16 June 2003
Sex.com, lies, and VeriSign
Gary Kremen owned the presumably lucrative domain sex.com, and all was well, as the phrase goes.
Then in 1995, one Stephen Michael Cohen forged a letter from Kremen's company asking domain registrar VeriSign to transfer the domain to, um, Stephen Michael Cohen. And VeriSign promptly did so.
Six years of litigation followed. Cohen admitted to the forgery, but has thus far managed to avoid the $65 million in penalties and restitution ordered by the court. He appealed the size of the judgment to the 9th Circuit Court of Appeals, which refused any relief, and last week the Supreme Court upheld the judgment. Cohen himself wasn't present; he is hiding out in Mexico.
Gary Kremen, however, has bigger fish to fry: VeriSign has refused to accept any responsibility for turning over the domain to Cohen, arguing that a domain name cannot be considered "property" in any legal sense and therefore they cannot be held liable; further, says VeriSign, if it is found liable, the entire registry system could crumble, heralding the end of the Internet as we know it.
VeriSign's Network Solutions unit has been working to clean up its act in recent years and, not incidentally, to further limit its liability in domain disputes but should the courts find for Kremen, it will cost NSI $100 million and what's left of its credibility.