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Internet Law & Litigation
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CharlesCarreon.com
Internet Law & Litigation
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The Sex.com Case
The Internet domain name sex.com is a web portal owned by Escom LLC. It was the focus of one of the most publicized legal actions about ownership of domain names. A 2008 book covering the case, called The Sex.com Chronicles, was written by Charles Carreon who was lead counsel in the case.
History:
In 1994, entrepreneur Gary Kremen then founder of Match.Com, now the CEO of Grant Media, LLC registered sex.com with Network Solutions (NSI). He did not develop a site. In October 1995, NSI transferred the domain to Stephen M. Cohen, who had been trying to gain control of the domain for some time by misrepresentation, using phone calls, e-mails and forged letters.
He eventually persuaded an employee of NSI to change the ownership through illegal means. After gaining control of the domain, Cohen produced an advertising-heavy site that received up to 25 million hits a day. From payments for click-throughs and other advertising, Cohen was reportedly making $50,000 to $500,000 per month.
Kremen undertook steps to recover the domain, while Cohen claimed he obtained the domain legally from Online Classifieds (OCI). A five-year legal battle ensued, led by cyberlawyer Charles Carreon.
Kremen was victorious in November 2000, when Network Solutions was ordered to return the domain to the plaintiff. According to the record of Kremen v. Cohen, Cohen was ordered to pay $25 million into court; in April 2001, the California District Court awarded Kremen an additional $40 million for lost earnings, for a total judgment of $65 million.
Cohen appealed the judgment and refused to allow assessment of his business: He provided false information and declared most of his companies bankrupt while illegally moving assets out of US jurisdiction. When an arrest warrant was issued, Cohen fled to Mexico.
Kremen offered a $50,000 reward for information, but Cohen remained at large while continuing to file appeals that were rejected. In October 2005, Cohen was arrested in Tijuana, Mexico for immigration violations, and was handed over to US authorities.
Cohen was released from custody on December 5, 2006, when Judge Ware determined that the Court is satisfied that Cohen has provided an accounting of assets to the extent that he is able from jail.
Most notably, Charles Carreon scored a legal first: the Ninth Circuit Court of Appeals ruled that Internet domain names are personal property under California law. While that might seem obvious, given that Kremen sold it in 2006 for around $14 Million, it was far from obvious in 1999. The entire five year legal battle is covered in a book authored by Charles titled: The Sex.Com Chronicles.
Related posts:
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March 30th, 2010 at 5:17 pm
[...] if the whole saga of Sex.com being stolen and then given back to the original owner wasn’t a strange enough story, now Mike Mann, who is one of several reported owners of [...]
April 11th, 2010 at 2:20 am
[...] if the whole saga of Sex.com being stolen and then given back to the original owner wasn’t a strange enough story, now Mike [...]