Locals fight the domain-name gamePeople in the Internet business smell something rotten in Busan: Recently the entity that distributes domain names made available by lottery many domains related to sex, and three friends in Busan grabbed four of them. Also, a Korean who recently secured the valuable domain sex.biz is standing up to a challenge by an American businessman who says he should have the rights to it.
Son Seong-il, Nam Gi-joong and Lee Myeong-jae on Nov. 5 walked away with sex.co.kr, xxx.co.kr, sex.or.kr and sex.ne.kr after winning the computer-executed drawings for the domains conducted by the Korea Network Information Center.
The three friends said they competed for the domains by entering the lottery under the names of about 100 close relatives and friends. The numbers of applicants for the four domains ranged from 2,000 to 24,000 each.
The competition for the domains was so intense because of the immediate value they provide. Probably the most valuable domain in the world, sex.com, is owned by a man in Arizona, Gary Kremen, and is estimated to be worth at least $100 million. The most a domain has been sold for is $7.5 million, which is what business.com fetched.
The Busanites stand to get rich. "An average of 10,000 Internet surfers a day try to visit sex.co.kr although it hasn't opened yet and there are no advertisements for it," said Suh Chang-nyeong, the president of an Internet firm. "When this site launches, the most popular adult Web site in the country will be born."
Naturally, complaints have mounted about the coincidental distribution of the four domains. Other applicants and various people in the industry are asking for a do-over. The three men have recieved harsh e-mails accusing them of somehow tweaking the computer program that selected the winners.
But an official at the Korea Network Information Center said the lottery was done fairly. "There is nothing wrong with the computer program," he said. "We can only say that they were lucky."
Still, as the suspicions grew, the Seoul district prosecutors office decided to begin an investigation, and put its computer crime team on the case.
In a different case, a domain name dispute resolution office in North America, the National Arbitration Forum, recently sent a notice to a Korean, Peter I. Jeong, to hand over the ownership of the sex.biz domain to Marcus R. Schatte. Mr. Jeong acquired the domain in March.
Mr. Schatte has filed a complaint saying that Mr. Jeong is violating his trademark rights, because Mr. Schatte runs a business called "Sex" that sells trinkets such as refrigerator magnets. The forum pointed out to Mr. Jeong that the domain name sex.biz is identical to the name of Mr. Schatte's company, which he began in February 2001.
Mr. Jeong is optimistic that he can prevail in this case. He is arguing that Mr. Schatte's right to the "Sex" trade name is limited to the United States, and therefore Mr. Schatte has no grounds in an international dispute.
In addition, Mr. Jeong is arguing that the word "sex" is commonplace, pointing out that many other countries prohibit businesses from holding a trademark for the name.
Refusing to submit to the forum's request, Mr. Jeong has filed a related suit with the Seoul district court to confirm his rights to the domain.
He says he thinks he will prevail, and that he recently signed a contract to fully apply the domain to a business. The forum earlier had insisted that Mr. Jeong only registered the domain to sell, rent or transfer it to Mr. Schatte or his competitor to make a big profit.
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