Subtleties of the legislation: can the domain be sold as an asset?

The company has been investing in the site for years, promoting the address in search engines, printing it on business cards and signs - and sincerely considers this address its property. In fact, if we are talking about the domain in the Belarusian zone .by, the company does not own it. It only administers it – that is, in fact, rents space in the address bar of the browser. This difference between “owning” and “administrating” seems theoretical until the question arises about the sale of a business, the division of an inheritance or the departure of a key employee. Then it turns out that the digital asset, which everyone considered theirs, legally belongs to a completely different construction of rights.

To explain the intricacies of legislation in this matter and share the practice, we asked the notary of the Brest notary district Svetlana Zaretskaya.

Svetlana Zaretskaya. “The problem is that many citizens put the sign equally between the domain name and the site,” says Svetlana Zaretskaya. In some cases, an appeal to notaries sounds like this: “we want to issue a purchase and sale of the site” or “issue the right to inheritance on the site.” In fact, a website or web resource is a very complex set of civil rights, each of which can have its own independent and by no means small value.

The notary gives a good example: when visiting the website of a large online store, the visitor first of all sees the brand name and logo.

- It would seem, just a word and a picture, explains Svetlana Zaretskaya. However, a large company addressed me as a notary with a request for an expensive transaction: they planned to allow the release of goods under their own brand to a third-party manufacturer.

Then more. The site has photos of products and videos, some of which were shot with the involvement of paid models and photographers; there are illustrations and advertising texts written by copywriters; a database of customers, orders and deliveries; there is a program code, design and, if the site is on someone else's hosting, the right to rent this hosting.

- Each of these seemingly indivisible components of the site has its own value, the notary notes. And the transfer of rights to them is regulated by different norms of civil legislation, by-laws and rules of individual services. The notary deliberately put the domain name out of the brackets of this “vinegret” called “site” to show its true place.

- A domain is just a set of characters that we see in the address bar of the browser when we go to some resource: google.com, yandex.ru, belnotary.by. It replaces a much less convenient IP address. By entering 185.179.83.208 in the address line, you will also get to the website of the Belarusian Notary Chamber, but, of course, belnotary.by is a more native entry than a faceless set of numbers and points. And adds the main practical conclusion: if you change or lose the domain name, it will not affect your rights to content, software, hosting rental. Of course, the domain has value. In Belarus, at the state level, norms are fixed only for domains in .by and .bel zones. For other zones (.ru, .com, .biz), Belarusian citizens have to look for protection of their interests in other jurisdictions. The basic document here is the instruction “On registration of domain names in the national domain zone”, approved by the order of the Operational and Analytical Center under the President of the Republic of Belarus in 2010. This is what notaries are guided by.

The key point that most often does not think about business: the instruction fixes the right of administration, that is, the right to use the domain, and not the right of ownership or lease in the classical civil sense. The person who has this right is officially called the owner of the domain, although the wording is essentially conditional: there is nothing to own in the legal sense, you can only administer. Domain registration begins with an application and an agreement with the registrar - including in electronic form. And here, according to the notary, lies the main risk for business: the right to administration gets exactly the one who is specified in the application and contract, and not the one who actually invented and promotes the address.

Svetlana Zaretskaya simulates a situation that may well happen in reality: the programmer of the company, having abused the trust of the management, registers the domain as an individual, and then tries to use it for personal purposes. It is possible to fight back the domain in such a situation, but only through the court - and this is a slow and difficult procedure. Therefore, the notary advises not to bring to the proceedings, but initially indicate in the application and contract exactly that person - the company that should become the owner of the domain.

In accordance with the instructions for a legal entity, the application must include the full name, legal address, registration data, account number of the payer, contacts and data of the head.

To confirm that the domain really belongs to the company, a copy of the contract with the registrar will help. But even if it is lost or not issued at all – as it happens in most cases, if the service was ordered online on a public offer – it is okay: a notary, court or other authorized body can always request this information from the registrar. Moreover, information about the domain owner is publicly available on the official service whois.cctld.by. Domain as an Asset: Selling and Reorganizing Can I Sell a Domain with a Business? Technically, no.

- I am not an expert in economic issues, but my personal opinion is that the site itself is an asset of the enterprise, and the domain name is just one of its attributes. You can only sell what is owned, and in respect of domains, the instruction provides exclusively for the right of administration. Accordingly, we are not talking about the purchase and sale, but about the transfer (assignment) of this right.

The rights to administer the domain can be transferred to another person under an assignment agreement, by a court decision, and they pass by inheritance or succession in the reorganization of a legal entity.

There is also a trap with a deadline: you can transfer the rights to the domain only while its registration is valid. If the previous owner did not renew the registration in time and it expired, there is nothing to transfer, the rights to administration are lost.

When changing the director of the company, the right of administration is not automatically lost, but the instruction obliges to inform the registrar within seven working days of any changes in the information about the owner. Inheritance: Why a domain cannot be divided A separate category of disputes that a notary encounters is inheritance. The situation is complicated by the fact that a domain name, unlike an apartment or an account, is not physically divided into shares.

- The registrar will still accept an application for the transfer of administration rights from only one person, explains Svetlana Zaretskaya. If there are several heirs and each is issued a certificate of right to his share in the inheritance, they will have to negotiate who will eventually become the sole administrator of the domain.

Another point that customers often stumble upon: the transfer of the right of domain administration by inheritance does not mean the automatic transfer of rights to other components of the site: program code, content, logo, hosting rental. If the entire site is inherited, the notary recommends applying for a transaction to professional lawyers. It is misleading to assume that if the domain coincides with the name of the company or its trademark, the company automatically receives a preferential right to this domain. This is not the case: the instruction does not provide any advantages at all when registering.

The only restriction does not apply to the brand owner, but to the one who tries to register someone else’s name: the instruction prohibits the choice of domains that are identical or confusingly similar to already registered trade names, trademarks or geographical indications, if the applicant does not have rights to them. Anyone who still registers such a domain, risks losing the right to administer it, but only through the court, at the claim of the real right holder.

Therefore, for those who are just starting a business, a notary advises checking the purity of the future domain in advance, rather than relying on luck. To do this, open sources are useful: egr.gov.by, where you can find a legal entity by name, the website of the National Center for Intellectual Property ncip.by with a search by registered trademarks, as well as a regular search in Google and Yandex - if someone has already taken the name, search results are likely to show it. To the question of where to start checking the security of your digital asset, the answer from Svetlana Zaretskaya is very specific: go to whois.cctld.by and see who exactly registered the domain of the company. If the owner indicates the company itself and all the data are relevant, there is no cause for concern. If not, it’s time to check while registration is still in place. And of course, do not forget to renew it in time: the expired registration period can nullify the rights to the domain faster than any corporate conflict.

ryazapova@sb.by