Kentucky Seizes Domain Names 11/19/2008 09:58:00 am by Dan Krohn

	Late last month I sent out an email dealing with the Kentucky case in which the state seeks to seize domain names of Internet gambling sites, arguing that they are just like roulette wheels - devices used for illegal gambling. See reprint below. Several groups, including the Electronic Freedom Foundation, have filed motions with the appellate court to have the trial court's procedure halted. The appellate court has put the matter on hold pending arguments before it in December. So the final result is not yet known, but at least the issue is set to get a more appropriate examination. Stay tuned. Kentucky Seizes Domain Names October 28, 2008 The State of Kentucky is upset about online gambling. In a creative effort to shut down Internet gambling, Kentucky is pursuing a court case in which it seeks to seize the domain names of several Internet gambling sites. This has been the subject of considerable controversy in the legal community, and this writer expects the case to go through rounds of appeal if both sides continue to pursue it. A number of interesting questions arise. One is how much credit would be given to such an order from a Kentucky court by courts/governments of other nations. If a server is located in another nation which permits such activities, that country is unlikely to care more about Kentucky's revenue raising efforts. Hence, the effort to seize the domain names and not the servers. But this raises the questions: what kind of property is a domain name, how can it be seized, and from whom? Will domestic ISP's be effectively ordered to block access to certain domains? Will domain registrars be required to change ownership on their records as the court has held? (It seems at this point that the registrars are split with some complying with the court's order and some retaining counsel to oppose it.) What kind of property is a domain name anyway? In some cases a domain name is a trademark, but not always. Yet domain names can have value. Often a domain name is legally just an address. If illegal gambling were occurring in a building at 1000 Main Street, one could expect the police to raid and carry off people and equipment - but 1000 Main Street, the location, would remain. Thus far the trial court has held that such domain names are the same as roulette wheels for the purposes of this case. The Kentucky court bases some of its ruling on the asserted ability of online casinos to put up geographic blocks that would prevent computers in Kentucky from accessing their domains. But how effective would such blocks be, and what if clever Kentucky gamblers found ways around the blocks? These are just some of the questions raised by this new Kentucky effort, but I doubt the questions will be resolved in this lawsuit. The ramifications are tremendous as the same enforcement technique, if permitted and effective, could be used in an almost infinite number of e-commerce situations. This is the kind of situation that makes the intersection of computers and law so fascinating. Changes are rapid and often unpredictable. I love it!

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More Reason for Trust Busting 11/10/2008 01:20:02 pm by Dan Krohn

	Interestingly the big insurer AIG which already has been the subject of a government bailout is on the verge of getting another one. Now the federal governmetn already owns roughly 80% of AIG by way of the initial bailout. However, it seems that AIG continues to burn through money at an extraordinary pace, and it continues to hold a load of toxic (gotta love that word in this context) assets. So the government is looking to put in more money, then presumably when that is spent, again more money - with no announced plan to end the draining. Oh, except for the proposal that the U.S. government take on the toxic assets itself. Now it seems that AIG has gotten itself so intertwined with other parts of the economy that the thought of it's failing is scary (this writer finds an indefinite unlimited money whirlpool scary, too, so take your pick). An example of that intertwining is public transportation. It seems that many public transport agencies have raised money by selling assets (in this case rail cars and buses - presumably not toxic in themselves) for cash, then leasing the same vehicles back from the investors who bought them. The investors required that the lease payments be insured by a highly rated company, and guess who insured the lion's share of these deals. Surprise! It was AIG. It's failure or flirtation with failure threatens to put quite a number of local transportation agencies into default. So now those agencies are leaning on their congressmen who are leaning on the Fed and other federal financial policy maker to help. If AIG were not so big and so dominant in certain markets, we could just let it fail. If it is too big to fail, it is too big to exist. As this blog has argued before, companies too big to fail should generally be broken up under antitrust laws. If there is a good reason for their being too big to fail, then they should be heavily regulated (and that means really heavily regulated - like government agency approval of all executive pay packages) by the government or owned by the government outright. That's no more contrary to our capitalist market system than taxpayer bailouts of big companies which have made bad decisions.

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