T-Mobile USA, Inc. v. Terry et al

Filing 188

JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS in favor of Plaintiff T-Mobile USA, Inc. against Custom Access, Inc., George E Collett, Marilou Collett, Matthew Collett, Sandra Ortiz, Sarah M. Hoffman, Sherman Terry, signed by Judge Ronald B. Leighton. (DN) Modified on 7/17/2012 (DN). (cc to Marilou Collett; Matthew Collett; and Sarah Hoffman)

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The Honorable Ronald B. Leighton

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON, AT TACOMA

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T-MOBILE USA, INC., a Delaware
Corporation,

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Plaintiff,
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v.
SHERMAN TERRY, et al.,

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Defendants.

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) No. 3:11-cv-5655-RBL
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) FINAL JUDGMENT AND PERMANENT
) INJUNCTION AGAINST DEFENDANTS
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Plaintiff T-Mobile USA, Inc. (“T-Mobile”), brought the above-captioned lawsuit

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against Defendants Sherman Terry, Custom Access, Inc., Sandra Ortiz, George Collett,

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Marilou Collett, Mathew Collett and Sarah Hoffman (“Defendants”), alleging that

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Defendants are engaged in, and knowingly facilitate and encourage others to engage in the

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unlawful bulk purchase, computer hacking, and trafficking in T-Mobile-branded Subscriber

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Identity Module (“SIM”) cards that have been improperly loaded with stolen airtime,

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trafficking in and/or using the confidential and proprietary T-Mobile codes that are required to

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access T-Mobile’s proprietary activation system and wireless telecommunications network,

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selling methods and processes to defraud T-Mobile, and illegally accessing T-Mobile’s

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computers for the purpose of defrauding T-Mobile. Plaintiff further alleges that this is part of

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a larger scheme involving the unauthorized and unlawful bulk purchase, trafficking,

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advertising, and resale of T-Mobile prepaid wireless telephones (“Prepaid Handsets” or
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“Handsets”), including the resale of Handsets to buyers in foreign countries, unauthorized and

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unlawful computer unlocking of T-Mobile Prepaid Handsets, alteration of proprietary

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software computer codes installed in the Handsets to permit T-Mobile to subsidize the cost of

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the Handsets, and trafficking of the Handsets and SIM cards for profit (collectively, the

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“Subsidy Theft and Activation Fraud Scheme”).

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Defendants and their co-conspirators perpetrate the Subsidy Theft and Activation

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Fraud Scheme by acquiring large quantities of T-Mobile Prepaid Handsets including SIM

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cards, from retail stores, and by soliciting others (“Runners”) to purchase T-Mobile Prepaid

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Handsets with SIM cards in large quantities. The T-Mobile Prepaid Handsets are then

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removed from their original packaging, along with the accessories, including copies of the

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written warranties and ownership manuals, and the Handsets are shipped, unlocked or to be

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unlocked, and the accompanying activation materials, including but not limited to SIM cards,

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are resold by Defendants and their co-conspirators at a substantial profit. The T-Mobile

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Prepaid Handsets are acquired with the knowledge and intent that they will not be activated

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for use on the T-Mobile prepaid wireless network, as required by the terms of the T-Mobile

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contracts. Instead, the T-Mobile Prepaid Handsets are computer-hacked. The purpose of this

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hacking, known as “unlocking,” is to erase, remove, and/or disable the proprietary software

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installed in the Handsets by the manufacturers at the request and expense of T-Mobile, which

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enables the use of the T-Mobile Prepaid Handsets exclusively on T-Mobile’s prepaid wireless

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system. The illegally unlocked Handsets are trafficked and resold as new by Defendants and

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their co-conspirators, at a premium, under the T-Mobile trademarks and the SIM cards are

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sold fraudulently activated or to be fraudulently activated on the T-Mobile network.

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Defendants and their co-conspirators use confidential and proprietary materials to

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illegally access T-Mobile’s secure computers to fraudulently activate SIM cards on T-

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Mobile’s wireless telecommunications network. Defendants and their co-conspirators then

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traffic in the illegally-acquired airtime, the confidential and proprietary activation materials,

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and the methods and processes to defraud T-Mobile.
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As a result of the Defendants’ active participation in the Subsidy Theft and

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Activation Fraud Scheme, T-Mobile brought claims against Defendants for federal

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trademark infringement and false advertising under 15 U.S.C. § 1125(a)(1)(A) and (B);

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violations of the federal Computer Fraud and Abuse Act, 18 U.S.C. § 1030, et seq. and

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Georgia Statute § 16-9-93, Computer Systems Protection Act; contributory trademark

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infringement; common law fraud; unfair competition in violation of Georgia Statute § 23-

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2-55; deceptive trade practices in violation of Georgia statute § 10-1-374 et seq.; tortious

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interference with prospective business advantage; civil conspiracy; unjust enrichment; and

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conversion.

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On April 23, 2012, the Court entered an Order Granting Partial Summary

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Judgment and Entering Permanent Injunction Against Defendant George Collett. (Dkt.

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#182). Subsequent to the Summary Judgment Order, the Court entered an Order striking

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George Collett’s answer and entering default judgment on the claims not addressed in the

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Summary Judgment Order.

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Defendants Custom Access, Inc., Sherman Terry and Sandra Ortiz. With respect to

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Defendants Marilou Collett, Mathew Collett, and Sarah Hoffman, the Court has struck

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their answers and entered default judgments against them. Accordingly, pursuant to

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Federal Rules of Civil Procedure 8(b)(6), 54(b), 55(b), 56, 58 and 65, the Local Rules of

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the Court, the respective positions advocated by the parties and having reviewed the

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Complaint and file and being otherwise duly and fully advised in the premises, it is hereby
ORDERED, ADJUDGED and DECREED that:

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The Court has also entered default judgment against

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

in T-Mobile’s Complaint. Venue is proper in this judicial District.
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The Court finds that T-Mobile has the right to use and enforce said rights in

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the standard character mark T-Mobile and a stylized T-Mobile Mark (collectively, the “T-

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Mobile Marks”), as depicted below:

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T-Mobile uses the T-Mobile Marks on and in connection with its telecommunications

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products and services. T-Mobile alleges that Defendants’ use of the T-Mobile Marks

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without authorization in connection with the Subsidy Theft and Activation Fraud Scheme

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has caused, and will further cause, a likelihood of confusion, mistake and deception as to

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the source of origin of the counterfeit products, and the relationship between T-Mobile

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and Defendants. T-Mobile alleges that Defendants’ activities constitute false designation

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of origin, false descriptions and representations, and false advertising in commerce in

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violation of § 43(a) of the Lanham Act, 15 U.S.C. §1125(a)(1)(A) and (B). T-Mobile

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alleges that Defendants knew or should have known that T-Mobile is the licensee of the

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T-Mobile Marks and that Defendants had no legal right to use the T-Mobile Marks on

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infringing products.

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

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violations of 15 U.S.C. § 1125(a)(1)(A) and (B) (federal trademark infringement and false

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advertising). The Court further finds that the conduct constitutes violations of the federal

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Computer Fraud and Abuse Act, 18 U.S.C. § 1030, et seq. and Georgia Statute § 16-9-93,

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Computer Systems Protection Act; contributory trademark infringement; common law

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fraud; unfair competition in violation of Georgia Statute § 23-2-55; deceptive trade

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practices in violation of Georgia statute § 10-1-374 et seq.; tortious interference with

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prospective business advantage; civil conspiracy; unjust enrichment; and conversion, and

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has caused substantial and irreparable harm to T-Mobile, and will continue to cause

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substantial and irreparable harm to T-Mobile unless enjoined.

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4.

T-Mobile has suffered damages, including loss of goodwill and damage to

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its reputation, as a result of Defendants’ conduct that far exceeds the $5,000 aggregate

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annual damages under the Computer Fraud and Abuse Act. On review and consideration

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of all relevant factors, T-Mobile is entitled to damages and injunctive relief on the claims

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as set forth in the Complaint.
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Final judgment is hereby entered against Defendants Sherman Terry,

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Custom Access, Inc., Sandra Ortiz, George Collett, Marilou Collett, Mathew Collett and

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Sarah Hoffman, jointly and severally, and in favor of the Plaintiff T-Mobile USA, Inc., on

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all of the claims set forth in T-Mobile’s Complaint in the principal amount of One

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Million, Thirty-Four Thousand, Nine Hundred and Thirty-Eight Dollars and Sixteen Cents

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($1,034,938.16 (U.S.)), which shall bear interest at the legal rate, for which let execution

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issue forthwith.

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6.

Defendants Sherman Terry, Custom Access, Inc., Sandra Ortiz, George

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Collett, Marilou Collett, Mathew Collett and Sarah Hoffman, and each of their respective

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partners, agents, representatives, employees, servants, heirs, personal representatives,

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beneficiaries, relatives, contractors, companies, corporations, including, but not limited to,

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Custom Access, Inc. and Cell Phone George Inc., and each and all of Custom Access, Inc.

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and Cell Phone George Inc.’s past and present respective officers, directors, successors,

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assigns, parents, subsidiaries, affiliates, related companies, predecessors-in-interest,

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companies, respective agents, and employees, and all other persons acting on behalf of or

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for the benefit of any Defendant or who are in active concert or participation with any

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Defendant, including but not limited to any corporation, partnership, association,

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proprietorship or entity of any type that is in any way affiliated or associated with a

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Defendant or a Defendant’s representatives, agents, assigns, employees, servants,

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affiliated entities, and any and all persons and entities in active concert and participation

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with any Defendant who receive notice of this Order, shall be and hereby are

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PERMANENTLY ENJOINED from:
a.

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purchasing, selling, providing, altering, advertising, soliciting, using,

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and/or shipping, directly or indirectly, any T-Mobile “Activation

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Materials,” which consist of SIM cards, PIN numbers, activation and

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proprietary codes, and/or other mechanism, process or materials

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used to activate service or acquire airtime in connection with an

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activation on the T-Mobile network;
b.

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purchasing, selling, unlocking, reflashing, altering, advertising,

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soliciting, using, and/or shipping, directly or indirectly, any T-

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Mobile products or services.
c.

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purchasing, selling, unlocking, reflashing, altering, advertising,

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soliciting and/or shipping, directly or indirectly, any Activation

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Materials or T-Mobile mobile device that Defendants know or

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should know bears any T-Mobile marks or any marks likely to cause

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confusion with the T-Mobile marks, or any other trademark, service

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mark, trade name and/or trade dress owned or used by T-Mobile

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now or in the future;
d.

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accessing, directly or indirectly, personally or through an agent or

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associate, any of T-Mobile’s internal computers or computer

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systems;
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accessing, altering, erasing, tampering with, deleting or otherwise
disabling the software contained in any T-Mobile mobile device;

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f.

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supplying T-Mobile Activation Materials or mobile device to or

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facilitating or in any way assisting other persons or entities who

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Defendants know or should know are engaged in selling SIM cards,

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Activation Materials, and/or methods or processes to defraud T-

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Mobile or are unlocking T-Mobile mobile device and/or hacking,

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altering, erasing, tampering with, deleting or otherwise disabling the

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software installed in T-Mobile mobile device;
g.

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supplying T-Mobile Activation Materials or devices to or facilitating

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or in any way assisting other persons or entities who Defendants

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know or should know are engaged in any of the acts prohibited
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under this Permanent Injunction, including, without limitation, the

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buying and/or selling of T-Mobile Activation Materials or mobile

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device; and
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knowingly using the T-Mobile marks or any other trademark,

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service mark, trade name and/or trade dress owned or used by T-

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Mobile now or in the future, or that is likely to cause confusion with

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T-Mobile’s marks, without T-Mobile’s prior written authorization.

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The purchase, sale, trafficking, use, or shipment of any T-Mobile mobile

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device, SIM card, accessory, or Activation Materials without T-Mobile’s prior written

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consent within and/or outside of the continental United States is and shall be deemed a

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presumptive violation of this permanent injunction.

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Pursuant to the Lanham Act, Defendants shall deliver and turn over all T-

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Mobile SIM cards, handsets, and products in their possession, or subject to their custody or

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control, bearing or infringing on any T-Mobile trademark or a confusingly similar copy

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thereof, to T-Mobile within 10 days of the date of this Final Judgment.

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The last known address of George Collett is 510 South 112th Street,

Tacoma, WA 98444.
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The last known address of Marilou Collett is 8714 S. Asotin Street,

Tacoma, WA 98444.
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The last known address of Matthew Collett is 1010 S. 21st Street, Tacoma,

WA 98405.
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The last known address of Sarah Hoffman is 1010 S. 21st Street, Tacoma,

WA 98405.
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The last known address of Defendant Sherman Terry is, c/o FPC Atlanta,

P.O. Box 150160, Unit #G-11, Atlanta, Georgia 30315.
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The last known address of Defendant Sandra Ortiz is 84 Clantoy Street,

Springfield, Massachusetts 01104.
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The last known address of Custom Access, Inc. is 60 Cliff View Dr,

Covington, Georgia 30016.
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The address of Plaintiff, T-Mobile USA, Inc., is 12920 S.E. 38th Street,

Bellevue, Washington 98006.
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The Court retains jurisdiction over this matter and the parties to this action

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to enforce any violation of the terms of this Permanent Injunction by a finding of

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contempt and an order for payment of compensatory damages to T-Mobile in an amount

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of $5,000 for each T-Mobile Prepaid Handset, accessory, or item of Activation Material

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that a Defendant is found to have purchased, sold, advertised, activated, used, provided or

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unlocked in violation of this Injunction.

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compensatory and will serve to compensate T-Mobile for its losses in the event any

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Defendant violates the terms of this Order.

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The Court finds that these amounts are

The Court hereby finds, pursuant to Fed. R. Civ. P. 54(b), that there is no

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just reason for delay and orders that Judgment shall be entered against Defendants as set

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forth herein.

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DONE AND ORDERED this 17th day of July, 2012.

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A

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Ronald B. Leighton
United States District Judge

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Copies furnished to:
All Counsel of Record and pro se parties

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