Is it possible for an internet domain to be the object of the crime of misappropriation?
The Second Chamber of the Supreme Court has ruled for the first time, in a recent judgment, on the crime of misappropriation in regards to an internet domain.
In the recently passed Judgment 1464/2022, the High Court absolved 4 persons accused of having misappropriated a website domain name that was the property of the religious group to which the accused persons belonged.
Said religious group created a webpage with the internet domain www.alfatelevisión.org in order to spread its message, and linked the webpage to bank and PayPal accounts to receive donations.
The 4 accused persons split off from this original group and created their own association, changing the entry passwords to the PayPal account and to the internet domain in order to block access to the URL of the former religious group and for the accused persons to maintain the use of the webpage. After these actions, they were dismissed by the Board of the original religious group.
The Provincial Court of Guadalajara condemned the accused persons on the understanding that the internet domain should be considered an asset of the company, susceptible to misappropriation and, therefore, their conduct constituted a crime of misappropriation.
Before the sentence, the accused persons submitted an appeal that was upheld by the Supreme Court and resolved through the sentence in question.
The Supreme Court considered that the conduct of the accused persons does not fit into the classification of a crime of misappropriation, given that the events took place when they were still members of the original religious group.
To reach such a conclusion, the court chamber analysed the legitimacy of considering the internet domain of a company as an asset and expressed in the following terms: “the inclusion of the domain name amongst the assets of any company – an incontrovertible statement, since it has an economic value – does not inexorably lead to the conclusion that the illegal use of this domain constitutes this type of crime.”
In this way, the domain and the name of a company will indeed be classed as assets of a company, and may be the object of the crime of misappropriation.
Nevertheless, in the case being analysed at hand, the High Court understood that the typical structure of the crime of misappropriation of Article 253 of the Penal Code requires the concurrence of other elements of the crime that, in this case, do not seem present.
“Even when we interpret with the greatest degree of flexibility the material object of the crime of misappropriation, understanding that the exclusion of the term “company asset” does not imply a restriction of the “unjust” portion tackled by the new Article 253 of the Penal Code, it remains indispensable that this object of economic value be received in “…deposit, commission or custody, or that it be entrusted in accordance with any other title that produces the obligation of delivery or returning them.”
Thus, the Court Chamber concluded that one may not talk of misappropriation, since the events took place (the change of entry password to the URL) prior to the date of termination of the accused persons by the Board, and therefore, they were making use of the powers and exercising the functions that until this moment they held in the group.
The sentence concluded by analysing the cases in which the fraudulent use of a webpage domain may constitute a crime, as would be the case of fraud in the event that the use of the name had misled third parties into believing that their payment was made in favour of a person who is not the one who should receive the benefit.
The Court Division understood that it would be possible for the fraudulent use of the name to constitute a crime against patent rights or intellectual property, when the domain was “the vehicle to undermine the rights protected by a trademark (citing Articles 270, 273 and related provisions of the Penal Code) and its illegal use may constitute some of the crimes against “patent rights or intellectual property”, or even data hacking, but concludes that in this case the indicted behaviour does not fit within the scope of these crimes.
Aleix Cuadrado
Vilá Abogados
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6th of May 2022
