I recently had the pleasure of presenting the topic of Secured Lending in Websites and Domain Names on a Canadian Bar Association webinar with two other panelists, Sylvia De Sousa, Partner at Thompson Dorfman Sweatman LLP, Winnipeg, Manitoba and John Loughnane, Partner at Nutter McClennen & Fish LLP. The webinar is available here.
We examined how domain names and websites fit under secured transactions law concepts, how to conduct due diligence and the types of filings required to perfect security interests on these assets. We also discussed how to ensure a successful enforcement of security interests against domain names and websites. On this topic, John gave us some interesting examples of website value extracted in bankruptcy auctions:
Given these examples of retail setbacks (and others…), companies are investing more time and efforts in e-commerce. The objective is to adapt to the growth of consumer online retailing habits. Domain names and websites play an important role in this context. Lenders should leverage their value in their credit analysis of borrowers and take enforceable security interests in the underlying contractual and intellectual property rights.