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The sex appeal in the domain name battle over sex.com is in the details: fugitives, bounties, theft and pornography. But the case — in particular the plaintiff’s claims against Network Solutions Inc. — is likely to force the 9th U.S. Circuit Court of Appeals to measure timeworn property laws against the Internet, where nothing seems tangible and possession is harder to define than simply drawing lines in the dirt. On Tuesday, a three-judge panel seemed inclined to reinstate a suit against the company that once served as the exclusive postmaster for U.S. Internet addresses, a move which could have significant implications toward defining property in the Information Age. “Let’s say you lose,” Judge Alex Kozinski asked a lawyer for the company, adding the caveat that the question did not mean his client would, in fact, lose. “What happens to your client? What is the next step in the analysis?” During the argument, which lasted more than an hour, the court heard from several lawyers. Most of the time was spent hearing arguments on behalf of Stephen Michael Cohen, who fraudulently obtained the Web site name and was hit with a $65 million judgment last year; Gary Kremen, the Internet entrepreneur who filed the case and now owns the hardcore site; and Network Solutions. Whether the Internet is the Next Big Thing or the biggest bubble that ever burst, one thing is as constant there as everywhere else: Sex sells. And the case over one of the more lucrative domains imaginable has been closely followed. The case originated in 1994, when Cohen sent Network Solutions a phony letter saying he should be registered as the new owner since Kremen no longer wanted the name. Network Solutions transferred ownership without verifying the letter with Kremen. Cohen, an ex-con, built sex.com into a popular Internet destination. Kremen sued Cohen in 1998 for unlawfully converting his property, the sex.com domain. But courts have usually held that under the tort of conversion, the property must be tangible. U.S. District Judge James Ware of the Northern District of California ordered the domain name returned to Kremen last year, but rejected his claims against Network Solutions. Kremen’s lawyer, James Wagstaffe, told the panel Tuesday the case was one of “conversion by diversion,” arguing that Network Solutions is liable for assigning sex.com to Cohen. The Kerr & Wagstaffe partner conceded that a domain name is something you can’t put your hands around, but that it is tangible because its removal denies a person the right to use it. Network Solutions lawyer David Dolkas argued that a conversion must include tangible property — a document, something. Without it, there cannot be a key element of the tort of conversion: possession. “There’s no formal certification that’s given to a domain name registrant that says: ‘Here’s proof of your property registration,’” the Gray Cary Ware & Freidenrich partner said. The judges seemed to buy Wagstaffe’s argument. Judge M. Margaret McKeown asked Dolkas if Network Solutions would be liable if a disgruntled employee sabotaged access to a valuable domain, such as Yahoo.com or Amazon.com. When Dolkas suggested that it may not be, Kozinski replied: “Surely that can’t be right.” Kozinski threw out more examples. What about stock ownership where records are kept solely on a computer? he asked. What about ATM withdrawals where money is charged from one account rather than another? “Why isn’t this exactly, precisely, 100 percent the same?” Kozinski asked. Dolkas said Network Solutions, which was acquired by VeriSign Inc. in 2000, merely served as a translator between domain names and numeric IP addresses, which computers use to navigate the Internet. He said an adverse ruling would “eviscerate the tort of conversions” and “work a world of hurt not just on Network Solutions but on all domain name registrars” and other businesses as well. “It doesn’t help to say that the sky is falling,” McKeown replied. “I don’t know if it will or not.” Ware had been reluctant to extend the tort into uncharted waters without state lawmakers having a chance to address it. McKeown asked Wagstaffe if the court should certify the question to the California Supreme Court, since it involves state tort law. “I think it doesn’t need to be,” Wagstaffe said. “I think the law is clearer than you think.” The panel seemed marginally interested in Cohen’s appeal of the massive judgment, which he argues leaves him unable to purchase necessities, such as toilet paper. Not only did Ware rule against him, but during the trial the judge issued a warrant for his arrest for failing to appear. Kremen offered a $50,000 reward for Cohen’s arrest, but has since withdrawn it. Cohen’s lawyer argued that he was and is under house arrest in Mexico. The validity of the arrest, like the extent of Cohen’s assets and virtually everything else in the case, is hotly contested. It did not help that Cohen’s lawyer, Pasadena, Calif., solo W. Michael Mayock, began his argument this way: “I feel sorry for Judge Ware. He’s sort of like the guy in a B-movie who gets hit with a sucker punch.” Mayock ventured about two more minutes into his argument before he was stopped by Kozinski and lectured about the wisdom of saying a U.S. District Court judge was suckered. “Why don’t you start over,” Kozinski said.

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