Sex.com was originally registered by Gary Kremen of San Francisco in 1994. The following year, Stephen Cohen, an ex-convict, took the name from Kremen by sending a forged letter of transfer to Network Solutions (which subsequently became part of VeriSign).
Cohen then ran a highly profitable porn portal until November 2000 when a court awarded Kremen the return of the domain name having found that the forged signature on the letter to Network Solutions misspelled Kremen’s name.
A Californian district court ordered Cohen to pay the sum of $65 million in damages to Kremen. However, Cohen has to date paid nothing and has failed to appear at several court hearings.
In 2000, a lower court ruled that NSI, which is the sole domain name registry for .com domain names, is immune from civil suit in cases where it negligently handled a domain name. The 9th Circuit is currently examining Kremen’s appeal against that ruling.
VeriSign denies responsibility for turning the domain name over to Cohen after receiving his forged letter. The company claims that it should not be held liable, because its domain name database is merely a “translator” between web addresses and domain names and not representative of an ownership right.
However the judges of the 9th Circuit challenged this argument and asked VeriSign to demonstrate why its database is different “from a stock certificate”, according to a report by CNET.
Kremen’s attorneys, on the other hand, accuse VeriSign of breaching an “implied” contract of ownership of the sex.com domain. They also claim that, if the domain name registry had notified Kremen and asked him if he approved the transfer, the case would have been avoided.
The judges are expected to issue a ruling within the following weeks or months.