Is your company domain name and website safe from creditors?

On Behalf of | Feb 11, 2017 | Firm News |

A domain name and website can be the lifeblood of the business. Losing an online presence can be detrimental to that company. On the other hand, liquidating a debtor’s website can be an important source of collection for a creditor.

In a published opinion issued on February 2, 2015, the Minnesota Court of Appeals held that a creditor may garnish a debtor’s domain name and the copyright-protected material contained on the debtor’s website. See Sprinkler Warehouse, Inc. v. Systematic Rain, Inc. (A14-1121) (click here for the opinion). In that case, the creditor obtained a judgment from the debtor in Texas, then docketed and attempted to collect on the judgment in Minnesota. Specifically, the creditor went after the debtor’s domain name ( and website.

The legal issue was whether domain names and websites are garnishable property under Minn. Stat. 571.73, subd. 3. In a matter of first impression, the appeals court concluded that domain names have characteristics of “property” because they can be bought and sold, may contain intellectual property, and are well-defined interests. The court also concluded that websites, which often contain copyright-protected material, have attributes of personal property such as the right to exclude others from using it. The court observed that some parts of websites may not be copyright-protected and may not be garnishable.

The case is an important example of courts applying traditional statutes to modern technology.