Re: The Sex.Com Chronicles, by Charles Carreon
Posted: Fri Jun 13, 2014 1:58 am
NOTHING LEFT TO TRY
It was late November 2000. We were tracking the progress of our weapons arcing toward ground zero. They met a little anti-missile defense in the form of motions to strike the declarations of Carreon and Whatley, with their wild tales of Cohen’s evil deeds, but the days of easy deflection were over for Cohen. We vaporized his obstructions, and our weapons continued en route to their targets.
Judge Ware had finally set the hearing for a date we hoped would stick -- November 27th -- and the entire Oregon team was coming down to see what our efforts would produce. Although Gary invited us all to stay at his new place on Third Street, it was an aesthetic purgatory in a run-down industrial district across from the wharfs. Gary had lost old Bob Deschl as his computer geek and pizza procurer, replacing him with a tweeker named Crab whose sleeping habits were irregular. Crab bragged about his remodeling skills, but gritty brick dust coated everything in the house for months, including the bed sheets, rendering it uninhabitable by members of the fairer sex. Not that Gary seemed to mind. He called his new headquarters Dogpatch, named after the bar down the street, and was building out a dungeon in the basement, forging a new, kinkier image.
With victory approaching, and relief in sight, crappy lodgings were more than I expected my wife, child and fellow-lawyer to endure. So Tara, Ana, Sue and I stayed at the Lighthouse Hotel in Pacifica that has great views of the pounding surf, and is just twenty minutes north of the San Jose federal courthouse.
The morning of the 27th, the weather was sunny as Tara steered the Camry South on the 280 through the rolling green hills that fringe the Pacific coast. We sailed past the exit to Half-Moon Bay, the Stanford campus, and Sandhill Road, and rolled into San Jose, down the broad curving streets, and into the parking lot south of the Federal Courthouse. Inside, we met up with Wagstaffe and Pam, who would be arguing the trademark issue after Jim tackled the main issue of conversion of personal property. The bright, sunlit areas on the second floor of the courthouse were rather solemn, but our mood was bright. Diestel showed up, smiling with friendly anticipation. Ana and Sue talked cheerfully with everyone. Tara and Diestel hit it off. In the last year, Gary’s team had swelled to three firms and eight lawyers -- two from my office, two from Diestel’s, and four from Jim’s.
Then Gary showed up with a copy of the San Jose Mercury News. There it was, on the front page, below the fold, with a color picture of Judge Ware -- an article about the case. Wagstaffe had finally come through with the publicity he said he could conjure, and it was the first time an article about the case had hit the print media. All prior articles had been digital only. Somehow, the fact that the mainstream news had already picked it up made it seem more likely that we would win. How, after all, could Judge Ware tell the whole world that Cohen, a convicted con-man, should keep what he had stolen? Perhaps Gary had been right all along, and what was simply needed was that everyone should know that “the guy stole it!”
In the courtroom, Jim, Pam, Gary and I sat down at the large conference-sized counsel table next to the jury box, settling into the blue leather swivel rockers edged with faceted brass tacks. Tara, Sue and Ana sat in the gallery on our side of the aisle -- the left side, as we sat facing the bench. It was one of those moments that make you proud to be a lawyer, despite what you know about the profession. The surroundings pull it out of you, as you contemplate the majestic symbols on the wall, and enjoy the physical separation between those who sit at counsel table and those who do not. You appreciate the size of the room, the solemnity of the bailiff, the mental isolation of the court reporter, the indulgent power of the clerk who takes business cards and speaks with the advocates. I for one cannot forget, when standing in a federal courtroom, that this is the place, for good or ill, where right and wrong are distinguished from each other in our society, in a free-for-all of debate and argument, a fast-changing flow of facts and rules that only experts can navigate.
When the case was called and we introduced ourselves, Judge Ware seemed his usual self, but his opening words suggested something more. He began:
“Well, although this matter has been before this court in a number of different ways and in a number of different motions, and I’m familiar with the background, I’m presented here with an opportunity to adjudicate the case summarily on an argument that, as a matter of law, there’s a basis for declaratory relief being granted in favor of the plaintiff and requesting certain injunctive relief.”
Alluding to the large volume of our submissions, Judge Ware continued:
“I doubt if I would have enough time in the day today if you wanted to repeat all the arguments that you’ve made in your papers, but I wanted to give you a brief opportunity to say by way of oral presentation to the court anything you would wish to add.”
Jim began. Directing Judge Ware’s attention to the forged letter, he laid out the facts in parallel statements:
“There’s no dispute that the signature at the bottom of this page from Ms. Dimmick is forgery. There’s no dispute as to that fact. No one is arguing that this document effectuated a transfer of this domain name. There’s no dispute that Ms. Dimmick had no involvement or connection with Online Classifieds, none whatsoever. In fact, there is no dispute that Mr. Cohen prepared this letter with his friend Vito Franco. There’s no dispute that the first line of this letter saying that Mr. Cohen supposedly had numerous conversations with Ms. Dimmick was a lie. He had no conversations with her.”
With a series of gentle nods, Judge Ware confirmed the indisputability of this trio of facts. Jim continued attacking the letter, saying it was “implausible, to say the least, that an Internet company that sells online advertising would not have a connection to the Internet.” Judge Ware’s face showed that he agreed with this proposition. Judge Ware also appeared willing to infer that Cohen had substituted his own email address for Gary’s on the registration form so that, as Jim put it, “if NSI actually checked up on the bizarre letter, they would call up and say ‘Did you mean to transfer?’ and he would have impersonated Mr. Kremen.” Since ordinarily, an error in the contact fields of a computer document wouldn’t give rise to an inference of fraudulent intent, Jim deftly sprinkled mud in Cohen’s direction, alluding to his theft of the Kinko’s documents: “I would ordinarily not make that assumption, if we didn’t have a substantial history of this man impersonating people his whole life, and he’s done it in this case, impersonating a lawyer to get documents.”
Using the knife of undisputed facts to reveal the place where the decision had to be made, Jim cut to the heart of the issue:
“The signature is forged -- it’s undisputed. It’s forged ab initio, and all title transfers fail as a matter of law; therefore, the domain name must be returned and NSI has already submitted itself to your Honor’s jurisdiction to do that, to return the domain name.”
Latin phrases sometimes seem to say more than the English equivalent, or at least lawyers like to think so. Take the term ab initio, which means “from the beginning,” and provides the root for words like “initiate” and “initially.” Beginnings are fundamental to the distinctions the law must draw to establish who owns a piece of property. Ownership rights arise from lawful beginnings. Illicit beginnings generate only illegitimate claims of ownership. Law distinguishes legitimate rights from illegitimate claims. Property law is almost entirely the product of inheritance litigation, and English property law denied bastards the right to inherit a crown, a fortune, or a title. In essence, we were arguing that Cohen had a bastard’s claim to Sex.Com, and nothing more. He was a pretender, a usurper, a man without good title, and Gary Kremen was the true heir.
Judge Ware had taken it all in. Cohen’s claim was void from the beginning, because as the old rule says so simply, “no lawful title can arise from theft.” But the law has another principle of great age, which is that only those with “standing” can bring a civil suit to correct a civil wrong. Only someone who stands to inherit has standing to contest a will. Only the defrauded person can complain of a fraud. And only the person who owned a piece of property when it was stolen can file a civil complaint for conversion. Referring to Cohen’s standing argument as a “piece of confetti,” Jim dismissed “the suggestion that Mr. Cohen somehow can get away from summary judgment because the domain name was not owned by Mr. Kremen.” His argument is an excellent example of how to keep the focus on your opponent, even when the attack is on your own client’s status:
“It’s perhaps glib, but let me say it, your Honor. His argument is that ‘I stole from someone, but I don’t know from whom. It wasn’t Mr. Kremen.’ That’s not his standing to make that argument. He is not here. If someone else wants to come into this courtroom and say, ‘We’re the owner,’ they have the power to do that, but that’s not before your Honor.”
So Cohen had no standing to contest Kremen’s standing! Wagstaffe had stolen Cohen’s weapon and deftly turned it against him. Judge Ware’s face showed satisfaction at this artful turn of phrase. Nevertheless, artful phrases are not enough to win summary judgment, where every essential fact must be indisputable. We needed to remove every cloud on Gary’s title to Sex.Com, particularly those cast by his own careless statements at deposition. Fortunately, Gary had managed to obtain declarations from five of his former business partners at Electric Classifieds, Inc., whom I will call the “ECI Insiders.” As you may recall, ECI purchased Online Classifieds, Inc. (OCI). The ECI Insiders all swore that Sex.Com had always remained Gary’s personal property, and had never been assigned to OCI. Wagstaffe now laid the declarations of the ECI Insiders on the table:
“Attached as Exhibit F to my declaration are all of the declarations from people at OCI that say we never acquired Sex.Com. There is no witness in this case who says that OCI acquired Sex.Com and Mr. Kremen’s testimony, if it is read with any care whatsoever, does not say that Sex.Com was transferred to OCI.”
The team hadn’t been all of one mind about including the declarations of the ECI Insiders, because Pam and Michael were inclined to shy away from the issue, and didn’t even mention the five declarations in their legal brief in support of summary judgment. But Gary and I knew we needed the declarations, which had cost Gary a lot of time and effort to obtain. I had not addressed the problem at the writing stage, and it’s not the best practice to just toss some declarations in to the record for unexplained reasons. Nevertheless, at the last moment during our three-day marathon in Wagstaffe’s office, I had pointed out to Gary that his painfully garnered declarations weren’t being included in our submissions. After a short discussion with Wagstaffe, who agreed with our thinking, he attached them as Exhibit “F” to his own declaration. Watching Judge Ware’s approving look as he took in their importance, I was very glad Gary had been able to obtain them, and that I had made the necessary fuss to get them into the record. The ECI Insider declarations put paid to Cohen’s “standing” argument with a five-pointed seal.
Jim wrapped up his argument by passing the torch to Pam, continuing his use of festive metaphor: “So the trademark piece of confetti -- Ms. Urueta can address that.” Pam had decided to burn the confetti by arguing that no one could trademark Sex.Com. This is called proving more than you need to, but for Pam it was easier than understanding all the facts. The USPTO had already determined that Sex.Com was a descriptive mark that Cohen could trademark by showing that, despite its descriptive character, the mark had acquired “secondary meaning.” I had no argument with that conclusion, and simply contended that Cohen had tricked the USPTO into approving the registration with false statements. Cohen’s declaration that said he’d used Sex.Com in commerce long before he stole the domain in 1995 was a complete invention, and all the use of Sex.Com he’d gotten since he stole it was illegitimate. We could have gotten Cohen’s trademark registration set aside for fraud, while preserving our right to trademark the domain lawfully. However, to make such an argument would have required Pam to have a greater grasp of the facts in the USPTO file, and frankly, at the time, I was not fully up to speed on trademark issues, so Pam’s strategy became our strategy.
Pam was operating like many intelligent young lawyers do -- entirely on theory, and thus she took a theoretical tack that destroyed the future to secure the present:
“When analyzing whether or not Sex.Com can be marked in the first place, the court needs to look at the word ‘sex.’ Mr. Cohen makes the argument that Sex.Com is not generic, it is descriptive, but even that argument, your Honor, fails. For a descriptive mark to be trademarked it needs to acquire secondary meaning, and all Mr. Cohen has done is offer thirteen declarations, submitted by friends of Mr. Cohen’s, that go to the prior use of Sex.Com.”
Just thirteen declarations? On any ordinary day, that sounds like a lot of evidence -- thirteen declarations should be enough to bulwark the arguable validity of a trademark that the US Patent & Trademark Office had already concluded was protectable as a descriptive mark possessed of secondary meaning. Thirteen unrebutted declarations, as these all were, would seem likely to raise an issue of fact.
Pam needed to explain why thirteen declarations meant nothing:
“Those thirteen declarations don’t establish secondary meaning, and even if they did, those secondary meanings aren’t a survey of the relevant market. Mr. Cohen needs to show this court that, worldwide, a consumer would associate Sex.Com with YNATA, and he has failed to do that.”
Now this was a good point -- Cohen’s declarations didn’t even attempt to establish secondary meaning. Ironically, it would’ve been easy to do so, because every day, lots and lots of people type “sex.com” into their browser and hit “return.” One might presume they knew what they expected to find there. The statistics necessary to make a good “secondary meaning” argument were all there in Cohen’s computer, and he didn’t use them.
As her argument went on, Pam meandered deeper into theoretical realms, arguing there was no “likelihood of confusion” between Gary’s “use” of the domain and Cohen’s operation of the website. That was strange territory because Gary had never used Sex.Com at all, so any claim of confusion was absurd. Gary had no use, so how could it ever have conflicted with Cohen’s use? Pam theorized that Gary might someday market chocolate chip cookies through Sex.Com, and that would not infringe on Cohen’s use of it as a sex site. Theoretically, she posited, Cohen might come back to court with a trademark claim if Gary abandoned the theoretical sale of chocolate chip cookies and reverted to selling pornography. She had run so far into the woods that she was running out the other side.
At the time, however, I had no criticisms. Pam’s words were just a merry tinkle in my ears as I watched Judge Ware’s face, the mirror of my fate. Reading the transcript today, Pam sounds like a fruit loop, but Cohen’s case had been marked for death, and Judge Ware was happy to hear a nice young lady prattle on with such confidence. He could adopt her argument. It was probably correct, or not too far wrong. More importantly, Cohen’s number was up. Judge Ware was going to pull the trigger.
Dorband stood up, and began by arguing, as he had for years, that Gary lacked standing to sue, because the domain had been registered in the name of Online Classifieds, Inc., a non-existent corporation. Although Judge Ware tried to maintain the appearance of judicial neutrality, he failed. His face registered disgust as he listened to about a hundred words of Dorband’s argument, then began rebutting it vigorously with his own counter-argument. Cohen, said Judge Ware, had used a forged letter to acquire the domain! His claim was based on no valid title! He had no standing to object to Gary’s standing! He had stolen documents produced under subpoena!
It warms an advocate’s heart to hear the judge reciting his own arguments, and I swiveled in my chair at counsel table to pass amazed and delighted looks to Tara, Ana, and Sue, who reciprocated with subtle nods.
When Judge Ware concluded there was nothing new from Cohen’s side, he set aside legal issues and just asked Dorband where Cohen was. When Dorband said Cohen wasn’t there, and didn’t have to be, it was not what the judge wanted to hear. He was sick of phantoms, of conjuration, of endless wordplay. Like a lion tamed by an enchantment, suddenly recovering his ferocity, he turned on the enchanter. His cool exterior dissolved, and sharp angles of displeasure showed in the folds of his robe. It was time to back off, but a weary Dorband dug in his heels, his silver head bobbing somewhat as he deflected one after another of the judge’s hostile questions. Judge Ware seemed shocked by the mildness of Dorband’s deflections, as if some emotion from him, some acknowledgement that the spell was unwinding, was required.
Judge Ware had wanted to be sure that Dorband had no evidence to rebut the claims of actual fraud and theft. We had exposed the workings of Cohen’s larcenous machine in our papers, and Judge Ware had apparently examined them in detail. He had clearly watched the video. Only that could explain his rage, barely restrained by judicial decorum, which revealed itself as a slow detonation proceeding in Judge Ware’s consciousness. That suppressed explosion was setting off an even bigger charge of outrage that had slowly accumulated in the judge’s mind, fed by all the evidence drawn from our briefs and exhibits -- Cohen’s lifetime of crime, his liberal use of forgery to take what was not his, the network of phony companies with nonexistent directors, the pipeline of cash, the entire map of Cohen’s Big Lie. Though it had all seemed unlikely upon first hearing, we had proven it all, even down to catching Cohen on video stealing bank records.
When Cohen decided to steal the Wells Fargo documents, he blithely staked the last of his personal capital on a wild bet, probably without even thinking about what he was doing. When the camera caught him at his game, he lost everything. After that, Cohen was just a thief, and the judge knew how to deal with thieves.
Judge Ware had been fully primed when he took the bench. He knew all he needed to know about Steven Michael Cohen, and nothing Dorband said had changed his mind. He was now permitting himself to go ballistic. His voice began to rumble like thunder. I turned back toward my crew and gave them the raised-eyebrows look. They returned the same look. It was real. We had arrived on the plain of judgment.
Like the wind that announces the onset of a sudden storm, Judge Ware swept the last of Dorband’s arguments aside, and declared that he was ruling in Gary’s favor on everything. He was directing NSI to immediately put the registration in Gary’s name. He was freezing all Cohen’s real estate and monetary assets, and he was going to require Cohen to pay a bond into Court to secure the judgment he intended to levy against him. He would reduce his order to writing during the noon hour, and we could pick it up after lunch. So that Cohen didn’t pull any clever tricks before then, he told Dorband to call Cohen immediately and tell him that the freeze order was effective now.
The thunder of Judge Ware’s voice had barely subsided when Dorband asked whether he was imposing a temporary or a permanent injunction. Judge Ware answered that it was permanent. Dorband then ventured to ask about the trial date. Judge Ware took umbrage at the very notion of a trial, as his response made clear: “Trial? What trial? There is nothing left for a jury to try!”
It was late November 2000. We were tracking the progress of our weapons arcing toward ground zero. They met a little anti-missile defense in the form of motions to strike the declarations of Carreon and Whatley, with their wild tales of Cohen’s evil deeds, but the days of easy deflection were over for Cohen. We vaporized his obstructions, and our weapons continued en route to their targets.
Judge Ware had finally set the hearing for a date we hoped would stick -- November 27th -- and the entire Oregon team was coming down to see what our efforts would produce. Although Gary invited us all to stay at his new place on Third Street, it was an aesthetic purgatory in a run-down industrial district across from the wharfs. Gary had lost old Bob Deschl as his computer geek and pizza procurer, replacing him with a tweeker named Crab whose sleeping habits were irregular. Crab bragged about his remodeling skills, but gritty brick dust coated everything in the house for months, including the bed sheets, rendering it uninhabitable by members of the fairer sex. Not that Gary seemed to mind. He called his new headquarters Dogpatch, named after the bar down the street, and was building out a dungeon in the basement, forging a new, kinkier image.
With victory approaching, and relief in sight, crappy lodgings were more than I expected my wife, child and fellow-lawyer to endure. So Tara, Ana, Sue and I stayed at the Lighthouse Hotel in Pacifica that has great views of the pounding surf, and is just twenty minutes north of the San Jose federal courthouse.
The morning of the 27th, the weather was sunny as Tara steered the Camry South on the 280 through the rolling green hills that fringe the Pacific coast. We sailed past the exit to Half-Moon Bay, the Stanford campus, and Sandhill Road, and rolled into San Jose, down the broad curving streets, and into the parking lot south of the Federal Courthouse. Inside, we met up with Wagstaffe and Pam, who would be arguing the trademark issue after Jim tackled the main issue of conversion of personal property. The bright, sunlit areas on the second floor of the courthouse were rather solemn, but our mood was bright. Diestel showed up, smiling with friendly anticipation. Ana and Sue talked cheerfully with everyone. Tara and Diestel hit it off. In the last year, Gary’s team had swelled to three firms and eight lawyers -- two from my office, two from Diestel’s, and four from Jim’s.
Then Gary showed up with a copy of the San Jose Mercury News. There it was, on the front page, below the fold, with a color picture of Judge Ware -- an article about the case. Wagstaffe had finally come through with the publicity he said he could conjure, and it was the first time an article about the case had hit the print media. All prior articles had been digital only. Somehow, the fact that the mainstream news had already picked it up made it seem more likely that we would win. How, after all, could Judge Ware tell the whole world that Cohen, a convicted con-man, should keep what he had stolen? Perhaps Gary had been right all along, and what was simply needed was that everyone should know that “the guy stole it!”
In the courtroom, Jim, Pam, Gary and I sat down at the large conference-sized counsel table next to the jury box, settling into the blue leather swivel rockers edged with faceted brass tacks. Tara, Sue and Ana sat in the gallery on our side of the aisle -- the left side, as we sat facing the bench. It was one of those moments that make you proud to be a lawyer, despite what you know about the profession. The surroundings pull it out of you, as you contemplate the majestic symbols on the wall, and enjoy the physical separation between those who sit at counsel table and those who do not. You appreciate the size of the room, the solemnity of the bailiff, the mental isolation of the court reporter, the indulgent power of the clerk who takes business cards and speaks with the advocates. I for one cannot forget, when standing in a federal courtroom, that this is the place, for good or ill, where right and wrong are distinguished from each other in our society, in a free-for-all of debate and argument, a fast-changing flow of facts and rules that only experts can navigate.
When the case was called and we introduced ourselves, Judge Ware seemed his usual self, but his opening words suggested something more. He began:
“Well, although this matter has been before this court in a number of different ways and in a number of different motions, and I’m familiar with the background, I’m presented here with an opportunity to adjudicate the case summarily on an argument that, as a matter of law, there’s a basis for declaratory relief being granted in favor of the plaintiff and requesting certain injunctive relief.”
Alluding to the large volume of our submissions, Judge Ware continued:
“I doubt if I would have enough time in the day today if you wanted to repeat all the arguments that you’ve made in your papers, but I wanted to give you a brief opportunity to say by way of oral presentation to the court anything you would wish to add.”
Jim began. Directing Judge Ware’s attention to the forged letter, he laid out the facts in parallel statements:
“There’s no dispute that the signature at the bottom of this page from Ms. Dimmick is forgery. There’s no dispute as to that fact. No one is arguing that this document effectuated a transfer of this domain name. There’s no dispute that Ms. Dimmick had no involvement or connection with Online Classifieds, none whatsoever. In fact, there is no dispute that Mr. Cohen prepared this letter with his friend Vito Franco. There’s no dispute that the first line of this letter saying that Mr. Cohen supposedly had numerous conversations with Ms. Dimmick was a lie. He had no conversations with her.”
With a series of gentle nods, Judge Ware confirmed the indisputability of this trio of facts. Jim continued attacking the letter, saying it was “implausible, to say the least, that an Internet company that sells online advertising would not have a connection to the Internet.” Judge Ware’s face showed that he agreed with this proposition. Judge Ware also appeared willing to infer that Cohen had substituted his own email address for Gary’s on the registration form so that, as Jim put it, “if NSI actually checked up on the bizarre letter, they would call up and say ‘Did you mean to transfer?’ and he would have impersonated Mr. Kremen.” Since ordinarily, an error in the contact fields of a computer document wouldn’t give rise to an inference of fraudulent intent, Jim deftly sprinkled mud in Cohen’s direction, alluding to his theft of the Kinko’s documents: “I would ordinarily not make that assumption, if we didn’t have a substantial history of this man impersonating people his whole life, and he’s done it in this case, impersonating a lawyer to get documents.”
Using the knife of undisputed facts to reveal the place where the decision had to be made, Jim cut to the heart of the issue:
“The signature is forged -- it’s undisputed. It’s forged ab initio, and all title transfers fail as a matter of law; therefore, the domain name must be returned and NSI has already submitted itself to your Honor’s jurisdiction to do that, to return the domain name.”
Latin phrases sometimes seem to say more than the English equivalent, or at least lawyers like to think so. Take the term ab initio, which means “from the beginning,” and provides the root for words like “initiate” and “initially.” Beginnings are fundamental to the distinctions the law must draw to establish who owns a piece of property. Ownership rights arise from lawful beginnings. Illicit beginnings generate only illegitimate claims of ownership. Law distinguishes legitimate rights from illegitimate claims. Property law is almost entirely the product of inheritance litigation, and English property law denied bastards the right to inherit a crown, a fortune, or a title. In essence, we were arguing that Cohen had a bastard’s claim to Sex.Com, and nothing more. He was a pretender, a usurper, a man without good title, and Gary Kremen was the true heir.
Judge Ware had taken it all in. Cohen’s claim was void from the beginning, because as the old rule says so simply, “no lawful title can arise from theft.” But the law has another principle of great age, which is that only those with “standing” can bring a civil suit to correct a civil wrong. Only someone who stands to inherit has standing to contest a will. Only the defrauded person can complain of a fraud. And only the person who owned a piece of property when it was stolen can file a civil complaint for conversion. Referring to Cohen’s standing argument as a “piece of confetti,” Jim dismissed “the suggestion that Mr. Cohen somehow can get away from summary judgment because the domain name was not owned by Mr. Kremen.” His argument is an excellent example of how to keep the focus on your opponent, even when the attack is on your own client’s status:
“It’s perhaps glib, but let me say it, your Honor. His argument is that ‘I stole from someone, but I don’t know from whom. It wasn’t Mr. Kremen.’ That’s not his standing to make that argument. He is not here. If someone else wants to come into this courtroom and say, ‘We’re the owner,’ they have the power to do that, but that’s not before your Honor.”
So Cohen had no standing to contest Kremen’s standing! Wagstaffe had stolen Cohen’s weapon and deftly turned it against him. Judge Ware’s face showed satisfaction at this artful turn of phrase. Nevertheless, artful phrases are not enough to win summary judgment, where every essential fact must be indisputable. We needed to remove every cloud on Gary’s title to Sex.Com, particularly those cast by his own careless statements at deposition. Fortunately, Gary had managed to obtain declarations from five of his former business partners at Electric Classifieds, Inc., whom I will call the “ECI Insiders.” As you may recall, ECI purchased Online Classifieds, Inc. (OCI). The ECI Insiders all swore that Sex.Com had always remained Gary’s personal property, and had never been assigned to OCI. Wagstaffe now laid the declarations of the ECI Insiders on the table:
“Attached as Exhibit F to my declaration are all of the declarations from people at OCI that say we never acquired Sex.Com. There is no witness in this case who says that OCI acquired Sex.Com and Mr. Kremen’s testimony, if it is read with any care whatsoever, does not say that Sex.Com was transferred to OCI.”
The team hadn’t been all of one mind about including the declarations of the ECI Insiders, because Pam and Michael were inclined to shy away from the issue, and didn’t even mention the five declarations in their legal brief in support of summary judgment. But Gary and I knew we needed the declarations, which had cost Gary a lot of time and effort to obtain. I had not addressed the problem at the writing stage, and it’s not the best practice to just toss some declarations in to the record for unexplained reasons. Nevertheless, at the last moment during our three-day marathon in Wagstaffe’s office, I had pointed out to Gary that his painfully garnered declarations weren’t being included in our submissions. After a short discussion with Wagstaffe, who agreed with our thinking, he attached them as Exhibit “F” to his own declaration. Watching Judge Ware’s approving look as he took in their importance, I was very glad Gary had been able to obtain them, and that I had made the necessary fuss to get them into the record. The ECI Insider declarations put paid to Cohen’s “standing” argument with a five-pointed seal.
Jim wrapped up his argument by passing the torch to Pam, continuing his use of festive metaphor: “So the trademark piece of confetti -- Ms. Urueta can address that.” Pam had decided to burn the confetti by arguing that no one could trademark Sex.Com. This is called proving more than you need to, but for Pam it was easier than understanding all the facts. The USPTO had already determined that Sex.Com was a descriptive mark that Cohen could trademark by showing that, despite its descriptive character, the mark had acquired “secondary meaning.” I had no argument with that conclusion, and simply contended that Cohen had tricked the USPTO into approving the registration with false statements. Cohen’s declaration that said he’d used Sex.Com in commerce long before he stole the domain in 1995 was a complete invention, and all the use of Sex.Com he’d gotten since he stole it was illegitimate. We could have gotten Cohen’s trademark registration set aside for fraud, while preserving our right to trademark the domain lawfully. However, to make such an argument would have required Pam to have a greater grasp of the facts in the USPTO file, and frankly, at the time, I was not fully up to speed on trademark issues, so Pam’s strategy became our strategy.
Pam was operating like many intelligent young lawyers do -- entirely on theory, and thus she took a theoretical tack that destroyed the future to secure the present:
“When analyzing whether or not Sex.Com can be marked in the first place, the court needs to look at the word ‘sex.’ Mr. Cohen makes the argument that Sex.Com is not generic, it is descriptive, but even that argument, your Honor, fails. For a descriptive mark to be trademarked it needs to acquire secondary meaning, and all Mr. Cohen has done is offer thirteen declarations, submitted by friends of Mr. Cohen’s, that go to the prior use of Sex.Com.”
Just thirteen declarations? On any ordinary day, that sounds like a lot of evidence -- thirteen declarations should be enough to bulwark the arguable validity of a trademark that the US Patent & Trademark Office had already concluded was protectable as a descriptive mark possessed of secondary meaning. Thirteen unrebutted declarations, as these all were, would seem likely to raise an issue of fact.
Pam needed to explain why thirteen declarations meant nothing:
“Those thirteen declarations don’t establish secondary meaning, and even if they did, those secondary meanings aren’t a survey of the relevant market. Mr. Cohen needs to show this court that, worldwide, a consumer would associate Sex.Com with YNATA, and he has failed to do that.”
Now this was a good point -- Cohen’s declarations didn’t even attempt to establish secondary meaning. Ironically, it would’ve been easy to do so, because every day, lots and lots of people type “sex.com” into their browser and hit “return.” One might presume they knew what they expected to find there. The statistics necessary to make a good “secondary meaning” argument were all there in Cohen’s computer, and he didn’t use them.
As her argument went on, Pam meandered deeper into theoretical realms, arguing there was no “likelihood of confusion” between Gary’s “use” of the domain and Cohen’s operation of the website. That was strange territory because Gary had never used Sex.Com at all, so any claim of confusion was absurd. Gary had no use, so how could it ever have conflicted with Cohen’s use? Pam theorized that Gary might someday market chocolate chip cookies through Sex.Com, and that would not infringe on Cohen’s use of it as a sex site. Theoretically, she posited, Cohen might come back to court with a trademark claim if Gary abandoned the theoretical sale of chocolate chip cookies and reverted to selling pornography. She had run so far into the woods that she was running out the other side.
At the time, however, I had no criticisms. Pam’s words were just a merry tinkle in my ears as I watched Judge Ware’s face, the mirror of my fate. Reading the transcript today, Pam sounds like a fruit loop, but Cohen’s case had been marked for death, and Judge Ware was happy to hear a nice young lady prattle on with such confidence. He could adopt her argument. It was probably correct, or not too far wrong. More importantly, Cohen’s number was up. Judge Ware was going to pull the trigger.
Dorband stood up, and began by arguing, as he had for years, that Gary lacked standing to sue, because the domain had been registered in the name of Online Classifieds, Inc., a non-existent corporation. Although Judge Ware tried to maintain the appearance of judicial neutrality, he failed. His face registered disgust as he listened to about a hundred words of Dorband’s argument, then began rebutting it vigorously with his own counter-argument. Cohen, said Judge Ware, had used a forged letter to acquire the domain! His claim was based on no valid title! He had no standing to object to Gary’s standing! He had stolen documents produced under subpoena!
It warms an advocate’s heart to hear the judge reciting his own arguments, and I swiveled in my chair at counsel table to pass amazed and delighted looks to Tara, Ana, and Sue, who reciprocated with subtle nods.
When Judge Ware concluded there was nothing new from Cohen’s side, he set aside legal issues and just asked Dorband where Cohen was. When Dorband said Cohen wasn’t there, and didn’t have to be, it was not what the judge wanted to hear. He was sick of phantoms, of conjuration, of endless wordplay. Like a lion tamed by an enchantment, suddenly recovering his ferocity, he turned on the enchanter. His cool exterior dissolved, and sharp angles of displeasure showed in the folds of his robe. It was time to back off, but a weary Dorband dug in his heels, his silver head bobbing somewhat as he deflected one after another of the judge’s hostile questions. Judge Ware seemed shocked by the mildness of Dorband’s deflections, as if some emotion from him, some acknowledgement that the spell was unwinding, was required.
Judge Ware had wanted to be sure that Dorband had no evidence to rebut the claims of actual fraud and theft. We had exposed the workings of Cohen’s larcenous machine in our papers, and Judge Ware had apparently examined them in detail. He had clearly watched the video. Only that could explain his rage, barely restrained by judicial decorum, which revealed itself as a slow detonation proceeding in Judge Ware’s consciousness. That suppressed explosion was setting off an even bigger charge of outrage that had slowly accumulated in the judge’s mind, fed by all the evidence drawn from our briefs and exhibits -- Cohen’s lifetime of crime, his liberal use of forgery to take what was not his, the network of phony companies with nonexistent directors, the pipeline of cash, the entire map of Cohen’s Big Lie. Though it had all seemed unlikely upon first hearing, we had proven it all, even down to catching Cohen on video stealing bank records.
When Cohen decided to steal the Wells Fargo documents, he blithely staked the last of his personal capital on a wild bet, probably without even thinking about what he was doing. When the camera caught him at his game, he lost everything. After that, Cohen was just a thief, and the judge knew how to deal with thieves.
Judge Ware had been fully primed when he took the bench. He knew all he needed to know about Steven Michael Cohen, and nothing Dorband said had changed his mind. He was now permitting himself to go ballistic. His voice began to rumble like thunder. I turned back toward my crew and gave them the raised-eyebrows look. They returned the same look. It was real. We had arrived on the plain of judgment.
Like the wind that announces the onset of a sudden storm, Judge Ware swept the last of Dorband’s arguments aside, and declared that he was ruling in Gary’s favor on everything. He was directing NSI to immediately put the registration in Gary’s name. He was freezing all Cohen’s real estate and monetary assets, and he was going to require Cohen to pay a bond into Court to secure the judgment he intended to levy against him. He would reduce his order to writing during the noon hour, and we could pick it up after lunch. So that Cohen didn’t pull any clever tricks before then, he told Dorband to call Cohen immediately and tell him that the freeze order was effective now.
The thunder of Judge Ware’s voice had barely subsided when Dorband asked whether he was imposing a temporary or a permanent injunction. Judge Ware answered that it was permanent. Dorband then ventured to ask about the trial date. Judge Ware took umbrage at the very notion of a trial, as his response made clear: “Trial? What trial? There is nothing left for a jury to try!”