The federal government experienced two embarrassing setbacks last week related to Operation In Our Sites, the campaign to seize domain names suspected of being used to infringe copyright. A federal judge dismissed a forfeiture complaint against the Spanish sports site RojaDirecta.com (though the government is keeping the domain for now). Also last week, the government returned the domain Dajaz1.com, tacitly admitting that it had made a mistake in seizing the domain in the first place.

These seizures have raised a lot of questions. Does the government really have the power to seize a domain name, hold it for a year, and then return it without compensating the owner? Is it common for the records of routine property seizures to be sealed? Shouldn't the courts be doing a better job of supervising these seizures?

We asked intellectual property attorney (and Ars Technica reader) Mark Lyon to weigh in. He faulted the court for not holding the government's feet to the fire, and suggested that domain owners should have had their day in court months ago. Unfortunately, he said, domain owners have few avenues for recourse against abuses of asset forfeiture law.

Immediate release?

Theoretically, a domain seizure is not supposed to be a punishment, but merely a mechanism to prevent a suspect from continuing to use property for a criminal purpose or hiding or disposing of it before a judge can make a decision. For example, if a car is being used for drug smuggling, the government can seize it to prevent the owner from selling or destroying it.

Owners of seized property are supposed to have the opportunity to challenge the seizure in court. Indeed, federal law specifies that property owners are entitled to "immediate release of seized property" if the seizure imposes a "substantial hardship" and if this hardship outweighs the risk that the property will be "destroyed, damaged, lost, concealed, or transferred" before the forfeiture case concludes. Given that it's impossible to destroy, damage, or conceal a domain name, and given that any transfer can be reversed by the US-based registry of the .com domain, Lyon argued this shouldn't even be a close call.

But a federal judge disagreed in August, ruling that because the RojaDirecta website had already been moved to rojadirecta.me, that Rojadirecta can use its "large Internet presence" to "simply distribute information about its new domain name to its customers."

Lyon disagreed. "Yes, a website can stay up absent its domain name," he said. But "their traffic is their business," and an abrupt switch to a new domain name—not to mention the stigma of having the old domain name replaced by an anti-piracy notice—clearly satisfied the "substantial hardship" standard.

Troubling secrecy

Lyon also expressed concern that the Dajaz1.com forfeiture process took so long. "The courts are supposed to move swiftly" on forfeiture cases, he said, dealing with them before most other matters. Yet it took the government a year to decide what to do with the domain, with no apparent objection by the courts.

"It appears that the court was very open and allowable to the government in delaying those hearings," he said. "It appears that the way this has been handled is to allow administrative delay" to drag out the process much longer than the law allows.

Of course, it's hard to be sure what happened because the docket was secret—and that also concerns Lyon. It's not uncommon for courts to seal individual documents, as when the government needs to keep the identity of a confidential informant under wraps. But, he said, it's "very unusual for an entire case to be sealed." He said sealing a forfeiture case is particularly problematic because it makes it hard to provide adequate notice to the rightful owner and give him the opportunity to contest the seizure.

"The court is not holding the government's feet to the fire and forcing them to proceed swiftly" as the law requires, he said. This "very lenient" approach allows the government to "hold onto property longer than they should if they're not going to move forward.

Compensation unlikely

Unfortunately, the owners of Dajaz1.com and RojaDirecta.com are unlikely to be compensated for the costs of the seizures, even if they prove to be completely unfounded. "It's very hard to recover against the government," Lyon said. "Especially for international folks." Even in the best-case scenario, the costs of the seizure—in lost traffic and legal fees—will "dwarf anything they'll be able to recover."

Lyon questioned whether forfeiture was the best way to deal with infringing websites. "Copyright holders have an array of procedures and processses they can use" to fight piracy without getting the government involved, he said. And with the .com registry based in the US, the traditional rationale for domain seizures—that the owner will hide, sell, or destroy the property before the courts can hear the case—simply doesn't apply to domain names.

But this also seems like an area where the courts should be doing a better job overseeing the seizures. So far, it appears the courts have been largely deferring to the government's judgment on which sites to seize. But as the examples of government mistakes accumulate, the courts need to put the government a shorter leash, giving every domain owner the opportunity to promptly contest the seizure and vindicate its rights.