T-Mobile USA, Inc. v. All Pro Distributing Inc. et al, No. 2:2008cv02691 - Document 34 (C.D. Cal. 2008)
Court Description: FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS ALL PRO DISTRIBUTING, INC., AND SHACHAR SHABTAY A/K/A SHAWN SHABTAYJUDGMENT by Judge George H Wu, in favor of T-Mobile USA, Inc. against All Pro Distributing Inc., Shachar Shabtay: Final judg ment is hereby entered jointly and severally against Defendants Shachar Shabtay a/k/a Shawn Shabtay and All Pro Distributing, Inc., and in favor of the Plaintiff, T-Mobile USA, Inc., on all of the claims set forth in TMobiles Complaint in the princip al amount of Two Million Five Hundred Thousand Dollars (U.S. $2,500,000) that shall bear interest at the legal rate for which let execution issue forthwith.Defendants and each and all of their past, future, and present officers,directors, succes sors, predecessors, assigns, parents, subsidiaries, affiliates, related companies, agents, employees, investigators, consultants, heirs, personal representatives, beneficiaries, relatives, independent contractors, and all other persons or entities ac ting or purporting to act for his/her/its benefit, and any and all persons or entities in active concert and participation with any Defendant who receive notice of this Order, shall be and hereby are PERMANENTLY ENJOINED from (See document for details.) 33 (JS-6. Case Terminated) (ake)
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T-Mobile USA, Inc. v. All Pro Distributing Inc. et al 1 2 3 4 5 6 7 8 9 10 11 12 13 MICHAEL H. WEISS (State Bar No. 110148) mweiss@proskauer.com PROSKAUER ROSE LLP 2049 Century Park East, 32nd Floor Los Angeles, CA 90067-3206 Telephone: (310) 557-2900 Facsimile: (310) 557-2193 Attorneys for Plaintiff T-Mobile USA, Inc. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 15 17 T-MOBILE USA, INC., a Delaware Corporation Plaintiff, 18 19 20 21 22 23 24 MADE JS-6 JAMES B. BALDINGER (Florida Bar No. 869899) jbaldinger@carltonfields.com (admitted pro hac vice) STACEY K. SUTTON (Florida Bar No. 289530) ssutton@carltonfields.com (admitted pro hac vice) DAVID B. ESAU (Florida Bar No. 650331) desau@carltonfields.com (admitted pro hac vice) CARLTON FIELDS, P.A. 525 Okeechobee Blvd., Suite 1200, P.O. Box 150 West Palm Beach, FL 33402-0150 Telephone: (561) 659-7070 Facsimile: (561) 659-7368 14 16 Doc. 34 v. ALL PRO DISTRIBUTING INC., a California Corporation; SHACHAR SHABTAY; and DOES 1-10, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV-08-02691 GW (AGRx) FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS ALL PRO DISTRIBUTING, INC., AND SHACHAR SHABTAY A/K/A SHAWN SHABTAY 25 26 27 28 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS ALL PRO DISTRIBUTING, INC. AND SHACHAR SHABTAY A/K/A SHAWN SHABTAY Dockets.Justia.com 1 Plaintiff T-Mobile USA, Inc. (“T-Mobile”), brought the above-captioned 2 lawsuit against, inter alia, Defendants Shachar Shabtay a/k/a Shawn Shabtay and 3 All Pro Distributing, Inc. asserting that Defendants are engaged in an unlawful 4 enterprise involving the acquisition, sale, and counterfeiting of large quantities of 5 T-Mobile prepaid wireless telephones (“T-Mobile Prepaid Handsets” or 6 “Handsets”) and SIM cards that causes substantial and irreparable harm to T- 7 Mobile (the “Bulk Resale Venture”). 8 T-Mobile asserts that Defendants perpetrate the Bulk Resale Venture by 9 acquiring bulk quantities of T-Mobile Prepaid Handsets, which include SIM cards, 10 from retail stores, such as Wal-Mart or Target. T-Mobile further asserts that 11 Defendants solicit others to purchase T-Mobile Prepaid Handsets and SIM cards in 12 bulk for their own benefit. T-Mobile asserts that Defendants acquire the T-Mobile 13 Prepaid Handsets and SIM cards with the actual or constructive knowledge and 14 intent that they will not be activated for use on the T-Mobile prepaid wireless 15 network and that the Handsets will be computer-hacked. The purpose of this 16 hacking, known as “unlocking,” is to erase, remove and/or disable proprietary 17 software installed in the Handsets, which enables the use of the T-Mobile Prepaid 18 Handsets exclusively on T-Mobile’s prepaid wireless system. T-Mobile asserts that 19 the unlocked Handsets and SIM cards are then trafficked and resold overseas, at a 20 premium, under the T-Mobile trademarks for unauthorized use outside of Plaintiff’s 21 prepaid wireless system. 22 T-Mobile Prepaid Handsets are sold subject to terms and conditions (“Terms 23 and Conditions”) which restrict and limit the sale and use of T-Mobile Prepaid 24 Handsets. These Terms and Conditions are set forth in printed inserts that are 25 included in the packaging with every T-Mobile Phone, and are also available to the 26 public on T-Mobile’s website. The Terms and Conditions are referenced in printed 27 warnings that are placed on the outside of the retail packaging of the Handsets. T- 28 Mobile alleges that the Terms and Conditions and language on the packaging 2 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS ALL PRO DISTRIBUTING, INC. AND SHACHAR SHABTAY A/K/A SHAWN SHABTAY 1 constitute a valid binding contract. 2 The Terms and Conditions of T-Mobile Prepaid Handsets provide, among 3 other things, that purchasers will not to use the Handsets for a fraudulent purpose 4 that “negatively impact[s] [T-Mobile’s] customers, employees, business, ability to 5 provide quality service, [and] reputation.” T-Mobile Terms and Conditions, ¶ 7. 6 As a result of the alleged Bulk Resale Venture, T-Mobile has asserted claims 7 against Defendants for breach of contract; federal trademark infringement and false 8 advertising under 15 U.S.C. § 1125(a)(1)(A) and (B); unfair competition under 9 California common law; contributory trademark infringement; tortious interference 10 with business relationships and prospective advantage; harm to T-Mobile’s 11 goodwill and business reputation; civil conspiracy; unjust enrichment; and 12 conspiracy to induce a breach of contract. 13 Complaint and file and being otherwise duly advised in the premises, it is hereby The Court, having reviewed the 14 ORDERED, ADJUDGED and DECREED that: 15 1. 16 17 This Court has jurisdiction over the parties and all of the claims set forth in T-Mobile’s Complaint. 2. The Court finds that T-Mobile has the right to use and enforce said 18 rights in the standard character mark T-Mobile and a stylized T-Mobile Mark 19 (collectively, the “T-Mobile Marks”) as depicted below: 20 21 22 T-Mobile uses the T-Mobile Marks on and in connection with its 23 telecommunications products and services. Defendants’ use of the T-Mobile Marks 24 without authorization in connection with the Bulk Resale Venture, if proven as 25 alleged, has caused, and will further cause, a likelihood of confusion, mistake and 26 deception as to the source of origin of the counterfeit products, and the relationship 27 between T-Mobile and Defendants. Defendants’ activities, if proven as alleged, 28 constitute false designation of origin, false descriptions and representations, and 3 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS ALL PRO DISTRIBUTING, INC. AND SHACHAR SHABTAY A/K/A SHAWN SHABTAY 1 false advertising in commerce in violation of § 43(a) of the Lanham Act, 15 U.S.C. 2 §1125(a)(1)(A) and (B). T-Mobile asserts that Defendants knew or should have 3 known that T-Mobile is the exclusive licensee of the T-Mobile Marks and that 4 Defendants had no legal right to use the T-Mobile Marks on infringing products. 5 3. The Court finds that the Terms and Conditions and the language on the 6 packaging constitute a valid binding contract enforceable against Defendants. The 7 Court finds that facilitating others to use T-Mobile Prepaid Handsets in conjunction 8 with service providers other than T-Mobile; tampering with or altering T-Mobile 9 Prepaid Handsets, SIM cards and/or the Handsets’ software; and/or entering 10 unauthorized PIN numbers in the Handsets for purposes of unlocking the Handsets 11 or facilitating others in such acts, constitute independent breaches of contract for 12 which T-Mobile is entitled to relief. 13 4. The Court finds that the conduct set forth in the Complaint, if proven 14 as alleged, violates the following statutes: 15 U.S.C. § 1125(a)(1)(A) and (B) 15 (federal trademark infringement and false advertising), and Cal. Bus. & Prof. Code. 16 § 17200, et seq. (California unfair competition). The Court further finds that the 17 conduct, if proven as alleged, constitutes contributory trademark infringement; 18 tortious interference with business relationships and prospective advantage; harm to 19 T-Mobile’s goodwill and business reputation; civil conspiracy; unjust enrichment; 20 and conspiracy to induce a breach of contract, and has caused substantial and 21 irreparable harm to T-Mobile, and would continue to cause substantial and 22 irreparable harm to T-Mobile unless enjoined. 23 5. T-Mobile has suffered damages, including loss of goodwill and 24 damage to its reputation, as a result of Defendants’ conduct. T-Mobile is entitled to 25 injunctive relief on the claims set forth in the Complaint. 26 6. Final judgment is hereby entered jointly and severally against 27 Defendants Shachar Shabtay a/k/a Shawn Shabtay and All Pro Distributing, Inc., 28 and in favor of the Plaintiff, T-Mobile USA, Inc., on all of the claims set forth in T4 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS ALL PRO DISTRIBUTING, INC. AND SHACHAR SHABTAY A/K/A SHAWN SHABTAY 1 Mobile’s Complaint in the principal amount of Two Million Five Hundred 2 Thousand Dollars (U.S. $2,500,000) that shall bear interest at the legal rate for 3 which let execution issue forthwith. 7. 4 Defendants and each and all of their past, future, and present officers, 5 directors, successors, predecessors, assigns, parents, subsidiaries, affiliates, related 6 companies, 7 representatives, beneficiaries, relatives, independent contractors, and all other 8 persons or entities acting or purporting to act for his/her/its benefit, and any and all 9 persons or entities in active concert and participation with any Defendant who 10 receive notice of this Order, shall be and hereby are PERMANENTLY ENJOINED 11 from: 12 agents, (a) employees, investigators, consultants, heirs, personal Purchasing, selling and/or shipping any Prepaid mobile device 13 or Prepaid SIM card (collectively, the “T-Mobile Handsets”). Specifically, they are 14 enjoined from purchasing, selling, and/or shipping, directly or indirectly, prepaid T- 15 Mobile Handsets and prepaid SIM card models, regardless of whether such devices 16 are new or used, whether in or out of their original packaging, or whether “locked,” 17 “unlocked,” or otherwise modified in any way by any person. This injunction 18 applies to all currently available prepaid T-Mobile Handsets and prepaid SIM cards 19 and those that may be offered for sale in the future; 20 (b) unlocking of any T-Mobile Handset; 21 (c) supplying T-Mobile Handsets or SIM cards to or facilitating or 22 in any way assisting other persons or entities who they know or should know are 23 engaged in unlocking T-Mobile Handsets and/or hacking, altering, erasing, 24 tampering with, deleting or otherwise disabling the software installed in T-Mobile 25 Handsets or fraudulently activating SIM cards; 26 (d) supplying T-Mobile Handsets or SIM cards to, or facilitating or 27 assisting in any way, persons or entities who they know or should know are 28 engaged in any of the acts prohibited under this permanent injunction including, 5 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS ALL PRO DISTRIBUTING, INC. AND SHACHAR SHABTAY A/K/A SHAWN SHABTAY 1 without limitation, the buying, selling and/or shipping of locked or unlocked T- 2 Mobile Handsets and SIM cards; and (e) 3 knowingly using the T-Mobile Marks or any other trademark, 4 service mark, trade name and/or trade dress owned or used by T-Mobile now or in 5 the future, without T-Mobile’s prior written authorization. 6 8. The purchase, sale or shipment of any prepaid service T-Mobile 7 Handsets or SIM cards without T-Mobile’s prior written consent within and/or 8 outside of the continental United States is and shall be deemed a presumptive 9 violation of this permanent injunction. 10 9. If, after the Judgment is entered, it is discovered that the parties to this 11 action have violated the terms of this Permanent Injunction, the Court will order the 12 payment of compensatory damages to T-Mobile in the amount of Five Thousand 13 Dollars and Zero Cents ($5,000.00 (U.S.)) for each T-Mobile phone and/or item of 14 T-Mobile Prepaid Handset-related materials or accessories, including but not 15 limited to SIM cards, purchased, sold, unlocked, reflashed, altered, advertised, 16 and/or shipped. 17 reasonable estimations of the minimum damages suffered by T-Mobile for such a 18 breach and will serve to compensate T-Mobile for its losses in the event a 19 Defendant violates the terms of this Permanent Injunction. 20 21 22 23 24 25 26 10. The Court finds that these amounts are compensatory and The last known address of All Pro Distributing, Inc. is 15240 Raymer Street, Van Nuys, California 91405-1016. 11. The address of Plaintiff, T-Mobile USA, Inc. is 12920 S.E. 38th Street, Bellevue, Washington 98006. 12. Defendants waive their right to appeal from the entry of this Final Judgment. 13. The Court retains jurisdiction over this matter and the parties to this 27 action in order to enforce the terms of this Permanent Injunction by a finding of 28 contempt and an order for payment of compensatory damages to T-Mobile USA, 6 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS ALL PRO DISTRIBUTING, INC. AND SHACHAR SHABTAY A/K/A SHAWN SHABTAY 1 Inc. in an amount of not less than $5,000 for each T-Mobile Handset that a 2 Defendant is found to have purchased, sold, altered, unlocked or shipped in 3 violation of this injunction. 4 14. The prevailing party in any proceeding to enforce compliance with the 5 terms of this Permanent Injunction shall be entitled to an award of its attorneys’ 6 fees and costs. 7 15. The Court hereby finds, pursuant to Fed. R. Civ. P. 54(b), that there is 8 no just reason for delay and orders that Judgment shall be entered against 9 Defendants as set forth herein. 10 11 DONE AND ORDERED in Chambers this 14th day of November, 2008. 12 13 ____________________________________________ JUDGE, UNITED STATES DISTRICT COURT 14 15 16 Copies furnished to: 17 18 19 James B. Baldinger, counsel for Plaintiff James Whitelaw, counsel for Defendants 20 21 22 23 24 25 26 27 28 7 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS ALL PRO DISTRIBUTING, INC. AND SHACHAR SHABTAY A/K/A SHAWN SHABTAY
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