Sex.com Back in Court

The Sex.com saga returned to the spotlight Tuesday as a panel of three judges from the U.S. Court of Appeals for the Ninth Circuit
attempted to ascertain whether Sex.com CEO Gary Kremen had the right to hold VeriSign responsible for improperly
transferring the Sex.com domain to Stephen Michael Cohen based on a forged document.

It was Network Solutions Inc. (NSI), acquired by VeriSign in 2000, that transferred the URL.

The court agreed to hear Kremen’s appeal in July.

At the end of a five year battle for the ownership of the Sex.com URL, U.S. District Judge James Ware found Cohen liable for fraud
and forgery. The judge slammed Cohen with a bill for $40 million in compensation for lost profits and an additional $25 million in
punitive damages. However, while Kremen was awarded the URL, the ruling also barred him from filing additional grievances against
VeriSign.

Cohen subsequently skipped town and is believed to be living somewhere in Mexico. Kremen did not receive a cent of the settlement
money.

Kremen hopes to overturn the ruling which prohibits him from suing VeriSign, arguing that the registry broke its contract with him
by not applying reasonable security measures when it received the forged letter requesting the domain be transferred. VeriSign has
since begun confirming transfer requests by phone or e-mail. Privacy advocates including the American Internet Registrants
Association (AIRA), and San Francisco-based online non-profit civil liberties organization Electronic Frontier Foundation (EFF),
both filed amicus briefs on Kremen’s behalf for the appeal.

Meanwhile, VeriSign argued that it should not be held liable and that allowing a suit would lead to an avalanche of further
lawsuits. The company said that the domain name server database was not representative of ownership rights.

The judges are expected to rule on whether to allow a lawsuit in the next few months. Kremen said he would reinstate a $50,000
bounty on Cohen’s head.