AT&T Suing To Stop Prepaid Phone Unlocking, Resale

from the this-is-a-trademark-violation? dept

Thu, Feb 7th 2008 6:26pm — Mike Masnick

It's quite interesting to see the way companies misuse intellectual property law in order to try to prop up what is otherwise a weak business model. We've covered the case of Tracfone, a prepaid mobile phone company, who sells cheap phones hoping to make it up on the service fees. However, when an exception was added to the DMCA allowing phone unlocking, Tracfone flipped out. The company even went so far as to claim that unlocking mobile phones could represent a national security issue. Tracfone, though, is a rather small player in the space. It turns out that AT&T is joining in on the fun and suing to stop prepaid phone unlocking. The company is not going after individual unlockers, but the bulk unlockers. What's interesting, though, is that the lawsuit appears to be over the issue of trademark violation. Why this isn't just a contractual issue isn't clear -- but it seems strange to make it a trademark issue. However, again, all this really shows is that the business model around prepaid phones, relying on subsidized phones, isn't a particularly good one. That's no reason to sue or pass laws that protect it, though.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: prepaid, trademark, unlocking
Companies: at&t, tracfone

10 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Coward, 7 Feb 2008 @ 6:34pm

Mike...
...I love your posts, but man, you've got to get some key points OTHER than the Streisand Effect and business models.
[ link to this | view in thread ]
Anonymous Coward, 7 Feb 2008 @ 7:34pm

Theft
The linked article even goes so far as to say that unlocking prepaid phones "amounts to a theft of subsidies" and that the telcos are "working with federal law enforcement officials on the problem". Notice how these companies like to call anything that challenges their business plans "theft"? Sounds like the old "illegal interference with business model" claim to me.

Gimme a break.
[ link to this | view in thread ]
Terry, 7 Feb 2008 @ 7:36pm

Theft by Illegal Interference with Business Model - I love it!
[ link to this | view in thread ]
Ben, 7 Feb 2008 @ 8:26pm

Re: Mike...
Coward, By trying to draw attention away from the Streisand Effect and business models, you are drawing attention to the Streisand Effect and business models. BTW, nice objective source there, lamenting about theft of subsidies! Nearly fell outta my chair.
[ link to this | view in thread ]
Edmond Woychowsky, 8 Feb 2008 @ 4:37am

AT&T
This just shows that Jerry Pournelle was right when he said AT&T couldn't market a cure for death.
[ link to this | view in thread ]
jhunter, 8 Feb 2008 @ 7:06am

Trademark
Maybe they are making a trade mark issue because their logo is on the phone. So when the unlocker sells the unlocked phone it still has an AT&T logo. And I can see how a customer could be confused by this.
[ link to this | view in thread ]
cb, 8 Feb 2008 @ 8:38am

AT&T: If you don't want your phone unlocked and used for other purposes than don't make it, don't market it or don't sell it. Get a life would you. Move on.
[ link to this | view in thread ]
Doug Stewart, 8 Feb 2008 @ 3:15pm

Resale of Phones
This is a battle that AT&T is destined to lose (and good on that I say).

The Office of Trademarks and Copyrights have already moved that this is a "non-event".

Remember the Tracphone? These jokers tried playing the same game and lost.

If AT&T would spend half as much energy trying to meet their customer's needs as trying to screw them. They'd make more money.
[ link to this | view in thread ]
lou, 24 Feb 2008 @ 10:52am

tracfone sying on customers
tarcfone--whose carrier is at&t is allowing its cutomer's calls to be spied on by the govenment agencies...if your outgoing calls on tracfone say---as mine does at all times---"CALL DIVERT SET"---you are a victime of the global, war-mongering overlords. i m an american citizen with no criminal records (after near 60 years of life in the "land of the free") and i--nor my friends and family are any part of the "global terrorist network"...the criminal u.s. gov't. is a big brother andwe are on animal farm...god help us....
[ link to this | view in thread ]
Roy, 14 Oct 2008 @ 7:01pm

TracFone or AT&T?
Look at my video showing a side by side comparison of my iPhone and my TracFone... Go figure.

My AT&T service (Cingular when I started it in March 2002) was so bad and unreliable, I had to purchase a TracFone as a backup. My mom was in Hospice, and I needed to be in touch 27-7... The TracFone was flawless and got "bars" everywhere.

My TracFone/AT&T "shootout can be seen by typing in my "name" ROYINTEXAS on YouTube.
[ link to this | view in thread ]