Kremen v. Cohen 99 F.Supp.2d 1168, N.D.Cal. May 30, 2000

Plaintiff Gary Kremen registered the domain name sex.com with NSI on May 9, 1994. Plaintiff identified Online Classified, Inc. ("Online Classified") as the registering organization.

In a letter dated October 15, 1995, Sharon Dimmick, purportedly on behalf of Online Classified, informed Defendant Stephen Cohen that Online Classified had "decided to abandon the domain name sex.com" and requested that Mr. Cohen "notify the internet registration on our behalf, to delete [their] domain name sex.com."

Shortly thereafter, Mr. Cohen registered sex.com in the name of a company he operated.

Plaintiff contends that the October 15, 1995 letter is a forgery by Mr. Cohen.

On October 16, 1998, Plaintiff filed suit against numerous defendants, including NSI, for its deletion of the domain name. Plaintiff alleges the following causes of action against NSI: (1) breach of contract, (2) breach of intended third-party beneficiary contract, (3) breach of fiduciary duty, (4) negligent misrepresentation, (5) conspiracy *1171to convert property and (6) conversion of bailee.

NSI moved for summary judgment as to all claims against it.

Conversion and Conspiracy to Convert Property
California law does recognize "conversion of intangibles represented by documents, such as a bonds, notes, bills of exchange, stock certificates, and warehouse receipts." Id. Intangible property such as "goodwill of business, trade secrets, a newspaper route, or a laundry list of customers" are not subject to conversion. Id. In Berger v. Hanlon, 129 F.3d 505, 517 (9th Cir.1997) (citing Restatement (Second) of Torts, § 242 and comments), the Ninth Circuit noted that "[a]lthough the common law rule has been relaxed somewhat, and the tort may now reach the misappropriation of intangible rights customarily merged in or identified with some document, it has not yet been extended further."
 

There is simply no evidence establishing that a domain name, including sex.com, is "merged in or identified with" a document or other tangible object. Thus, under the traditional precepts governing the tort of conversion, a domain name is not protected intangible property

The Court recognizes that the present action invites abandoning the traditional strictures of conversion to encompass forms of intangible property never contemplated in its formation. However, this Court heeds the California Supreme Court's admonitions to exercise restraint in imposing " '[new tort duties] when to do so would involve complex policy decisions,' (citation omitted) especially when such decisions are more appropriately the subject of legislative deliberation and resolution."

The Court leaves it to the legislature to fashion an appropriate statutory scheme to protect dormant domain names unprotected by trademark law. See 15 U.S.C. § 1125(d). However, it simply notes the imprudence of superimposing the archaic principles governing the tort of conversion onto the nebulous realm of the Internet.
In sum, the Court grants summary adjudication of both the conversion and conspiracy to convert property causes of action against NSI.

Why no discussion of in rem provisions of federal statute?
 

NEWS!!  Nov 28, 2000 Court orders sex.com returned to Mr. Kremen.