A Brief Legal Update

Stephen Yagielowicz

A couple of recent developments in the Internet legal arena may bear interest for adult Webmasters - including an appeal to the US Supreme Court by a fugitive conman involved in the domain dispute case, and the assault on spam by the Federal Trade Commission: Fugitive’s Supreme Appeal
The first piece comes to us from Joanna Posner at, the popular adult search portal which announced that Stephen Michael Cohen filed an appeal to the Supreme Court after his appeal to both a three judge panel and the entire U.S. Court of Appeals for the Ninth Circuit was rejected. Cohen, an ex-convict and the perpetrator in the high profile Sex.Com domain name heist, contends that the Ninth Circuit's dismissal should be reversed. Cohen's appeal of his $65 million judgment was dismissed because he is a fugitive from justice.

In 1995, VeriSign Inc. (Nasdaq: VRSN), formerly Network Solutions, Inc. (NSI), handed over the popular domain name to Cohen after he sent a forged letter to NSI headquarters. "We are convinced that the Supreme Court will agree that you can't appeal a judgment when you're on the lam," said Kremen's attorney Jim Wagstaffe of San Francisco. "It defies reason to say that you can use the legal system to your benefit while, at the same time, you're thumbing your nose at law enforcement officials."

Every year, over 7,000 similar petitions are filed with the Supreme Court. The court typically takes about 90 of them. "These petitions are rarely granted even under the best of circumstances. In this case, it's simple: the Supreme Court has no reason to accept review," said Steven Adamski, a partner at Adamski Moroski Madden & Green LLP, a full service business law firm. "I think even Mr. Cohen understands his chances are zero."

VeriSign still awaits a ruling on their responsibility and corresponding financial accountability for unilaterally assisting in the theft of the lucrative domain name when they did not verify the domain name transfer request document. In August 2002, when the U.S. Court of Appeals agreed to expedite oral arguments in's appeal against NSI, Judge Kozinski expressed his surprise at NSI's disregard for an unmistakably forged letter. "I mean this is really sloppy. You wouldn't approve this if you had seen this letter," said Kozinski to VeriSign's attorneys.

If the Ninth Circuit recognizes a domain name as property that can be converted, VeriSign could be found liable and could face a financial burden as low as zero to as large as a percentage of their current market capitalization. While some camps feel that a major judgment against VeriSign could mean “the death of the Internet” a worse fate may be the courts deciding that domain names are not ‘property’ – we’ll be watching this case with great interest…

The FTC Looks to Can SPAM
The Federal Trade Commission has published an agenda and list of participants for a three-day "Spam Forum" it will host Wednesday, April 30 through Friday, May 2. The forum is being held to address the proliferation of unsolicited commercial e-mail and to explore the technical, legal, and financial issues associated with it.

The forum will be held at the Federal Trade Commission, Washington, D.C. It will be open to the public and pre-registration is not required. The detailed agenda is available here.

Panels include discussions of: E-mail Address Gathering, Falsity in Sending Spam, Open Relays/Open Proxies/Form Mail Scripts, The Economics of Spam, Blacklists, Best Practices, Wireless Spam, Federal and State Legislation, International Perspectives, Litigation Challenges, Technological Solutions to Spam and Structural Changes to E-Mail.

Those wishing to attend the Spam Forum should be aware that it is open to the public, that the FTC anticipates large attendance, and that space is extremely limited. The Conference Center at the FTC's Satellite Building seats only 350 people, with overflow rooms providing video and audio broadcasts of the Forum at the FTC's Headquarters building – a 15- minute walk from the Satellite Building. Space also is limited in the overflow rooms. Accordingly, the facilities may not be able to accommodate all of those who wish to attend – so if you are concerned with spam legislation and its potential impact on your operations, make plans to attend early.

While you may feel that these two cases have little potential impact on your businesses, a more thorough understanding of the factors and forces involved, and the precedents they establish could well affect you and your bottom line directly. Stay tuned, and be informed! ~ Stephen

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