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Thursday, June 26, 2008, 05:55 pm PT (08:55 pm ET)

Apple makes example of iPod repairman in lawsuit

The owner of an iPod repair shop is being sued by Apple for misuse of the coveted iPod trademark — and of allegedly manipulating Apple to both send him replacement units for free as well as tricking the electronics giant into repairing out-of-warranty iPods.

The simplest component of Apple's nine-page lawsuit, filed late last week, accuses Michigan state resident Nicholas Woodhams of misusing Apple's "iPod" and "Pod" trademarks through the name of his iPod Mechanic company and website.

Apple charges that Woodhams wasn't given permission to use the media player's name and was asked to stop using it in 2006. He reportedly agreed and struck an agreement with Apple to stop using the name over a phase-out period that would see him drop the iPod Mechanic name by January 2007, with the ipodmechanic.com domain parked by March of the same year.

None of these happened, Apple says. Accordingly, users can still visit and do business with the site today.

More egregious are accusations in the lawsuit that Woodhams has knowingly committed fraud against Apple by convincing the Cupertino, Calif.-based firm to send him free components.

One such act reportedly had Woodhams exploiting Apple's iPod shuffle Advance Replacement Program in 2007. In the official approach, customers with broken iPod shuffles were asked by Apple to fill out an online repair form and ship out their damaged iPods in exchange for fresh replacements; if they failed to return their old models, they would be charged the price of a new player.

The defendant, however, is claimed to have filled in many of these forms for customers himself, using a credit card he knew would be authorized for a potential charge — a prerequisite to getting the replacement — but would immediately decline any actual credit charges Apple would make when the broken unit mysteriously failed to ship.

Woodhams and those aware of the scheme "never planned" to return any iPods and ultimately sold the brand new models at a heavy discount, the complaint reads — a tactic no longer in evidence on the site, but one which reportedly cost Apple over $75,000.

In a second fraud claim, Apple also says that Woodhams persuaded Apple to repair out-of-warranty iPods by swapping the back cases of out-of-warranty iPods with those of iPods still covered for free under Apple's one-year service agreement. The approach purportedly let him avoid paying for the repair or the necessary parts himself, though Apple doesn't illustrate the financial damage it says was suffered as a result of the deception.

As both the contract breach and the alleged fraud are all viewed as deliberate, the iPod maker believes it's owed triple damages in addition to forcing Woodhams to give up using the iPod Mechanic website and the associated marks.

Neither Apple nor Woodhams has commented on the lawsuit.