VeriSign Dispute Over Sex.Com Domain Name Sent to State Court
By Pham-Duy Nguyen
San Francisco, Jan. 3 (Bloomberg) -- A federal appeals court asked California's high court to resolve questions about the Sex.Com domain name in a dispute over whether VeriSign Inc.'s Network Solutions must pay as much as $65 million for improperly transferring the address.
Gary Kremen appealed a 2001 U.S. District Court ruling that Network Solutions was immune from civil suits stemming from the mishandling of the address, which was stolen from him by Stephen Cohen. Cohen, a fugitive in Mexico, hasn't paid a $65 million judgment for acquiring the domain name through fraud and Kremen sued the company that manages Internet addresses to recover a portion of the money.
The 9th U.S. Circuit Court of Appeals today said the question of whether an Internet address has value such as a stock certificate or an automobile was a matter of state law and sent the case to the California Supreme Court.
``With the growing ubiquity and importance of the Internet and the number of domain names increasing exponentially -- there are now 30 million domain names -- clarity in the application of California state law to domain names presents an important question for resolution,'' Judge M. Margaret McKeown wrote on behalf of the three-judge panel.
Network Solutions's attorney said the domain name doesn't fit the legal requirements for conversion because it's just a series of digits in a database.
``A domain name is not tangible,'' said attorney David Dolkas, who argued the case in front of the three-judge panel. ``It's an electronic address that exists because of a contractual relationship.''
Parking Lot Attendant
Jim Wagstaffe, Kremen's attorney, compared Network Solutions's role in the dispute between Kremen and Cohen as the parking lot attendant who was careless on his watch.
``Both decisions recognize that a domain name is a property,'' he said. The only question remaining for the state's high court, is whether the Network Solutions, like the parking attendant, can be sued.
In a dissent, Judge Alex Kozinski said the case is about a ``long common law tradition,'' and wasn't a novel issue for the California Supreme Court to decide.
``This case in not about `regulation of the Internet under state law,' as the majority believes,'' Kozinski wrote. ``It's about general principles of tort law that happen to apply to the Internet because that's the type of property (Network Solutions) gave away.''
Wagstaffe said he was buoyed by Kozinski's dissent. ``Judge Kozinski would clearly find in favor of my client,'' he said.
All proceedings in the case are delayed until the California Supreme Court decides whether it will take up the issue, the appeals court said.
Shares of VeriSign rose 6 cents to $8.55 in Nasdaq Stock Market trading. |
