Sex.Com Case Stakes Out Domain Rights

In what adult Internet search engine Sex.com is calling a partial victory in its case against registrar VeriSign, a federal appeals court has asked the California Supreme Court to consider whether a domain name can be considered property.

The order given by the Ninth U.S. Circuit Court of Appeals in San Francisco, and released by the adult site Thursday, comes as the latest twist in a six-year battle over defining property in the Internet age. Gary Kremen, Sex.com founder and chief executive officer, brought the court action after what he contends was an illegal appropriation of his property: the URL.

URL Usurped

The case originated in 1995 when an ex-con named Stephen Cohen sent a forged letter to registrar Network Solutions, which VeriSign purchased in 2000, requesting the Sex.com domain be transferred to his name. Network Solutions transferred the domain without verifying the move with Kremen, and Cohen built a thriving porn business around the hot domain.

Kremen sued Cohen in 1998 for the unlawful conversion of his property. However, courts have generally held that, under the tort of conversion, property must be tangible.

The U.S. District Court for the Northern District of California ordered the domain name returned to Kremen in 2001 and hit Cohen with a $65 million judgment. The court rejected Kremen's claim against VeriSign, however, and he has appealed the decision.

Cohen, meanwhile, has fled and is presumed to be living in Mexico. Unable to collect most of the multimillion-dollar verdict from Cohen, Kremen is seeking to gain the balance from VeriSign.

Registrar Denies Duty

VeriSign claims that a domain name isn't property, and therefore it is not responsible for the transfer, Sex.com said.

However, the owner of the adult site believes the appeals court's deferral to the state supreme court over the property issue is a step toward winning its case. According to arguments by Sex.com, court opinions stretching back to 1880 give precedence to the idea that intangible property can be converted.

The case is being closely watched by the Internet industry, as it offers to define the value of online real estate. What's more, a ruling in favor of Kremen could result in numerous lawsuits against domain registries, and VeriSign in particular.

No one from VeriSign was immediately available to comment on the case Thursday.