Los Angeles, CA – T-Mobile’s trademark attorneys filed a trademark infringement, Lanham Act unfair competition, and breach of contract lawsuit in Federal District Court in Los Angeles. T-Mobile accuses the defendants of acquiring large quantities of T-Mobile prepaid phones from retail stores such as Wal-Mart and Target, not intending to activate the phones for use on the T-Mobile wireless network. Instead, the complaint continues, the cellular phones are computer-hacked in order to unlock the phones and disable the installed software and then the phones are shipped overseas and sold as new T-Mobile phones which are operable on other cellular telephone networks. Also, T-Mobile alleges that the defendants – in order to overcome the limits imposed by retailers on the number of telephones which may be purchased by one customer – employ “runners” to make multiple purchases of the telephones at different locations.
“Defendants’ conduct, together with that of currently unknown civil and criminal co-conspirators, is causing T-Mobile to suffer millions of dollars in losses and has caused immediate and irreparable injury to T-Mobile and T-Mobile’s trademarks,” the complaint states. T-Mobile subsidizes the price of the cellular telephone and sells it below cost, but recoups the subsidy from profits earned on the sale of the prepaid airtime cards. Thus, the complaint asserts, if the phones purchased by defendants are not activated on the T-Mobile wireless network, T-Mobile is unable to recoup its costs. The T-Mobile phones are also sold subject to terms and conditions which restrict and limit the sale and use of the phones. By unlocking the phones and not activating them on the T-Mobile network, the defendants are allegedly breaching the contractual terms of purchase. The case is titled T-Mobile USA, Inc. v. All Pro Distributing, Inc., et al., CV08-02691 GW (C.D. Cal. 2008).