In an order issued earlier this month, the U.S. Ninth Circuit Court of Appeals asked the California Supreme Court to rule on the question. The appellate court said it was asking the state's highest court to decide the matter because the case "raises a new and substantial issue of state law in an arena that will have broad application."

The case involves the hijacking of the Sex.com domain, registered by Gary Kremen in 1994. In 1995, defendant Stephen Cohen forged a letter to registrar Network Solutions and convinced that company to transfer the domain to him. In 1998, Kremen sued Cohen and Network Solutions, which is now owned by VeriSign, to get the domain back and asked for damages.

Earlier court rulings ordered Cohen to pay $65 million in damages but said Network Solutions was not liable, ruling that a domain name did not constitute "protected intangible property."

Kremen appealed that ruling to the Ninth Circuit, which has now asked California's highest court to decide the matter.

A representative for VeriSign said the company does not comment on ongoing litigation.