Last week, US District Court Judge James Ware dismissed a claim
against an individual accused of hijacking sex.com. Steven Cohen
obtained the name by allegedly forging a letter to domain registrar
Network Solutions in 1996 authorising the transfer from its
original owner, Gary Kremen. The judge ruled that, even if this
happened, it could not amount to “conversion” under US legislation,
or in effect, theft.
Judge Ware wrote: “There is simply no evidence establishing that
a domain name including sex.com [meets the definition of property]
as required by the law of conversion.” He followed his own earlier
decision in a case by Kremen against Network Solutions, taking the
view that a domain name is more akin to a designation for a
service, like a telephone number, than property in its own right.
He observed that it was for the legislature, not the courts, to
clarify the ambiguities of US property law and its relevance to
domain names.
However, Judge Ware went on to grant a request by Gary Kremen to
file an amended claim charging Cohen with a breach of California’s
unfair competition code. This provides that if someone steals a
product and sells it, the person is unfairly competing with another
who has to buy the product and sell it. If successful with such an
amended claim, Kremen could recover the profits enjoyed by Cohen
from the porn site at sex.com, estimated in the hundreds of
millions of dollars.
It is also thought that Kremen will use Californian fraud law to
get a court ruling that Network Solutions should transfer back the
domain name. If successful, Kremen would also be entitled to
compensation.
