IPv4 Address Transfers
& The Chain of Title
by IPv4 Staff
Companies sell (or transfer) assets in many different ways, not always in the normal course of business. Sometimes distress causes bankruptcy or liquidation. Other circumstances for asset transfers occur during mergers, acquisitions and various forms of reorganization. It is often the case that multiple classes of assets are transferred in a “bundle” including a number of valuable things, of differing varieties. An entire portfolio of assets can change ownership in a single documented sentence.
Because the variety of assets bought and sold can be considerable, many types move without anyone being fully aware of them. During mergers, language in purchase agreements may include, “and all other assets” to cover anything being transferred that is not explicitly included in an inventory of things bought and sold. Which means, “everything else not listed here” is being sold by one entity to the acquiring entity.
Intangible assets, like patents or copyrights, are transferred in such exchanges more or less invisibly. IP address blocks are similar but not the same. They are frequently unused, under-used, or overlooked. So, they move from one company to another without much notice, invisible to all the participants.
IP address transfers present their own official requirements. These “challenges” aren’t busy paperwork. ARIN (and the other RIRs) are deeply concerned with illicit use of IP addresses. To stop such use they are sensitive to and watch for the illegitimate transfer of addresses. So, RIRs require different kinds of proof of ownership when approving an official transfer.
When multiple, undocumented, out-of-sight sales or mergers of companies have happened, this can be a problem. Put simply, for transfers to be recognized by ARIN, ownership, documented in a title transfer, must be established. This is a baseline requirement in order for ARIN to recognize the transfer.
Some Ownership Basics
A “chain of title” is the record of ownership, documenting the sequence of transfers of ownership of any property. It is an historical timeline that documents – ideally without gaps – who the owners of something have been and who they are now. Of course, many kinds of things can be assets and so, therefore, can be owned. Obvious examples include real estate or automobiles. But intangibles such as copyrights or patents can also be owned and so frequently include a proof of ownership: a title. Even “rights” are traded. The right to farm a piece of land one doesn’t own might be an asset that is owned by a person or entity.
A ”registration” is not a “title.” That is, registering a vehicle with a state department of transportation almost always requires a proof of ownership: the title to the car. But the reverse is not true: one can sell an automobile, transferring the title without informing the state in which it is registered. If the title to the thing was transferred correctly, proper notary and signatures in place, title has changed but the registration hasn’t. The registering agency is in the dark.
In a further anonymizing of asset ownership, possession and use can become vague or even invisible. The 1937 Cord your grandfather won in a poker game and stored in his barn but has never driven or registered is a pretty invisible asset. Especially if, getting older, he forgets it’s behind the third stall on the left. If grandpa’s land (and the barn and the car) passes to his children, probate will likely see to it that the title to the real estate is transferred to a new owner. But the car – though probably now the legal property of his estate – will have no formal transfer of title. And no valid registration. Any attempt to register it will likely fail.
Transfer Rules & Requirements
The ARIN community has developed policies to govern IP address transfers. Most are rigoroius but largely routine. However, complexity can arise in two broad categories: transfers arising from mergers & acquisitions, and reorganizations. ARIN’s role in either case is to confirm that there is a chain of title from the original registrant to the new registrant.
ARIN performs this task using only supplied paperwork. The purpose here is to discover and reject illegitimate claims to title and/or attempts to use another, legitimate owner’s addresses.
To validate ownership, ARIN accepts authenticated copies of documents describing the transfer of assets, such as:
- asset purchase agreements;
- bills of sale;
- merger or amalgamation agreements filed with a recognized government;
- final court orders;
- SEC or other public filings that document the transfer.
In the case of name changes, ARIN accepts documents such as amended articles of incorporation, or a government verification of the change.
ARIN’s CEO, John Curran, has publicly explained that they look for consistency and coherency in validating documentation.
This sounds simple enough but can become quite complex when multiple mergers, liquidations or other corporate transactions happen. Simple matters such as typographical errors, missing or non-existent documentation can frustrate the process. Nevertheless, the scope the internet and networks generally, plus the occasionally nefarious behavior of some players in this field makes caution necessary.
It wasn’t always this way. The internet’s early registration practices were less formal. Everyone knew everyone and so more casual naming was used. For instance, an early IANA registration illustrates the early off-handedness that has been rinsed from the process. The registration for 22.214.171.124/8 lists “AT&T Bell Laboratories.” But ARIN’s registration was updated last year and shows “AT&T Services, Inc.” along with current contact information. Informal registration records from the past don’t prohibit IP addresses from being transferred. But thorough reviews of the the chain of title take time. Where the chain of title is murky or entirely undocumented, the process gets progressively more complex.