California Supreme Court to Decide Whether Domain Names Are Property

The U.S. Court of Appeals (9thCir.) has issued an Order certifying questions to be considered by the California Supreme Court in the case of Kremen v. Cohen and Network Solutions. In particular, the Court of Appeals asked the question in its Order whether an Internet domain name lies within the scope of property subject to the law of conversion. This case arises out of the celebrated sex.com dispute. In particular, sex.com had been registered by Gary Kremin in 1994 with Network Solutions, Inc. (NSI). Stephen Cohen subsequently forged a letter authorizing NSI to cancel Kremin's registration and allowing its registration by Cohen. Kremin sued Cohen and NSI. Kremin won back the domain name and was awarded a judgment for damages against Cohen. Kremin, however, cannot collect on his judgment. At issue is Kremin's claim against NSI alleging fraudulent transfer. Kremin asserts that NSI is liable in tort for conversion as a bailee. While the Appeals Court could have ruled on this issue, it chose not to, reasoning that the tort of conversion is a matter of state law, that the ultimate authority is the Supreme Court of California, and that the Supreme Court of California has not yet ruled on whether a domain name is property for the purposes of the tort of conversion. Courts applying California law have, in fact, recognized conversion of intangible property without inquiring whether it was merged in a document. The Supreme Court of California may change this approach when it examines the issue with respect to Internet domain names. For a copy of the Order, visit: http://makeashorterlink.com/?J56422E13