Sprint Solutions, Inc. et al v. KT Corp. et al

Filing 37

FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS KT CORP AND HAUTING T. LO A/K/A HAU TING LO by Judge Michael W. Fitzgerald. Final judgment is hereby entered against Defendant KT Corp. and in favor of the Plaintiffs, on all of the claims se t forth in Plaintiffs' Complaint in the principal amount of $5,000,000.00. Defendants and all of their past and present agents, employees, heirs, personal representatives, beneficiaries, relatives, and all other persons or entities acting o r purporting to act for them or on their behalves, including, but not limited to, any corporation, partnership, proprietorship or entity of any type that is in any way affiliated or associated with Defendants or Defendants representatives, agents, as signs, employees, independent contractors, associates, servants, and any and all persons and entities in active concert and participation with Defendants who receive notice of this Order, shall be and hereby are PERMANENTLY ENJOINED. Related to: Stipulation for Judgment and Permanent Injunction 35 (MD JS-6. Case Terminated). (jp)

JS-6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
SPRINT SOLUTIONS, INC.
and SPRINT COMMUNICATIONS
COMPANY L.P.,
Plaintiffs,
v.
KT CORP. and HAUTING T. LO
a/k/a HAU TING LO
Defendants.

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Case No: 2:14-CV-00736-MWF

FINAL JUDGMENT AND PERMANENT INJUNCTION
AGAINST DEFENDANTS KT CORP. AND
HAUTING T. LO A/K/A HAU TING LO
Plaintiffs Sprint Solutions, Inc., and Sprint Communications Company L.P.
(collectively, “Sprint” or “Plaintiffs”) brought the above-captioned lawsuit against
Defendants KT Corp. and Hauting T. Lo a/k/a Hau Ting Lo (collectively,
“Defendants”), alleging that Defendants are engaged in an unlawful enterprise
involving the unauthorized and deceptive bulk purchase and resale overseas 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 subsidy investment in

the 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 alleges that Defendants and their co-conspirators perpetrate the Bulk
Handset Trafficking Scheme by acquiring large quantities of Sprint Phones from
Sprint and/or Sprint authorized retailers and dealers, and by soliciting others to
purchase Sprint Phones in large quantities for the benefit of Defendants. Sprint
further contends that Defendants and their co-conspirators acquire the Sprint
Phones with the knowledge and intent that the Phones will not be used on the
Sprint wireless network (as required by the Sprint contracts), but instead, that the
Phones are trafficked and the vast majority resold as new overseas where the
Phones are not subsidized by wireless carriers. According to Sprint, in some cases,
Defendants and their co-conspirators acquire the Sprint Phones with the knowledge
and intent that the Phones will be computer-hacked or “unlocked,” to disable
software installed in the Phones by the manufacturers at the request and expense of
Sprint, which enables the activation of the Sprint Phones exclusively on Sprint’s
wireless system. The purpose of the software is to allow Sprint to offer the Phones
at a discount to the consumer while protecting Sprint’s subsidy investment in the

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Phone. The illegally unlocked Phones are trafficked and resold as new, at a
premium, under the Sprint trademarks.
Sprint Phones are sold subject to terms and conditions (“Terms and
Conditions”) which conspicuously restrict and limit the sale and use of the Phones.
These Terms and Conditions are set forth in printed inserts that are packaged with
each Phone and are posted on Sprint’s website.

Pursuant to the Terms and

Conditions of Sprint Phones, purchasers agree, among other things: (a) to pay the
monthly service charges and other related fees; (b) to pay an Early Termination
Fee (“ETF”) for each line of service that is terminated before the contract term is
concluded; (c) to activate the Sprint Phones on the Sprint CDMA network; (d) not
to resell the Sprint Phones and related products and services; and (e) not to use the
Phones for a purpose that could damage or adversely affect Sprint.
In this case, Sprint asserted claims against Defendants for breach of contract,
unfair competition, tortious interference with business relationships and
prospective advantage, civil conspiracy, unjust enrichment, conspiracy to induce
breach of contract, common law fraud, fraudulent misrepresentation, violations of
the federal Computer Fraud and Abuse Act, 18 U.S.C. § 1030, et seq., federal
trademark infringement under 15 U.S.C. § 1114, federal common law trademark
infringement and false advertising under 15 U.S.C. § 1125(a)(1)(A) and (B),
contributory trademark infringement, conversion, and unfair competition in

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violation of California Business & Professions Code § 17200, et seq. Based on the
respective positions advocated by the parties, and having reviewed the Complaint
and file and being otherwise duly and fully advised in the premises, it is hereby:
ORDERED, ADJUDGED and DECREED that:
1.

This Court has jurisdiction over all the parties and all of the claims set

forth in Sprint’s Complaint.
2.

The Court finds that Sprint has the right to use and enforce rights in

the standard character Sprint® mark and stylized Sprint® Virgin Mobile, payLo,
Assurance Wireless and Boost Mobile trademarks (collectively, the “Sprint
Marks”), as depicted below:

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Sprint uses the Sprint Marks on and in connection with its telecommunications
products and services. The Sprint Marks are valid, distinctive, protectable, famous,
have acquired secondary meaning, and are associated exclusively with Sprint.
3.

The Court finds that the Terms and Conditions and the language in

and on the packaging constitute a valid and binding contract enforceable against
Defendants. The Court finds that (a) failing to pay for monthly service charges; (b)
failing to pay ETF fees; (c) failing to activate the Phones on the Sprint wireless
network; (d) reselling and exporting the Sprint Phones and related products and
services; and (e) using the Phones for a purpose that could damage or adversely
affect Sprint, constitute independent breaches of contract for which Sprint is
entitled to relief.
4.

The Court finds that the conduct set forth in the Complaint constitutes

violations of the Lanham Act, 15 U.S.C. §§ 1114 and 1125(a)(1)(A) and (B) (federal
trademark infringement and false advertising). The Court further finds that the
conduct also constitutes breach of contract, unfair competition, tortious interference
with business relationships and prospective advantage, civil conspiracy, unjust
enrichment, conspiracy to induce breach of contract, common law fraud, fraudulent
misrepresentation, violations of the federal Computer Fraud and Abuse Act, 18
U.S.C. § 1030, et seq., contributory trademark infringement, and conversion.

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5.

Sprint has suffered damages, including loss of goodwill and damage

to its reputation, as a result of Defendants’ conduct. On review and consideration
of all relevant factors, Sprint is entitled to damages and injunctive relief on the
claims as set forth in the Complaint.
6.

Final judgment is hereby entered against Defendant KT Corp. and in

favor of the Plaintiffs, on all of the claims set forth in Plaintiffs’ Complaint in the
principal amount of Five Million Dollars and Zero Cents ($5,000,000.00 (U.S.)),
which shall bear interest at the legal rate, for which let execution issue forthwith.
7.

Defendants and all of their past and present agents, employees, heirs,

personal representatives, beneficiaries, relatives, and all other persons or entities
acting or purporting to act for them or on their behalves, including, but not limited
to, any corporation, partnership, proprietorship or entity of any type that is in any
way affiliated or associated with Defendants or Defendants’ representatives,
agents, assigns, employees, independent contractors, associates, servants, and any
and all persons and entities in active concert and participation with Defendants
who receive notice of this Order, shall be and hereby are PERMANENTLY
ENJOINED from:
a.

purchasing, selling, unlocking, reflashing, altering, advertising,
soliciting and/or shipping, directly or indirectly, any Sprint
Phones, without Sprint’s prior written authorization;

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b.

supplying Sprint Phones to or facilitating or in any way
assisting other persons or entities who Defendants know or
should know are engaged in the purchase or sale of Sprint
Phones or hacking, altering, erasing, tampering with, deleting
or otherwise disabling the software installed in Sprint Phones,
without Sprint’s prior written authorization;

c.

engaging in any of the conduct described in the Complaint as
the “Bulk Handset Trafficking Scheme;”

d.

supplying Sprint Phones to or facilitating or in any way
assisting other persons or entities who Defendants know or
should know are engaged in any of the acts prohibited under
this Permanent Injunction, including, without limitation, the
buying and/or selling of Sprint Phones; and

e.

knowingly using the Sprint Marks or any other trademark,
service mark, trade name and/or trade dress owned or used by
Sprint now or in the future, or that is likely to cause confusion
with

Sprint’s

authorization.

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Marks,

without

Sprint’s

prior

written

8.

The purchase, sale or shipment of any Sprint Phones without Sprint’s

prior written consent within and/or outside of the continental United States is and
shall be deemed a presumptive violation of this permanent injunction.
9.

The addresses of Defendants are as follows:
KT Corp.
22881 Hilton Head Drive, Unit 254
Diamond Bar, California 91765
Hauting T. Lo a/k/a Hau Ting Lo
22881 Hilton Head Drive, Unit 254
Diamond Bar, California 91765

10.

Defendants waive any and all rights to challenge the validity of this

Final Judgment in this Court or in any other court, and specifically waive their
right of appeal from the entry of this Final Judgment.
11.

The Court retains jurisdiction over this matter and the parties to this

action to enter an award of damages against Defendant Hauting T. Lo and to
enforce any violation of the terms of this Permanent Injunction by a finding of
contempt and an order for payment of compensatory damages to Plaintiffs in an
amount of $5,000 for each Sprint Phone that Defendants are found to have
purchased, sold or unlocked in violation of this Injunction. The Court finds that
these amounts are compensatory and will serve to compensate Sprint for its losses
in the event Defendants violate the terms of this Order.

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12.

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
Defendants as set forth herein.
DONE AND ORDERED this 22nd day of October, 2014.

____________________________________
UNITED STATES DISTRICT JUDGE

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