Summary

  • Gary Kremen registered Sex.com in 1994. In 1995, Network Solutions changed the registration after receiving a letter that a court later found was forged, without first contacting the listed registrant.
  • The Ninth Circuit held in 2003 that a domain name could be property subject to conversion under California law because the interest was precisely defined, capable of exclusive control, and supported by a legitimate claim to exclusivity.
  • The decision did not declare every digital interest to be property, did not base liability on modern ICANN transfer rules, and did not itself fix Network Solutions’ final damages after remand.
  • The durable operational lesson is a receipt chain: authority, independent confirmation, execution, notice, registry state, dispute handling, and restoration must remain distinguishable.

One letter, one authoritative record

Gary Kremen registered Sex.com on 9 May 1994 through Network Solutions for Online Classifieds, Inc. He named himself as the administrative and technical contact. Registration was free at the time, but the absence of a price did not make the database entry inconsequential. The record determined who could direct the domain and who could authorize later changes.

In October 1995, Network Solutions received a letter on Online Classifieds letterhead. It purported to authorize deletion of the existing registration and registration of the name to Stephen Cohen. The district court later found that the letter was forged. Network Solutions did not contact Kremen before acting. It deleted the registration held for Online Classifieds and registered the name to a company controlled by Cohen.

That sequence matters more than the notoriety of the domain. The decisive control act was not a broad claim about “ownership of the internet.” It was a registrar changing a defined authoritative record on purported authority, without confirmation from the contact already recorded as entitled to direct it.

When Kremen demanded reinstatement, Network Solutions said it would not restore the domain without a court order. The district court eventually restored the name to Kremen and entered a $65 million judgment against Cohen. Kremen had limited success collecting that judgment. The later claim against Network Solutions therefore raised a different question: could the registrar be liable in conversion for wrongfully disposing of the registrant’s interest?

What the courts decided—and what they did not

The federal district court granted summary judgment to Network Solutions. It rejected Kremen’s implied-contract theory and his claim that registrants were intended third-party beneficiaries of the federal cooperative agreement. On conversion, the court applied a documentary-merger limitation and treated the intangible domain interest as outside the tort.

The Ninth Circuit affirmed the rejection of the contract theories but reversed on conversion. Applying California law, it asked whether the claimed interest was capable of precise definition, capable of exclusive possession or control, and supported by the claimant’s legitimate claim to exclusivity.

A particular domain name met that test. It was precisely identifiable. The registrant controlled where users who invoked the name would be directed. Registration supplied a legitimate claim to exclusive control of that name. California law, the appellate court concluded, did not impose a strict rule that an intangible interest had to be merged into a paper document before conversion could apply.

The procedural limit is essential. The Ninth Circuit did not calculate final conversion damages against Network Solutions. It held that the claim should not have been removed on summary judgment and sent the matter back for further proceedings. Nor was the opinion a universal code of digital property. It applied California conversion law to the specific interest represented by a domain registration and to the record-changing conduct before it.

A 2024 Ninth Circuit decision, Best Carpet Values, illustrates that limit. The court declined to extend Kremen’s property analysis automatically to transient copies of websites displayed on users’ screens. The comparison is useful because it resists the slogan that anything digital is property. The claimed interest must still be identified and tested.

The control surface behind the legal holding

The case exposes at least six separate control points. First is the evidence that identifies the registrant and the person authorized to request a change. Second is confirmation with the existing registrant before an irreversible alteration. Third is classification: a registrant change is not necessarily the same operation as an inter-registrar transfer. Fourth is the registrar’s execution log and notice. Fifth is the registry’s acceptance of registrar-submitted state. Sixth is the court or restoration receipt used when the authoritative record is disputed.

Collapsing those points into a single word—“transfer”—conceals where the failure occurred. A forged instruction is an alleged authority event. Deleting one registrant and entering another is an execution event. Changing the registry-backed state is an authoritative-state event. Refusing restoration without a court order is a dispute-handling position. Each needs its own actor, timestamp, evidence and reason.

Current ICANN transfer policy adds AuthInfo codes, confirmations and notices to defined transfer and registrant-change operations. That policy is useful contemporary context, not retroactive law. The standardized framework arrived after the 1995 event and was not the legal basis of the 2003 holding. Saying that Network Solutions violated today’s procedure would replace chronology with hindsight.

The same discipline applies to institutional names. Network Solutions performed registration services; later corporate arrangements placed those services in the VeriSign group while registry and registrar functions remained analytically distinct. Corporate succession may explain records and present-day directory links, but it does not rewrite which actor performed the 1995 change.

The case therefore supports a narrow proposition with broad practical value. Where an operator controls a uniquely defined record that directs real-world activity, an unauthorized state change may interfere with an interest the law recognizes. Whether another digital interest qualifies depends on that interest, that jurisdiction and that claim—not on analogy alone.