T-Mobile USA, Inc. v. C-Tech Wholesale Inc. et al, No. 2:2009cv08232 - Document 10 (C.D. Cal. 2009)
Court Description: FINAL JUDGMENT AND PERMANENT INJUNCTION by Judge Valerie Baker Fairbank: Final judgment is hereby entered in the principal amOUNT $5,000,000 that shall bear interest at the legal rate for which let execution issue forthwith, against Defendant C- Tech Wholesale, Inc., and in favor of the Plaintiff, T-Mobile USA, Inc., on all of the claims set forth in T-Mobile's Complaint. Defendants C-Tech Wholesale, Inc. and Hassan Chaalan, and eachand all of their respective officers, directors, succe ssors, predecessors, assigns,parents, subsidiaries, affiliates, related companies, predecessors-in-interest, agents,employees, investigators, personal representatives, beneficiaries, and all otherpersons or entities acting or purporting to act for hi m/it or on his/its behalf,including but not limited to any corporation, partnership, proprietorship or entity of any type that is in any way affiliated or associated with any Defendant or any Defendant's representatives, agents, assigns, parent entities, employees, associates, servants, affiliated entities, and any and all persons and entities in active concert and participation with any Defendant who receive notice of this Order, shall be and hereby are PERMANENTLY ENJOINED. (See attached Final Judgment for further details). Related to: Stipulation for Judgment 9 . (MD JS-6. Case Terminated). (jp)
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T-Mobile USA, Inc. v. C-Tech Wholesale Inc. et al 1 2 3 4 5 Doc. 10 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 JS-6 6 7 8 9 10 11 12 13 14 JAMES B. BALDINGER (Florida Bar No. 869899) Admission Pro Hac Vice pending jbaldinger@carltonfields.com 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 Attorneys for Plaintiff T-Mobile USA, Inc. 15 UNITED STATES DISTRICT COURT 16 CENTRAL DISTRICT OF CALIFORNIA 17 18 T-MOBILE USA, INC., a Delaware Corporation 19 20 ) ) ) ) ) ) ) ) ) ) ) Plaintiff, v. 21 22 23 24 C-Tech Wholesale Inc., a California Corporation; and Hassan Chaalan, Defendants. 25 Case No. CV-09-8232 VBF(PJWx) FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS CTECH WHOLESALE, INC. AND HASSAN CHAALAN 26 27 Plaintiff T-Mobile USA, Inc. (“T-Mobile”), brought the above-captioned 28 lawsuit against Defendants C-Tech Wholesale, Inc. and Hassan Chaalan 15954111.1 FINAL JUDGMENT AND PERMANENT INJUNCTION 1 Dockets.Justia.com 1 (“Defendants”) asserting that Defendants are engaged in an unlawful enterprise 2 involving the acquisition, sale, and alteration of large quantities of T-Mobile 3 prepaid wireless telephones (“T-Mobile Prepaid Handsets” or “Handsets”) and 4 SIM Cards, PIN numbers, and/or other mechanism, process or materials used to 5 activate service or acquire airtime in connection with an activation, including but 6 not limited to T-Mobile’s FlexPaySM program (“Activation Materials”) that causes 7 substantial and irreparable harm to T-Mobile (the “Subsidy Theft Scheme”). 8 Defendants allegedly perpetrate the Subsidy Theft Scheme by acquiring bulk 9 quantities of T-Mobile Prepaid Handsets, which include T-Mobile Activation 10 Materials, from retail stores, such as Wal-Mart or Target. Defendants allegedly 11 solicit others to purchase T-Mobile Prepaid Handsets and Activation Materials in 12 bulk for their own benefit. Defendants allegedly acquire the T-Mobile Prepaid 13 Handsets with the actual or constructive knowledge and intent that they will not be 14 activated for use on the T-Mobile prepaid wireless network and that the Handsets 15 will be computer-hacked. The purpose of this hacking, known as “unlocking,” is 16 to erase, remove and/or disable proprietary software installed in the Handset, 17 which enables the use of the T-Mobile Prepaid Handsets exclusively on T- 18 Mobile’s prepaid wireless system. 19 trafficked and resold overseas, at a premium, under the T-Mobile trademarks for 20 unauthorized use outside of Plaintiff’s prepaid wireless system and the Activation 21 Materials that come with the Handsets are illicitly sold and/or fraudulently 22 activated to appropriate airtime. The unlocked Handsets are then allegedly 23 T-Mobile Prepaid Handsets are sold subject to terms and conditions (“Terms 24 and Conditions”) which conspicuously restrict and limit the sale and use of the T- 25 Mobile Prepaid Handsets. These Terms and Conditions are set forth in printed 26 inserts that are included in the packaging with every T-Mobile Prepaid Handset, 27 and are also available to the public on T-Mobile’s website. 28 Conditions are referenced in printed warnings that are placed on the outside of the 15954111.1 FINAL JUDGMENT AND PERMANENT INJUNCTION 2 The Terms and 1 retail packaging of the Handsets. T-Mobile alleges that the Terms and Conditions 2 and language on the packaging constitute a valid binding contract. 3 Pursuant to the Terms and Conditions and the language on the packaging, 4 purchasers of T-Mobile Prepaid Handsets agree, among other things: not to use the 5 Handsets for a fraudulent purpose that “negatively impact[s] [T-Mobile’s] 6 customers, employees, business, ability to provide quality service, [and] 7 reputation.” T-Mobile Terms and Conditions, ¶ 7. 8 As a result of the Subsidy Theft Scheme, T-Mobile has asserted claims 9 against Defendants for breach of contract; federal trademark infringement and false 10 advertising under 15 U.S.C. § 1125(a)(1)(A) and (B); unfair competition under 11 Cal. Bus. & Prof. Code. § 17200, et seq., contributory trademark infringement; 12 tortious interference with business relationships and prospective advantage; harm 13 to T-Mobile’s goodwill and business reputation; civil conspiracy; unjust 14 enrichment; and conspiracy to induce a breach of contract. 15 16 The Court, having reviewed the Complaint and file and being otherwise duly advised in the premises, it is hereby: 17 ORDERED, ADJUDGED and DECREED that: 18 1. 19 20 This Court has jurisdiction over all 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 21 rights in the standard character mark T-Mobile and a stylized T-Mobile Mark 22 (collectively, the “T-Mobile Marks”), as depicted below: 23 24 25 T-Mobile uses the T-Mobile Marks on and in connection with its 26 telecommunications products and services. Defendants’ alleged use of the T- 27 Mobile Marks without authorization in connection with the Subsidy Theft Scheme 28 has caused, and will further cause, a likelihood of confusion, mistake and 15954111.1 FINAL JUDGMENT AND PERMANENT INJUNCTION 3 1 deception as to the source of origin of the counterfeit products, and the relationship 2 between T-Mobile and Defendants. Defendants’ alleged activities constitute false 3 designation of origin, false descriptions and representations, and false advertising 4 in commerce in violation of § 43(a) of the Lanham Act, 15 U.S.C. §1125(a)(1)(A) 5 and (B). Defendants knew or should have known that T-Mobile is the exclusive 6 licensee of the T-Mobile Marks and that Defendants had no legal right to use the 7 T-Mobile Marks on infringing products. 8 3. The Court finds that the Terms and Conditions and the language on 9 the packaging constitute a valid binding contract enforceable against purchasers of 10 T-Mobile Phones. The Court finds that facilitating others to use T-Mobile Prepaid 11 Handsets in conjunction with service providers other than T-Mobile; tampering 12 with or altering T-Mobile Prepaid Handsets, SIM cards and/or the Handsets’ 13 software; and/or entering unauthorized PIN numbers in the Handsets for purposes 14 of unlocking the Handsets or facilitating others in such acts, constitute independent 15 breaches of contract for which T-Mobile is entitled to relief. 16 4. The Court finds that the conduct set forth in the Complaint, if proven 17 as alleged, would constitute breach of contract; federal trademark infringement and 18 false advertising under 15 U.S.C. § 1125(a)(1)(A) and (B); unfair competition 19 under Cal. Bus. & Prof. Code. § 17200, et seq., contributory trademark 20 infringement; tortious interference with business relationships and prospective 21 advantage; harm to T-Mobile’s goodwill and business reputation; civil conspiracy; 22 unjust enrichment; and conspiracy to induce a breach of contract. The Court further 23 finds that the alleged Subsidy Theft Scheme would cause substantial and 24 irreparable harm to T-Mobile, and would continue to cause substantial and 25 irreparable harm to T-Mobile unless enjoined. 26 5. T-Mobile has suffered damages, including loss of goodwill and 27 damage to its reputation, as a result of Defendants’ alleged conduct. T-Mobile is 28 entitled to injunctive relief on the claims set forth in the Complaint. 15954111.1 FINAL JUDGMENT AND PERMANENT INJUNCTION 4 1 6. Final judgment is hereby entered in the principal amount of Five 2 Million Dollars and Zero Cents (US $5,000,000) that shall bear interest at the legal 3 rate for which let execution issue forthwith, against Defendant C-Tech Wholesale, 4 Inc., and in favor of the Plaintiff, T-Mobile USA, Inc., on all of the claims set forth 5 in T-Mobile’s Complaint. 6 7. Defendants C-Tech Wholesale, Inc. and Hassan Chaalan, and each 7 and all of their respective officers, directors, successors, predecessors, assigns, 8 parents, subsidiaries, affiliates, related companies, predecessors-in-interest, agents, 9 employees, investigators, personal representatives, beneficiaries, and all other 10 persons or entities acting or purporting to act for him/it or on his/its behalf, 11 including but not limited to any corporation, partnership, proprietorship or entity of 12 any type that is in any way affiliated or associated with any Defendant or any 13 Defendant’s representatives, agents, assigns, parent entities, employees, associates, 14 servants, affiliated entities, and any and all persons and entities in active concert 15 and participation with any Defendant who receive notice of this Order, shall be and 16 hereby are PERMANENTLY ENJOINED from: a. 17 purchasing, selling, unlocking, reflashing, altering, advertising, 18 soliciting and/or shipping, directly or indirectly, any T-Mobile 19 Prepaid Handsets or Activation Materials; b. 20 purchasing, selling, unlocking, reflashing, altering, advertising, 21 soliciting and/or shipping, directly or indirectly, any T-Mobile 22 mobile device or Activation Material that Defendants know or 23 should know bears any T-Mobile marks or any marks likely to 24 cause confusion with the T-Mobile marks, or any other 25 trademark, service mark, trade name and/or trade dress owned 26 or used by T-Mobile now or in the future. 27 Defendants are enjoined from purchasing, selling, and/or 28 shipping, directly or indirectly, all models of T-Mobile Prepaid 15954111.1 FINAL JUDGMENT AND PERMANENT INJUNCTION 5 Specifically, 1 Handsets and related Activation Materials currently offered for 2 sale by T-Mobile or that may be offered for sale in the future, as 3 listed and updated from time to time on T-Mobile’s website: 4 http://www.t-mobile.com, regardless of whether such devices 5 are, new or used, whether in or out of their original packaging, 6 or whether “locked,” “unlocked,” or otherwise modified in any 7 way by any person; 8 c. unlocking of any T-Mobile Handset; 9 d. accessing, altering, erasing, tampering with, deleting or 10 otherwise disabling the software contained in any T-Mobile 11 Prepaid Handset; e. 12 supplying T-Mobile Handsets or Activation Materials to or 13 facilitating or in any way assisting other persons or entities who 14 Defendants know or should know are engaged in unlocking T- 15 Mobile Handsets and/or hacking, altering, erasing, tampering 16 with, deleting or otherwise disabling the software installed in T- 17 Mobile Handsets; f. 18 supplying T-Mobile Handsets or Activation Materials to or 19 facilitating or in any way assisting other persons or entities who 20 Defendants know or should know are engaged in any of the acts 21 prohibited under this Permanent Injunction, including, without 22 limitation, the buying and/or selling of locked or unlocked T- 23 Mobile Handsets or Activation Materials; and g. 24 knowingly using the T-Mobile Marks or any other trademark, 25 service mark, trade name and/or trade dress owned or used by 26 T-Mobile now or in the future, or that is likely to cause 27 confusion with T-Mobile’s marks, without T-Mobile’s prior 28 written authorization. 15954111.1 FINAL JUDGMENT AND PERMANENT INJUNCTION 6 1 8. The purchase, sale or shipment of any T-Mobile Handsets or 2 Activation Materials without T-Mobile’s prior written consent within and/or 3 outside of the continental United States and/or the sale of Activation Materials is 4 and shall be deemed a presumptive violation of this permanent injunction. 5 6 7 8 9 10 11 12 13 9. The address of C-Tech Wholesale, Inc. is 4141 Ball Road, Cypress, California 90630. 10. The address of Hassan Chaalan is 4122 Elizabeth Court, Cypress, California 90630. 11. The address of Plaintiff, T-Mobile USA, Inc. is 12920 S.E. 38th Street, Bellevue, Washington 98006. 12. Defendants waive their right of appeal from the entry of this Final Judgment. 13. The Court retains jurisdiction over this matter and the parties to this 14 action in order to enforce any violation of the terms of this Permanent Injunction 15 and to enforce the terms of the parties’ settlement agreement (including providing 16 any rights or remedies contained therein). Upon T-Mobile’s filing of an affidavit 17 or declaration that any one or all of the Defendants have defaulted under the 18 settlement agreement or/or violated the Permanent Injunction, the Court shall find 19 the Defendants in contempt and shall award T-Mobile compensatory damages in an 20 amount of $5,000 for each T-Mobile prepaid handset or item of Activation 21 Material that Defendants are found to have purchased, sold, or unlocked in 22 violation of this Injunction. The Court finds that these amounts are compensatory 23 and will serve to compensate T-Mobile for its losses in the event a Defendant 24 violates the terms of this Order. 25 14. The Court retains jurisdiction over this matter to enter a subsequent 26 judgment for damages against Defendant Chaalan in the event of a violation of the 27 terms of this injunction or the settlement agreement. 28 15954111.1 FINAL JUDGMENT AND PERMANENT INJUNCTION 7 1 15. The Court hereby finds, pursuant to Fed. R. Civ. P. 54(b), that there is 2 no just reason for delay and orders that Judgment shall be entered against 3 Defendants as set forth herein. 4 DONE AND ORDERED in Chambers this 24TH day of November, 2009. 5 6 ____________________________________________ JUDGE, UNITED STATES DISTRICT COURT 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15954111.1 FINAL JUDGMENT AND PERMANENT INJUNCTION 8
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