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AT&T Mobility LLC v. S&D Cellular

September 23, 2009

AT&T MOBILITY LLC AND AT&T INTELLECTUAL PROPERTY II, L.P., PLAINTIFFS,
v.
S&D CELLULAR, INC., D/B/A SND CELLULAR INC.; DILIP DASWANI; AND DOES 1-10, DEFENDANTS.



FINAL JUDGMENT AND PERMANENT INJUNCTION AGAINST DEFENDANTS

Plaintiffs AT&T Mobility LLC and AT&T Intellectual Property II L.P. (collectively "AT&T"), brought the above-captioned lawsuit against, Defendants S&D Cellular, Inc. d/b/a SND Cellular Inc. and Dilip Daswani (collectively, "Defendants"), alleging that Defendants are engaged in an unlawful enterprise involving the acquisition, sale, and alteration of large quantities of AT&T wireless devices sold for the purpose of use with AT&T's prepaid service (referred to herein as "GoPhones" or "Phones") and associated SIM cards and activation kits purchased from retail outlets, the solicitation and payment of others to bulk purchase Phones for Defendants' benefit, computer hacking and erasing or otherwise disabling software installed in the Phones, or selling the Phones to others who disable the software, and ultimately selling or facilitating the sale of the altered Phones as new under the AT&T trademarks for unauthorized use outside of the AT&T wireless system for profit and illicitly selling and/or fraudulently activating the SIM cards that come with the prepaid devices for the unlawful acquisition of airtime (the "Illicit Bulk Resale Scheme").

AT&T GoPhones are sold subject to terms and conditions ("Terms and Conditions") which conspicuously restrict and limit the sale and use of the GoPhones. These Terms and Conditions are set forth in printed inserts that are included in the packaging with every AT&T GoPhone and are posted on AT&T's website. The Terms and Conditions and language on the GoPhone packaging constitute a valid binding contract.

AT&T asserts that Defendants have violated the Terms and Conditions by, inter alia, purchasing AT&T GoPhones with the intent that such phones will not be activated and used on AT&T's service, but instead with the intent to improperly unlock, repackage, and resell the phones, and by otherwise using the GoPhones in violation of the Terms and Conditions.

As a result of Defendants' involvement in the Illicit Bulk Resale Scheme, AT&T asserted claims against Defendants for breach of contract; federal trademark infringement under 15 U.S.C. § 1114, 15 U.S.C. § 1125(a), and 15 U.S.C. § 1125(c); violation of Cal. Bus & Prof. Code §§ 14200 et seq. and 17200 et seq.; contributory trademark infringement; tortious interference with business relationships and prospective advantage; tortious interference with contract; conspiracy to induce breach of contract; civil conspiracy; and unjust enrichment.

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 AT&T's complaint.

2. The Court finds that AT&T has the right to use and enforce said rights in the stylized AT&T and GOPHONE marks, which are used in connection with telecommunications products and services, as depicted below:

AT&T uses the AT&T Marks on and in connection with its telecommunications products and services. The AT&T and GOPHONE marks are valid, distinctive, protectable, famous, have acquired secondary meaning, and are associated exclusively with AT&T.

3. The Court finds that Defendants' involvement in the Illicit Bulk Resale Scheme constitutes breach of contract; federal trademark infringement under 15 U.S.C. § 1114, 15 U.S.C. § 1125(a), and 15 U.S.C. § 1125(c); violation of Cal. Bus & Prof. Code §§ 14200 et seq. and 17200 et seq.; contributory trademark infringement; tortious interference with business relationships and prospective advantage; tortious interference with contract; conspiracy to induce breach of contract; civil conspiracy; and unjust enrichment.

4. The Court finds that the Terms and Conditions and the language on the GoPhone packaging constitute a valid binding contract enforceable against Defendants. The Court finds that (a) facilitating others to use GoPhones in conjunction with service providers other than AT&T, and (b) tampering with or altering, or facilitating or assisting others to tamper with or alter, GoPhones or the GoPhones' software constitute independent breaches of contract for which AT&T is entitled to relief.

5. The Court further finds that Defendants' participation in the Illicit Bulk Resale Scheme, including, inter alia the purchase and sale of GoPhones and activation kits, causes substantial and irreparable harm to AT&T for which there is no adequate remedy at law, and will continue to cause substantial and irreparable harm to AT&T unless enjoined.

6. On review and consideration of all relevant factors, AT&T is entitled to damages and injunctive relief on the claims as set forth in the Complaint.

7. Final judgment is hereby entered against Defendant S&D Cellular, Inc., d/b/a SND Cellular Inc. and in favor of the Plaintiffs AT&T Mobility LLC and AT&T Intellectual Property II L.P. on all claims set forth in AT&T's 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.

8. S&D Cellular, Inc. d/b/a SND Cellular Inc. and Dilip Daswani, and each and all of their past and present respective officers, directors, successors, assigns, parents, subsidiaries, affiliates, related companies, predecessors-in-interest, agents, employees, heirs, personal representatives, beneficiaries, relatives, and all other persons or entities acting or purporting to act for him/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, independent contractors, associates, servants, affiliated ...


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