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January 16, 2003 — (WEB HOST INDUSTRY REVIEW) — Adult Internet portal Sex.Com announced on Thursday that it has seen promising results in its pending court decision against VeriSign, as the Ninth US Circuit of Appeals in San Francisco asked the state Supreme Court to intervene in the case.
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The California State Supreme Court has been asked to determine the question of whether a domain name is property that can be converted, as well as issue guidance to assess damages that could amount to $100 million, said Sex.Com.
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Attorneys for Sex.Com founder and CEO Gary Kremen said the order, which identifies domain names as a kind of property, was a step toward victory in the case involving Kremen, VeriSign and Stephen Cohen. VeriSign took the Sex.Com domain name from Kremen when it received a forged letter from Cohen, asking that Sex.Com be transferred into his name. VeriSign, then Network Solutions Inc., transferred the domain into Cohen’s name, and he used it to build a multi-million dollar porn site.
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Sex.Com also said the US Court of Appeals rejected Cohen’s appeal for a rehearing on the underlying issue, leaving the US Supreme Court as the only recourse.
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The Appeals Court, says Sex.Com, noted that the state Supreme Court had ruled, as far back as 1880, that intangible property, in that case stock certificates, could be converted. In a written opinion, one judge said it is clear from the 1880 case, and subsequent cases, that domain name is property that can be converted.
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The three-judge panel deferred the question to the California Supreme Court, noting that the case addresses a substantial new issue in state law that will have broad applications. A ruling in favor of Kremen could result in numerous lawsuits against domain registries, and a multimillion-dollar damage claim against VeriSign from Kremen.
