The court has rejected an appeal by cyber-squatter Stephen Cohen against a $65m (拢39m) damages award that was made after Cohen obtained the domain fraudulently and used it to set up a major porn website.
The story began in 1994 when Gary Kremen registered the name sex.com with Network Solutions, which is now known as Verisign.
However, the following year Verisign transferred the domain name to Cohen after the company received a forged letter authorising the move.
The blunder Verisign made in transferring the URL to Cohen, who had just served a prison term for bankruptcy fraud, gave him instant control over a domain name that was thought to be worth over $500,000 a month in advertising revenue.
Cohen then developed a lucrative porn website at the address, before the courts returned Sex.com to Kremen in 2000. When Kremen first registered the address with Verisign, there was no written contract.
The Supreme Court ruling could have significant implications because, by holding Verisign responsible for allowing the erroneous transfer to Cohen, it treats internet addresses as property.
Verisign had contended that domain names are not legal property and thus it could not be held accountable for giving the address away even though it failed to check on the authenticity of the letter passing over ownership of the domain name.
Kremen now has the option of pursuing Verisign, which still denies blame, and if, as expected, Verisign loses it could face a legal bill running into hundreds of million of dollars.
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