Sun, Aug 13, 2006 - Page 9 News List

The battle for the sex.com domain name

The decade-long tussle over the world's most seductive Internet address is a retelling of the Trojan War story for the digital age

By Kieren Mccarthy  /  THE GUARDIAN , LONDON

No strategy was too devious and no approach too risky in the struggle to own sex.com. From the very first day that Kremen finally sued Cohen -- July 9, 1998 -- it was a high-stakes game with a worldly fortune guaranteed to the victor and the promise of ruination to the loser. Each knew his entire life depended on winning, and each knew that only one of them was ever going to win.

The trouble is that Stephen Cohen refuses to accept he has been beaten. He lost the sex.com domain in court back in November 2000, but has yet to pay one cent of the US$65 million he was subsequently ordered to give Gary Kremen.

To stop the courts getting at him, Cohen moved all his money between October 2000 and April 2001 to hidden offshore accounts and then moved himself to Mexico. Worried about Kremen's determination to get him, he then moved to Monte Carlo, living the high-life for a few years before returning to Tijuana some time in 2004. Despite Cohen's constant pretense to be in other parts of the world, Kremen discovered his nemesis was back and started plotting to get him dragged into the US.

But before his plan came to fruition, fate intervened. Cohen's stepdaughter was arrested trying to smuggle 92kg of marijuana across the border in her car, insured in Cohen's name. The Mexican police started taking an interest in the con man.

Four months later, on Oct. 27 last year, he was arrested and transported across the border to sit in the same jail as his daughter. Two months later he sat in a San Jose jail facing Kremen and Kremen's lawyers, refusing to give any details about where his money was. Including interest, he now owes Kremen US$82 million, and Kremen wants it.

The judge told Cohen that he will stay in jail until he hands over bank details, but eight months later Cohen's absolute refusal to be beaten means he is still there under lock and key, having not given a single usable piece of information.

Cohen can certainly afford the massive fine, despite his endless protestations. A court appointed receiver back in 2001 estimated he had made at least US$40 million profit from sex.com alone between September 1995 and November 2000, but accepted that he had been stymied by Cohen stealing his own bank records while they were being copied for the court to review. Kremen's team of specialist financial investigators have since traced huge transfers of funds which suggest Cohen is sitting on several hundred million dollars.

When Kremen did go after Cohen, Cohen used his huge income from sex.com to frustrate the legal fight. But then the dotcom boom hit and Kremen cashed in, most profitably with a US$3 million windfall thanks to an early investment in content management company Interwoven. Even so it took Kremen another 14 months to get sex.com back.

From there it was another three years and a few more million in legal fees to finally get Network Solutions, the company that had wrongly given Cohen control of sex.com (and then refused to hand it back), to sit down at the settlement table with Kremen. They paid him an estimated US$20 million not to go to trial.

But Kremen had already won his main victory -- recognition by the US legal system on July 25, 2003, that domain names were in fact property and an individual has rights over it, establishing a fundamental pillar within Internet law.

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