The following is an excerpt from the August 28, 2000 edition of Wired News. (Visit http://www.wired.com/news/politics/0,1283,38398,00.html for the whole article.)
"On Monday, U.S. District Court Judge James Ware dismissed a theft claim -- technically called a "conversion" claim -- against the convicted felon accused of hijacking sex.com, ruling that Web domains aren't property, and therefore can't be stolen.
If there was a crime committed four years ago when Steven Cohen obtained sex.com by allegedly forging a bogus letter to Network Solutions authorizing the transfer of sex.com from its original owner, it wasn't theft, the judge found. Although sex.com's a solid enough piece of virtual real estate to support Cohen's now multi-million porn empire, legally, it's not real estate at all.
"There is simply no evidence establishing that a domain name, including sex.com," meets the definition of property " as required by the law of conversion," the judge wrote in his ruling, citing his own words from a May decision in a separate suit brought by sex.com's original owner, Gary Kremen, against domain registrar Network Solutions.
In the May decision, the judge sided with lawyers for Network Solutions, who argued that a domain name was not property, but rather a designation for a service -- akin to a phone number."
Why is this scary? It is scary because it means that property rights do not cover your domain name. If you build your entire business or hobby on the strength of your domain name, and someone takes it from you - it is not considered theft.
It also means that if a sufficiently large company with enough legal muscle decides it wants your domain name, you may have no recourse but to submit and find another.
This is just another sign that the laws have not caught up with technology. Few judges, politicians and lawyers are even actually on the web, much less familiar with it. And that is scary.