Appeals court to hear suit against VeriSign

A US Court of Appeals is to decide whether VeriSign is liable for damages after transferring the sex.com domain name to someone...

A US Court of Appeals is to decide whether VeriSign is liable for damages after transferring the sex.com domain name to someone who forged a letter claiming ownership.

According to groups supporting Gary Kremen, the owner of sex.com, this is a case with potentially broad implications for anyone who registers a domain name.

Kremen has spent seven years and $3.4m (£2.2m) in legal fees for the right to keep a domain name he says he should have never lost.

Two years ago, he won a partial victory when a US District Court ordered sex.com to be returned to him. He also won $65m (£42m), uncollected so far, against the forger.

But Kremen failed to convince the court that VeriSign, formerly Network Solutions, was liable for its actions. The court ruled that the company's role was limited under law.

Kremen registered the sex.com name in 1994. A year later, Network Solutions received a letter claiming to represent Kremen's company and authorising the transfer of the domain name. Network Solutions transferred the name.

VeriSign "just can't hold up their hands and say we have no liability for mistakes", said Kremen. "Their argument is: 'We can turn off anyone's domain at any time.' Imagine if they did that to IBM. It's ridiculous."

Kremen's argument has found support from the American Internet Registrants Association (AIRA) and the Electronic Frontier Foundation (EEF). Both have filed supporting briefs.

The stakes in this case are very substantial, according to William Bode, the attorney representing AIRA. If Kremen reverses the lower court and finds VeriSign liable for managing domain names "then I expect to see dozens and dozens of lawsuits filed" against the company, and possibly a class action lawsuit, he said.

EFF said that if the lower court decision stands, domain name registries would be immunised from liability "for even gross misconduct in [the] handling of domain names generally".

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