Court of Appeal finds domain name “property located in Ontario”

Patrick J. Cotter and David Katz, JD
Published August 9th, 2011

     In Tucows.com Co. v. Lojas Renner S.A., 2011 ONCA 548, the Court of Appeal for Ontario overturned the motion judge’s ruling that Ontario does not have in personam jurisdiction over an out of province defendant in a domain name dispute.

     Tucows, an internet domain name registrant, is also the registered owner of the domain name “renner.com”. Lojas Renner, a Brazilian department store chain, filed a UDRP complaint against Tucows seeking to obtain an order under the UDRP transferring the renner.com domain name to it.  Rather than respond to the merits of the complaint under the UDRP, Tucows launched proceedings in Ontario against Lojas Renner.  Tucows sought a declaration that its registration and use of renner.com did not run afoul of the UDRP and that Renner had no basis for a UDRP complaint.

     Tucows then relied on the Ontario proceedings to have the UDRP complaint terminated on the basis that the issues were before the Ontario court.

     On Renner’s motion to stay the Ontario proceedings for lack of jurisdiction, the motions judge considered the factors of Rule 17 which, if applicable, would create a presumption of a “real and substantial connection” to Ontario.  The motions judge found that a domain name, being intangible, had no physical presence and so could not be “personal property located in Ontario” such as to engage Rule 17.02(a).  As none of the other factors in Rule 17 could be engaged to connect the dispute to Ontario, the motions judge permanently stayed the action.

     The Ontario Court of Appeal reversed the decision of the motions judge finding that domain names, while intangible, are personal property and that the domain name renner.com was a business asset of Tucows, a Nova Scotia company that carried on business in Ontario.  The Court then determined the situs of the domain name by considering the “connecting factors” test to determine where it had the strongest contacts.  It found that Ontario had the closest contacts to renner.com because of the location of the registrant, registrar, and intermediary servers. The Court therefore held that it had jurisdiction over a foreign defendant based on the situs of the plaintiff’s intangible property.