Six-Year Contested Court Battle Is Over
SAN FRANCISCO, April 20 /PRNewswire/ -- Sex.Com (www. sex.com) announced
today a final settlement with VeriSign (Nasdaq: VRSN) (formerly Network
Solutions, Inc.), concluding a six-year legal fight that set several important
precedents for the future of the Internet. After the Ninth Circuit Court of
Appeals granted Sex.Com a sweeping victory that held VeriSign/Network
Solutions, Inc. (collectively "VeriSign") strictly responsible for mishandling
the famous domain name, Sex.Com and VeriSign have settled Sex.Com's lawsuit
against VeriSign.
The implications of the lawsuit are far-reaching in all areas of Internet
infrastructure and governance, as well as intellectual property law. Sex.Com
single-handedly caused the courts to define domain names as property, and thus
changed the laws governing the World Wide Web.
"After years of litigation, the Sex.Com legal battle set the key precedent
requiring domain name registrars to be accountable for their mishandling of
such an important public resource as the Internet domain name system," said
Robin Gross, an attorney who specializes in cyberspace law. "Now, registrars
must use the same level of care as any other business and will be responsible
for abusive practices," she added.
In October 1995, Stephen Michael Cohen, a many-time convicted felon, had
supposedly sent a forged letter to VeriSign, requesting the transfer of the
Sex.Com domain name from Kremen, the rightful owner of the name. VeriSign led
the courts to believe that Cohen made this request via a forged letter. It
now appears that Cohen simply picked up the phone, asked for and was granted
the Sex.Com domain name immediately. This was at a time when the queue for
domain names was over four weeks. VeriSign made no attempt to verify Stephen
Cohen's connection to Sex.Com -- of which there was none.
"It was already damaging that VeriSign had taken my domain name away from
me without my permission, and refused to give it back when shown proof that it
was stolen," said Gary Kremen, chief executive officer of Sex.Com. "I'm
ecstatic that we have reached a settlement so we can put the case behind us
and find peace in knowing that the Ninth Circuit's opinion in the Sex.Com case
will have an influential role in holding Internet registrars responsible for
mishandling their customers' domain name properties."
In its landmark decision, the U.S. Court of Appeals found that VeriSign
was subject to the tort of conversion by not returning property that was owned
by another party. Despite Kremen's written complaints with absolute proof,
VeriSign did nothing to use their powers to reverse their improvident
transfer.
"The decision of the Ninth Circuit was a great victory for Internet Domain
Name registrants, and Mr. Kremen's perseverance in securing that decision was
truly commendable," said William Bode, managing partner of the Washington,
D.C. law firm, Bode & Grenier, LLP, General Counsel for the American Internet
Registrants Association, and author of a friend of the court brief filed in
the case. "Hundreds of domain name registrants lost their valuable property
due to the negligence of Domain Name Registrars. The court's decision
proclaimed that those afflicted registrants have a remedy under law to recover
their damages -- providing much-needed protection to Internet entrepreneurs.
This ultimately will enhance Internet commerce."
Douglas Masters, a partner with Loeb & Loeb LLP in Chicago, Illinois,
says, "Gary's Sex.Com victory is likely to influence legal developments in
important areas beyond domain names. In this digital age, the handling of
intangible property has taken on enormous importance. The 9th Circuit's
decision is an important step in applying settled principles to this new
realm."
Kremen (http://www.kremen.com) was awarded a $65 million judgment against Cohen
for stealing the domain name, which the U.S. Supreme Court declined to
overturn on June 12, 2003.
About Grant Media, LLC
Sex.Com and its non-adult companion search engine, (GalaxySearch.Com), are
wholly owned and operated by Grant Media, LLC, receiving on average 25 million
search queries, 150,000-200,000 unique users and 400,000+ page-views daily. A
majority of the traffic is type-in traffic; many are first-time surfers
looking for specific adult content. Additionally Sex.Com distributes its
search results and banners to over 25 other search engines internationally.
Sex.Com is committed to maintaining a leadership position in the quality of
our products and services. As a result of its strong adherence to the laws
and practices in the global Internet community, Sex.Com is able to ensure a
safe, stable and growing online advertising environment.
Case No: 01-15899
For more information, please contact: Grant Media, LLC/Sex.Com Joanna
Posner, jposner@grantmedia.com, (858) 492-9447
This release was issued through The Xpress Press News Service, merging e-
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media outlets worldwide. For more information, visit
http://www.XpressPress.com
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