[arin-ppml] On USG 'granting of rights'

[Marc Lindsey]

The question of whether IPv4 numbers qualify as property has been the subject of a lot of discussion on the PPML (recently and over the years).  As lawyers working within this domain, my partner (Janine Goodman) and I have researched the subject extensively.  Although the answer is not as crisp as many would like, after balancing the conflicting considerations, the common law leads to finding property rights in IPv4 numbers. 

A resource's position on the spectrum between the commons and private property can change over time.  When a resource is considered part of the commons, allocation and access are governed by the community.  When a resource is considered "private property," the law vests the owners with rights of control and access.  

To be considered private property, a resource must be separately identifiable and have a degree of persistence.  Under current common law in the U.S., the courts have found that a resource rises to the level of "private property" where the holder of that resource has the right to possess, the right to use, and the right to dispose of the resource, and the right to exclude others from enjoying these other rights. 

Scarcity of the resource and its commercial value are key catalysts to moving a resource along the spectrum from commons to private property.  When a resource is scarce and its value increases, the common law tends to recognize that the holder of that resource has greater rights to control access to the resource (thereby excluding others from use) and to transfer the resource (thereby giving the holder the ability to extract value).  When a holder of a resource has the rights to possess, use, dispose of and exclude from others the use of a resource, all of the property ingredients are present.  

So where do IPv4 number resources fall on the spectrum?  The best example of a category of property newly recognized in the modern era is domain names.  In 2003, domain names attained the legal status of property in the Ninth Circuit case, Kremen v. Cohen, a  decision that has been followed by numerous courts.  In concluding that domain names were intangible property, the Ninth Circuit found that a property interest must satisfy three conditions: (1) it must be "an interest capable of precise definition", (2) the interest must be "capable of exclusive possession or control," and (3) "the putative owner must have established a legitimate claim to exclusivity." 

A court asked to decide on the property status of IPv4 numbers would, by operation of judicial precedents, apply this property law test because it is readily extendable to IPv4 numbers.  We  would also expect that, applying this test, the court would reach the same conclusion the Ninth Circuit did with respect to domain names: (1) IP number registrants have sole authority to decide how their numbers will be used within the Internet; (2) registrants have the right and authority to use IPv4 numbers exclusively for routing over the public Internet; and (3) like domain names, registrants are reflected in an authorized Internet registry, which "informs others that the [IPv4 number] is the registrant's and no one else's."  IPv4 numbers, like domain names, are now considered a valuable asset, and like domain names, they possess all of the requisite ingredients of private property.  

The Kremen v. Cohen case also sheds some light on why ARIN firmly (and rationally) advocates the position that IP addresses are not property. The Kremen court found that the domain name registry at the time, Network Solutions, could be held liable for wrongfully converting another's property where it failed to observe an appropriate duty of care in maintaining and updating its registry records. 

I'm sharing the above with the PPML to, hopefully, contribute to the conversation generally on policies that (directly or indirectly) implicate the "property" status of IPv4 numbers. I am not, however, offering legal advice by way of this posting.

Marc Lindsey
Avenue4 LLC
2001 L Street, N.W.
Suite 900
Washington, D.C. 20036
www.Avenue4LLC.com