337 F.3d 1024 (9th Cir. 2003)
Kremen v. Cohen—often called the "sex.com" case—is a landmark in the legal treatment of digital assets.
Is an internet domain name property under California law such that it is subject to the tort of conversion, and can a registrar be liable for conversion by wrongfully transferring a domain name based on a forged authorization?
Under California law, conversion is the wrongful exercise of dominion over another's property. Its elements are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's wrongful act or disposition of the plaintiff's property rights; and (3) resulting damages. Conversion is a strict-liability tort; good faith or innocence is not a defense. An intangible interest qualifies as property for conversion if it is: (a) capable of precise definition; (b) capable of exclusive possession or control; and (c) the putative owner has a legitimate claim to exclusivity. California law does not require a strict "merger" of the intangible interest into a document to sustain a conversion claim.
A domain name is property under California law and is subject to the tort of conversion. NSI's transfer of sex.com to Cohen based on a forged letter constituted a wrongful disposition of Kremen's property interest sufficient to support a conversion claim. The Ninth Circuit reversed the district court's summary judgment for NSI and remanded for further proceedings.
Kremen is a seminal case recognizing that valuable digital identifiers can be "property" protected by common-law torts. It broadens the scope of conversion to encompass certain intangibles without requiring merger into a document, aligning traditional doctrines with modern assets. The decision places registrars and analogous intermediaries on notice that they may face strict-liability exposure for mishandled transfers, incentivizing robust verification procedures. For students, the case illustrates: (1) how courts derive property tests for new asset classes; (2) the strict-liability nature of conversion; and (3) the dynamic interplay between tort and property concepts in technology contexts.