Update.Com Software v. Klinger

Citation: Update.Com Software AG v. Klinger (c.o.b. Update Corp.), [2000] O.J. No. 88 (Ont. S.C.J.)

Factual Background
Plaintiff is an Austrian company that entered into an agreement with an Ontario, Canada resident to purchase the domain name  registered with Network Solutions in the United States. In reliance on the agreement, the plaintiff changed its name, filed an IPO in Europe and created a branding program around the domain name. The defendant refused to perform the agreement and sought to convey the domain name to a third party for more money.

Trial Court Decision
This lawsuit was filed in December 1999. The majority of the parties had no nexus to Canada, and the agreement itself said it was to be construed in accordance with the laws of the Inner Courts of Vienna, Austria. The plaintiff sought a Declaratory Order and specific performance.

To obtain specific performance, the plaintiff had to successfully argue that a domain name is a unique form of property capable of being the subject matter of an order for specific performance. The plaintiff relied upon a U.S. insolvency case (Umbro Int'l, Inc. v. 3263851 Canada, Inc., 50 U.S.P.Q.2d (BNA) 1786 (Va. Cir. Ct. Feb. 3, 1999)), that held that a domain name was “property” for purposes of garnishment, and thus, could be seized.

On February 3, 2000, Justice Nordheimer ordered specific performance for the conveyance of the domain name “update.com”.