borders transaction updates any of this materially, then the community should be made aware, and I would appreciate citations. For that matter, I would appreciate clarification of ARIN's "objection" in the Nortel transaction. I have not found such a document in the legal record, and would ask for a reference if one can be given.

Your summary notwithstanding, the intent of my original comment seems clear. The bankruptcy court has recognized a bundle of rights in IPv4 addresses as an asset. Indeed, under Title 11 Section 363, the court implicitly recognized this as a form of property. It was recognized explicitly as property in the purchase agreement.

I do recognize the nuance that your summary described, and see how my comment could be more accurate if worded differently. You'll please forgive me - did I mention that I'm not a lawyer? - for using casual language and shorthand in my message. I believe the correct text would have been "exclusive rights of a seller to transfer their rights in IP addresses" or something of that nature. But just as real property rights are transferred and yet referred to casually as "land" or a "house" etc, or as intellectual property rights are transferred and yet referred to as a "book" or a "song", I found it convenient to refer to the bundle of rights associated with an IP address block as simply "IP addresses".  I will probably do so again in the future, but I trust that we're all intelligent enough to understand.

-Benson [2]

1 - Again I would remind everybody that I'm not a lawyer. I'm assured by people in the lawyering business that legalese is a foreign language, in which a common phrase might be interpreted to mean the exact opposite of what it says, up is down, good is bad, cats and dogs sleeping together, etc.

2 - I, Benson Schliesser, am an employee of Cisco Systems; however, opinions expressed in this email are my own views and not those of Cisco Systems or anybody else.

On Dec 7, 2011, at 12:32 PM, John Curran wrote:

> On Dec 7, 2011, at 2:20 PM, John Curran wrote:
>> On Dec 7, 2011, at 2:12 PM, Benson Schliesser wrote:
>>> To an extent, this has been acknowledged by the US courts as they've recognized the exclusive rights of a seller to transfer IP addresses as an asset.
>> Benson - 
>> Please provide a citation for the above, because I am not aware
>> of any court ruling to this effect.  The only findings that I am 
>> aware of are rulings that support the sale of an address holders
>> rights in an address block in a manner that does not interfere with
>> ARIN and ARIN community's rights with respect to the address block.
> For the purposes of saving some time (since everyone is going to 
> go looking for much of the same information), let me outline the 
> Nortel/MSFT outcome:
> To be clear, Nortel did transfer its rights of certain address
> registrations to Microsoft.  Rights can indeed be treated as an
> asset of an estate (e.g. airspace rights, mining rights, license
> rights) but that does not mean that the underlying item is a form
> of "free and clear" property, only that something (often limited in
> nature) has been transferred.
> The original sale order would have transferred Nortel's rights and
> interests "free and clear" to Microsoft.  ARIN filed an objection 
> with the court, and the parties were able to work out an amended 
> sale and court order which was satisfactory.  The parties (Nortel 
> and Microsoft) jointed submitted a revised sales order that said the 
> addresses "will be placed under a registration services agreement 
> (LRSA) between ARIN and Microsoft", and draft court order that read 
> "For avoidance of doubt, this Order shall not affect the LRSA 
> and Purchaser's rights in Internet Numbers transferred pursuant to 
> this Order shall be subject to the terms of the LRSA".  Microsoft 
> entered into an RSA (Registration Services Agreement) with ARIN, 
> which delineated their rights applicable to their use of the number
> resources. In summary, this case's outcome was that it was in all 
> parties interests to deal only with those rights that the Internet 
> number registry system (in this case ARIN) indicated were available 
> to the address holder, as opposed to a sale "free and clear" as has
> been otherwise suggested.
> FYI,
> /John
> John Curran
> President and CEO
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