Seizing IP addresses in the Netherlands as a security for your damages claims in international litigation

IP addresses can be seized by way of a prejudgment attachment measure under Dutch procedural law. The value of the IP addresses can be used as a security for basically any damages claim in litigation anywhere in the world. Since one of five Region Internet Registries (called RIPE) is located in Amsterdam, the Netherlands, chances are high that such IP addresses are maintained by RIPE which would give the Dutch court’s jurisdiction to seize them even though the main proceedings are pending or will be filed in other jurisdiction. This offers great possibilities for claimants in international litigation against companies entitled to IP addresses, such as Internet Service Providers (“ISPs”) involved in hosting notorious counterfeit websites.

IP addresses as an asset under Dutch law

An IP address ("Internet protocol address") is a set of numbers used to locate and specify an individual user of the Internet. IP addresses are used in Internet communications, with each device connected to the Internet assigned an IP address. Each website with a domain name is also linked to a specific IP address through what is known as the Domain Name System (DNS server).^[1] So without IP addresses, Internet traffic is not possible, which is why IP addresses are indispensable and highly sought after.

RIPE is a so-called Regional Internet Registry of which only five exist worldwide. Through these Regional Internet Registries, the distribution and registration of IP addresses is coordinated. RIPE is responsible for Europe, Russia and the Middle East and has its headquarters in Amsterdam, the Netherlands.

Different IP addresses exist and all IP addresses of the most requested type - the so-called IPv4 addresses - are all given away. Therefore, they are marketable and represent a considerable monetary value. Consequently, a trade has developed in IPv4 addresses, making it an interesting seizure asset^[2]. IP addresses are thus transferable. As a member of RIPE, a company however does not acquire ownership of the IP address. One only acquires the right of registration.  The right holder has a claim to RIPE to the continued use of the IP address.  According to RIPE, the registration right can be seized. This can be compared with a domain name as an asset that can be part of prejudgment attachment.

Previously, IPv4 addresses have been successfully seized and sold in auctions in the Netherlands. RIPE has written on its website^[3] about its internal protocol in the case of such a seizure. RIPE itself also believes that it is possible to seize the right to use IP addresses.^[4] RIPE explicitly states on its own website that it will cooperate with such a seizure if:

• the attachment measure has been recognized/approved by a Dutch court;
• the relevant decision of a Dutch court is served by a bailiff at RIPE;
• RIPE is named in the court decision and the decision creates an obligation for RIPE to cooperate with the prejudgment attachment in question; and
• the relevant resources are reported in the decision.

In addition, RIPE has stated in earlier proceedings that seizing IP addresses technically has no impact on its operations.^[5]

This means that prejudgment attachment is possible with respect to IP addresses

Jurisdiction of Dutch courts

Since the IP addresses are hosted in Amsterdam, the Dutch courts have jurisdiction on prejudgment attachment claims relating to these assets even though it does not have jurisdiction in the main proceedings between de IP address owner and the claimant. This means that in an international dispute between for example a Chinese company as claimant and a Brazilian company as defendant, in which proceedings on the merits are pending before the courts in Spain, it is still possible to seize assets of the Brazilian defendant in the Netherlands, as long as these assets are located in the Netherlands.

The Dutch courts will judge the request for prejudgment attachment on an ex parte basis (without the owner of the IP addresses being heard) and on a preliminary basis only and such request are granted more often than not, provided that the request is sufficiently substantiated. The defendant can always request for lifting the seizure but it has to start short summary proceedings before the Dutch courts proactively. Otherwise, the IP addresses are frozen by RIPE until a decision has been rendered in the (foreign) proceedings on the merits.

It is even possible to file for prejudgment attachment if no proceedings on the merits are pending anywhere yet. In such a case, it should be explained to the Dutch courts where such proceedings on the merits are going to be filed and how much time the claimant would need for that. The Dutch courts will then impose a deadline on the claimant to actually proceeding with filing such proceedings on the merits, which can be in other jurisdictions. Failure to do so will lead to lifting of the attachment.

Successful attachment of IP address in international litigation

All this is not only theory as we can confirm ourselves. We have recently successfully assisted US companies in seizing IP addresses hosted with RIPE in Amsterdam, which IP addresses were ‘owned’ by a Turkish company. The US companies were already involved in litigation in the US against the Turkish company and had filed a claim for damages as a result of direct liability for copyright infringement using the Turkish company’s IP addresses of which the Turkish company as an ISP was aware. The US companies knew that RIPE hosted thousands of IP addresses in the name of the Turkish ISP, which means these assets are located in Amsterdam, the Netherlands.

On behalf of the US companies we obtained a positive court decision for prejudgment attachment on IP addresses as a security for its damages claims in the US main proceedings. The IP addresses are not only secured for a possible sale as compensation for the US companies’ damages but are also frozen by RIPE. This means that the defendant is no longer in a position to transfer the IP addresses during the proceedings on the merits, which of course gives the claimant a much stronger position in the legal proceedings and possible settlement negotiations.

[1] The domain name therefore solves that digit combinations with four numbers between 0 and 255 are difficult for users to remember, and that through the domain name, the website being run at the corresponding IP address can be easily accessed.

[2] https://www.sidn.nl/nieuws-en-blogs/ipv4-adressen-het-nieuwe-goud

[3] https://labs.ripe.net/author/ciaran_byrne/a-first-for-the-ripe-ncc-seizure-of-the-right-to-registration-of-ipv4-addresses-for-the-recovery-of-money/

[4] https://labs.ripe.net/author/ciaran_byrne/a-first-for-the-ripe-ncc-seizure-of-the-right-to-registration-of-ipv4-addresses-for-the-recovery-of-money/

[5] The Hague District Court February 13, 2013, case number/role number: C/09/414930 / HA ZA 12-339, r.o. 4.3. See also https://www.ripe.net/publications/news/the-ripe-nccs-case-against-the-state-of-the-netherlands-dismissed-full-verdict