Judge Awards $65 Million in Portal Hijacking

In a record verdict against cyber-squatting, a federal judge Tuesday awarded a San Francisco entrepreneur $65 million for the five-year hijacking of his domain name sex.com.

U.S. District Judge James Ware ordered fugitive Stephen Michael Cohen and his businesses to turn over $40 million in estimated profit from Cohen’s time running the pornography portal as well as $25 million in punitive damages. He also reissued a month-old warrant for Cohen’s arrest for contempt of court.

Attorneys for Gray Kremen, the engineer and venture capitalist who registered the sex.com address for free in 1994, conceded that he isn’t likely to see Cohen behind bars. Cohen, a multiple felon who once ran an Orange County swingers’ club, lives in Tijuana.

“The number is big, but it is unlikely that I will ever see more than a small fraction,” Kremen said.

The battle opened a window on the unusually profitable world of digital porn and illustrated the loose atmosphere of Internet business.

Ware, who returned the Web site to Kremen in November, also resolved one of the lingering factual disputes in the nonjury case. Cohen obtained control of the Web address from Internet overseer Network Solutions in 1995 after sending a letter purporting to be from Kremen’s company. Ware ruled Tuesday that Cohen forged, or directed someone else to forge, that letter.

Cohen attorney Robert Dorband had promised to appeal Ware’s anticipated ruling, arguing that Kremen had mis-registered the domain name. Dorband didn’t return a call, and Cohen couldn’t be reached.

Kremen’s site recently dropped the hard-core images placed by high-paying porn advertisers. The site now has a text-based directory linking to other sex sites by topic.

“We have done what we said we were going to do--reduce the amount of pornography on the site as we transition the site to more mainstream content,” Kremen said.