Are IP Addresses Property?

by Leo Vegoda

John Locke’s labor theory of property states that we create property by mixing our labor with something natural. He uses the example of a person owning an apple after they have picked it from an unowned tree. Which makes perfect intuitive sense for everything that can be considered “substantial” in the sense that it is made of a material substance.

But there is an entire class of intangible things. These aren’t exactly natural, in Locke’s sense, but are nevertheless real. Many can be classified as intangible assets, with a further subset of those known as intellectual property. This is a sizable universe of stuff: copyrighted art, music and writing, patents, trademarks and brands, etc. But in spite of being the products of human effort – insubstantial – these forms of intellectual property are commonly owned by someone or some entity.

IPv4 addresses are what the World Intellectual Property Organization calls “creations of the human mind.”

But unlike artistic creations, or patents, IP addresses aren’t subject to invention. IPv4 addresses are just numbers, starting at zero and ending at 4,294,967,295. They are the range of numbers specified in the protocol developed by Vint Cerf and Bob Kahn. There are a very large, if finite number of them. In the case of IPv6 addresses, there are a practically unlimited number of them, and they are all free. But each IPv4 and IPv6 IP address is unique and therein lies its value. Because they are unique, IP addresses are used to deliver packets of data to specific locations. Very specific locations, the one designated by the sole controller of its use.

Does this specific use make IP addresses “property?” If a “property right is the exclusive authority to determine how a resource is used” then IP addresses probably don’t fit.

IP addresses are identifiers in a communications system. Because it’s a system, multiple organizations must use the identifiers. The sender, intermediate networks and the receiver.

What Happens Without a Registry

In order for IP addresses to universally function as extremely targeted destinations two things must be true about them. First, each must be identified in a generally-available list of destinations and, second, only one user may use it. An IP address (number) is the internet’s version of a GPS coordinate. It is based on a generally accepted convention and marks only one spot on the globe.

Early in the life of the internet there was some confused use of identifiers used by pre-Internet Protocol networks. Rules about who was using which were unclear. This, inevitably, led to confused message delivery. RFC 417 from 1972 is five lines long. But those lines explain the value of a registry. TENEX systems were using “link numbers outside the allowed range” – identifiers not assigned to them. Jon Postel, as the IANA, published the RFC – by postal mail – to get the problem fixed.

Nearly 30 years later, an internet service provider (ISP) contacted the internet registry RIPE NCC when its IPv4 address range was announced (used) by another ISP. The RIPE NCC learned that the offending network had used all of its allocated IPv4 address space and just kept going into new territory. They started using addresses from the next block of addresses because they didn’t know that they couldn’t.

After a conversation with the registry, they stopped announcing the other ISP’s addresses. They requested more addresses and the problem was solved.

These two short tales illustrate why sole use of unique numbers is critical to the network. To insure that exclusive use, something has to keep track of the users and their numbers. So, having a trusted authority who keeps records of who has what IP address space is vital. That’s why we have registries for physical property like land and aircraft, and registries and patent offices for intellectual property. Registries are an essential component of a rules-based order. They assign control (and sometimes ownership) to the intangible.

Registration Rights Are What Matter

In 2011, Microsoft obtained a large block of IPv4 addresses through the Nortel bankruptcy. The agreement involved defined the seller’s rights as: “Seller’s exclusive right to use the Legacy Numbers Blocks, Seller’s exclusive right to transfer the Legacy Number Blocks, and any other legal and equitable rights that Seller may have in and to, the Legacy Number Blocks.”

Milton Mueller, an economist specializing in the internet, who runs the Internet Governance Project, reported on the Microsoft/Nortel agreement. Mueller that the language used in it established the transfer as involving asset control that was the same as in real property rights.

Not everyone immediately agreed. For many, the extent of the rights in an IP address described as the same as property rights were questioned. The exclusivity of use was assumed. But the absolute ownership of the address was at issue. Clarification by way of judicial decision was required.

The registries, network operators, and the judicial system have gained experience since the Microsoft/Nortel agreement. Nine years later in 2020, in a different case, a Dutch court recognized an order from a German court and bailiffs served it on the RIPE NCC. In effect, a court determined that the rights to an IP address registered to one entity could be litigated as property and transferred by court order. In the ruling the court distinguished between ownership of the number and control of its registered use. Importantly, it found that “the resources were not owned by the member and that it was the right to the registration which could be seized.” The RIPE NCC complied.

The result is that the registration an IP address is unique, worldwide. Registration maintains uniqueness in the sense that it makes clear who is the authorized controller of an IP address’. Registration includes the ability to transfer IP address use to someone else, subject to the policy of the registries, in return for payment. Thus, “ownership” is of the registration, not the address itself.