RealTime IT News

Supreme Court Ends Sex.com Battle

Writing the final chapter of the six-year legal battle over the Sex.com domain name, The U.S. Supreme Court Thursday rejected the appeal of Stephen Michael Cohen, the man found to have illegally hijacked the domain.

"The Supreme Court's denial of Mr. Cohen's writ petition is significant because it puts the final nail in the coffin," said Pamela Ureta, an attorney for Gary Kremen, founder of Sex.com. "Cohen has tried unsuccessfully both in the Ninth Circuit and, most recently in the Supreme Court, to overturn the $65 million judgment against him. There is nowhere else for him to try to appeal; the judgment is final."

Kremen registered Sex.com in 1994 through Network Solutions, now a subsidiary of VeriSign . At the time, Kremen was doing business as Online Classifieds, Inc.

After a period of a year while Sex.com sat dormant, Cohen, who previously served time in federal prison for bankruptcy fraud and impersonating an attorney, decided to commandeer the potentially lucrative domain name and forged a letter written on Online Classified letterhead to Network Solutions requesting transference of ownership.

For a fee of $1,000, Networks Solutions processed the domain name conversion and Sex.com officially became Cohen's property.

According to reports, Cohen then launched an Internet pornography business based on the Sex.com domain name, but by the time Kremen was aware of the theft, Network Solutions refused to change the registration back without a court order.

Kremen went to legal battle against Cohen and his numerous business entities, with an added appeal that Network Solutions should be responsible for negligence due to the fact that the registrar did not even attempt to verify the forged letter that served as the basis for the domain name conversion.

In September 2002, the U.S. Court of Appeals for the 9th Circuit approved a $65 million award in Kremen v. Cohen, setting the wheels in motion for Kremen to regain control of Sex.com and collect a substantial judgment from Cohen, including $25 million in punitive damages.

But by that time Cohen had skipped off to Tijuana, Mexico and would not comply with the judgment's orders.

During the same ruling, the claim against Network Solutions was rejected based on the fact that a private company which is the sole domain name registry for domain names is immune from civil suit in cases where it negligently handled a domain name.

Cohen then appealed to the Ninth Circuit Court of Appeals. Finally, he appealed to the U.S. Supreme Court with a petition for Writ of Certiorari, which the court rejected.

"The U.S. Supreme Court has finally put an end to Cohen's battle over the Sex.com domain name in a precedent-setting case that requires domain name registrars to be held accountable for their mismanagement of crucial public resources such as the Internet," said Robin Gross, executive director of international civil liberties organization IP Justice.

Charles Carreon, one of Kremen's lead attorneys, added, "Sex.com provided the best test case imaginable, and Mr. Cohen turned it into a test of endurance. Although Gary takes the top prize, all domain name owners will benefit from the law this case has established. I trust that eventually, VeriSign will accept responsibility for its initial blunder and pay Gary the damages that are due."

Kremen has sued VeriSign for unilaterally taking away the Sex.com domain name, and for inadequately safeguarding his property. The verdict in Kremen's suit against VeriSign is still outstanding.