exemption did not apply to the defendant’s activities because the defendant’s “purchase and
resale of the TracFone handsets was for the purpose of reselling those handsets for a profit, and
not ‘for the sole purpose of lawfully connecting to a wireless telephone communication
network.’”^810 The court entered a judgment against the defendant for statutory damages in the
amount of $1,020,800.^811 Interestingly, the court entered an injunction against the defendant that
prohibited the defendant from even “purchasing ... any wireless mobile phone that they know or
should know bears any TracFone Trademark ....”^812
In TracFone Wireless, Inc. v. GSM Group, Inc.,^813 the defendant was engaged in bulk
purchase, reflashing, and redistributing TracFone phones. The plaintiff brought claims under
Section 1201 for circumvention and trafficking in circumvention technology, and the defendant
moved to dismiss for failure to state a claim, relying on the Copyright Office exemption. The
court denied the motion, ruling that the exemption did not apply because, citing the Dixon case,
the purpose of the defendant’s circumvention was to resell wireless telephone handsets for profit
and not for the sole purpose of lawfully connecting to a wireless telephone communications
network.^814 The court subsequently entered final judgment and a permanent injunction against
the defendants based on the DMCA claims on the same rationale. The permanent injunction
prohibited the defendants from purchasing or selling any wireless mobile phone that the
defendants knew or should have known bore any TracFone trademark and from reflashing or
unlocking any such phone. The court retained jurisdiction over the matter to punish any
violation of the permanent injunction in an amount of not less than $5,000 for each TracFone
handset that a defendant was found to have purchased, sold, or unlocked in violation of the
injunction, or $250,000, whichever was greater.^815
Similarly, in TracFone Wireless, Inc. v. Bitcell Corp.,^816 the court found the defendant’s
unlocking and resale of TracFone phones to constitute a violation of Section 1201. The court
noted that TracFone phones were sold subject to terms and conditions restricting use and sale of
the phones that were set forth in printed inserts included in the packaging with the phones, were
available to the public on TracFone’s web site, and were referenced in printed warnings placed
on the outside of the retail packaging of the phones.^817 With no legal analysis, the court simply
stated that the “Terms and Conditions and language on the packaging constitute a valid binding
contract.”^818 The court ruled that the Copyright Office exemption did not apply because the
(^810) Id. at p. 40,531.
(^811) Id.
(^812) Id.
(^813) 555 F. Supp. 2d 1331 (S.D. Fla. 2008).
(^814) Id. at 1336-37.
(^815) TracFone Wireless, Inc. v. GSM Groups, Inc., No. 07-23166-C1V Martinez-Brown, slip op. at 4-6 (S.D. Fla.
Aug. 15, 2008).
(^816) 2008 U.S. Dist. LEXIS 41955 (S.D. Fla. May 28, 2008).
(^817) Id. at *3.
(^818) Id.