TracFone claims unlocking cellphones is a DMCA violation

[rms () bsf-llc com]

http://arstechnica.com/news.ars/post/20060217-6205.html

Prepaid cell phone provider tries DMCA smackdown
2/17/2006 12:31:05 PM, by Eric Bangeman

When a company feels its business model is threatened, it will often use
any means necessary to fight back. One unintended side effect of the
passage of the Digital Milennium Copyright Act was to give companies in
the technology industry another bullet in the chamber, albeit one that
frequently misfires. TracFone, which describes itself as "the largest
provider of prepaid wireless telephone service in the United States," has
sued (http://www.copyright.gov/1201/2006/reply/14granick_WA.pdf) Sol
Wireless Group, accusing the company of violating the DMCA along with
trademark violations and unfair competition.

Almost every cellular provider sells its phones at a deep discount when
you agree to sign up for service—either on a contract or prepaid. In the
case of TracFone, they sell locked Nokia handsets below cost and then make
their money by selling prepaid minutes. So far, so good. In the fine
tradition of American entrepreneurialism, Miami-based Sol Wireless Group
saw a business opportunity and began buying phones from TracFone,
unlocking them so they can be used on any network, and then reselling them
at a tidy profit.

When TracFone discovered that its Nokia 1100 and 2600 phones were being
resold, they hired a private investigator to, well, investigate. After
negotiating the purchase of a handful of phones, a PI went to the Sol
Wireless store:

While at Sol Wireless, one of the investigators observed defendant Pino
take a Nokia 1100 wireless handset out of a plastic bag, remove the back
cover of the phone, and insert a small, black, square-shaped device
approximately three inches in diameter into the back of the wireless phone
where the battery is located. The device was then connected by a black
curled cord, similar to a telephone cord, to the back of a computer
located on top of the desk. After a short time, the device was removed
from the back of the wireless phone. This action took approximately one to
two minutes to accomplish. Pino performed the same process on each of
Nokia wireless phones purchased by the investigator. The phones, along
with a battery and charger, were then packaged in Nokia container boxes.

...



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