Sex.com case seeks to define domain names as property

In what adult Internet search engine Sex.com is calling a partial victory in its case against registrar VeriSign Inc., a US 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 Sex.com Founder and Chief Executive Officer (CEO) Gary Kremen's six-year battle over the fraudulent transference of his Sex.com domain name, and could have broad implications when defining property in the Internet age.

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

Kremen sued Cohen in 1998 for the unlawful conversion of his property, although 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 US$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.

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

However, the adult site believes that the appeals court's deferral to the state supreme court over the property issue is a step toward winning its case. According to 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.

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