On factoriality of Cox rings

Generalized Cox's construction associates with an algebraic variety a remarkable invariant -- its total coordinate ring, or Cox ring. In this note we give a new proof of factoriality of the Cox ring when the divisor class group of the variety is finitely generated and free. The proof is based on a notion of graded factoriality. We show that if the divisor class group has torsion, then the Cox ring is again factorially graded, but factoriality may be lost.