Sex.com, Sex.com, you're my Sex.com

Supreme Court rejects ludicrous appeal

By Kieren McCarthy, 12th June 2003

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The US Supreme Court has rejected the appeal by Stephen Michael Cohen in the sex.com case.

The decision brings to a close two years of pointless legal argument and leaves the way clear for sex.com owner Gary Kremen to concentrate on forcing .com registry VeriSign to admit its guilt in transferring the valuable domain to Mr Cohen in 1995.

"We are pleased to put a successful end to Mr. Cohen," said Richard J. Idell, a lawyer representing Kremen.

The decision was entirely expected however, since Mr Cohen's appeal against $65m costs awarded to Mr Kremen had already been rejected by the US Court of Appeals for the Ninth Circuit as an "egregious abuse of the litigation process".

However, while the Supreme Court decision is "the final nail in the coffin" according to Kremen's lawyers, it does not mean that retrieving the funds still owed to Mr Kremen will prove any easier. Mr Cohen is currently a fugitive from justice in Mexico where a careful reallocation of assets in offshore funds before and after the initial ruling against him means he can live a comfortable and well-guarded existence. (Bounty hunters seeking a reward offered by Kremen for Cohen were involved in several gun fights with what Cohen says was the Mexican police.)

Cohen defrauded Kremen out of the domain sex.com - which is worth $500,000 a month just in advertising space - by sending a blatantly forged letter to VeriSign asking that it be handed over to him. This VeriSign duly did without checking the letter or contacting Kremen.

It took Kremen nearly six years in the law courts to regain possession of the domain and the judge ordered Cohen - who has always admitted forging the letter - to repay $65m in costs and unwarranted earnings. Shortly after, Mr Cohen fled the country and since then has concocted increasingly bizarre reasons as to why he is unable to pay the fine.

With the case finally put to rest however, Mr Kremen faces his toughest battle - forcing VeriSign to accept blame for transferring the domain without checking in the first place. He is expected to win although VeriSign is sticking to its defence that a domain name cannot legally be held to be property and as such it cannot be held to account for giving the sex.com away to someone else.

If VeriSign eventually loses, it will face a $100m fine and legal fee bill. It would also set a legal precedent that will encourage thousands of other domain owners to seek recompense for wrongly handing over domains (something VeriSign has become particularly famous for).

Such is VeriSign's concern that in a petition to the US courts it claimed that if it lost the case it would actually mean the end not only of the company but the entire Internet. ®

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