Judge Tells Sprint to Try Again
LOS ANGELES (CN) - Sprint needs to show it suffered a substantial business loss to prevail in a lawsuit against a bulk reseller it accuses of hacking into Sprint phones and selling them for a profit overseas, a federal judge ruled.
Sprint sued Pacific Cellupage last year, claiming the reseller was buying up Sprint phones and unlocking them for use outside the Sprint network.
"The unlocking process involves removing or altering the proprietary software on the phones that prevents them from being used outside Sprint's wireless network," U.S. District Judge Christina Snyder wrote in an 11-page order on July 21.
Snyder granted Pacific Cellupage's and defendants Yousef Saghian, Daniel Saghian, and Navid Davidian's motion to dismiss, finding that Sprint did not make clear that it had suffered a "loss" under the Computer Fraud and Abuse Act (CFAA) of 1986.
Sprint claimed it spent more than $5,000 investigating the scheme, as required by the CFAA, which says a case must allege a "'loss to 1 or more persons during any 1-year period ... aggregating at least $5,000 in value.'"
But Snyder found that Sprint did not make clear which losses stem "directly from conducting damage assessments and other investigations of possible impairment to the integrity of Sprint's computer networks."
"Currently, the SAC [second amended complaint] alleges that Sprint has 'spent well in excess of $5,000,' but then proceeds to reference a series of costs, some of which are cognizable losses under the CFAA, and some that are not. As a result, the SAC does not unambiguously allege cognizable loss under the CFAA that exceeds $5,000," Snyder found.
Sprint has until Aug. 18 to file a third amended complaint.
It accused Pacific of unfair competition, tortious interference with prospective economic advantage, fraud, trademark infringement, and other counts.