Unlocking legal action possible, not always desirable

James Baldinger, a partner at Carlton Fields PA, has successfully litigated cases on behalf of Tracfone Wireless Inc. against individuals and groups that have purchased discounted Tracfone handsets, unlocked them and resold them for profit.
Based on his experience with such litigation and his familiarity with exemptions to the Library of Congress’ Digital Millennium Copyright Act, which protect individuals who unlock their own phones for personal use, Baldinger said that individuals or groups that provide unlocking procedures to others for fun or profit are potential targets of litigation.
In the AT&T Mobility/Apple Inc. case, Baldinger cautioned that he did not know what if any copyrights owned by the two companies might be violated by unlocking the iPhone. But both companies may well have a case against anyone who has unlocked the iPhone and spread his knowledge, including the folk hero du jour, George Hotz, if the latter actually traded his knowledge for the car and iPhones he received from CertiCell.
“I think they’re violating the DMCA,” Baldinger said. “They’re trafficking in certain instrumentalities that permit circumvention of certain copyrights.”
Violated copyrights could pertain to software that locks the phone, enabling AT&T Mobility to capitalize on its business model for the iPhone, or violated copyrights might pertain to other proprietary software that enables applications on the AT&T Mobility network.
“I don’t know how many of those things stop working when you unlock the phone and try to run it on another network,” Baldinger said. “And I’m not sure which party-Apple or AT&T-owns those copyrights.”
“We have been successful in getting courts to recognize that the DMCA exemption does not apply to people who are unlocking handsets for profit,” Baldinger said. “The exemption applies only to people who are unlocking their phone for the sole purpose of lawfully connecting to a network.”
“I can’t speak for Apple or AT&T, so I can’t say who the target would be, or even whether they’ll attempt to challenge this,” Baldinger added. “But the companies out there trying to earn a buck unlocking people’s phones, or by selling the ‘instrumentality’ for doing so, they’re the ones with the most to worry about.”
What about firms based overseas?
“It always complicates things when you have to chase someone down in another country,” the attorney said.
Baldinger, who worked for eight years as an in-house attorney at AT&T, including a stint as vice president of security, said that a company in AT&T Mobility’s position must evaluate its overall strategy and possible undesirable outcomes to litigation, such as negative publicity from a perception that it was singling out, say, a teenage hacker
basking in the media limelight.
“I’m particularly sensitive to the other, outside pressures one must consider when deciding whether to use litigation,” Baldinger said. “Public relations is certainly one of them. These are consumer-based businesses. You have to think about the implications. Sometimes you decide the issue is too important and you have to press forward with litigation. These are very sophisticated players and I’m sure they’re weighing their options.”
All this would seem to put CertiCell on the hot seat regarding its Sept. 14 declaration of its “intentions” towards the iPhone.
“It’s a brilliant publicity stunt,” Baldinger said.