J.T. Colby & Company, Inc. et al v. Apple, Inc.

Filing 130

MEMORANDUM OF LAW in Opposition re: 104 MOTION for Summary Judgment.. Document filed by Ipicturebooks LLC, J.Boyston & Company, J.T. Colby & Company, Inc., Publishers LLC. (Chattoraj, Partha)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
J.T. COLBY & COMPANY, INC. d/b/a
BRICK TOWER PRESS, J. BOYLSTON &
COMPANY, PUBLISHERS LLC and
IPICTUREBOOKS LLC,

Case No. 11-cv-4060 (DLC)

Plaintiffs,
-againstAPPLE INC.,
Defendant.

MEMORANDUM OF LAW IN OPPOSITION TO
DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

ALLEGAERT BERGER & VOGEL LLP
Partha P. Chattoraj
David A. Shaiman
111 Broadway, 20th Floor
New York, New York 10006
[phone]
Attorneys for Plaintiffs J.T. Colby & Co., Inc. d/b/a
Brick Tower Press, J. Boylston & Co., Publishers,
LLC, and ipicturebooks, LLC

TABLE OF CONTENTS

TABLE OF AUTHORITIES .......................................................................................................... ii
PRELIMINARY STATEMENT .................................................................................................... 1
FACTUAL BACKGROUND ......................................................................................................... 6
ARGUMENT .................................................................................................................................. 6
I.

Summary Judgment Standard ............................................................................................. 6

II.

PLAINTIFFS’ TRADEMARKS ARE ENTITLED TO PROTECTION ........................... 7
A.

Plaintiffs’ IBOOKS Mark Is Suggestive..................................................................... 7

B.

Whether IBOOKS Is Descriptive or Suggestive Is a Disputed Question of Fact ....... 9

C.

Plaintiffs’ IBOOKS Trademark Has Developed Secondary Meaning ..................... 10

III.

APPLE DOES NOT HAVE PRIORITY OVER PLAINTIFFS .................................... 14

A.
Apple’s Purported Acquisition of the Mark from Family Systems Was an Invalid
Assignment in Gross ............................................................................................................. 14
B.

Apple’s Registration Should Be Cancelled for Fraud on the PTO ........................... 17
1. Apple’s Recordation of the Family Systems Assignment and Subsequent Renewal of
the 634 Registration Were Fraudulent .............................................................................. 19
2. Apple’s May 17, 2010 Amendment to the 634 Registration Contained Knowing
Falsehoods......................................................................................................................... 21
3. Apple’s April 7, 2010 Application for a New IBOOKS Registration and its
Subsequent Amendment Were Fraudulent ....................................................................... 22

IV. THERE IS A LIKELIHOOD OF CONFUSION BETWEEN THE PARTIES’
IDENTICAL MARKS ON RELATED GOODS ..................................................................... 24
A.

Saturation of the Market ........................................................................................... 25

B.

Analysis of Polaroid Factors ..................................................................................... 26

V. PLAINTIFFS’ RELATED STATE-LAW CLAIMS ARE SUBJECT TO SIMILAR
STANDARDS AND ARE THEREFORE NOT SUBJECT TO DISMISSAL ........................ 33
CONCLUSION ............................................................................................................................. 34

i

TABLE OF AUTHORITIES

Cases
Abercrombie & Fitch Co. v. Hunting World, 537 F.2d 4 (2d Cir. 1976) ....................................... 8
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) .................................................................. 6
Arista Records LLC v. Lime Group LLC, No. 06 CV 5936 (KMW), 2011 WL 1642434
(S.D.N.Y. Apr. 20, 2011) .......................................................................................................... 32
Best Cellars, Inc. v. Wine Made Simple, Inc., 320 F. Supp. 2d 60 (S.D.N.Y. 2003) ................... 33
Boathouse Group, Inc. v. Tigerlogic Corp., 777 F. Supp. 2d 243 (D. Mass. 2011) ..................... 17
Bristol-Meyers Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033 (2d Cir. 1992)........................ 8
Celotex Corp. v. Catrett, 477 U.S. 317 (1986) ............................................................................... 6
City of New York v. Tavern on the Green, L.P., 427 B.R. 233 (S.D.N.Y. 2010) .................. 18, 21
Clark & Freeman Corp. v. Heartland Shoe Co., Inc., 811 F. Supp. 137 (S.D.N.Y. 1993) ........... 17
Coach Leatherware Co., Inc. v. AnnTaylor, Inc., 933 F.2d 162 (2d Cir. 1991) ........................... 10
E.G.L. Gem Lab Ltd. v. Gem Quality Inst., Inc., 90 F. Supp. 2d 277 (S.D.N.Y. 2000) .............. 32
First Nat’l Bank of Omaha v. Mastercard Int’l Inc., No. 03 Civ. 707(DLC), 2004 WL 1575396
(S.D.N.Y. 2004) .................................................................................................................. 25, 26
Golden Pac. Bancorp v. FDIC, 273 F.3d 509 (2d Cir. 2001) ....................................................... 34
Gross v. Bare Escentuals Beauty, Inc., 632 F. Supp. 2d 283 (2008) ...................................... 10, 14
Haggar Int’l Corp. v. United Co. for Food Indus. Corp., No. 03 CV 5789(ARR), 2011 WL 67049
(E.D.N.Y. Jan. 10, 2011) .......................................................................................................... 24
Hasbro, Inc. v. Lanard Toys, Ltd., 858 F.2d 70 (2d Cir. 1988) ...................................................... 9
Information Clearing House, Inc. v. Find Magazine, 492 F. Supp. 147 (S.D.N.Y.1980) .............. 9
Kensington Pub. Corp. v. Gutierrez, No. 05 Civ. 10529 (LTS), 2009 WL 4277080 (S.D.N.Y.
Nov. 10, 2009) .......................................................................................................................... 10
Lane Cap. Mgmt., Inc. v. Lane Cap. Mgmt., Inc., 192 F.3d 337 (2d Cir. 1999) ............ 7, 9, 10, 16
Levitt Corp. v. Levitt, 593 F.2d 463 (2d Cir. 1979) ..................................................................... 16
Mastercard Int’l Inc. v. First Nat’l Bank of Omaha, No. 02 Civ. 3691(DLC), 2004 WL 326708
(S.D.N.Y. Feb. 23, 2004) .............................................................................................. 6, 7, 9, 25
Mears v. Montgomery, No. 02 Civ. 0407, 2004 WL 964093 (S.D.N.Y. May 5, 2004) ............... 18
Medisim Ltd. v. BestMed LLC, No. 10 CV. 2463 (SAS), 2012 WL 5954757 (S.D.N.Y. Nov. 28,
2012) ......................................................................................................................................... 31
Patsy’s Brand, Inc. v. I.O.B. Realty, Inc., 317 F.3d 209 (2d Cir. 2003) ....................................... 25
Patsy’s Italian Rest., Inc. v. Banas, 575 F. Supp. 2d 427 (E.D.N.Y. 2008).................................. 18

ii

Perfect Pearl Co. v. Majestic Pearl & Stone, Inc., __ F. Supp. 2d __, 2012 WL 3526611
(S.D.N.Y. Aug. 14, 2012) ........................................................................................................... 8
Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir.1961) ................................... 24
Randa Corp. v. Mulberry Thai Silk, Inc., No. 00 CIV 4061 (LAP), 2000 WL 1741680 (S.D.N.Y.
Nov. 27, 2000) .......................................................................................................................... 33
Rattner v. Netburn, 930 F.2d 204 (2d Cir. 1991) ............................................................................ 6
Sunenblick v. Harrell, 895 F. Supp. 616 (S.D.N.Y. 1995) ........................................................... 26
Thompson Med. Co., Inc. v. Pfizer Inc., 753 F.2d 208 (2d Cir.1985).......................................... 10
Tri-Star Pictures, Inc. v. Unger, 14 F. Supp. 2d 339 (S.D.N.Y. 1998) ......................................... 13
Ushodaya Enterprises, Ltd. v. V.R.S. Int'l, Inc., 63 F. Supp. 2d 329 (S.D.N.Y. 1999) ................ 20
W.W.W. Pharm. Co. v. Gillette Co., 984 F.2d 567 (2d Cir. 1993) .............................................. 26
Statutes
15 U.S.C. § 1064(3) ...................................................................................................................... 17
Rules
Fed. R. Civ. P. 56(c) ....................................................................................................................... 6
Treatises
MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION (West 2011) ...................................... 29
SIEGRUN D. KANE, KANE ON TRADEMARK LAW (PLI 2011) ........................................................ 14
Regulations
TMEP § 1209.03(d) ........................................................................................................................ 8

iii

Plaintiffs J.T. Colby & Co., Inc. d/b/a Brick Tower Press, J. Boylston & Co., Publishers,
LLC, and ipicturebooks, LLC respectfully submit this Memorandum of Law in opposition to the
Motion for Summary Judgment of Defendant Apple Inc. (“Apple”).
PRELIMINARY STATEMENT
Plaintiffs and their predecessors in interest have been selling books bearing the iBooks
imprint since 1999, generating revenues in excess of $33 million. The iBooks brand developed a
cachet for innovative titles in the science fiction, fantasy, military history, and graphic novel
genres, among others, and garnered a reputation as an early adopter of electronic book
distribution media, such as interactive CD-ROMs and digital distribution rights. By 2004,
Publishers Weekly named the company one of the ten outstanding independent publishers of the
year. Thus, on January 27, 2010, when Defendant Apple Inc. announced that it intended to
introduce the iPad tablet computer that would permit the user to purchase, download and read
electronic books through its “iBooks” application (“app”), Plaintiffs’ principal John T. Colby,
Jr., a scion of generations of book publishers, who himself had worked in the business of book
publishing for 30 years, as a Chief Financial Officer at Doubleday and in running his own family
of independent imprints, see Declaration of John T. Colby, Jr. in Opposition to Motion for
Summary Judgment, dated January 25, 2013 (“Colby Decl.”) ¶¶ 2-57, was justifiably concerned.
Using the contact information for the Apple publicist named at the end of that January 27
press release, Mr. Colby telephoned and emailed Apple on January 29, 2010, notifying them that
the iBooks imprint had been in circulation since the 1990s, and requesting a conversation with an
appropriate Apple representative to work out a business arrangement between Plaintiffs and
Defendant concerning sales of Plaintiffs’ books through the iBooks app. Instead of taking Mr.
Colby up on his offer, Apple immediately referred his email to its counsel. In subsequent

conversations, which took place in the months before Apple released the iPad and the iBooks app
in April 2010, Apple explained to Mr. Colby that Apple owned a federally registered IBOOKS
trademark, unlike Plaintiffs’ common law trademark, and, in any event, that Apple’s trademark
had been in use since before 1999.
Faced with the possible cancellation of the IBOOKS registration and liability for its
knowing and willful infringement of Plaintiffs’ common law IBOOKS trademark, Apple resorts
to belittling and mocking Plaintiffs and their principal, John Colby, who rescued the IBOOKS
brand and publishing business, with its many business relationships and thousands of author
contracts, from bankruptcy after the company’s founder, Byron Preiss, died in a tragic car
accident. Apple contends that Plaintiffs are too small to matter, that their business is too frail to
be entitled to trademark protection, and that their brand is too obscure to be confused with
Apple’s pervasive marketplace identity. Upon scrutiny, however, these insults are revealed for
what they are – fictions created to obscure the stark and simple truth of what actually occurred:
Plaintiffs have been selling books with the IBOOKS imprint since 1999; Apple decided to enter
the electronic book sales market in conjunction with its release of the iPad tablet computer, in
order to compete with electronic book readers like the Kindle; Apple decided it liked the iBooks
name; Apple learned about Plaintiffs’ longtime use of the mark; and Apple did not care. This
lawsuit was filed to redress that wrong.
Apple moves for summary judgment, contending that there are no disputed issues for a
jury to decide. To the contrary, however, most of the facts on which Apple bases its motion are
sharply disputed, and Apple’s presentation of the facts in its motion simply ignores such
disputes. But in this Court, such disputes must be decided by triers of fact, and their existence
mandates denial of Apple’s motion.

2

First, Apple contends that, as a matter of law, Plaintiffs do not own a protectable
common-law trademark. Apple is wrong. First, Plaintiffs’ IBOOKS mark is not merely
“descriptive.” Although, like every savvy businessman in 1999, iBooks founder Byron Preiss
hoped to capitalize on sales of his books through the Internet, the “i” in “ibooks” was never
intended to mean “internet,” and there is no evidence indicating that consumers understood the
IBOOKS mark to mean “internet” in 1999 or thereafter in connection with Plaintiffs’ book and
e-book publishing business. Preiss’s company, ibooks, inc., developed a logo that included the
little “i” inside of a light bulb, which can be a symbol for an “idea,” thereby indirectly suggesting
a connection between books and ideas. These books were sold in bookstores, on the websites of
Amazon and Barnes & Noble, and elsewhere, but nothing about the books in the company’s
catalog, which ranged from horror to suspense to science fiction to romance, described any
intrinsic connection to “Internet.” As applied to a publisher and seller of books, at least,
“ibooks” is suggestive, not descriptive. Any doubt about this question is dispelled by the fact
that, when ibooks sought to register its trademark, the examining attorney did not deem the mark
to be descriptive, but rather “misdescriptive” – recognizing that a leap of imagination was
required between the mark and the products.
Even if Plaintiffs’ IBOOKS mark is deemed to be descriptive, however, Plaintiffs still
have common law trademark rights in their brand because they have developed sufficient
secondary meaning in their relevant product market – distributors and wholesalers, book
retailers, and fans of the genres that Plaintiffs publish. Since its founding in 1999, the company
has earned over

in revenue through May 2012. The company has spent more than

on advertising, including co-operative advertising with their distributors. There can be
little dispute that ibooks, inc. had achieved secondary meaning by 2004, when Publishers

3

Weekly named it one of the top independent publishers in America, long before Apple entered
the bookselling business in 2010. Notably, Apple did not call or rely upon any witnesses, of all
the fact and expert witnesses called by each side in this action, who had any experience in the
book publishing industry. Among all of its expert witnesses and its many Rule 30(b)(6)
designees and other witnesses, not a single one has meaningful experience with book publishing,
and not a single one is able to provide industry-specific insight into the strength of Plaintiffs’
mark and the robustness of Plaintiffs’ business. By contrast, Plaintiffs have adduced or offered
the testimony of three witnesses, all experienced veterans of the book publishing industry, with
intimate knowledge of how marketing, branding and sales happen in the industry – fact witness
Richard Freese, expert witness Michael Shatzkin, and Plaintiff’s principal Mr. Colby (see Colby
Decl. ¶¶ 3-57) – all of whom have stated, under oath, that Plaintiffs’ IBOOKS is a recognized
brand. Moreover, because books published by Plaintiffs, once bought by consumers, sit on
bookshelves with Plaintiffs’ IBOOKS logo on the spine, Plaintiffs’ brand continues to exert
influence even after consumers come home from the store.
Simply put, stereotypical market analysis not tailored to the publishing industry, such as
that carried out by Apple’s experts, does not capture the specific relationship between consumers
and brands that exists in publishing. A book is not a disposable consumer product, like a can of
soda; people keep books, put them on their shelves (or digital library), and can become exposed
to the names of publishers post-sale, over time, in this way, as Plaintiffs’ expert Michael
Shatzkin explained.
Second, Apple began using the IBOOKS mark in commerce in 2010. Plaintiffs are
clearly the senior users of the mark, having used it since 1999. Apple’s only claim to priority
rests on the purported assignment of the mark from Family Systems to Apple, which was an

4

invalid assignment in gross. As set forth more fully in Plaintiffs’ Motion for Partial Summary
Judgment, no evidence exists that any goodwill transferred from Family Systems – which
continued to offer the same software and services under a different name – to Apple. Moreover,
to the extent that Apple knew that its use of the mark was not the same as the use to which
Family Systems had put the mark, its filings with the PTO, representing that the mark had been
in use for ten years in the way that Apple uses it, were fraudulent. As a result, Apple’s IBOOKS
trademark registration, with its 1996 priority date, must be cancelled. Even if the Court does not
grant summary judgment to Plaintiffs on this issue, at a minimum, disputed issues of material
fact as to Apple’s ownership of the registration and its priority preclude summary judgment.
Third, Apple’s IBOOKS mark, affixed to software that permits users to purchase books
in an “iBookstore” that is “included” in the iBooks app, is likely to cause reverse confusion with
Plaintiffs’ identical IBOOKS word mark. Apple’s argument that its electronic book purchasing
and reading application cannot cause consumer confusion with respect to Plaintiffs’ imprint on
electronic and hard copy print books contradicts generations of well-settled trademark law. With
respect to the Polaroid factors showing likelihood of confusion, sharply disputed issues of
material fact prevent summary judgment. Plaintiffs’ survey expert, Dr. Susan Schwartz
McDonald, found that “in a digital-book environment, a significant percentage of consumers
would interpret the presence of the word, ‘iBooks,’ on the information page inside the book to be
a source signifier for Apple,” leaving approximately 55% of consumers confused. See Chattoraj
Opp. Decl. Ex. 101, McDonald Report at 2; Pls. 56.1 Statement Add’l Undisputed Facts ¶ 42.
Plaintiffs’ New York common-law claims should be upheld for similar reasons.
Accordingly, Apple’s motion for summary judgment should be denied in its entirety, and
this action should be calendared for trial.

5

FACTUAL BACKGROUND
Plaintiffs respectfully refer the Court to Plaintiffs’ Statement of Controverted and
Undisputed Facts submitted in opposition to Defendant Apple Inc.’s Rule 56.1 Statement for the
factual background of this opposition.
ARGUMENT
I.

Summary Judgment Standard
In order to obtain summary judgment, the movant must show that there is no genuine

dispute as to any material fact and that the movant is entitled to judgment as a matter of law. See
Fed. R. Civ. P. 56(c). “The moving party bears the burden of demonstrating the absence of a
material factual question, and in making this determination the court must view all facts in the
light most favorable to the non-moving party.” Mastercard Int’l Inc. v. First Nat’l Bank of
Omaha, No. 02 Civ. 3691(DLC), 2004 WL 326708, at *4 (S.D.N.Y. Feb. 23, 2004) (denying
motions for summary judgment on unregistered trademarks) (citing Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 247 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). The
function of the district court in considering the motion for summary judgment is not to resolve
disputed issues of fact but only to determine whether there is a genuine issue to be tried. Rattner
v. Netburn, 930 F.2d 204, 209 (2d Cir. 1991). “In assessing the record, including affidavits,
exhibits, interrogatory answers, and depositions, to determine whether there is a genuine issue as
to any material fact, the court is required to resolve all ambiguities and draw all factual
inferences in favor of the party against whom summary judgment is sought.” Id. “If, with
respect to a material fact as to which the moving party contends there is no dispute, there is
evidence in the record from which a reasonable inference could be drawn in favor of the
nonmoving party, summary judgment is improper.” Id.

6

On this motion, where Apple’s counsel has already stated to the Court that Plaintiffs’
claims and allegations are “fact-intensive,” see Letter from Dale M. Cendali to the Hon. Denise
M. Cote, dated Dec. 18, 2012 (docket doc. no. 67), and where the parties have come forward
with voluminous submissions of declarations, exhibits and statements, it is readily apparent that
there are numerous factual issues in genuine dispute between the parties – issues that must be
decided by a trier of fact.
PLAINTIFFS’ TRADEMARKS ARE ENTITLED TO PROTECTION

II.

In order to be found valid and protectable, a mark must be capable of distinguishing the
products it marks from those of others. Mastercard, 2004 WL 326708, at *4 (quoting Lane Cap.
Mgmt., Inc. v. Lane Cap. Mgmt., Inc., 192 F.3d 337, 344 (2d Cir. 1999)). The classification of
trademarks to determine their protectability is a “factual question.” Lane, 192 F.3d at 344. Here,
at least three separate and independent bases exist to find Plaintiffs’ IBOOKS trademarks
protectable for purposes of this motion: (a) Plaintiffs’ common-law trademark IBOOKS is
suggestive, and therefore entitled to protection on that basis alone; (b) alternatively, issues of fact
preclude a determination on summary judgment that Plaintiffs’ mark is suggestive or descriptive;
and (c) even if Plaintiffs’ mark is deemed to be descriptive, Plaintiffs’ have adduced sufficient
evidence of secondary meaning to preclude summary judgment.
A.

Plaintiffs’ IBOOKS Mark Is Suggestive

“A mark is suggestive if it merely suggests the features of the product, requiring the
purchaser to use imagination, thought, and perception to reach a conclusion as to the nature of
the goods.” Lane, 192 F.3d at 344. Suggestive marks are “automatically protected.” Id.
As applied to Plaintiffs’ products – books – the word “ibooks” is suggestive. Apple
contends that the letter “i” prefixed to the word means that the “imprint is but one example of
many recently-coined words using ‘i’ to refer to the internet,” and therefore is merely
7

descriptive. Br. at 6 (citing TMEP § 1209.03(d)). But “[t]he focus in categorizing a mark is on
how the words are used in context rather than their meaning in the abstract.” Bristol-Meyers
Squibb Co. v. McNeil-P.P.C., Inc., 973 F.2d 1033, 1041 (2d Cir. 1992) (citing Abercrombie &
Fitch Co. v. Hunting World, 537 F.2d 4, 12 (2d Cir. 1976)). Notably, when Preiss’s company
attempted to register the mark “IBOOKS” with the PTO, to be affixed upon “Books, namely, a
series of fiction books; non-fiction books in the field of science,” the examining attorney initially
rejected the application on grounds of “misdescriptiveness,” because the “i” prefix was in some
way misleading, when applied to books. See Plaintiffs’ Local Rule 56.1 Statement in Opposition
to Defendant’s Motion for Summary Judgment (“Pls. 56.1 Statement”) ¶¶ 131-32; cf. Perfect
Pearl Co. v. Majestic Pearl & Stone, Inc., __ F. Supp. 2d __, 2012 WL 3526611, at *9 (S.D.N.Y.
Aug. 14, 2012) (“The defining feature of a descriptive mark is that it gives the consumer an
immediate idea of the contents of the product.”).1
With respect to Plaintiffs’ print books, which constitute the majority of their sales, see
Defendant’s Local Rule 56.1 Statement in Support of Motion for Summary Judgment, dated
December 21, 2012 (“Def. 56.1 Statement”) ¶ 201, the appearance of the imprint “ibooks” on the
cover, combined with the ibooks “light bulb” logo, does not connote the internet. See Colby
Decl. ¶ 33. Insofar as Plaintiffs’ logo includes a lower case “i” inside a light bulb, a traditional
symbol of an “idea,” the “i” could also suggest the concept of ideas, in connection with books.
See Pls. 56.1 Statement ¶ 10. In addition, based on a conversation between Plaintiffs’ principal
John Colby and the ibooks founder Byron Preiss, Mr. Colby understood that Mr. Preiss believed
that the “i” could stand for the independent, “sentient” identity that he believed books to have.
1

Apple notes that its own effort to register IBOOKS was met with a refusal on grounds of descriptiveness, and
argues that “There is no reason that Plaintiffs’ alleged mark should be treated any differently.” Defendant’s
Memorandum of Law in Support of Motion to Dismiss, dated December 21, 2012 (“Br.”), at 6. Of course, the
difference is that Plaintiffs affix the mark as an imprint on books they publish, whereas Apple offers books for sale
by download through the iBooks app through the Internet. Pls. 56.1 Statement Add’l Undisputed Facts ¶ 30.

8

Colby Dec. ¶ 33; Colby 30(b)(6) Dep. 320-22. At least with respect to books, the letter “i” could
have several different evocative meanings. See Hasbro, Inc. v. Lanard Toys, Ltd., 858 F.2d 70,
74 (2d Cir. 1988) (“An illuminating explanation of the difference between a descriptive mark
that conveys an idea of the characteristics of the product and a suggestive one that requires
imagination to divine the nature of the product is that ‘if there is an imaginative factor
connecting the name and the product; [if] one suggests the other, but without describing it,’ then
the name is suggestive.”) (quoting Information Clearing House, Inc. v. Find Magazine, 492 F.
Supp. 147, 156 (S.D.N.Y.1980) (Weinfeld, J.) (suggestive mark “comprehends a variety of items
but does not describe any one of them in particular”)).
B.

Whether IBOOKS Is Descriptive or Suggestive Is a Disputed Question of Fact

The issue of whether a mark is descriptive or suggestive is a fact question. See Lane, 192
F.3d at 344. Apple contends that the word IBOOKS, when applied to Plaintiffs’ goods,
describes the goods as books available for sale on the Internet, relying primarily on certain press
releases issued by Plaintiffs’ predecessor describing ibooks, inc. as, among other things, “the
first publishing imprint designed to take full advantage of the promotional and distribution
potential of the internet.” Def. 56.1 Statement ¶ 6. But the meaning of those press releases is
hotly disputed based on other statements therein, see Pls. 56.1 Statement ¶ 6, and there is other
evidence suggesting that Plaintiffs’ predecessor did not believe that “ibooks” was intended to
evoke the Internet. See Pls. 56.1 Statement ¶¶ 6-10, 131-32 (correspondence with PTO); Colby
Dec. ¶ 33; Colby 30(b)(6) Dep. 320-22. Summary judgment on this issue is therefore
inappropriate. See Mastercard, 2004 WL 326708, at *5 (“Determination of whether SMART
ONE is a descriptive or suggestive term requires a factual inquiry that precludes summary
judgment on this issue.”).

9

C.

Plaintiffs’ IBOOKS Trademark Has Developed Secondary Meaning

In the event that the Court determines that Plaintiffs’ IBOOKS trademark is descriptive,
Plaintiffs’ mark is still entitled to protection upon a showing of secondary meaning. Lane, 192
F.3d at 344. Here, Plaintiffs have come forward with substantial evidence of secondary
meaning.
The Second Circuit has outlined six factors for determining whether a descriptive mark
has acquired a secondary meaning: 1) advertising expenditures, 2) consumer studies linking the
mark to a source, 3) unsolicited media coverage of the product, 4) sales success, 5) attempts to
plagiarize the mark, and 6) the length and exclusivity of the mark’s use. See Gross v. Bare
Escentuals Beauty, Inc., 632 F. Supp. 2d 283 (2008) (citing Thompson Med. Co., Inc. v. Pfizer
Inc., 753 F.2d 208, 217 (2d Cir.1985)). When evaluating whether secondary meaning exists, no
single factor is dispositive. See Kensington Pub. Corp. v. Gutierrez, No. 05 Civ. 10529 (LTS),
2009 WL 4277080, at *5 (S.D.N.Y. Nov. 10, 2009) (denying summary judgment). Determining
secondary meaning is a fact-intensive inquiry that is generally avoided at the summary judgment
phase. Gross, 632 F. Supp. 2d at 291 (citing Coach Leatherware Co., Inc. v. AnnTaylor, Inc.,
933 F.2d 162, 169 (2d Cir. 1991) (“The careful weighing of evidence necessary to determining
secondary meaning renders it an unlikely candidate for summary judgment.”)).
In this case, Plaintiffs provided the detailed and fact-specific report of expert witness
Michael Shatzkin, who has “50 years of participation in the book in the book-publishing
industry, the last 40 of them continuously,” and has “worked with most of the major players in
the industry as an author, agent, packager, or consultant.” (Declaration of Claudia T. Bogdanos
in Opposition to Motion to Exclude Testimony of Michael Shatzkin, dated Jan. 25, 2013
(“Bogdanos Decl.”), Ex. A (Expert Report of Mike Shatzkin) (“Shatzkin Rep.”) at 2.) For the
last 20 years, much of his work has focused on digital change in the book-publishing industry.
10

(Bogdanos Decl., Ex. B (Deposition of Mike Shatzkin, dated Dec. 4, 2012) (“Shatzkin Tr.”) at
45:6-47:4.) Mr. Shatzkin opined as follows:
The iBooks imprint has reached thousands of its niche readers. The
records show that during the period when Byron Preiss owned and
operated iBooks, it sold about 5 million units, of which nearly 2 million
were in the science-fiction genre. Given the propensity of science-fiction
readers to stick to their genre, it is reasonable to assume that many
thousands, perhaps tens of thousands, of science-fiction readers purchased
and read several iBooks titles and thus recognized the iBooks imprint.
In addition, iBooks published works by some very significant science
fiction authors, including Ray Bradbury and Arthur Clarke. This further
supports the assumption that the imprint would have been known to
science-fiction devotees, who pay attention to substantial, recognized
authorship.
Because of its specialization, such a niche reader group is aware of authors
and individual imprints within the genre - more acutely so than is a
general readership. The specialized nature of a genre, such as science
fiction, results in a focused reader circle, attuned to the authors and
publishers within the particular field.
As a result, at the time the entire industry turned its attention to consumer
branding (which can't be assigned a precise date, but which started to
happen in the later part of the first decade of the 21st century, and with
accelerating speed after Kindle was launched in November 2007), the
owners of iBooks would have found themselves with a strong foundation
on which to promote iBooks as a science-fiction brand directly to
consumers. They had big authors, they had a big backlist, and they had
undoubtedly sold enough people – many thousands if not tens of
thousands -- multiple titles, to enable that. As previously observed,
publishing brands are defined by the content they publish.
Bogdanos Decl. Ex. A at 2. In addition, fact witness Richard Freese, who was the
distributor for Plaintiffs’ books, and who worked with the company’s founder, Byron Preiss,
during the start-up and growth of the company, as well as with Mr. Colby, testified that he found
the ibooks backlist “attractive” and that “the brand, especially in the science fiction and fantasy
area was very strong. They had authors like Isaac Asimov and Arthur C. Clarke and Edgar Rice
Burroughs. And they had a very solid base that was well recorded in retail.” Pls. 56.1 Statement

11

Add’l Undisputed Facts ¶¶ 4-8. Mr. Freese testified that ibooks was a “catch” for Mr. Colby
because “when you are distributing independent publishers, when you get a publisher that is over
a million dollars, it is significant. And I recall thinking of them as being significant.” Id. ¶¶ 8-9.
By contrast, Apple has solicited the opinion of a marketing expert, Dr. Gregory S.
Carpenter, who admittedly has no familiarity with the publishing industry, see Bogdanos Decl.
Ex. A at 6-7, who opined that Plaintiffs do not have a “brand.” Pls. 56.1 Statement ¶¶ 16-18.
Perhaps because of his “one size fits all” approach, Dr. Carpenter stated that none of the 100,000
imprints of independent book publishers can claim to have “secondary meaning”; only five or six
of the largest publishers, Dr. Carpenter posited, could claim to have secondary meaning to
consumers. See Bogdanos Decl. Ex. A at 7. Dr. Carpenter’s assertions are wrong, and in any
event, they suggest genuine issues of disputed material fact. As set forth in detail below, when
the proper standards are applied, Plaintiffs have clearly shown secondary meaning.
Advertising Expenditures. Plaintiffs have documentary evidence of well over $616,127
in advertising and marketing activities. See Def. 56.1 Statement ¶ 60-61; Pls. 56.1 Statement ¶¶
60-78; see also Colby Decl. ¶ 56.
Apple contends that, because Plaintiffs’ evidence of “consumer” ads is limited (though
still existent), Plaintiffs’ advertising appears to be directed “to the trade.” This argument betrays
Apple’s expert’s ignorance concerning the publishing industry. Trade consumers, such as
wholesalers, retailers, and distributors, are still consumers. See, e.g., Pls. 56.1 Statement ¶¶ 6-8
(testimony of third-party witness Richard Freese regarding observations of consumer, buyer, and
distributor interest in and awareness of Plaintiffs). As Plaintiffs’ publishing-industry expert
Michael Shatzkin pointed out, in publishing, “almost no money is spent --or has been spent-creating consumer awareness or recognition of brands.” (Chattoraj Opp. Decl. Ex. 103, Shatzkin

12

Report at 5.) In the publishing industry, advertising expenditure is far less important than postsale exposure and other “earned” goodwill. See id.
Consumer Studies. Plaintiffs did not conduct consumer surveys on secondary meaning,
but they did come forward with the report and testimony of an expert witness, Michael Shatzkin,
who opined concerning Plaintiffs’ brand strength, as set forth above. Plaintiffs also obtained
testimony from a third-party percipient witness, Richard Freese, who testified concerning his
awareness of Plaintiffs’ and Plaintiffs’ predecessor’s positive reputation, as indicated above.
Unsolicited Media Coverage. Plaintiffs have adduced substantial evidence of unsolicited
media coverage. Pls. 56.1 Statement ¶¶ 98-111.
Sales Success. Plaintiffs have had substantial sales success over the 14 years of their and
their predecessors’ existence. Pls. 56.1 Statement ¶¶ 24-59 (authenticating business records and
sales recordation).
Attempts to Plagiarize the Mark. Plaintiffs are not aware of such attempts, other than
with respect to the conduct underlying the claims in this action.
Length and Exclusivity of the Mark’s Use. Plaintiffs have been using the IBOOKS mark
since September 1999 -- much longer than Apple. With regard to the four examples of thirdparty uses identified by Defendant, Br. at 14-15, there is no evidence that they actually competed
with Plaintiffs’ marks, and there is no evidence that any third-party use was well promoted or
recognized by consumers. Accordingly, these examples do not weigh in the balance. See TriStar Pictures, Inc. v. Unger, 14 F. Supp. 2d 339, 353 (S.D.N.Y. 1998).
“None of the above factors alone is dispositive in determining secondary meaning, nor is
it necessary for a party to prove every element.” Id. at 348. Taken together, these factors
suggest that Plaintiffs have shown sufficient secondary meaning to have their day in Court. At a

13

minimum, there are sharply disputed areas of fact in many of these categories, so summary
judgment is not appropriate. See Gross, 632 F. Supp. 2d at 291.
III.

APPLE DOES NOT HAVE PRIORITY OVER PLAINTIFFS
Apple announced its iBooks application to the public on January 27, 2010, and launched

it April 2010. Def. 56.1 Statement ¶¶ 163, 165. Plaintiffs began using their IBOOKS commonlaw mark in 1999. Id. ¶ 126. Nevertheless, Apple claims that, because of the Family Systems
Registration, it can benefit from that registration’s priority date in 1996. Br. at 15. Accordingly,
the sole basis for Apple’s claim of priority is its purported acquisition of the Family Systems
trademark registration. As set forth in greater detail in Plaintiffs’ December 21, 2012, Motion
for Partial Summary Judgment, Apple’s agreement with Family Systems, executed mere hours
before Apple’s announcement of the iBooks app, was an invalid assignment in gross.
Accordingly, Apple is not entitled to “tack on” the Family Systems priority date, and Plaintiffs
are the senior users of the IBOOKS mark. As eloquently stated by one of Apple’s expert
witnesses, “[w]hen the priority rug is pulled out from under the assignee because of an invalid
assignment, the assignee may find himself branded as the infringer.” SIEGRUN D. KANE, KANE
ON TRADEMARK LAW

§ 21:4 (PLI 2011). Plaintiffs also allege that Apple perpetrated fraud on

the PTO in connection with various filings pertaining to the Family Systems mark, as set forth in
detail below. Both of these theories, if proven, would render the mark invalid, and give rise to its
cancellation, regardless of any alleged incontestability of the registration.
A.

Apple’s Purported Acquisition of the Mark from Family Systems Was an Invalid
Assignment in Gross

Apple’s iBooks software is an entry point for consumers to buy, download, store and read
published books and other written materials on their Apple-branded mobile devices. Based on
the testimony of the only deponent witness with personal knowledge, Family Systems’ software

14

was a Wiki-like collaboration tool; even if it were possible to load a published book into it, that
was not its intended purpose. Pls. 56.1 Statement ¶¶ 143, 158. Based on this difference alone,
Apple could not possibly have acquired “goodwill” from Family Systems in connection with its
naked acquisition of the Family Systems registration. Indeed, Apple’s iBooks software was
already created and about to launch before Apple approached Family Systems about the potential
acquisition.
Apple has adduced virtually no evidence that it acquired any goodwill from Family
Systems in connection with its

hase of Family Systems’ trademark registrations.

As set forth in Plaintiffs’ December 21, 2012, Motion for Partial Summary Judgment, which is
incorporated herein by reference:
•

The assignment agreement did not convey any of Family Systems’ other

intellectual property, such as the several patents that Family Systems had obtained for its ibook
“interactive web-collaboration system,” which Family Systems marketed to individuals and
businesses that wished to collaborate or contribute to common projects on the Internet.
•

It did not require Apple to continue to offer the same services through the

www.ibook.com website – which URL Apple redirected to the web page
www.apple.com/ipad/built-in-apps/, where the iBooks software appears several screens down.
•

It did not provide for the transfer of any of Family Systems’ tangible assets, such

as Internet servers, data rooms or offices.
•

It did not include any transfer of customer or email lists, or market research data,

or business plans.
•

It did not call for any of Family Systems’ employees, including the visionary

CEO who founded the company to bring his ideas to the marketplace, to be employed by Apple.

15

•

Although Family Systems apparently changed to VERBOL the name of the

software it once called ibook, Family Systems continued to use and distribute that software.
Long-established principles require invalidation of this assignment. See, e.g. Levitt Corp.
v. Levitt, 593 F.2d 463, 468 (2d Cir. 1979) (“When a business purchases trademarks and
goodwill, the essence of what it pays for is the right to inform the public that it is in possession
of the special experience and skill symbolized by the name of the original concern, and of the
sole authority to market its products.”).
Faced with these undisputed facts, Apple instead tries to mischaracterize the testimony of
Richard Goldhor, the only witness who testified concerning Family Systems’ products based on
personal knowledge, and Steve Gedikian, the Apple executive (and 30(b)(6) representative)
responsible for the iBooks app, in order to create the misimpression that the iBooks app is
substantially similar to the Family Systems ibook web collaboration software. As set forth in
detail in Plaintiffs’ Local Rule 56.1 Statement, however, Apple’s assertions concerning the
nature of the Family Systems product, and its alleged similarities to Apple’s iBooks application,
are specious. Pls. 56.1 Statement ¶¶ 143-162.
Moreover, these allegations boil down to Apple’s assertions that, because the goods and
services set forth on Family Systems’ registration certificate were “computer software used to
support and create interactive, user-modifiable electronic books,” the Apple iBooks app is
“substantially similar” to the Family Systems software if aspects of the iBooks app can, through
semantics, be deemed to be “interactive” or “user-modifiable.” See Br. at 19-20. But this is not
the law. The registration certificate language does not control what is covered by the trademark;
instead, the actual goods or services with which the mark was used (here, the Family Systems
“web collaboration system”) determine the scope of the trademark and goodwill. See Lane, 192

16

F.3d at 345 (“[T]he statute does not state that the certificate of registration is itself evidence of
how the public actually views the mark, and we conclude that the certificate does not constitute
evidence of this fact as such.”). In any event, Apple’s effort to shoehorn the iBooks app into the
Family Systems mold is belied by undisputed facts. See Pls. 56.1 Statement Add’l Undisputed
Facts ¶¶ 31-36; see also, e.g., Boathouse Group, Inc. v. Tigerlogic Corp., 777 F. Supp. 2d 243,
251-52 (D. Mass. 2011) (finding assignment in gross, negating priority, of mark for socialnetwork interaction software when assignee's product was application premised on access to
information generated by user's social network and had ability to aggregate information or allow
user to search, edit and delete content, whereas assignor's product was a “plugin,” an optional
feature designed to work with specific software, had limited functionality, required the user to
input content, lacked search feature and did not rely on or require access to user's social network
to function).
To the extent that Apple wished to forestall a conflict with Family Systems, it need not
have procured an assignment in gross. It is revealing, however, that Apple’s internal invoice
concerning the Family Systems

payment describes it as an “ibook settlement

payment.” See Dec. 21, 2012 Chattoraj Decl. in Support of Motion for Partial Summary
Judgment Ex. 21 at APPLE-IBOOKS 0033432. See Clark & Freeman Corp. v. Heartland Shoe
Co., Inc., 811 F. Supp. 137 (S.D.N.Y. 1993) (finding assignment in gross where assignment was
effected to resolve assignor’s threatened opposition to assignee’s attempt to register mark on
dissimilar product).
B.

Apple’s Registration Should Be Cancelled for Fraud on the PTO

The Lanham Act provides for cancellation at any time of a trademark registration that
was fraudulently obtained. See 15 U.S.C. § 1064(3). Misrepresentations in a PTO filing provide
a basis for cancelling the registration if the misstatements (1) were made with knowledge of their
17

falsity, and (2) were material to the determination to grant the registration. See Mears v.
Montgomery, No. 02 Civ. 0407, 2004 WL 964093, at *16 (S.D.N.Y. May 5, 2004) (granting
summary judgment cancelling music group’s trademark registration obtained by fraudulent
material statements during application process); Patsy’s Italian Rest., Inc. v. Banas, 575 F. Supp.
2d 427, 464 (E.D.N.Y. 2008) (ordering cancellation of trademark registrations based on
defendant’s failure to notify PTO of trademark’s previous use), aff’d, 658 F.3d 254 (2d Cir.
2011). An applicant’s statements to the PTO must reflect “uncompromising candor.” City of
New York v. Tavern on the Green, L.P., 427 B.R. 233, 242-43 (S.D.N.Y. 2010) (granting
summary judgment and cancelling debtor’s trademark for fraud on the PTO) (internal citation
omitted).
Here, Apple has played fast and loose with the PTO. As set forth above, Apple utilized a
sham transaction with Family Systems to claim a false priority in its registration of the IBOOK
mark – a registration it then sought to shoehorn into IBOOKS, through a knowingly false
“amendment,” for use with its iBooks software application and bookstore. As an apparent
fallback, in April 2010, Apple also filed a new IBOOKS trademark application with the PTO,
seeking to cover its use of IBOOKS with the sale of books and publications, as well as the
software application that it was in the process of releasing; when Plaintiffs in this action pointed
out that this application constituted an admission that iBooks was in the business of selling books
and Apple’s purported IBOOKS trademark therefore infringed directly on Plaintiffs’ trademark,
Apple belatedly sought to delete from that application all of the allegedly conflicting classes of
use. All of these machinations required knowing and materially false statements to be included
in Apple’s PTO filings. These misstatements provide a separate and independent ground for
cancelling Apple’s registration of the IBOOKS mark.

18

1.

Apple’s Recordation of the Family Systems Assignment and
Subsequent Renewal of the 634 Registration Were Fraudulent

On February 4, 2010, the day Apple paid Family Systems

for the naked

assignment of the IBOOK 634 Registration, Apple filed a recordation of the assignment of the
634 Registration with the PTO. (See Pls. 56.1 Statement ¶ 166.) In substituting Apple and its
attorneys of record in that registration, Apple represented that it was continuing to use the
IBOOK mark as the assignor had previously used it, and Apple’s filings stated that Family
Systems had transferred all goodwill in connection with the IBOOK mark to Apple. (See Jarrett
Decl. Ex. 92.) These statements were fraudulent when made. In reality, as set forth in greater
detail above, no goodwill was transferred with the assignment agreement, notwithstanding that
agreement’s boilerplate statement that goodwill was in fact transferred, and Apple was not
continuing to use the IBOOK mark in connection with the same goods and services as the
previous Family Systems registration.
At the time that Apple filed the recordation and claimed ownership of the registered
trademark IBOOK for computer software used to support “interactive, user-modifiable books,”
Apple was aware of Plaintiffs potential claims against it, and Apple was also aware that its use of
the Family Systems Mark was totally different from, and not in continuity with, the use that
Family Systems had made. Apple’s statements to the contrary -- alleging that Apple’s “first use
in commerce” of the IBOOK mark took place on October 27, 2000, based on Family System’s
first use of the IBOOK trademark – are flatly incorrect and obviously misleading. This
deception is exacerbated by the specimens submitted by Apple in connection with the
registration; with each of the specimens, Apple includes web pages showing the iBooks app as it
appears on Apple’s websites or in the iTunes software. Apple’s statement to the PTO that these
specimens evidence the use to which the IBOOK mark had been put since October 2000 is false,

19

or at least substantially misleading.
Similarly, on June 7, 2010, Apple filed a required Declaration of Continued Use and
Application for Renewal for the 634 Registration, pursuant to sections 8 and 9 of the Lanham
Act. (See Jarrett Decl. 94.) In the Section 8 Declaration of Continued Use, Apple stated that
“the mark is in use in commerce on or in connection with ALL goods or services listed in the
existing registration.” (See id.) At that time, the 634 Registration recited that it covered only
“computer software used to support and create interactive, user-modifiable electronic books.”
As indicated above, Apple was actually using the IBOOKS mark in connection with
downloadable books and electronic transmission of streamed and downloadable content, not in
connection with the goods and services offered by Family Systems. The specimen of use that
accompanied the declaration showed Apple’s use of the IBOOK mark on its website and in the
iTunes store, altogether different from the Family Systems specimens of use previously
submitted. (Compare Chattoraj Declaration in Support of Plaintiffs’ Motion for Partial Summary
Judgment (“Chattoraj Decl.”) Ex. 33, with Chattoraj Decl. Ex. 72.)
Given the substantial differences between the Family Systems specimens and the Apple
specimens (compare Chattoraj Decl. Ex. 33 to Chattoraj Decl. Ex. 72.), the conclusion is
inescapable that Apple knew that it was making a different use of the mark, that the Family
Systems Assignment Agreement did not provide for any transfer of any actual goodwill from
Family Systems to Apple, but that Apple purposely concealed this information from the PTO in
order to obtain the “priority” in the use of IBOOK to which Family Systems was allegedly
entitled. See Ushodaya Enterprises, Ltd. v. V.R.S. Int'l, Inc., 63 F. Supp. 2d 329, 335-337
(S.D.N.Y. 1999) (PTO directed to cancel mark based on knowingly material misrepresentations
submitted in support of trademark application). Fraud on the PTO includes situations where an

20

applicant misleadingly declares that a mark was “in use” during a time it was not. See Tavern on
the Green, 427 B.R. at 243 (granting summary judgment and cancelling debtor’s trademark for
fraud on the PTO where debtor knowingly misstated the date of first use in commerce in the
registration application.).
2.

Apple’s May 17, 2010 Amendment to the 634 Registration
Contained Knowing Falsehoods

As indicated above, the mark that Apple purported to acquire from Family Systems was
IBOOK, in connection with “computer software used to support and create interactive, usermodifiable electronic books.” Although Family Systems used the mark to describe its “web
collaboration system,” such that the singular form of the word mark made sense, the singular
form did not work, and would not work, as a signifier of Apple’s book buying, downloading and
reading software. A plural form of the word is necessary to invoke the many books available for
sale and for download through the iBooks app, features central to the consumer experience of the
iBooks app. In the May Application, Apple reiterated its knowingly false claim that the iBooks
mark was first used in commerce on October 27, 2000 in the same way as Apple used it, and also
falsely stated that
the proposed amendment to the mark does not materially
alter the character of the mark in the registration and does
not render it sufficiently different to require publication.
The new form of the mark has the same meaning as, and
contains the essence of, the original mark. The addition of
“S” – changing the mark from IBOOK to IBOOKS –
creates the impression of being essentially the same mark,
so that consumers will readily understand the mark to be
the same.
U.S. Trademark Reg. No. 2,446,634, at Section 7. Apple’s statement is misleading. In reality,
consumers would be mystified by the name IBOOK for a product that purports to “include” a
bookstore. (See Def. 56.1 Statement ¶ 168.) Apple’s programming, branding, design, and sales

21

efforts depended on just the opposite – on the belief that the public would begin associating
iBooks with its brand new electronic book and reading delivery application. (See Pls. 56.1
Statement Add’l Undisputed Facts ¶ 30.) Just as with the Family Systems assignment in the first
place, this amendment seeks to conceal the basic differences between the previous and the
current uses of the 634 Registration, in an effort to obtain the benefit of Family Systems’ earlier
date of first use. The filing was made knowingly, and with intent to mislead, in order to further
the transformation of the original 634 Family Systems Registration from IBOOK (a web
collaboration system) to IBOOKS (software to purchase, download and read books), while
supposedly preserving Apple’s connection to the earlier priority date it desires. Simply put, the
law need not countenance such gamesmanship.
3.

Apple’s April 7, 2010 Application for a New IBOOKS
Registration and its Subsequent Amendment Were Fraudulent

On April 7, 2010 (the “April Application”), having already allegedly purchased the
IBOOK mark from Family Systems, Apple filed a new trademark application that sought to
expand the International Classes of goods and services with which Apple’s IBOOKS mark could
be used. (See PTO Application Serial No. 85/008,412.) This application was filed at
approximately the same time as the iBooks app was first made available to the public, and it was
predicated on Apple’s January 25, 2010 foreign registration of the IBOOKS mark with the
trademark registry in Trinidad and Tobago. See id. The application listed six International
Classes in which the IBOOKS mark was allegedly in use, including 009 (downloadable
electronic publications in the nature of books, plays, pamphlets, brochures, newsletters, journals,
magazines and periodicals on a wide range of topics of general interest), 016 (“printed matter”;
periodicals, books, magazines, newsletters, brochures, booklets, pamphlets, manuals, journals,
and leaflets on a wide range of topics of general interest), 035 (“retail store services in the field

22

of books”), 038 (“telecommunications services”; “electronic transmission of streamed and
downloadable publications for browsing over computer networks, namely books, magazine,
periodicals . . .”), 041 (“educational and entertainment services; providing electronic books . . .”),
and 042 (“design and development of computer hardware and software”). Id. In a December 29,
2010 response to the PTO’s refusal to allow this application for publication, Apple claimed that
this list of uses “merely seeks to expand Apple’s registration of the IBOOKS mark to goods and
services related to those for which the mark is already registered,” citing the Family Systems
registration and its IBOOK notebook-computer registration. (See Chattoraj Decl. Ex. 74.)
On or about March 6, 2012, during the pendency of this action, Plaintiffs’
predecessor counsel emailed a proposed draft of Plaintiffs’ Amended and Supplemental
Complaint to Apple’s counsel, and indicated that Plaintiffs intended to add allegations arising
from Apple’s April Application. See Pls. 56.1 Statement Add’l Undisputed Facts ¶ 26. On
March 13, 2012, Apple filed a Trademark/Service Mark Amendment to Allege Use form (the
“Amendment Form”) with the PTO on March 13, 2010. See Pls. 56.1 Statement Add’l
Undisputed Facts ¶ 27. The Amendment Form deleted three classes – 016, 038, and 041 -- from
the allegations of use contained in the April Application, including “periodicals, books,
magazines, newsletters, brochures, booklets, pamphlets, manuals, journals, and leaflets on a wide
range of topics of general interest” and “downloadable electronic publications in the nature of
books,” among other things. Id. (Notably, Apple retained all of these classes in its pending
application for registration of the IBOOKSTORE mark (see Chattoraj Decl. Ex. 75), even though
Apple’s own press releases make clear that the iBooks app “includes” the iBookstore. See
Chattoraj Opp. Decl. Ex. 78.

23

For purposes of opposing Defendant’s Motion for Summary Judgment, at least two
plausible inferences can be drawn from Apple’s course of conduct. Either Apple included
knowingly false uses or intended uses for the IBOOKS mark when Apple submitted the April
Application to the PTO, or Apple deliberately attempted to circumvent Plaintiffs’ infringement
claims and their efforts to discover information regarding Apple’s sales of electronic books, by
fraudulently deleting all statements of use Apple believed could be exposed to Plaintiffs’
infringement claims. Although proof of these factual theories, which would also invalidate
Apple’s ‘634 registration, must await the trial of this matter, the evidence underlying this claim
gives rise to genuine issues of disputed fact, preventing summary judgment based on Apple’s
alleged priority. See, e.g., Declaration of Robert T. Scherer, dated January 25, 2013, Ex. B
(Scherer Expert Report), at 29-32 (summarizing evidence); Haggar Int’l Corp. v. United Co. for
Food Indus. Corp., No. 03 CV 5789(ARR), 2011 WL 67049, at *5-*6 (E.D.N.Y. Jan. 10, 2011)
(denying summary judgment on fraud on the PTO claim based on disputed issues of fact).
IV.

THERE IS A LIKELIHOOD OF CONFUSION BETWEEN THE PARTIES’
IDENTICAL MARKS ON RELATED GOODS
This is a textbook reverse-confusion case. Plaintiffs’ iBooks imprint had developed a

following in certain literary genres, and were poised to market directly to consumers, when
Apple released its reading and purchasing application, bearing the identical word mark, and
almost immediately made it infeasible for Plaintiffs to utilize the IBOOKS mark, utterly
swamping and obliterating Plaintiffs’ senior mark. See Bogdanos Decl. Ex. A at 8. Apple now
contends that there can be no likelihood of confusion between these two identical word marks
associated with the sale and reading of books. This contention is incorrect.
To assess the likelihood of confusion between two marks, a court must
balance the eight factors set forth in the landmark case of Polaroid Corp.
v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir.1961). These
nonexclusive factors are the strength of the moving party's mark, the
24

similarity between the two marks, the proximity of the products, the
likelihood of bridging the gap, actual confusion, the sophistication of
consumers, the existence of bad faith on the part of the non-moving party,
and the quality of the non-moving party’s products.
Mastercard, 2004 WL 326708, at *5. “If a factual inference must be drawn to arrive at a
particular finding on a Polaroid factor, and if a reasonable trier of fact could reach a different
conclusion, the district court may not properly resolve that issue on summary judgment.” Id.
(quoting Patsy’s Brand, Inc. v. I.O.B. Realty, Inc., 317 F.3d 209, 215 (2d Cir. 2003)).
A.

Saturation of the Market

“Reverse confusion occurs when a bigger and better-known junior user saturates the
market with a similar trademark and overwhelms the senior user. The public comes to assume
the senior user’s products are really the junior user’s or that the former has become somehow
connected to the latter.” First Nat’l Bank of Omaha v. Mastercard Int’l Inc., No. 03 Civ.
707(DLC), 2004 WL 1575396, at *12 (S.D.N.Y. 2004) (quotation marks and citation omitted).
In this case, there is overwhelming evidence of saturation of the book market. As Plaintiffs’
survey expert Susan Schwartz McDonald observed:
The survey confirms my opinion that since early 2010, iBooks has become
a strong source indicator for Apple, and that Apple’s mark creates
significant confusion at present and potentially greater confusion in the
future, producing two unfortunate consequences: this confusion deprives
the market of correct information about the source of Plaintiffs’ products,
and it deprives Plaintiffs of meaningful control over the destiny of their
16-year old brand. (Chattoraj Decl. Ex. 101, McDonald Report at 1.)
Dr. McDonald further observed:
In response to Q. 1, just over 55% (55.4%) of Test Arm respondents
named either Apple or iTunes (and no other company), compared with 2%
of Control Arm respondents who named Apple or iTunes (and no other
company). Using that most conservative reading of Apple source
attributions, the net percent of unique Apple (or iTunes) source
attributions is 53% ± 6% (ρ=.05), meaning that we can say with 95%
confidence that the true value lies between 47% and 59%. Looking at
exclusive Apple/iTunes mentions provides us with the most definitive
25

measure of source identification (those answers to which respondents were
most committed). If, however, we include the percent of Apple responses
that were suggestive but not definite or were part of dual company
mentions, the net source confusion calculation is 60% minus 9%, or 51%
± 7% , i.e., between 44% and 58%.
Although 15% of Test-Arm respondents did not name a specific company
as the source of iBooks, it is interesting to note that only 1% (four people)
offered up (generically) “the publisher” as the company making the book
available, with or without specific brand mentions. (Chattoraj Opp. Del.
Ex. 101, McDonald Report at 15.)
This extremely high rate of confusion led Dr. McDonald to opine:
If the presence of the name “iBooks” on your very own title page (where
books declare their intellectual origins and their publication history),
suggests to consumers that Apple had some hand in making that book
available, then you might as well just drop your own name and find
another one altogether. There is no loss of brand equity more complete
than the inability of a brand to “mean” who it is and, instead, to be forced
by the encroachment of another to “mean” who it isn’t. (Chattoraj Opp.
Del. Ex. 101, McDonald Report at 19.)
This result is exactly what the reverse confusion doctrine exists to prevent. See, e.g.,
First Nat’l, 2004 WL 1575396, at *12 (“The senior user is harmed if its trademark is deprived of
its ability to identify and distinguish its services or if purchasers erroneously believe the senior
user is infringing the mark of the junior user.”) (citing W.W.W. Pharm. Co. v. Gillette Co., 984
F.2d 567, 571 (2d Cir. 1993)).
Apple contends that its mark cannot saturate Plaintiffs’ market because the parties’
products are in different markets. This contention is disposed of below.
B.

Analysis of Polaroid Factors

Strength of the Mark. In a reverse confusion case, the strength of the junior user’s mark
is at issue. See Sunenblick v. Harrell, 895 F. Supp. 616, 626 (S.D.N.Y. 1995). For the reasons
set forth above with respect to the suggestiveness of Plaintiff’s IBOOKS mark, Plaintiffs’ mark
is not “conceptually weak.” First Nat’l, 2004 WL 1575396, at *13. However, as indicated by

26

the exorbitant 55% rate of confusion revealed in Dr. McDonald’s survey, as well as the quantity
of Plaintiffs’ sales relative to that of Defendant, Plaintiffs’ mark has clearly, in the two years
since Apple announced iBooks, become commercially weak. This factor therefore weighs in
favor of Plaintiffs. See id.
Similarity Between the Marks. The marks affixed to Apple’s e-book reading software
and to Plaintiffs’ imprint both utilize the word IBOOKS. Apple focuses on the differing
capitalizations and the slightly different serif on the small “i,” as between the two marks. Based
on Dr. McDonald’s survey, however, these small differences do not appear to have any effect on
consumers.
In certain circumstances – for example, in every instance that Publishers Weekly reported
on the company or imprint from at least 2002 through the present – Plaintiffs’ name has been
spelled “iBooks,” the same way as Apple’s app is named, not “ibooks.” Pls. 56.1 Statement ¶
106. Apple accuses Plaintiffs of attempting to create false similarity between the marks, based
on the appearance of this spelling on several printings of Plaintiffs’ books. This accusation is
baseless. The printings resulted from anomalies in the way Plaintiffs were listed by Amazon
without Plaintiffs’ intervention, which anomalies apparently fluctuate – perhaps as a result of
Amazon’s reverse confusion – and which caused Plaintiffs to attempt to conform to Amazon’s
listings. See Colby Decl. ¶¶ 58-64.
In any event, Dr. McDonald has run additional surveys, specifically focused on the
question whether the difference in capitalization of the letter “b” has any effect on consumer
confusion:
To demonstrate that the upper case “B” in my original survey did not, in
fact, have a material effect (and that the difference in survey findings
actually has more to do with the way [Defendant’s expert witness
Nowlis’s] questions were conceived and framed), I conducted a sur-

27

rebuttal survey that precisely replicates my original survey in every
respect save one: use of a lower case “b” in both the Test and Control
Arms (ibooks and ebooks) instead of an upper case “B.” I made no other
changes in study design because I am persuaded that the original
methodology requires no adjustments. (Chattoraj Opp. Decl. Ex. 102,
Supplemental McDonald Report at 1.)
Even when changing stimuli in this fashion, the confusion levels were similar:
In response to this key question, 55% of Test Arm respondents named
either Apple or iTunes (and no other company) compared with only 2% of
Control Arm respondents. Using a conservative reading of Apple source
attributions (i.e. excluding responses that were merely speculative or
suggestive of Apple), the net percent of unique Apple/iTunes source
attributions is 53% ± 6% (ρ=.05), meaning that we can say with 95%
confidence that the true value lies between 47% and 59%. This number is
literally and statistically identical to the results of the prior “iBooks”
confusion survey. If we take a more inclusive approach and count as
confused the percent of Apple responses that were merely suggestive but
not definite (“maybe Apple”) or were part of dual company mentions, the
net source confusion calculation produces a slightly higher number: 59%
minus 8%, or 51% ± 6%. This number, too, is statistically unchanged from
the corresponding figure in the prior survey. (Chattoraj Opp. Decl. Ex.
102, Supplemental McDonald Report at 3.)
Based on this data, Dr. McDonald formed the following opinion:
Based on these findings, it is evident that capitalization of the “B” in
iBooks had no bearing on results of the initial survey; consumers attend
exclusively to the letter ”i” in making these source attributions and may or
may not even be aware of whether Apple uses a capital “B.” There can be
no doubt that, in the minds of book readers who make some use of digital
devices to read them, “i is for Apple,”meaning that consumers have been
conditioned to attach Apple source attributions to the “i,” and that even if
not familiar with “iBooks” or “ibooks,” they assume it to be an Apple
source signifier. The emerging rule is so powerful in the minds of
consumers that these results may understate the degree to which actual
iBooks awareness played a role in their source attributions. (Chattoraj
Opp. Decl. Ex. 102, Supplemental McDonald Report at 6.)
The Proximity of the Products. Apple contends that, because the iBooks app is a
software application to purchase, download and read electronic books on a mobile device,
whereas Plaintiffs’ IBOOKS mark is the imprint of a publishing house that sells books, there is
no likelihood of confusion. This contention is not consistent with Apple’s repeated public
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statements that the iBooks app “includes” iBookstore, and the functionality of purchasing books
and generating revenues for Apple. Pls. 56.1 Statement ¶ 178. Moreover, this contention is
contrary to the doctrine of “complementary goods”: If a similar mark appears on
“complementary goods” – in the sense that they might be used together, such as electronic books
and book reading software – “then there may be a strong likelihood that buyers will think that
there is some connection between the sources of such goods.” MCCARTHY ON TRADEMARKS
AND UNFAIR COMPETITION

§ 24:26, at 24-73 (West 2011) (including as examples “wine and

restaurant services” and “computer programs and modems”). As set forth in McCarthy and
related treatises, there is no absolute rule rejecting theories of confusion between related, but not
directly competitive goods. See id. §§ 24:5-24:60.
It also appears that there exists confusion, even among Apple employees, as to whether
the mark iBooks denotes the software application used for purchasing, downloading and reading
books, or the books that consumers download and read using the application. In its own
marketing survey of consumers, Apple posed the question, “Approximately how many free and
paid for iBooks have you downloaded from the iBookstore since you started using it?” Pls. 56.1
Statement of Add’l Undisputed facts ¶ 45. Likewise, Defendant’s witness Grace Kvamme
testified that there was so much confusion internally related to the proper usage of the term
iBooks as late as March 2012, as reflected in various internal emails produced by Apple, that the
Apple marketing group for the iBooks application felt it necessary to hold a meeting just to
clarify how iBooks and other related terms should be used both internally and externally. Pls.
56.1 Statement of Add’l Undisputed facts ¶¶ 46-47. Similarly, Apple’s CEO Steve Jobs used the
word “iBooks” to mean “book downloaded and read” in various instances, including in a Time
Magazine article. See Pls. 56.1 Statement Add’l Undisputed Facts ¶¶ 47-48. Among the general

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public, as seen in various media accounts, this confusion is endemic, including in books released
in order to teach consumers about the operation of the iPad and iBooks software. See Pls. 56.1
Statement Add’l Undisputed Facts ¶ 48. To the extent that consumers conflate the name iBooks
(for the application) with the books downloaded through that application, confusion between
Apple’s mark and Plaintiffs’ mark, as applied to books and electronic books, is more likely.
In this instance, the relatedness of the parties’ products at least gives rise to a genuine
issue of disputed fact.
Likelihood of Bridging the Gap. Plaintiffs’ expert witness Michael Shatzkin explained in
his report that Plaintiffs’ “specialization in a genre that is characterized by customers that make
repeat purchase in the genre suggests a core audience that would recognize it as a publishing
specialist. It is thus reasonable to surmise that were there no distractions suggesting the iBooks
brand meant something else (namely Apple and/or Apple’s iBooks/iBookstore), it is likely that
the publishers of iBooks would have had the opportunity to build on that awareness and create a
powerful niche brand in the digital space.” (Chattoraj Opp. Decl. Ex. 103, Shatzkin Report at 5.)
Mr. Colby likewise explained the steps he was taking to ensure his company was prepared to
make that leap before Apple’s infringement of their mark. See Colby Decl. ¶ 47-57. Dr.
McDonald, a marketing and survey expert, opined that because of Apple’s infringement, “the
future is even more diffuse and fluid because, left to their natural course, Plaintiffs would have
had various avenues in which to display and grow their mark, in multiple distribution and
reading environments.” (Chattoraj Opp. Decl. Ex. 101, McDonald Report at 7.)
Actual Confusion. Plaintiffs’ expert Dr. Susan McDonald concluded through her survey
that “in a digital-book environment, a significant percentage of consumers would interpret the
presence of the word, “iBooks,” on the information page inside the book to be a source signifier

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for Apple.” (See Chattoraj Opp. Decl. Ex. 101, McDonald Report at 2.) Dr. McDonald’s
Supplemental Survey found that this was unaffected by the manner in which the “B” in the
IBOOKS mark was displayed:
[I]t is evident that capitalization of the “B” in iBooks had no bearing on
results of the initial survey; consumers attend exclusively to the letter ”i”
in making these source attributions and may or may not even be aware of
whether Apple uses a capital “B.” There can be no doubt that, in the minds
of book readers who make some use of digital devices to read them, “i is
for Apple,” meaning that consumers have been conditioned to attach
Apple source attributions to the “i,” and that even if not familiar with
“iBooks” or “ibooks,” they assume it to be an Apple source signifier. The
emerging rule is so powerful in the minds of consumers that these results
may understate the degree to which actual iBooks awareness played a role
in their source attributions. (Chattoraj Opp. Decl. Ex. 102, Supplemental
McDonald Report at 6.)
Dr. McDonald’s report and survey protocol provide powerful evidence of actual
confusion, and strongly favors a finding of likelihood of confusion.
If the Court determines not to consider Dr. McDonald’s evidence of actual confusion on
this motion, however, such a determination does not preclude an ultimate finding of likelihood of
confusion, and certainly does not mandate summary judgment. See Medisim Ltd. v. BestMed
LLC, No. 10 CV. 2463 (SAS), 2012 WL 5954757, at *11-*12 (S.D.N.Y. Nov. 28, 2012) (finding
that Plaintiffs had offered sufficient evidence to permit a jury to conclude there was likelihood of
confusion, despite Plaintiffs’ lack of evidence of any actual confusion).
Sophistication of Consumers. Plaintiffs’ expert Michael Shatzkin noted that Plaintiffs’
“specialization in a genre that is characterized by customers that make repeat purchase in the
genre suggests a core audience that would recognize it as a publishing specialist.” (Chattoraj
Opp. Decl. Ex. 103, Shatzkin Report at 5.)
Existence of Bad Faith of Non-Moving Party. Instances of bad faith by Apple are alleged
in various contexts herein, but in any event, Apple is now barred from arguing against any

31

imputation of bad faith with respect to (1) its decision to proceed after learning of – at minimum
– Plaintiffs’ predecessor’s existence, and (2) its decision to proceed with the iBooks mark after
hearing from Plaintiffs’ principal on January 29, 2010, see Pls. 56.1 Statement ¶ 238; see also
Colby Decl. ¶ 67, because Apple has invoked the attorney-client privilege to thwart inquiry into
these areas.
For example, in support of their argument that no likelihood of confusion exists,
Defendants have sought to include 19 paragraphs of evidence with regard to their trademark
search and clearance process in their Local Rule 56.1 Statement of Undisputed Facts. (See Def.
56.1 Statement ¶¶ 154-172.) However, Defendant has also withheld all documents reflecting
communication between Apple and its attorneys concerning that process (see Pls. 56.1 Statement
of Add’l Undisputed Facts ¶ 38), and instructed witnesses not to answer questions pertaining
thereto, even when the only evidence of certain “good faith” activities was reflected in such
communications (see id. ¶ 39), stating repeatedly that it was not relying on an advice of counsel
defense in this action. (See id. ¶ 37.) Under these circumstances, Defendant is precluded from
offering evidence of its purported good faith. “Indeed, a party cannot be permitted, on the one
hand, to argue that it acted in good faith and without an improper motive and then, on the other
hand to deny . . . access to the advice given by counsel where that advice . . . played a substantial
and significant role in formulating actions taken by [the defendant].” Arista Records LLC v.
Lime Group LLC, No. 06 CV 5936 (KMW), 2011 WL 1642434, at *2 (S.D.N.Y. Apr. 20, 2011);
E.G.L. Gem Lab Ltd. v. Gem Quality Inst., Inc., 90 F. Supp. 2d 277, 296 n.133 (S.D.N.Y. 2000)
(assertion of attorney-client privilege at defendant’s deposition precluded evidence of reliance on
counsel to negate “bad faith” allegations).
Quality of the Non-Moving Party’s Products. This factor appears to be neutral.

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V.

PLAINTIFFS’ RELATED STATE-LAW CLAIMS ARE SUBJECT TO
SIMILAR STANDARDS AND ARE THEREFORE NOT SUBJECT TO
DISMISSAL
For the reasons set forth above, Plaintiffs’ state law claims should also be sustained.
The same standard that applies to Plaintiffs’ federal claim also applies to their New York

unfair competition claim.2 “Under New York law, a common-law claim for unfair competition
rests on the bad faith misappropriation of the labors and expenditures of another, likely to cause
confusion or to deceive purchasers as to the origin of the goods.” Best Cellars, Inc. v. Wine
Made Simple, Inc., 320 F. Supp. 2d 60, 83 (S.D.N.Y. 2003) (internal citations omitted)
(summary judgment not warranted where there existed disputed issues of material fact as to both
the defendant’s good faith and likelihood of confusion).
Plaintiffs’ claim of wrongful misappropriation by unfair competition should also survive
summary judgment as there are disputed issues of material fact as to likelihood of confusion.
See Randa Corp. v. Mulberry Thai Silk, Inc., No. 00 CIV 4061 (LAP), 2000 WL 1741680, at *56 (S.D.N.Y. Nov. 27, 2000). (“Unfair competition claims under New York law closely resemble
Lanham Act claims except the state law claim may require an additional element of bad faith or
intent.”) (emphasis added, internal citations omitted). Randa specifically found summary
judgment appropriate because there was no disputed issue as to likelihood of confusion; that is
clearly not the case here. See id. at *5-6. Additionally, for the reasons previously stated, even if
it were necessary to find evidence of bad faith under New York law, as Plaintiffs have shown, an
issue of material fact with respect to bad faith clearly exists.
Plaintiffs’ state law claim for unjust enrichment under New York law must also survive
as there are disputed issues of fact with regard to Defendant’s bad faith. To state a claim of

2

Plaintiffs no longer press their claim for conversion, based on their current understanding of the facts in this action
and the current state of discovery.

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unjust enrichment under New York law, the plaintiff must allege “(1) that the defendant was
enriched; (2) that the enrichment was at the plaintiff’s expense; and (3) that the circumstances
are such that in equity and good conscience the defendant should return the money or [benefit] to
the plaintiff.” Golden Pac. Bancorp v. FDIC, 273 F.3d 509, 519 (2d Cir. 2001). In fact,
Plaintiffs’ principal informed Apple of their infringement of his mark two days after the
announcement of the iBooks application, but months before it was actually launched, yet Apple
still chose to ignore Plaintiffs’ rights and proceed to market. See Pls. 56.1 Statement ¶¶ 238,
239, 243-245.
CONCLUSION
For the foregoing reasons, Defendant’s Motion for Summary Judgment should be denied
in its entirety.
Dated: New York, New York
January 25, 2013
Respectfully submitted,
ALLEGAERT BERGER & VOGEL LLP

By:

/s/ Partha P. Chattoraj
Partha P. Chattoraj
David A. Shaiman

111 Broadway, 20th Floor
New York, New York 10006
[phone]
Attorneys for Plaintiffs J.T. Colby & Co., Inc. d/b/a
Brick Tower Press, J. Boylston & Co., Publishers,
LLC, and ipicturebooks, LLC

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