While Gary was developing his dating and classifieds ads websites, Cohen was executing a well-planned strategy to make his theft secure by acquiring a trademark in Sex.Com from the U.S. Patent & Trademark Office (the “USPTO”). On May 20, 1996, seven months after Cohen sent the forged letter, one of his lawyers, Leonard Duboff of Portland, filed USPTO Service Mark Application #751-6638. Although many people scoffed at the notion of trademarking “Sex,” on the grounds that it was “merely descriptive of the product,” Duboff almost did it. The key to his near-success was Cohen’s willingness to swear in his official trademark declaration that, based on his prior use of the mark in commerce, Sex.Com had become “distinctive,” despite its descriptive character. Based on Cohen’s declaration, the USPTO examining attorney concluded that Sex.Com was a valid trademark, and ordered it “published for opposition” in the Trademark Gazette. Gary then learned of the application, and Sheri Falco filed an opposition.
When I took over the case, I sent the USPTO a copy of the third amended complaint, which caused the USPTO to suspend proceedings. Still, the mere fact that the USPTO had approved Sex.Com for publication was troubling, because one thing was becoming increasingly clear in the legal world–trademark ownership trumps the mere registration of the domain name. If Cohen could establish that Gary had registered the domain name in violation of Cohen’s pre-existing trademark, then Gary would be a cybersquatter, with no rights to the name at all. Cohen’s cross-complaint against Gary alleged a cybersquatting claim under the new anti-cybersquatting law. So Cohen’s “trademark defense” was very much a live issue.
We got the complete Sex.Com trademark application file from the USPTO. Cohen’s application included documents that claimed to show he had used Sex.Com as part of an online business called the French Connection BBS. The file contains a series of documents that tell a believable story of events that never happened. Without anyone to contradict those facts, it’s not surprising the USPTO examining attorney was deceived.
The USPTO awards trademarks only to those who show that they generate revenue from use of the trademark, so Cohen had to do the numbers for his imaginary business activity. Looking over his shoulder on March 19, 1997, we would have seen him seated at his computer, typing this:
I, STEPHEN M. COHEN, declare that:
1. I am the owner of the website http://www.sex.com and am making this declaration in the belief that the trademark “SEX.COM” has become distinctive of the services of my website by reason of my substantial and continued use in commerce of the mark for at least seventeen (17) years immediately before the date of this statement. Prior to use of the mark on my website, it was used on my electronic bulletin board.
2. The mark SEX.COM is recognized in the trade and by consumers of my services indicating my services.
3. Income from services performed under the SEX.COM mark since its introduction has been as follows:
1979: $4,872
1980: $11,370
1981: $13,770
1982: $15,320
1983: $14,780
1984: $15,270
1985: $18,550
1986: $21,990
1987: $41,020
1988: $57,720
1989: $68,010
1990: $72,233
1991: $88,670
1992: $62,450
1993: $84,950
1994: $97,010
1995: $186,440
As an inspired piece of imaginative writing, this apparently dry statement of numerical income would not seem to rank high; however, upon further consideration, the subtleties appear. No one can fail to notice that business has improved steadily over the years without any notable alteration in the trend except for a brief stumble, from $88,670 to $62,450 in 1992, when Cohen suffered minor business interruption due to his induction into Club Fed. Nor could anyone miss the run of double numbers that seems to put the whole column in motion. Each number is a helpless conscript in Cohen’s war against reality. Take $72,233, a royal number if ever there was one, who appeared, like a state dignitary on the wrong floor of an apartment building, in the decade-marking year 1990. Compare Cohen’s highjacking of this regal figure with his induction of the hard-working $15,270, who rang in solid returns for 1984. Finally, in 1995, the year he stole Sex.Com, like the sun separating the clouds, his numbers break into six figures, a sign of much better days to come. History is thus manufactured by those bold enough to seize it while others are napping.
When I started practicing as a lawyer in L.A., trademark law wasn’t cool. Anything to do with the USPTO was considered deadly dull, to be avoided by a smart associate at all costs. Patent and trademark lawyers were considered nerds, and the only sexy intellectual properties were music, movies and software. Nevertheless, after two years in the L.A. litigation department of the venerable Morgan, Lewis & Bockius, I was lured by substantially higher pay to a New York firm that did the trademark enforcement work for Louis Vuitton, the famous luxury goods manufacturer.
Our receptionist at the firm, the lovely African goddess Donna Grimes, loved to say every syllable of the firm name: “Hello, Reboul, MacMurray, Hewitt, Maynard and Kristol,” she would brightly recite every time she answered the phone. The job was politically incorrect. I spent much of my time filing lawsuits against people who sold luggage that looks exactly like Louis Vuitton, complete with the intersecting “LV” logo, but is actually counterfeit, manufactured in Korean linoleum factories. These lawsuits were necessary to avoid the damaging effects on the brand that result when a Beverly Hills matron mistakenly grabs the cleaning lady’s purse off the counter on her way to meet with her charity group, and ends up trying to pay for lunch at an exclusive eatery with a handful of bus tokens. Thus, I worked hard to get the fake stuff out of the garment district chop shops and South Central LA swapmeets in order to keep prices for the real stuff high at Neiman Marcus, Saks 5th Avenue and other trendy outlets.
I called this job “keeping the world safe for luxury goods,” and learned the usual MO for the trademark enforcement lawyer, which is a sort of rinky-dink imitation of undercover narcotics work. Certainly it has a similar effect, keeping prices high by suppressing the sale of contraband. I often refer to the DEA as the Office of Narcotics Price Maintenance. Like the DEA, we hired trademark narcs and set up buy-and-bust operations. First we hired private investigators to “make buys” of the infringing merchandise, then we would use these paid informants to swear out an application for a search and seizure order, which would be secretly issued by an obliging federal judge. With a crew of off-duty LAPD and a stack of paperwork about three inches thick, we would head over to the infringer’s place of business, then and there to take the phony luggage into custody, leaving sad-faced Koreans with a stack of legal documents and nothing left to sell. This was called a good day.
One day I had too much of a good thing. The night before I’d seized a bunch of luggage from a gal named Melissa, who was selling through Tupperware-type house parties. She was a nice blonde gal with about six years of partying on her thin Mayflower features. She had good quality fake LV. Because of the controlled setting, I went alone with only one cop, a cool-handed off-duty LAPD homicide detective. Our narc, Jodi, ushered us into Melissa’s living room and we saw all the tan and brown leather LV logos. The homicide dick is standing behind me as I move forward with a stack of papers. Melissa smiles her “Hello, gentlemen” smile, but it freezes on her face, and she follows up with “What’s goin’ on?” She looks incredulous. Jodi’s having a hard time, but she stays professional. I give Melissa the paperwork and explain why we have to take the stuff. I put the fake LV in the back of my car, street-value around $10,000 dollars.
The next morning I went downtown to do another, much bigger raid. I drove my car, a turquoise-blue late-seventies Dodge Swinger with a white vinyl top, to a loading dock near Santee Alley in the L.A. garment district. There, by pre-arrangement, I met my crew -- a half-dozen off-duty cops, my boss Andy Tashman, and the disgruntled Mexican worker who was tired of making $25/day working for the big LV pusher. This guy, who told me the job was a step up from selling Mexican popsicles for $8 a day, had signed an affidavit fingering five different locations. I left my Swinger with Melissa’s luggage in the back seat. That day we seized about $200,000 worth of luggage from three locations, packing it into big trucks for transport.
When I got back to my car, though, I not only had three parking tickets, I had an empty back seat. A Swinger is a two-door style, and the two doors are easy to pop with a slim-jim. Someone had done it. No evidence against Melissa. I had to report to the judge the status of the lost evidence, so I buried the information in a declaration that I handed to Melissa when she showed up at the post-seizure hearing. Any lawyer seeing the loss of the evidence, would’ve hit the sirens and the overhead lights, and had me up against the wall. My case against Melissa would’ve evaporated. It might be difficult to prove Melissa’s LV was counterfeit, now that I’d lost it. But Larry Lydick, Senior Judge, never mentioned the disappearance of the evidence at the court hearing, choosing instead to lecture Melissa about the error of her ways. I felt like the abyss had yawned open, then shut, swallowing only Melissa.
I left Reboul after barely a year doing this kind of work. At the Christmas party in New York City that year, a partner asked me how I was enjoying “the Vuitton work.” With a chipper smile I responded without hesitation, “Oh, it’s great. I love making Korean women cry.” The partner laughed wryly, and several other lawyers raised their champagne glasses and murmured assent to second my candor. Still, I’ve often said we learn the most from the worst jobs, and what I’d learned at Reboul proved useful early on in the Sex.Com case, when Gary and I performed a search of all the computerized docketing records of the United States Federal Court system, looking for any cases in which a Stephen Michael Cohen had been a party.
Our search turned up a large number of lawsuits involving Cohen, including one called Ashton-Tate v. Stephen Michael Cohen, John Cook and the French Connection. Indeed, Cohen had identified this case in his Rule 26 disclosures, but without providing the case number. I knew it was a trademark and copyright enforcement lawsuit filed by the SPA, the Software Protection Association, to seize computers that were being used to sell pirated software. As it happened, while at Reboul, I also worked for the SPA. So I subpoenaed the records from Howard, Rice, the big Bay Area lawfirm that had represented the SPA. A paralegal was able to retrieve a box of documents including a videotape. For a few hundred bucks, she sent me the lot.
The box contained printouts of what appeared on the computer screen when you dialed up the French Connection back in 1989. These were made by the SPA investigators, who signed declarations filed with the court, describing the business operations of the French Connection. Private investigator Richard Klaus’s declaration said he’d met Cohen, who took him to the address of Midcom in Orange County, showed him a million dollars worth of computers, and told him they were running the French Connection. The Klaus declaration also stated that the French Connection charged a $15/month membership fee, for which the user obtained access to a large database of pirated software. The French Connection had no sexual content. It was a supermarket for stolen software, including some of the big moneymakers of the day, like Lotus 1-2-3, WordStar and Word Perfect. Best of all, the videotape showed Richard Klaus dialing up the French Connection on a personal computer, revealing how the system worked. It did not, at any point, open a portal into a world of online porn.
The box also contained a news story from an Orange County newspaper, detailing how Cohen had been charged by the City of Tustin with running a house of prostitution. Some of the jury believed him when he said no, it was a private swing club, because he was acquitted. Although the French Connection in the eighties was never what Cohen later claimed it was, but rather what Klaus’s videotape shows, Cohen reimagined events, blurring the line between the Tustin swinger-club activity and the French Connection, to gin up a plausible story for claiming that Sex.Com was his based on prior use. Cohen’s claim that he began using Sex.Com five years before domain names were invented in 1984 was not a gaffe, but part of the big-lie strategy. The way Dorband explained it, “.com” was a file ending, like “.doc” or “.exe,” and Sex.Com was a “service” that earned money and became distinctive. I think I got more benefit from the SPA’s suit against the French Connection than the SPA did. Cohen gave the SPA lawyers the runaround for months, dodging service of process, pretending to be a lawyer named “Frank Butler” for purposes of delay, and promising to settle, but never signing the settlement papers. The file was ultimately closed for lack of action. Although originally filed under seal by the SPA, by 1999 the seal had been lifted, so I looked forward to showing the documents to Cohen at his deposition.
To nail it all down, I wanted to find Richard Klaus. My private investigator, Paul Nyland of Beverly Hills, traced Klaus to a pair of P.O. Boxes in Chloride and Bullhead City, Arizona. I sent him two Express Mail letters, one to each mailbox, but he never answered. I was disappointed, since I wanted to go to Chloride, having never been there. I often wondered who Klaus was hiding from.