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The situation is that I'm contracted for a company to do a website migration of the company's official website. The company was bought 7 years ago and the former owner remained contracted to manage the website. Now the new owner of the company wants to take control of the website, and the former owner is refusing to hand over the data such as database and source code.

Is the domain inherently included in the sale of the company? There could be no mistake about the fact that the website belongs to the company whatsoever. However, since I'm only contracted to help the migration, what legal courses does the new owner have? I'm only curious to perhaps predict the possible outcome of this situation.

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  • I wonder if you are asking tbe right question. A domain name us entirely different to a database which is entirely different to the source code. The question depends on the sale and purchase agreement - and indeed it is possible that the database and source code were never owned by the company, let alone sold.
    – davidgo
    Jun 26, 2021 at 5:36

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It will depend on the specific facts

Let's define a few terms:

  • Company A was the original company,
  • Company B is the current company (which may be the same as Company A or a different company),
  • Owner A was (and may still be) the shareholders of Company A,
  • Owner B are the shareholders of Company B,
  • the Business is the enterprise that was carried on by Company A and is now carried on by Company B,
  • the Domain is the licence from the Domain Name Registrar which may be owned by any of the above (except the Business because it's not a legal person).

Owner A and Owner B might be an individual natural person or an individual company or a group of natural persons/companies.

Both the Business and the Domain are assets just like a car or office furniture that can be bought and sold independently of the Company that owns them.

  1. Who owned the domain registration?

This might have been Company A in its own right or Owner A in which case Company A would be using it under some sort of licence, probably an implicit and undocumented one.

  1. Was Company A or the Business bought?

Both are possibilities, see Is it possible to keep assets from being taken when a company is bought by another?

If the company was sold the Company B is Company A. If the business was sold then Company A is different from Company B.

Company A owned the Domain and Company A was sold

Company A/B continues to own the domain. There is no room for dispute here.

Owner A owned the Domain and Company A was sold

Owner A continues to own the domain but Company A/B retains the benefit of the licence. There is scope for dispute over the terms and duration of that licence.

Company A owned the Domain and the Business was sold

The terms of the contract would need to be consulted to determine whether the Domain was part of the assets that comprised the Business. There is scope for dispute here, see the Peanut Butter Wars over whether trade dress was part of the business (spoiler, it was).

If it was, then Company B owns it even if it is legally still held by Company A - they would be holding it on trust for Company B pending legal transfer. There is no scope for dispute here.

If it wasn't, then one has to ask how has Company B been using it for 7 years? There is scope for dispute here. It's possible that they were using it under a licence, if so, what are the terms? It's also possible they have a right to it as a result of other IP they own, usually a trademark.

Owner A owned the Domain and the Business was sold

The terms of the contract would need to be consulted to determine whether the licence in the Domain was part of the assets that comprised the Business. There is scope for dispute here.

If it was then Company B retains the benefit of the licence. There is scope for dispute over the terms and duration of that licence.

If it wasn't, then one has to ask how has Company B been using it for 7 years? There is scope for dispute here. It's possible that they were using it under a licence, if so, what are the terms? It's also possible they have a right to it as a result of other IP they own, usually a trademark.

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  • Thanks for the extensive description and details. I just want to mention that it is not only the domain name in question here. The value for Owner B is primarily the data and source code of the website.
    – I'm Root James
    Jun 25, 2021 at 2:33
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    The answer is mainly the same except a domain name can be the subject of a forced transfer while those other things can't be.
    – Dale M ♦
    Jun 25, 2021 at 2:34
  • ?? If true, that point is very relevant. Why could data and source code not be subject to force transfer? According to what info I'm privy to that was a major reason the business (or comany, I think business) was bought. Can't anything be subject to force transfer. Judge Judy does it all the time.
    – I'm Root James
    Jun 25, 2021 at 2:36
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    @I'mRootJames a domain name I legally bought and paid for can be taken off me if I don’t have a legitimate reason to own it. That can’t happen with most other things. That’s different from going to court because ownership is disputed.
    – Dale M ♦
    Jun 25, 2021 at 23:10
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    Also, Judge Judy is conducting an arbitration, not a court. Judges have to follow the law, arbitrators have to resolve the dispute the way the parties want - if the parties want the matter decided by a coin toss, that’s legal for an arbitrator but a judge can’t do that. Since, JJ is first and foremost entertainment, what the parties agree she can do is probably pretty unrestricted.
    – Dale M ♦
    Jun 25, 2021 at 23:14
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Is the domain inherently included in the sale of the company?

The things that are included in the sale from one party to another are what is included for the contract related to that sale - what does the contract say?

Also, what does the contract say about the former owners ongoing work for the website? Typically this might be classed as a work-for-hire, or it might not be, so it depends again on what the contract does and does not say as to where the copyright for that website ends up.

Basically, its not necessarily a situation where the domain or website is obviously "owned" by the purchaser unless the contracts say so - if the contracts are mute on the specific matter then its going to take a court case to settle this based on general wording in the contracts.

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    A sale of “all of the company’s assets” would not need to mention a specific asset to be clear that the website was included. A sale of all of the shares of the company would also not need to list particular assets for them to be included.
    – George White
    Jun 24, 2021 at 23:55
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    @GeorgeWhite the first example is covered under my first paragraph - it entirely depends what the contract says. The second example is not the same situation, it just results in the same outcome.
    – user28517
    Jun 25, 2021 at 0:06
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    I agree that a contract would govern. However, I took - "if the contracts are mute on the specific matter" to mean the contract needed to specifically call out the website or it was unclear. That would be incorrect in the two most likely scenarios. In a purchase of all of the stock, a contract may not be relevant.
    – George White
    Jun 25, 2021 at 0:21
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    @GeorgeWhite fair enough, I would have taken "all of the companies assets" to mean the contract wasnt mute on the specific matter - perhaps poor wording on my behalf. And a stock buyout again isnt the same situation and is unambiguous.
    – user28517
    Jun 25, 2021 at 0:23

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