Sex.com Case Finally 'Over'

Spad writes "The Register is reporting that Stephen Michael Cohen has, unsurprisingly, lost his appeal against the $65m in costs awarded to Gary Kremen for defrauding him out of the sex.com domain name almost 6 years ago. However, Cohen is currently a fugitive from justice in Mexico, with his assets in various offshore accounts, making it very difficult for Mr Kremen to claim his money. Kremen is now pursuing a $100m suit against VeriSign for signing over the domain in the first place, which he is expected to win." See our previous story for more background.

Comments

Verisign in big trouble

[Anonymous Coward]

If they do loose this one others will follow. I read recently they let Al Jazerra's domain go to a US citizen using a forged fax.

Re:Verisign in big trouble

[Organic_Info]

"can't be as bad as what it was being used for"

What providing a different point of view?

I watched a BBC documenty about Al Jazerra filmed during the Iraq conflict. While their slant may be towards their regions audience I found them to be quite imapartial. Sure they showed pictures of captured/dead coalition soldiers (God rest their souls) that western audiences found disagreeable - but at the end of the day they showed no censorship in favour of coalition or Iraq sides**.

I'd much prefer to see both sides of the story than be force fed the propagander of a single side - ours or theirs.

**Al Jazerra stopped reporting any Iraq news for a day as the the Iraq government wanted two of their reporters removing for showing coalition progress in to Baghdad - the Iraq government relented and asked Al Jazerra back.

Re:Verisign in big trouble

[Otter]

I watched a BBC documenty about Al Jazerra filmed during the Iraq conflict. While their slant may be towards their regions audience I found them to be quite imapartial.

Not that I'm qualified to express an opinion on this one way or the other but -- how on earth can you determine them to be "quite impartial" on the basis of a BBC documentary about them? Presumably anything from the BBC is utterly objective and impartial?

Incidentally, al-Jazeera's old head was on the payroll of Iraqi intelligence, for what that's worth...

Re:Verisign in big trouble

[onion2k]

Incidentally, al-Jazeera's old head was on the payroll of Iraqi intelligence, for what that's worth...

The head of Fox News is George Bush's cousin. What of it?

End of the internet?

[Tickenest]

Man, this story just keeps getting funnier. At the end of the article, VeriSign claims in its court filings that if it loses this case and sets a precedent for others who have been defrauded out of their domains, it'll be "the end of the Internet". Anyone wanna set up a Paypal account to collect donations to stave off the end of the Internet?

Re:End of the internet?

[LorneReams]

Yeah, like god forbid they actually do their fucking jobs. Boo hoo, poor VeriSign. Maybe this will teach them to be more diligent in their dealing in the future. That can only HELP the internet, not end it.

Re:End of the internet?

[Dark Paladin]

[tongue_in_cheek]

I think Verisign is suddenly realizing that "Oh - you mean we, as the people who hold onto the domain names, actually have a responsibility to protect our clients against fraud? I mean - what's up with that? Do you go after a bank if somebody writes a whole lot of checks in your name and only offers them a social security card as ID but no picture identification?

"What? You do? Well, that's just UnAmerican - if businesses are held up to a standard of laws - what? They usually are? Well, shit on me! Who knew!

"Obviously, this means the end of the Internet, then. Who ever took responsibility for what happened on the Internet?"
[/tongue_in_cheek]

Re:End of the internet?

[Ryosen]

Not even a social security card. The correct analogy would be a forged check. It's fraud, plain and simple and, yes, the bank would have a legal responsibility.

What galls me is that Verisign has successfully implanted into the justice system the belief that a domain name is not physical property. This, to me at least, is an asinine assertion devised only to alleviate themselves of professional liability.

While they apparently have no legal responsibility, there is still the professional responsibility of verifying a claim to transfer of ownership. Verisign's inaction encourages fraud, plain and simple, and it is corporate irresponsibility such as this that leads to draconian government regulation of public assets, such as the Internet. If business is not willing to regulate itself responibly, government will step in and do it for them. Invariably, as has happened in the past, the two never have the same agenda.

The loss of Verisign would not bring about the end of the Internet any more than the loss of MGM would bring about the end of Hollywood or United Airlines would eliminate the travel industry.

It's time that corporations be held accountable for their actions or, as is the case here, inactions.

[/rant]

Re:End of the internet?

[malia8888]

Verisign had a fiduciary duty to protect Mr. Kremen from theft of his property. They didn't do their jobs and they should pay.

They aren't guilty of theft like Steven Michael Cohen. Verisign is guilty of not protecting the domain name which in this case is very valuable property.

This is like a bank giving away the money of a customer to someone who fraudulently obtains access to their account.

Just by the premise that Verisign accepts people's money to protect and secure a domain name is proof in itself that domains are valuable. If they weren't valuable companies and individuals wouldn't be paying hard, cold cash to assure that the domain doesn't slip away from them.

Verisign would be better off compensating Mr. Kremen than sending a message to all their customers that they are not trustworthy.

Domain names

[nepheles]

This goes to show just how messed-up the current domain-ownership system is. For property, there is a tightly-controlled system of deeds, and clearly defined ownership. It is almost impossible to acquire ownership of land without the consent of the owner. This is how it should be

Many domains, however, are more valuable than land. And there are far too many cases such as this with disputed ownership and other such claims. A rethink of the system is necessary. It does nobody any good for people such as this to be able to abuse the system.

Re:Domain names

[EvilTwinSkippy]

Having just bought a house, it is VERY comforting to know the amount of paperwork that goes into a title transfer.

Of course, you run into the issue of recognizing a string of characters as property. A plot of land doesn't move. I can't type it out a new plot of land. I can go out and jump up and down on it.

A string of characters is a thought. At the very most it's like a trademark. Frankly I could fold up shop as FUBAR.COM and start life over again as NUBI.COM, and through the miracle of search engines, poeple would find me again.

And man oh man, if "domains" start to be property, people will start suing for using their "domains" in disparaging ways. Frankly, I think the whole domain name system is silly. If you are looking for "Realistic" speakers, and try to find them on realistic.com, you are in for quite a suprise. I've learned to trust only the search engines.

Re:Domain names

[aug24]

The problem here is that this 'land-equiv' can be created and can also become useless (who's going to want walmart.com if Walmart is sold to Tesco?).

The disputes tend mostly to be quite reasonable. If I have a company called Fred, based in France and you have a company called Fred based in the US, who gets fred.com? (If you lot would only use .co.us like you should've in the first place, most of this stuff wouldn't be a problem!)

In this case though, the problem is that there are complete morons working at Verisign who passed over a domain based on a blatantly forged letter, then would'nt transfer it back when their error was pointed out.

That's like a public notary accepting a badly forged will without checking with the deceased. No, hang on, I'll change that: accepting a badly forged contract of sale for a house without checking with the current owner.

As I see it, this is entirely Verisign's fault, and they are currently trying to argue that domains aren't property precisely to avoid the responsibility they have to administrate domains competently

J.

Re:Domain names

[swillden]

For property, there is a tightly-controlled system of deeds, and clearly defined ownership. It is almost impossible to acquire ownership of land without the consent of the owner.

This is not true.

There are any number of ways that the ownership of land can end up in dispute; my father-in-law tried to buy a house a few years ago and ended up just losing the entire purchase amount, and not getting the house, because it turned out that the seller didn't have a clear title. During a refinance of my house last year (which I have "owned" for over 10 years now) it was suddenly discovered that a creditor of the former owner had a $30,000 lien on it! And, actually, residential real estate is the *least* likely to have problems. Commercial property is often stickier, and unimproved land can be really bad.

The reason you can buy a house or other real estate with some degree of confidence isn't because the state does such an amazingly good job with managing the deeds, it's because when you buy a house you pay $300 to a "title insurance company". The first time I bought a house, I thought "Man, what a way to print money... $300 bucks and all they have to do for it is go to the county courthouse and look up the title."

In fact, when you pay the title insurance company you're buying an insurance policy: they're committing to defend your title and ensure that you either (a) keep the land or (b) get your money back, even if (b) means they have to cough it up. Where my father-in-law went wrong was that he chose not to use a title company (his choice, since he was paying cash), and that's also why commercial and unimproved real estate also often go wrong.

How should this translate into the domain name space? That's hard to say. The title company has an advantage when deciding on the price of your premium -- they have a pretty good idea of how much the house is worth, and while that value may double in a decade it won't grow by a factor of a million. In the case of domain names, most of them are pretty much worthless, but some of them end up being really valuable, and they're all treated the same. Maybe that's what's needed: the domain name equivalent of a property value assessor, so that the equivalent of a title company can provide insurance with a reasonable premium.

007 must be involved somehow

[AtariAmarok]

With all the international intrigue, this sounds like a plot for a new film:

"James Bond: Imminent Domain"

which has a working title

"Live and Let Domain-Sqaut"

(The title "The Spy who SEX.COM'ed me" has been rejected")

If not property right, then what?

[cybaea]

The core of Verisign's defence seems to be that domain names are not property rights. From the BBC article on the same ruling:

Forcing Verisign to accept blame for transferring the domain name in the first place could prove equally difficult.

Verisign maintains that domain names are not legal property and as such it cannot be held accountable for giving it away.

If it loses, as legal experts expect, Verisign would face a huge legal bill and fines of up to £100m.

Two questions: what excatly am I buying when I buy a domain name from Verisign and why do "legal experts" think they'll loose that battle -- presumably they have an extensive user agreement that clears them of responsibility for all and any wrongdoings?

Confused.

Why sue Cohen?

[NeB_Zero]

Why sue Cohen? I mean, yes it was wrong of him to try and defraud VeriSign, but isn't it really VeriSign's fault for not VeriFying the transfer? Let VeriSign sue Cohen for attempt to defraud AFTER they discover that the transfer was not sanctioned. If VeriSign would have provided a little more customer service, Kremen wouldn't be out any money, and Cohen would not be hunted. Just a thought.

Re:Why sue Cohen?

[LordKaT]

While he defrauded VeriSign, sex.com was a legitimate business, bringing in $500,000/month in advertising revenue alone. He, literally, destroyed a business. You go after both VeriSign and him, not just VeriSign.

--LordKaT

Re:ffs its just a domain !

[foofboy]

The big deal is, to quote the article
"[sex.com] is worth $500,000 a month just in advertising space"

In other words...

[seanmeister]

... he lost his sex appeal.

ba-dum-bum. :-|

Re:Bounty?

[b_sirrobin]

It looks like the bounty is a measly $50,000.


I might be crazy, but I'm not crazy enough to get in a gun fight with Mexican police for a chance at $50,000.

downanddirty.sex?

[EChris]

So when do y'all think the .sex TLD will come out? Or would that make sex sites too easy to censor? Or is that a good thing for the pr0n business, being easy to block by parental units, avoiding costly court cases?

sex.com would be such a moot issue if there was a .sex top level domain, in my opinion.

Chris

SEX.COM - i used to work for a pr0n company...

[ryan303]

I used to work for these 2 guys that paid Cohen to put their banners on sex.com. The reason this domain is so sought after is becasue it rakes in somthing like a 200,000$ a day just on referal sign-up traffic. You had to pay Cohen 10k-20k A DAY just to have your pr0n banner on the front of sex.com's site. So with no overhead, just one html page that needs to be served, its a genius business model. I actually got to meet Cohen, and he is not someone you wanna mess with. Right when he walked in our office you could tell, he was ready to beat the crap outta anyone who looked at him wrong. This was back in 1999, Unfortunately, the original owner will probably not see a dime from Cohen.

Re:Bounty?

[Nick of NSTime]

I've been in gunfights with Mexican police over a $4 bottle of tequila.

Better Title

[FutureShoks]

"Sex.com case finally reaches climax" would have been a much better title for this story.