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Last Updated: Monday, 28 July, 2003, 11:36 GMT 12:36 UK
Sex.com row rumbles on
Sex.com domain, BBC
The tangled tale of sex.com is still rumbling on
Internet domain seller Verisign is facing a multi-million dollar claim for damages over the way it has handled the lucrative sex.com domain.

The owner of sex.com is seeking damages from Verisign because it allowed the name to be hijacked by someone using a forged letter.

Sex.com's owner is looking for money from the domain firm because the man who wrote the letter has fled the US.

The claim for damages is possible because a California court has decreed that domains should be considered as property and deserve to be treated with similar care.

Cash call

Programmer Gary Kremen bought the sex.com domain in 1994 and intended to turn it into a porn portal.

However, in 1995 it was hijacked by Stephen Cohen who used a fake letter to convince the domain registrar, at that time called Network Solutions, to pass control to him.

Mr Cohen made millions of dollars from his ownership of sex.com but lost control of it in 2000 when a court decided that Mr Kremen was the rightful owner.

It is the first time a court has applied traditional property protections to a domain name
James Wagstaffe, attorney
In April 2001 Mr Cohen was ordered to pay Mr Kremen $65m (40m) in compensation for lost profits and a further $25m in punitive damages.

Rather than pay over the money, Mr Cohen transferred his assets out of the US and fled to Mexico.

He was declared a fugitive from justice and US Marshals were sent to apprehend him

After this Mr Kremen sued Verisign, which bought Network Solutions in a $21bn deal in March 2000, over its handling of the domain transfer.

In the latest twist to the saga, Mr Kremen has won this legal case and gained permission to get some of the missing cash from Verisign.

He can do this because San Francisco's Ninth Circuit Court of Appeals has ruled that domains should be regarded in the same way as land or a home and deserve a similar duty of care.

"This is a landmark internet decision," said James Wagstaffe, attorney for Mr Kremen. "It is the first time a court has applied traditional property protections to a domain name."

The case could have consequences for every firm that sells domain names and the way they handle claims over ownership.

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