Sprint Solutions, Inc. v. Brewer, No. 4:2016cv01071 - Document 12 (N.D. Cal. 2016)
Court Description: FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT THOMAS BREWER pursuant to Stipulation AS MODIFIED BY THE COURT. Signed by Judge Yvonne Gonzalez Rogers on 3/11/16. (Attachments: # 1 Certificate/Proof of Service)(fs, COURT STAFF) (Filed on 3/11/2016)
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Sprint Solutions, Inc. v. Brewer Doc. 12 1 2 UNITED STATES DISTRICT COURT 3 NORTHERN DISTRICT OF CALIFORNIA 4 SAN FRANCISCO DIVISION 5 6 7 SPRINT SOLUTIONS, INC. a Delaware corporation, and SPRINT COMMUNICATIONS COMPANY L.P. a Delaware limited partnership, 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Plaintiffs, v. Case No. 16-cv-01071-YGR FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT THOMAS BREWER PURSUANT TO STIPULATION, AS MODIFIED BY THE COURT THOMAS BREWER, Defendant. Plaintiffs Sprint Solutions, Inc. and Sprint Communications Company L.P. (collectively, “Sprint” or “Plaintiffs”) brought the above-captioned lawsuit against Defendant Thomas Brewer (“Defendant”) because Defendant is engaged in an unlawful enterprise involving the unauthorized and deceptive bulk purchase and resale of specially-manufactured wireless telephones designed for use on Sprint’s wireless service, including the Sprint iPhone (collectively, “Sprint Phones” or “Sprint Handsets” or “Phones” or “Handsets”), the theft of Sprint’s substantial financial investment in the Phones, the unlawful unlocking of Sprint Phones, the unlawful access of Sprint’s protected computer systems and wireless network, the trafficking of Sprint’s protected and confidential computer passwords, and the willful infringement of Sprint’s trademarks (collectively, the “Bulk Handset Trafficking Scheme” or the “Scheme”). Sprint Phones are sold subject to terms and conditions (“Terms and Conditions”) which conspicuously restrict and limit the sale and use of the Phones and prohibit accessing Sprint’s network for illegal or harmful use. These Terms and Conditions are set forth in printed inserts that are packaged with each Phone and posted on Sprint’s website. Pursuant to the Terms and Conditions of Sprint Phones, purchasers agree, among other things: (a) to pay the applicable service charges and other related fees; (b) to activate the Sprint Phones on the Sprint CDMA network; (c) 28 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT THOMAS BREWER Dockets.Justia.com 1 not to resell the Sprint Phones and related products and services; (d) not to use the Phones for a 2 purpose that could damage or adversely affect Sprint; (e) not to engage in fraudulent conduct, 3 falsification or impersonation; and (f) not to hack into Sprint’s computer systems. 4 Further, as an employee for an authorized Sprint reseller, Defendant was tasked with, inter 5 alia, soliciting customers to subscribe to Sprint services and selling Sprint Phones to those customers 6 when they subscribed to Sprint’s wireless service or renewed their wireless services with Sprint. 7 Instead of soliciting customers to subscribe to Sprint services, Defendant unlawfully procured brand 8 new Sprint Phones and then resold them, without subscriptions to Sprint’s wireless service. 9 Sprint has asserted claims against Defendant for breach of contract, unfair competition, 10 tortious interference with business relationships and prospective advantage, civil conspiracy, 11 unjust enrichment, common law fraud and fraudulent misrepresentation, federal trademark 12 infringement under 15 U.S.C. § 1114, federal common law trademark infringement and false 13 advertising under 15 U.S.C. § 1125(a)(1)(A) and (B), contributory trademark infringement, 14 conversion, trafficking in computer passwords under 18 U.S.C. § 1030(a)(6), unauthorized access 15 16 under 18 U.S.C. § 1030(a)(5)(C), and unauthorized access with intent to defraud under 18 Based upon the stipulation of the parties filed March 9, 2016 (Dkt. No. 11) U.S.C. § 1030(a)(4). Based on the sworn testimony provided by the Defendant, the respective 17 positions advocated by the parties, and having reviewed the Complaint and file and being 18 otherwise duly and fully advised in the premises, it is hereby: 19 ORDERED, ADJUDGED and DECREED that: 20 1. This Court has jurisdiction over all the parties and all of the claims set forth in 21 Sprint’s Complaint. 22 2. Sprint has the right to use and enforce rights in the standard character Sprint® mark 23 and stylized Sprint® Virgin Mobile, payLo, Assurance Wireless and Boost Mobile trademarks 24 (collectively, the “Sprint Marks”), as depicted below: 25 26 27 28 2 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT THOMAS BREWER 1 2 3 4 Sprint uses the Sprint Marks on and in connection with its telecommunications products and 5 services. The Sprint Marks are valid, distinctive, protectable, famous, have acquired secondary 6 meaning, and are associated exclusively with Sprint. 7 3. The Court finds that the Terms and Conditions and the language in and on the 8 packaging constitute a valid and binding contract enforceable between Sprint and each of its 9 customers. The Court finds the Terms and Conditions set forth certain rights and restrictions on 10 the use of Sprint Phones. Among other things, the Terms and Conditions: (a) require that the 11 customer pay applicable service charges and other related fees; (b) indicate that the Phone is 12 designed to be activated on the Sprint CDMA network; (c) prohibit resale of Sprint Phones and 13 related products and services; (d) not to use the Phones for a purpose that could damage or adversely 14 affect Sprint; (e) not to engage in fraudulent conduct, falsification or impersonation; and (f) not to 15 hack into Sprint’s computer systems. 16 17 18 4. The Court finds that Defendant agreed to be bound by the Terms and Conditions and breached his contract with Sprint. 5. The Court finds that Defendant tortiously interfered with Sprint’s business 19 relationships with its customers, namely, Fremont Fence Inc., Markus Supply – Ace Hardware, 20 Eastwood Apartments, BSR Realty Inc., Genova Delicatessen, Teal Holdings LLC, Applied Air 21 Filters, A and K Auto Body Filters, and Servin Co Fence Gate & Steele Fabricators. These 22 customers were completely unaware of Defendant’s use of their accounts to procure brand new 23 Sprint Phones. Defendant attempted to hide his unlawful and fraudulent conduct by having the 24 brand new Sprint Phones shipped to his house and requested that Sprint direct all communications 25 regarding the various fraudulent orders to his personal email address. On a few occasions, the Sprint 26 Phones were actually shipped to the legitimate Sprint customer. When that occurred, the customer 27 would contact Defendant, believing him to be a legitimate Sprint agent, and Defendant would tell the 28 3 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT THOMAS BREWER 1 customer that the phones were mistakenly shipped to the customer and Defendant would arrange to 2 pick up the Sprint Phones from the customer. In actuality, the customer was billed for those brand 3 new Sprint Phones. 4 6. 5 The Court finds that Defendant used the aforementioned accounts to unlawfully place 60 orders for 376 brand new subsidized Sprint Phones with a total equipment value of $225,436.00. 7. 6 The Court finds that these 376 brand new subsidized Sprint Phones that were 7 unlawfully obtained and resold by Defendant are materially different than those sold by Sprint. For 8 instance, the warranty information is removed, which invalidates the warranty in its entirety. 9 Furthermore, Defendant removed the Sprint Phones from the original packaging so that the Phones 10 are sold in packaging that is not approved by Sprint’s quality controls. These materially different 11 products that contain the Sprint Marks confuse consumers and erode consumer goodwill toward the 12 Sprint Marks. Accordingly, by reselling the Sprint Phones in this manner, the Court finds that 13 Defendant engaged in willful trademark infringement. 8. 14 The 376 fraudulently obtained, infringing Sprint Phones have the following electronic 15 serial numbers (“ESN”)1: : 089610778206834072, 089609575007435832, 089610778206821257, 16 089609831006775910, 089610778206886673, 089610675806624584, 089610778206699334, 17 089609523807366533, 089609831006849142, 089610778206713698, 256691515304609555, 18 256691515207562537, 256691515304609544, 256691515304609433, 256691515207602257, 19 256691515304559378, 256691515304609840, 256691515207602272, 256691515304559241, 20 256691515207602293, 256691515304609937, 256691515207562533, 256691515304559385, 21 256691515304653449, 256691515304559253, 256691515304609417, 256691515304559257, 22 256691515304609401, 256691515304559251, 256691515304608787, 256691515304559254, 23 256691515304559125, 256691515304610088, 256691515207602261, 256691515304609811, 24 256691515207602304, 256691515304609830, 256691515304559380, 256691515304626000, 25 256691515304609554, 256691515304559460, 256691515304559648, 256691515304559689, 26 27 28 An electronic serial number or ESN is a numeric identifier that uniquely identifies a Sprint Phone. 1 4 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT THOMAS BREWER 1 256691515206375429, 256691515206375441, 256691515206375432, 256691515206390610, 2 256691515206375320, 256691515206374274, 256691515206375443, 256691515206386209, 3 256691515206386181, 256691515206386210, 256691515206309380, 256691515206308760, 4 256691515206363513, 256691515206452599, 256691515206390631, 256691515206452612, 5 256691515206386744, 256691515206386242, 256691515206362902, 256691515206308678, 6 256691517505457731, 256691517505477384, 256691517505457736, 256691517505457745, 7 256691517505453426, 256691515304609910, 256691515304610437, 256691515304609912, 8 256691515207566185, 256691515207566409, 256691515304600082, 256691515304609890, 9 256691515304599944, 256691515304600119, 256691515304609924, 256691517500031016, 10 256691517500018192, 256691517500030982, 256691517500031028, 256691517500018177, 11 256691517500031063, 256691517500018193, 256691517500018181, 256691517500031017, 12 256691517500018180, 256691517505539937, 256691517505539888, 256691517505535013, 13 256691517505544276, 256691517505542166, 256691515207567381, 256691515304539716, 14 256691515304657942, 256691515304539785, 256691515304657939, 256691515304540532, 15 256691515304657943, 256691515304539732, 256691515304539904, 256691515304670101, 16 256691517502704962, 256691517503147574, 256691517503147576, 256691517503163456, 17 256691517503163504, 256691517503163526, 256691517503146752, 256691517503147570, 18 256691517503147637, 256691517503147639, 256691517503150710, 256691517503149971, 19 256691517503150100, 256691517505584945, 256691517505584952, 256691517505584149, 20 256691517505584265, 256691517505584257, 256691517503289401, 256691517503287433, 21 256691518402196608, 256691518402196627, 256691518402196633, 256691518402196736, 22 256691518402196738, 256691518402200865, 256691518402200867, 256691518402630406, 23 256691518402630425, 256691518402630499, 256691518402630514, 256691518402630754, 24 256691518402595202, 256691518402630518, 256691518402630745, 256691518402630774, 25 256691518402630800, 256691514305657462, 256691514305650211, 256691514305657416, 26 256691514305657476, 256691514305649669, 256691514305657449, 256691514305657448, 27 256691514305657440, 256691514305657424, 256691514305657474, 256691518409015377, 28 5 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT THOMAS BREWER 1 256691518409509256, 256691518409509251, 256691518409509250, 256691518409509255, 2 256691518409015395, 256691518409015399, 256691518409015415, 256691518409015416, 3 256691518409509252, 256691518409013505, 256691518409013540, 256691518409012624, 4 256691518409013396, 256691518409013401, 256691518409013399, 256691518409013577, 5 256691518409013634, 256691518409013636, 256691518409013641, 256691518704671120, 6 256691518704588912, 256691518704671091, 256691518704671111, 256691518704589352, 7 256691518704671240, 256691518704556641, 256691518704405543, 256691518704405074, 8 256691518704405041, 256691518704405028, 256691518704404768, 256691518704425843, 9 256691518704408067, 256691518704407924, 256691518704407906, 256691518704407889, 10 256691466105314450, 256691466105538432, 256691466105597201, 256691466105444963, 11 256691466105601622, 256691466105404930, 089609472607550774, 089610650207734358, 12 089610419808463733, 089609626207750792, 089609575008389158, 089610727008524121, 13 089609549408411542, 089610419808463761, 089609626207751191, 089610419808414464, 14 089610394207766405, 089609472607542129, 089610419808427649, 089609626207764115, 15 089609472607542353, 089366272605788456, 089361383008395123, 256691496900353657, 16 256691496900353878, 256691496900066080, 256691496900066146, 256691496900038808, 17 256691496900020870, 256691466104359430, 256691466106826054, 256691466103772485, 18 256691466107562857, 256691466104362790, 256691466104359426, 256691466107484754, 19 256691466107354753, 256691466103686706, 256691466105665540, 256691466105636865, 20 256691466104686614, 256691466105865792, 256691466106853459, 256691466106881649, 21 256691466107537300, 256691466106826352, 256691466106882632, 256691466106513527, 22 256691466106489929, 256691466106436646, 256691466107354003, 256691466107570817, 23 256691507400139379, 256691496900553028, 256691496900553113, 256691496900493204, 24 256691496900299831, 256691496900283494, 256691496900231705, 256691466105452816, 25 256691466105715462, 256691496900602950, 089267098101269872, 256691466109836403, 26 256691466509720374, 256691466110044450, 256691515202631945, 256691466105667173, 27 256691466106330729, 256691496900201353, 256691496900233507, 256691496900017989, 28 6 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT THOMAS BREWER 1 256691496900352384, 256691515207536664, 256691515304814113, 256691515206891095, 2 256691515304805783, 256691515207358066, 256691507300410935, 256691507600099074, 3 256691507300410921, 256691515406902567, 256691515406326374, 256691515406358933, 4 256691515205374360, 089128986206496309, 256691515206627922, 256691515405653861, 5 256691515405653847, 256691515206439030, 256691515206694231, 256691515206715463, 6 256691515206715528, 256691515206439280, 256691515206439257, 256691515206694677, 7 256691515206715473, 256691515206438983, 256691515206431281, 256691515406693681, 8 256691515406693633, 256691515406562146, 256691515406693669, 256691515406693652, 9 256691517407476865, 256691517407476883, 256691517407476887, 256691517407477017, 10 256691517407476856, 089792538109644327, 089792538109527348, 089792538109540660, 11 089792538109458292, 089792538109603350, 089878528606324339, 089878528606297220, 12 089877786202495603, 089877811802499430, 089877786202499331, 089877888602692649, 13 089877786202589831, 089877811801591321, 089877939801577509, 089877939801577366, 14 089877811801478996, 089877811801657174, 089877837401409590, 089877863001655430, 15 089877863001540914, 089877863001413411, 089877863001651842, 089877837401396788, 16 089779866209525584, 089877863001471872, 089877863001406547, 089877914207833974, 17 089877786207407641, 089877914207873138, 089877786207419458, 089877786207419431, 18 089877914207873107, 089877914207833653, 089877786207575873, 089877786207575637, 19 089877786207435920, 089877709406899592, 089877786207407969, 089877786207436119, 20 089877914207820631, 089877914207872916, 089877735005251095, 089877735005402998, 21 089877760605338710, 089877863009642263, 089877863009655186, 089877888609713012, 22 089877863009598505, and 089877811809008248. 23 9. The Court finds that Defendant was engaged in a conspiracy with all subsequent 24 purchasers of these 376 Sprint Phones as there is no legitimate way for any of these subsequent 25 purchasers to obtain brand new subsidized Sprint Phones without executing and fulfilling the terms 26 of a Sprint wireless service contract. 27 28 7 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT THOMAS BREWER 1 10. The Court finds that the totality of Defendant’s conduct constitutes unfair 2 competition, tortious interference with business relationships and prospective advantage, civil 3 conspiracy, unjust enrichment, common law fraud and fraudulent misrepresentation, federal 4 trademark infringement under 15 U.S.C. § 1114, federal common law trademark infringement and 5 false advertising under 15 U.S.C. § 1125(a)(1)(A) and (B), contributory trademark infringement, 6 conversion, breach of contract, and violations of the federal Computer Fraud and Abuse Act, 18 7 U.S.C. § 1030, et seq. 8 11. Sprint has suffered damages, including loss of goodwill and damage to its reputation, 9 as a result of Defendant’s conduct. On review and consideration of all relevant factors, Sprint is 10 entitled to damages and injunctive relief on the claims as set forth in the Complaint. 11 12. For each new Sprint Phone that Sprint sells, its investment and expected revenue from 12 the Phone averages $1,919. When a new Sprint Phone is unlawfully trafficked by Defendant and 13 his co-conspirators, Sprint loses its investment and does not receive the expected revenue, which 14 reduces its profits and increases Sprint’s costs. Sprint’s damages resulting from Defendant’s 15 acquisition and resale of new Sprint Phones add up to at least: $1,919 x 376 Sprint Phones = 16 $721,544.00. In light of Defendant’s willful violations of the Lanham Act, and because Sprint’s 17 damages uncovered by its investigation are modest compared to the likely damage caused by 18 Defendant, the Court will treble these damages to $2,164,632.00. 19 13. Final judgment is hereby entered against Defendant Thomas Brewer, and in favor of 20 the Plaintiffs, on all of the claims set forth in Plaintiffs’ Complaint in the principal amount of Two 21 Million, One Hundred and Sixty-Four Thousand, Six Hundred and Thirty-Two Dollars and Zero 22 Cents ($2,164,632.00 (U.S.)), which shall bear interest at the legal rate, for which let execution 23 issue forthwith. 24 14. For all Sprint brands, now and in the future, including but not limited to Sprint, Sprint 25 Prepaid, Boost Mobile, Virgin Mobile, PayLo and Assurance Wireless, Defendant and all of his past 26 and present agents, employees, heirs, personal representatives, beneficiaries, relatives, and all other 27 persons or entities acting or purporting to act for Defendant or on Defendant’s behalf, including, 28 8 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT THOMAS BREWER 1 but not limited to, any corporation, partnership, proprietorship or entity of any type that is in any 2 way affiliated or associated with Defendant or Defendant’s representatives, agents, assigns, parent 3 entities, employees, independent contractors, associates, servants, affiliated entities, and any and 4 all persons and entities in active concert and participation with Defendant who receive notice of 5 this Order, shall be and hereby are PERMANENTLY ENJOINED from: 6 7 8 a. acquiring, purchasing, selling, unlocking, reflashing, altering, advertising, soliciting and/or shipping, directly or indirectly, any new Sprint Phones; b. accessing, directly or indirectly through a third-party, any websites, 9 computers, software programs or any other location or application, for the purpose of 10 checking, verifying, changing, modifying, cleaning or clearing an electronic serial 11 number, mobile equipment identifier (MEID), International Mobile Station Equipment 12 Identity (IMEI) or any other unique identifier for a mobile device (collectively, “ESN 13 check”); 14 c. supplying Sprint Phones to or facilitating or in any way assisting other 15 persons or entities who Defendant knows or should know are engaged in the purchase or 16 sale of Sprint Phones or hacking, altering, erasing, tampering with, deleting or otherwise 17 disabling the software installed in Sprint Phones; 18 d. acquiring, advertising or reselling Sprint services; 19 e. engaging in any of the conduct described in the Complaint as the “Bulk 20 21 22 23 24 25 26 Handset Theft and Trafficking Scheme;” f. communicating with Sprint or its representatives or Sprint customers for or in connection with Sprint products or services; g. accessing Sprint’s computer networks either directly or through a Sprint representative or customer or a third-party; h. supplying Sprint Phones to or facilitating or in any way assisting other persons or entities who Defendant knows or should know are engaged in any of the acts 27 28 9 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT THOMAS BREWER 1 prohibited under this Permanent Injunction, including, without limitation, the buying 2 and/or selling of Sprint Phones; 3 i. knowingly using the Sprint Marks or any other trademark, service mark, 4 trade name and/or trade dress owned or used by Sprint now or in the future, or that is 5 likely to cause confusion with Sprint’s Marks, without Sprint’s prior written authorization; 6 7 8 9 10 11 j. holding himself out as being associated with, employed by or on behalf of, or acting as an agent, representative or authorized partner of Sprint; and k. advertising any products or services that have any purported connection to Sprint or any of Sprint’s affiliates. 15. The last known address of Defendant Thomas Brewer is 20885 Redwood Road, #312, Castro Valley, California 94546. 12 16. Defendant waives any and all rights to challenge the validity of this Final Judgment in 13 this Court or in any other court, and specifically waives his right of appeal from the entry of this 14 Final Judgment. 15 17. The purchase, sale or shipment of any Sprint Phones or engaging in any ESN checks 16 without Sprint’s prior written consent within and/or outside of the continental United States is and 17 shall be deemed a presumptive violation of this Permanent Injunction. 18 18. The Court retains jurisdiction over this matter and the parties to this action to enforce 19 any violation of the terms of this Permanent Injunction by a finding of contempt and an order for 20 payment of compensatory damages to Plaintiffs in an amount of $5,000 for each ESN check 21 conducted and/or every new Sprint Phone that Defendant is found to have acquired, purchased, 22 sold and/or unlocked in violation of this Injunction for a period of one year from entry of judgment. 23 The Court finds that these amounts are compensatory and will serve to compensate Sprint for its 24 losses in the event Defendant violates the terms of this Order. 25 26 27 28 10 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT THOMAS BREWER 1 2 19. The Court hereby finds, pursuant to Fed. R. Civ. P. 54(b), that there is no just reason for delay and orders that Judgment shall be entered against Defendant as set forth herein. 3 4 March DONE AND ORDERED this 11th of ______________, 201__. ___ day 6 5 6 _______________________________________ 7 UNITED STATES DISTRICT JUDGE YVONNE GONZALEZ ROGERS 8 9 10 Copies furnished to: 11 All Parties and Counsel of Record 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANT THOMAS BREWER
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