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

Filing 137

DECLARATION of Partha P. Chattoraj in Opposition re: 83 MOTION in Limine to Exclude any Testimony, Argument or Evidence Regarding the Expert Reports and Opinions of Robert T. Scherer.. Document filed by Ipicturebooks LLC, J.Boyston & Company, J.T. Colby & Company, Inc., Publishers LLC. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C Part 1, # 4 Exhibit C Part 2, # 5 Exhibit D, # 6 Exhibit E, # 7 Exhibit F, # 8 Exhibit G, # 9 Exhibit H, # 10 Exhibit I, # 11 Exhibit J, # 12 Exhibit K)(Chattoraj, Partha)

EXHIBITC

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

J.T. COLBY & COMPANY, INC. d/b/a
BRICK TOWER PRESS, J. BOYLESTON &
COMPANY, PUBLISHERS LLC and
IPICTUREBOOKS LLC,
Plaintiffs,
-againstAPPLE, INC.,
Defendants.

Case No. 11-cv-4060 (DLC)
Expert Report of Robert T. Scherer

TABLE OF CONTENTS

1.

RETENTION ....................................................................................................................... 1

2.

QUALIFICATIONS, PRIOR TESTIMONY AND RATE ................................................. 1

3.

REVIEW AND INVESTIGATIONS .................................................................................. 4

4.

TRADEMARK PRINCIPLES:
Trademark Rights are Based on Use, Not Registration ................................................. 6

5.

TRADEMARK CLEARANCE RESPONSIBILITY AND PROCEDURES:
Apple Failed to Conduct an Appropriate Trademark Clearance Search .................... 7

6.

REGISTRATION NO. 2,446,634, TRADEMARK !BOOK:
The Nature and Use of Family Systems' IBOOK Product is Significantly
Different Than Apple's IBOOKS Product. ................................................................... 17

7.

FAMILY SYSTEMS' U.S. PATENT NO. 6,411,993:
Apple Failed to Acquire the Underlying Patent for Family Systems' IBOOK
Product.............................................................................................................................. 23

8.

THE ASSIGNMENT OF REGISTRATON NO. 2,446,634, TRADEMARK
IB
AND THE ROLE OF GOODWILL:
1i
'·!

'\~ '

9.

10.
.............................. 32
11.

PLAINTIFFS' ACQUISITION OF THE iBooks TRADEMARK AND
BUSINESS:
Plaintiffs' Properly Acquired the iBooks Trademark Out of Bankruptcy ................ 36

12.

iBooks Inc.'s TRADEMARKS iBooks (APPLICATION NO. 75/786,491) AND
iBookstore.com (APPLICATION NO. 75/786,490):
Although Both Applications Were Abandoned, Plaintiffs Continued to Use
the iBooks Mark ............................................................................................................... 37

13.

APPLE'S TRADEMARK IBOOK (REGISTRATION NO. 2,470,147):
Apple's Original IBOOK Registration is Limited to Computer Hardware
and Required Family Systems Consent to Register ...................................................... 38

14.

APPLE'S !BOOKS (APPLICATION NO. 85/008,412), !BOOKSTORE
(APPLICATION NO. 85/008,432) AND OTHER PREFIX "i" MARKS:
Apple's Prefix "i" Marks are Famous Marks That are Immediately
Associated with Apple ...................................................................................................... 41

15.

OTHER INFRINGEMENT CLAIMS INVOLVING APPLE'S PREFIX "i"
MARKS:
Apple has been Accused of Trademark Infringement on Numerous
Occasions .......................................................................................................................... 43

16.

OPINIONS ......................................................................................................................... 44

ii

1.

RETENTION.
I was retained by attorneys for plaintiffs in the above-referenced litigation to: (i) discuss

the necessity and importance of conducting appropriate trademark clearance searches before
adopting a new trademark or expanding the use of an existing trademark; (ii) review the validity
of Family Systems' assignment of its IBOOK mark to Apple and discuss the nature and
requirement of goodwill; (iii) compare the nature of Family Systems' use of its IBOOK mark
with Apple's post-acquisition use of the !BOOKS mark (as amended); (iv) review the statements
made in Apple's Declaration of Use filed in Reg. No. 2,446,634; (v) review and explain the
several applications and registrations filed in the U.S. Patent and Trademark Office ("PTO") by
plaintiffs and defendant including Reg No. 2,470,147; Reg. No. 2,446,634; Reg. No. 2,718,222;
App. No. 85/008,412; App. No. 85/008,432; App. No. 75/786,490; and App. No. 75/786,491;
(vi) discuss whether iBooks 1 is a distinctive/descriptive mark; and (vii) review the validity of the
assignment of the iBooks mark out of bankruptcy to plaintiffs.
2.

QUALIFICATIONS, PRIOR TESTIMONY AND RATE.
I am a member of theN ew York State Bar Association and the District of Columbia Bar

Association and have been practicing in the area of trademark law since 1972. I retired from
active practice in December, 2005, but have continued to stay abreast of developments in the
trademark field. I have not previously testified as a trademark expert witness.
Upon graduation from Wayne State University Law School in 1972, I was employed by
the U.S. Patent and Trademark Office ("PTO") as a Trademark Examiner. While in that
position, I regularly (i) reviewed trademark applications for compliance with the mandatory
1

In order to aid in distinguishing between the parties respective marks, whenever
possible, I have chosen to display plaintiffs' marks with an initial lower-case letter, followed by a
single upper-case letter, i.e., iBooks or iBooks, Inc. and Family Systems' and Apple's marks in
all upper-case letters, i.e., !BOOKS or IBOOK.

1

filing requirements; (ii) conducted searches of the Trademark Register and of pending
applications; (iii) reviewed marks for descriptiveness; (iv) prepared PTO Office Actions and
reviewed responses thereto; (v) prepared several briefs to the Trademark Trial and Appeal Board
("TTAB") in support of final refusals; and (vi) on a rotating schedule, served with the PostRegistration Branch reviewing registrations for Sections 8 and 15 compliance and Section 9
renewal and as an interlocutory examiner with the TTAB. During my two years and three
months with the PTO, I reviewed approximately 2,000 applications.
In August, 1974, I went to work for the intellectual property law firm of Pennie &
Edmonds. As an Associate with the firm, I regularly (i) advised clients on basic trademark law
and PTO procedures; (ii) conducted trademark clearance searches for conflicting registered,
pending and common law marks; (iii) prepared and filed U.S. trademark and service mark
applications; (iv) prepared and filed responses to PTO Office Actions; (v) prepared and filed
Post-Registration documents including Section 8 and 15 Declarations of Use and Incontestability
and Section 9 Renewals; and (vi) prepared and filed assignment and change of name documents.
I also participated in several inter partes opposition and cancellation proceedings in the PTO and
trademark infringement litigation in the federal courts. During almost five years with the firm, I
was responsible for filing and prosecuting approximately 500 U.S. trademark/service mark
applications.
In 1979, I went to work for PepsiCo, Inc. as a Trademark Attorney. In that position, I
advised various subsidiary companies, i.e., Frito-Lay, Pizza Hut and Wilson Sporting Goods,
among others, on all trademark related matters, including, but not limited to (i) the selection,
searching and clearance of U.S. and foreign trademarks; (ii) the filing and prosecution of U.S.
and foreign trademark applications; (iii) the renewal of U.S. and foreign trademark registrations;

2

(iv) the filing of U.S. and foreign oppositions and cancellation actions; (v) trademark licensing
and (vi) the review of advertising and promotional materials for proper trademark use. While at
PepsiCo, I filed and prosecuted approximately 100 U.S. trademark applications and was
responsible for the maintenance and renewal of approximately 10,000 U.S. and foreign
registrations.
In 1983, I moved to Time Inc. as a Trademark Attorney and assumed responsibility for its
entire portfolio of U.S. and foreign trademarks. In that position, I oversaw the selection,
clearance, filing of applications, prosecution of applications, maintenance and protection of more
than 20,000 U.S. and foreign trademark registrations, including such well-known marks as
TIME, SPORTS ILLUSTRATED, FORTUNE and PEOPLE Weekly for magazines; HBO and
CINEMAX for television programming services; TIME-LIFE, WARNER BOOKS and
LITTLE, BROWN for book publishing and the TIME WARNER corporate mark and logo. I
also supervised the assignment of several large trademark portfolios during my 22 years with the
various Time Warner (a successor company) companies. I was responsible for the daily
monitoring of trademarks for infringement and for taking appropriate action when found. I
oversaw the licensing of the company's trademarks and the registration and protection of Internet
domain names. Through various promotions during my career, when I retired in December,
2005, I was Assistant General Counsel of Time Warner Inc. and had filed approximately 900
U.S. trademark applications on behalf of the company and its subsidiaries.
During my thirty-three years of trademark practice, as a Trademark Examiner in the PTO,
as a law firm associate, and as a corporate trademark attorney, I have conducted and reviewed
thousands of trademark searches and cleared such now well-known marks as InStyle,
ENTERTAINMENT WEEKLY and REAL SIMPLE for use on magazines, as well as the TIME

3

WARNER mark and corporate name. I have also conducted numerous searches and
investigations in connection with the expansion of such existing brands as PEOPLE Weekly,
HBO and CINEMAX. I have examined, filed and/or prosecuted more than 3500 applications
and been responsible for the maintenance of thousands of registrations in the United States
Patent and Trademark Office. In all these positions, I regularly advised clients and participated.
in such trademark related matters as trademark searching and clearance, trademark application
filings and prosecution, trademark maintenance and renewal, trademark assignments and
trademark licensing.
My compensation as an expert witness in the above-referenced matter is $500 per hour.
A copy of my current curriculum vitae is attached hereto as Exhibit A.

3.

REVIEW AND INVESTIGATIONS.
In connection with the preparation of this report, I was provided with and reviewed the

following documents and materials:
Court Documents
Complaint and Jury Demand
Answer and Affirmative Defenses of Defendant
Materials Provided by Plaintiffs' Counsel
Archived Materials from Family Systems' "iBook" Website
Archived Materials from uris located via Family Systems' "iBook" Website
Family Systems' "iBook" Instructions and General Information
TESS Search Results for "ibook" Applications/Registrations
Listings from Publishing Industry, Book Seller and Comic Book Websites (1999-2010) ·
Current Listings from Publishing Industry and Book Seller Websites (Sept./Oct. 2011)
Wikipedia Entry for Byron Preiss

4

Google Search Results for "iBooks" with "Publisher(s)/Publishing" (2009)
Advanced Search Results for "iBooks" with "Publishers or Publishing" (2009)
Deposition Transcript of Richard S. Goldhor, Ph.D., January 31, 2012
Deposition Transcript of John T. Colby, July 18, 2012
An Article titled "Trademark Searching" by Glenn Gundersen, 1994
Several Saegis Reports of Apple Trademark Searches
Memo Titled APPLE !BOOK AND !BOOKSTORE with Search Strategies
An Invoice for

for the !BOOK Settlement Payment, dated January 29, 2010

NY Certificate of Assumed Name iBooks, dated December 12, 2006
iBooks lTD September 2005 C/B Worksheet
J. Boyleston & Company, Publishers Consolidated Income Statement 1999 - 2011
United States Patent and Trademark Office Documents
File Wrapper for Reg. No. 2,446,634 !BOOKS (as amended)
File Wrapper for Reg. No. 2,470,147 !BOOK
File Wrapper for Reg. No. 2,718,222 ipicturebooks.com
File Wrapper for App. No. 85/008,412 !BOOKS
File Wrapper for App. No. 85/008,432 !BOOKSTORE
File Wrapper for App. No. 75/786,490 iBooksinc.com
File Wrapper for App. No. 75/786,491 iBooks
File Wrapper for Patent No. 6,411,993
I also used and reviewed the following PTO databases:
Trademark Electronic Search System (TESS)
Trademark Applications and Registrations Retrieval (TARR)
Trademark Manual of Examining Procedure (TMEP)
Trademark Document Retrieval (TDR)

5

Trademark Assignment Services
Trademark Rules of Practice
U.S. Trademark Law, 15 U.S.C. Section 1051 et seq. (Lanham Act) In addition to these
documents and materials, I reviewed relevant sections of McCarthy on Trademarks and Unfair
Competition, 4th edition, J. Thomas McCarthy (2005) and performed advanced searches of the
Google and Amazon.com databases.
4.

TRADEMARK PRINCIPLES:
Trademark Rights are Based on Use, Not Registration.
A trademark is defined as any word, name, symbol or device, or any combination thereof,

used to identify and distinguish one's goods from those manufactured or sold by others and to
indicate the source ofthe goods, even ifthat source is unknown. See Lanham Act, 15 U.S.C.
Section 1127. (The Lanham Act is the federal statute governing trademarks in the U.S.)
Trademarks are sometimes referred to as brand names. In the United States, trademark rights are
created when the mark is actually used in commerce on or in connection with goods in the
ordinary course of trade. Such marks are referred to as common law trademarks. The owner of a
common law mark may elect to register it in the PTO, but registration is not required in order to
own the mark or to claim a priority of use. While there are some procedural and evidentiary
advantages to owning a federal trademark registration, a common law or unregistered mark is
entitled to the same substantive rights and protection as a registered mark.
There are two primary bases on which to file an application to register a trademark in the
PTO. First, the application may be based upon actual use of the mark in interstate commerce.
This is referred to as a use-based application filed under Section 1(a) of the Lanham Act.
Second, the application may be based upon a bona fide. intent to use the mark in interstate
commerce. This is referred to as an intent to use or ITU application and is filed pursuant to

6

Section 1(b) of the Lanham Act. Even though the ITU application is filed before actual use of
the mark begins, the registration will not be granted until the mark has been used in interstate
commerce and evidenced to the PTO. While there are other bases for filing trademark
applications, they are not relevant to this litigation.

5.

TRADEMARK CLEARANCE RESPONSIBILITY AND PROCEDURES:
Apple Failed to Conduct an Appropriate Trademark Clearance Search.
When selecting a new trademark or materially expanding the use of an existing mark, it is

imperative that the trademark attorney conduct the necessary searches and, if appropriate,
follow-up investigations to determine whether the proposed mark is available for the intended
use. The question to be answered: "Is the use of the mark likely to cause confusion with an
existing third party mark?" There are at least three basic steps in the searching process.
First, the trademark attorney, either in-house or outside counsel, will customarily conduct
a screening or "knock- out" search in one or more available databases, including the PTO's
Trademark Electronic Search System (TESS) or another commercially available database such as
Thomson Compumark's SAEGIS service. By definition, these preliminary or screening searches
are limited to PTO and state trademark records, but they do not include any common law or
domain name records. A copy of a Thomson Compumark online promotional piece describing
the SAEGIS service as a "screening" or "knock-out" search is attached as Exhibit B. Because of
these limitations, the clearance process cannot stop here. If the screening search is "clear", in
that it did not disclose any confusingly similar third party marks, the second step is to order a
more comprehensive "full" search through one of several commercial vendors. Such searches
can be performed on a 4 hour turnaround, if necessary, or more commonly on a 2- 3 day
turnaround. The largest commercial trademark search firm is Thomson Compumark, and I have
attached a representative example of one of their full search reports as Exhibit C. In addition to

7

the PTO and state trademark databases discussed above, a full search includes (i) appropriate
common law databases; (ii) web databases such as Google and Yahoo; and (iii) domain name
databases. Also, because the test for trademark infringement is not limited to identical marks,
but includes "confusingly similar" marks, a full search is more comprehensive in that it includes
similar marks, variant spellings and phonetic equivalents.
If either the preliminary screening search or the more comprehensive full search disclose
a potentially conflicting mark, the third step is for the trademark attorney to undertake a further
investigation to determine the nature and extent of use of that mark. The investigation can take
several forms. If the mark is the subject of a federal registration (active/cancelled/expired) or an
application (active/abandoned), one can order the PTO file history of that mark to try to better
determine if and how the mark is being used. It is also possible to conduct an appropriate online
search to see if there are any references to the mark on the Internet. Another option is to hire a
professional trademark investigator to look into any use of the mark. Only after these searches
and any necessary investigations have been completed and there appear to be no confusingly
similar marks in use or, if a confusingly similar mark has been found, any likelihood of
confusion has been resolved via acquisition, license or consent, should use of the proposed mark
begin.
With the foregoing principles in mind, I reviewed Apple's clearance of the IBOOKS
mark and found that while it conducted the preliminary screening search of Thomson
Compumark' s Saegis database and several narrow searches limited to the Google search engine
(step 1), it completely ignored the comprehensive full search (step 2) and any follow-up
investigation (step 3). In my opinion, Apple's failure to conduct an appropriate
search/investigation was irresponsible and a serious departure from standard trademark searching

8

practice, I find it surprising that a large and sophisticated company, like Apple, did not follow-up
with a more comprehensive search.
I should mention here that Apple owns a federal registration for the !BOOK mark for
"computer hardware" (Reg. No. 2,470,147) and claims to own a second federal registration for
the mark !BOOKS (as amended) for "computer software used to support and create interactive
user-modifiable electronic books" (Reg. No. 2,446,634). Apple asserts that its use of the
!BOOKS mark in connection with downloadable books and the electronic transmission of
streamed and downloadable books is simply an expansion of these two earlier registrations so
that further searches and/or investigations are unnecessary. In order to see just how far Apple
intended to "expand" its use of the IBOOKJIBOOKS mark, I reviewed the list of goods/services
recited in Apple's most recent ITU applications to register the !BOOKS mark (App. No.
85/008,412) and the !BOOKSTORE mark (App. No. 85/008,432), both of which were filed on
April 7, 2010. As filed, both applications contained a lengthy list of goods and services in six
Classes. 2 In addition to "computers" in Class 9, which may qualify as an expansion of the earlier
!BOOK registration, the applications go on to state that Apple has a bona fide intention to use the
!BOOKS and !BOOKSTORE marks in connection with "printed matter ... " in Class 16;
"advertising and marketing services ... in Class 35; "telecommunications services ... " in Class 38;
"educational and entertainment services ... " in Class 41; and "design and development of
computer hardware and software ... " in Class 42. In Class 16, for example, Apple included the
items "printed publications; periodicals; books; magazines; newsletters ... ; Class 35 included the
items "sales promotion services; promoting the goods and services of others; conducting market

As we will see in subsequent sections, the PTO has created arbitrary classes of goods
and services numbered from 1 -45. The primary purpose of this classification system is to allow
the PTO to charge separate filing fees per class.
2

9

research ... " and Class 41 included "podcasts in the fields of entertainment, news, current events
and activities, hobbies ... ". (The actual list of goods/services goes on for almost two full singlespaced pages.)
Are we to believe that this long list of new 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"? That's what Apple told the Trademark Examiner in its response to a PTO
Office Action. However, it is obvious that this is far more than a mere expansion of the earlier
IBOOK/IBOOKS registrations as it encompasses numerous entirely new uses of the mark which
require an entirely new comprehensive search and clearance. (It appears that Apple subsequently
amended the above-referenced IBOOKS application by deleting Classes 16, 38 and 41, but kept
all six Classes in the !BOOKSTORE application. Even with this amendment, the three
remaining Classes in the IBOOKS application represent far more than an expansion of the earlier
marks and Apple had gone on record as intending to use the IBOOKS mark in connection with
all of the goods/services originally listed in the applications.) Also, the fact that Apple found it
necessary to conduct even a preliminary screening search of the IBOOKS mark is an indication
that this expanded use far exceeds the coverage of the earlier registration. Apple has a duty to
properly search and clear new marks or new uses of existing marks; being a very large and
successful company does not excuse Apple from responsibility and respect for the trademark
rights of others.
I have reviewed copies of several SAEGIS searches which appear to have been
conducted by Apple's outside counsel and found that one of those searches disclosed the marks
iBooks (App. No. 75/786,491) covering "books, namely, a series of fiction books; non-fiction
books in the field of science" and iBooksinc.com (App. No. 75/786,490) for "computerized on-

10

line ordering services in the field of printed publications" and "providing a website on global
computer networks featuring information on the field of printed publications", both filed by the
plaintiffs' predecessor-in-title, iBooks, Inc. see Exhibit D. Based upon this search, Apple was
clearly aware of plaintiffs' iBooks and iBooksinc.com marks and even though the applications
were abandoned in 2003 for failure to respond to a PTO action and tagged as "DEAD", they
remained as a possible bar to Apple's use of the IBOOKS mark and required further
investigation. Since, as noted in Section 4, trademark rights are based on use, not registration. I
then conducted my own search of the PTO's TESS database which again disclosed the iBooks
and iBooksinc.com applications.
Another search document produced by Apple under the heading "APPLE IBOOK and
!BOOKSTORE" referred to the "PRELIMINARY SEARCH STRATEGIES" and listed the
strategies used in running several different searches. See Exhibit E. Based upon the above
references, this document appears to relate only to a preliminary search of the IBOOK and
!BOOKSTORE marks and I have seen no other documents indicating that any comprehensive
full searches were commissioned.
I also reviewed several documents showing the results of a Google search of such terms
as "ibook", "ibookstore", "ebook", "ebookstore","eyebook", "eyebookstore", "mybook" and
"mybookstore" in various forms. Sometimes these terms were combined with a list of goods,
including "computer", "software", "electronic", "online", "device" or "reader". They were often
further broken down into Apple and non-Apple references. It is my understanding that these
searches may have been conducted by Apple's outside counsel. All of these searches were made
using the Google search engine and no effort was made to search publishing or book related
websites such as Amazon. com. While none of these searches disclosed any references to

11

plaintiffs' iBooks mark, this was not unexpected, because in reviewing the search strategies, it
looks as if Apple or its outside attorneys made a concerted effort to avoid any terms which were
likely to uncover the plaintiffs' iBooks mark or name. Apple was aware of plaintiffs' presence
in the publishing industry based upon a SAEGIS search, see Exhibit D; yet it never conducted a
search of the iBooks, Inc. name. If Apple had searched "ibooks" combined with plaintiffs'
company name, iBooks, Inc., as I recently did, it would have found numerous articles referring to
plaintiffs' ongoing iBooks business. In my search, the first 35 "hits" referred to iBooks and/or
iBooks, Inc. Apple could have, and should have, performed the same search. I was left with the
impression that Apple specifically designed the search to avoid finding references to plaintiffs'
business. In addition to this failure to search the appropriate terms/names, Apple also
deliberately combined several search terms with the word Apple, which would, of course,
eliminate finding any references to plaintiffs' mark/name. Although reference was made to a
"TRADEMARK. COM DOMAIN NAME SEARCH in Exhibit E, I have seen no report showing
that such a search was ever made.
The appropriate next step was to order the PTO file history to see why the application
was abandoned and whether the mark has been used. In reviewing the PTO file, I learned that (i)
iBooks, Inc. has been using the iBooks mark since 1999, and was planning to file an amendment
to allege use shortly; and (ii) iBooks, Inc. had iBooks sales in excess of $5,000,000 and spent
over $250,000 in advertising and promoting the iBooks mark in the first three years of business.
This important information was readily available to anyone who took the time and effort to order
the PTO file. Even though the application had been abandoned, the iBooks mark was being used
and remained a viable and valuable trademark belonging to plaintiffs. The disclosure of iBooks,

12

•
..

Inc.'s iBooks mark in the limited screening search was a "red flag", which required further
investigation.
In order to see what an investigation would have found, I again entered ''ibooks" with
"iBooks, Inc." in Google and found several references to Byron Preiss' and/or iBooks, Inc.'s
iBooks mark. Having found that the iBooks mark and the iBooks, Inc. company name are still
being reported in online databases, the next step in my investigation was to search several
databases devoted to the publishing industry, such as Amazon.com, Bowker's Books in Print and
Publishers Weekly, to determine the nature and extent ofthat use. A search of Amazon.com
disclosed more than 600 books published by plaintiffs' predecessor before May 23, 2006 under
the iBooks mark, with many ofthe books offered in a digital format. A search ofWorldCat, a
database which allows access to the collections of over 10,000 libraries worldwide, for each of
the years 1999 - 2009, disclosed hundreds of books published by iBooks, Inc. and using the
iBooks mark. A search of My Comic Shop, the world's largest online selection of comic books,
for the years 2000- 2006, disclosed a long list of iBooks' published comic books. Similarly, a
search of iBooks at comics.org, which is dedicated to building a database covering all printed
comics throughout the world, for the years 2003 - 2005, again revealed numerous comic books
using the iBooks mark.
A search of Publishers Weekly ("PW"), which refers to itself as "The International News
Magazine of Book Publishing and Bookselling" for each of the years 1999- 2009, found
repeated references to both iBooks and iBooks, Inc. beginning as early as May 24, 1999, with the
following reference:
"Byron Preiss Visual Publications will launch a new imprint in September [1999]
that will focus on books with content appropriate for marketing on the Internet.
The imprint, ibooks, will be done in cooperation with Pocket Books, which will
serve as ibooks' distributor."

13

The June 7, 1999, issue ofPW included the following:
" .. .longtime multimedia publisher Byron Preiss discussed his new project, iBooks,
which will combine classics of science, science fiction, history and mystery, in
trade paper, with free browsable chapters available online."
A PW article on March 3, 2003, stated that:
"The fastest growing publisher on this year's list is ibooks, the newest publishing
venture launched by Byron Preiss in 1999. The company publishes in a mix of
segments and formats, including e-books."
After Byron Preiss' tragic death in July, 2005, and the sale of the company's assets in bankruptcy
to plaintiffs' on December 13, 2006, PW continued to refer to the iBooks mark and the iBooks,
Inc. name in various articles.
A Google search of "ibooks" combined with the words "publisher/publishers/publishing"
for each of the months April- December, 2009, which closely preceded Apple's launch of its
new !BOOKS product, disclosed numerous references to plaintiffs' iBooks mark. And, finally, a
search on Wikipedia of the name "Byron Preiss", the founder of the !books imprint and one of
the pioneers of electronic publishing, included several references to the iBooks mark and listed
several books published by iBooks, Inc.
I then reviewed the results of more recent online searches conducted in September October, 2011 of"iBooks" and "iBooks, Inc." The updated search of Amazon.com identified
742 books referring to either iBooks or iBooks, Inc. and included references to the series names
"ibooks Fantasy Classics" and "!books Science Fiction Classics". I followed-up with my own
search of Amazon.com and found such additional series names as "!book Fan Books",
"Instructor !book", "Law and Order (!books)", "Military History (!books)", "Rabbi Small
Mysteries (!books)", "Student !book", "Transformers (!books)" and "X-Men (!books)". I also
examined the results of an "iBooks" search at barnesandnoble.com which disclosed over 750
iBooks references. Similar searches of Books by ISBN (an ISBN or International Standard Book

14

Number is assigned to each edition and variation of a book) and Bowker's Books in Print (R.R.
Bowker, LLC provides information support for the publishing industry in the United States.
Bowker is the official U.S. ISBN Agency, the publisher of Books In Print and other compilations
about books and periodical titles.) yielded hundreds of current uses ofplaintiffs' iBooks mark.
Similar databases are included in the common law portion of a comprehensive full search and
would have disclosed many of these same references to plaintiffs' use of the iBooks mark had
Apple taken that next all important step to clear the mark.
The pleadings in this case also refer to plaintiffs' ipicturebooks and ipicturebooks.com
marks, the latter of which was the subject of a cancelled registration for "books in print in the
field of fiction and non-fiction for children" and "computer services, namely, online books in
the field of fiction and non-fiction for children", owned by iBooks, Inc. I conducted an online
search of three databases to determine the nature and extent of use of these marks. At a website
called JacketFlap, which lists the work of 200,000+ authors, illustrators, publishers and other
creators of books for children and young adults, I found more than 350 ebooks published by
ipicturebooks. A similar search at Amazon.com disclosed more than 90 current books published
by ipicturebooks and a search ofthe Diesel eBook Store listed over 190 ipicturebooks books for
sale.
Based upon these several common law searches and investigations, it is evident that
plaintiffs' iBooks and ipicturebooks marks are actively used and regularly referenced in a wide
variety of databases dedicated to the publishing industry. An appropriate common law search/
investigation would have quickly disclosed plaintiffs' iBooks and ipicturebooks marks. To have
either failed to perform these investigations or to have ignored the results of an investigation is
highly irresponsible.

15

I also reviewed a treatise entitled "Trademark Searching", first published in 1994, written
by Glenn Gundersen, a copy of which is attached as Exhibit F. I understand that Mr. Gundersen
and his firm have on several occasions, including in the early stages ofthis iBooks/IBOOKS
conflict, provided trademark legal services to Apple. The overriding message of this treatise is
that "A trademark search is the critical legal step in the process of selecting a new mark." In
discussing the mechanics of the search process, Mr. Gundersen states at page 3:3 that:
"A newcomer to the search process might expect that it would suffice to check the
records of the U.S. Patent and Trademark Office. However, one cannot rely
solely on such a search because registration with the Trademark Office is not a
prerequisite to obtaining trademark rights in the U.S. Many valid trademarks
exist at common law without ever appearing on the federal trademark register.
Some appear in state registrations (although these registrations do not always
reflect actual use); others are not registered at all. Thus, the search must
encompass marks beyond those shown in federal applications and registrations."
Later in the same treatise, Mr. Gundersen states at page 3:11 that:
"The preliminary search uses a limited number of resources and queries the
searcher deems most likely to yield relevant marks with minimum effort. It
serves to eliminate marks that are clearly unavailable; it does not attempt to reach
a definitive answer on the availability of those marks that survive. Thus, while a
preliminary search can yield a clear "no" to a proposed mark, it cannot yield a
clear "yes". Only the potential for a "yes" can be reached at this point."
And, finally, Mr. Gundersen states at page 3:29 that:
"When counsel finds a potentially conflicting mark, it is usually necessary to
investigate further to determine if the mark has been abandoned, to better
understand the nature of the goods or services sold under the mark and the
marketing channels used, to ascertain the status of any pending applications and
registrations ... "
Despite the fact that Apple's attorneys are accomplished trademark professionals with years of
experience, they appear to have departed from the recommended protocol of their own outside
counsel and proceeded to use the IBOOKS mark in connection with downloadable books based
solely upon a preliminary or screening search. They failed to order a more comprehensive full
search or to undertake an appropriate investigation into the use of plaintiffs' iBooks mark, even

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though they knew of its existence based upon their preliminary SAEGIS search and John Colby's
January 29, 2010 e-mail. This failure to follow the customary steps in clearing the IBOOKS
mark was a glaring omission and evidences a total disregard for the trademark rights of others.

6.

REGISTRATION NO. 2,446,634, TRADEMARK /BOOK:
The Nature and Use of Family Systems' /BOOK Product is Significantly Different
Than Apple's /BOOKS Product.
(a) On October 8, 1996, a U.K. company called Family Systems Limited filed an ITU

application in the PTO (App. No. 75/182,820) to register the trademark IBOOK for "computer
hardware and software used to support and create interactive, user-modifiable electronic books".
Upon reviewing the application, the Trademark Examiner determined that the application was in
order and a search of the Trademark Register and pending applications did not disclose any
conflicting marks. The Trademark Examiner subsequently approved the IBOOK mark for
publication in the Official Gazette ("OG"). (Publication of a mark in the OG allows any person
who believes that they will be damaged by the registration of a mark an opportunity to oppose or
object to the registration of that mark.) In this case, no opposition was filed and a Notice of
Allowance was sent to Family Systems giving them six months to file a Statement of Use along
with evidence that the mark is being used on the recited goods. At the end of the six months,
Family Systems filed a First Request for Extension of Time to File a Statement of Use. The
extension was granted and the Applicant obtained an additional six months to file a Statement of
Use. (Trademark Rules allow for the filing of up to five requests for extensions of time and,
since Family Systems had not yet begun to use the IBOOK mark, they eventually filed the
maximum number of extensions stating in the second, third, fourth and fifth requests that
"Applicant is still actively engaged in research and development in connection with the products

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with which the mark will be used.") The PTO accepted the statement of Family Systems'
ongoing efforts to use the mark and granted all five requests.
On November 6, 2000, Applicant was finally able to file the required Statement of Use·
claiming that the mark was first used on "computer hardware and software used to support and
create interactive, user-modifiable electronic books" on October 27, 2000. The specimens
showing how the mark is used consisted of (i) what appears to be a screenshot from a website
maintained by hinmanconsulting which states:
"Welcome to TeamGirl
A Community Dedicated to Girl's Sports and
related Activities
If you would like to to [sic] contribute to this site and/or create a personal !book on this site
related to Girl's Sports, follow the links above to download and install the Family Systems !book
Controller and to enroll in this site. Click on Identity !books above to see a list of currently
available !books on this site.
Powered By !book Technology From family systems (Logo)
Send Comments to :[e-mail]"
(ii) what appears to be another screenshot from a videoboy.com website which states:

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"Welcome to VideoBoy
The purpose of this site is to provide a collaborative and self-extensible !book.. .
games. This site currently targets the Linux gaming community to assist such .. .
their Linux system to play Linux video games such as Quake3 ...
[The text on the right margin was cut-off in the file.]
Powered by lbook Technology From family systems (Logo)
If you would like to become a contributor:
1) Download the Ibook Controller Setup Program
2) Become a Contributor (requires lbook Controller)
3) View List of Current Contributors
4) View List of Current Identity !books on this Site"
and (iii) what appears to be a label from an lbook controller. These specimens were filed in the
PTO because they show the actual use of the mark, the nature of the use and the manner in which
the IBOOK mark is displayed. It is immediately apparent that the "electronic books" referred to
in the registration are created by the user and devoted to specific "communities" of users. The
IBOOK product itself does not contain a book or any other published work. It merely provides a
framework on which to create one's own content. It is the electronic equivalent of buying a
blank piece of paper and then having to write your own story. Upon acceptance of the Statement
of Use, the PTO granted registration to the IBOOK mark on April24, 2001, as Reg. No.
2,446,634.
In order to maintain this registration, Family Systems filed a Combined Declaration of
Use and Incontestability Under Sections 8 & 15 on April27, 2007. Family Systems stated
therein that they were still using the IBOOK mark in connection with "all goods or services
listed in the existing registration ... ", except for the item "hardware" which they deleted from the
registration. This was presumably done to comply with the Consent Agreement with Apple (See
Section 13). As evidence of their then current use of the IBOOK mark in connection with
computer software, Family Systems attached a screenshot referring to "topic-rooms" which tells

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the user to "Add your content here." With the deletion of"hardware", the PTO accepted the
combined Declaration of Use and Incontestability. This was the status of Family Systems'
IBOOK registration when it was transferred to Apple (See Section 8).
(b) In order to better understand what Family Systems' IBOOK software product is and
how it works, I reviewed materials from Family Systems' IBOOK website for the period 1998 2010. These materials consist of page after page of references to "The !Book Help Site", "The
Family Systems lbook lbook", "Family Systems Public lbook", a repetitive advertisement for
"Products Now Available" and "The Family Systems ibook Home Page" which lists "The ibook
Family of Products" including:
"The ibook Controller

For creating and managing interactive books on
webs. !books enable and encourage
collaboration.

The ibook Server

Software for hosting your own ibooks. Family
Systems also provides web hosting services.

Fax Processor

Web publishing for documents received by fax

My Sharer

My Sharer automatically publishes files to the
Internet.

Audio Recorder

Record, index and access your conferences and
personal phone calls.

Progress List

Create and manage task lists"

Another promotional piece called "Welcome to try.ibooks.com" stated that "This site is for users
of the Family Systems ibook system. On this site, you can create your own ibook, and manage
the content of that ibook using the ibook controller and other Family Systems products. It
operates under a set of site rules." (emphasis added). One of the few IBOOK sites having any
content is called "Vikram's Travels", which appears to consist entirely of content created by a
person named Vikram Singh describing his journey to Sri Lanka and India gathering family
stories. Mr. Singh went so far as to copyright the content on these Web pages in his own name.

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I also reviewed archived material from the http://try.ibook.com website. Family
Systems' created this website to give people an opportunity to get a free trial ibook Web space:
"Enroll for a trial subscription and we'll provide you with Web space on our trial
site, try.ibook.com. Once enrolled, you can use our ibook form to create weblogs
and begin publishing to the Web right away. With our Web Page Controller, you
can use any HTML editor to immediately create and modify your ibook's pages,
and to import voice recordings made with our Personal Audio Recorder. From
try.ibook.com, you can also download our experimental and prerelease products
and use them to construct comprehensive systems to share Web pages, chat and
voice content alongside traditional PC media."
(emphasis added).
The materials from the "Try IBOOK" website consist of several hundred "Identity lbook" sites
with personal names or monikers and little, if any, additional content. These web pages were
created pursuant to Family Systems' offer to provide free webspace on a trial basis. Examples of
weblogs with actual content include:
"UPA Voting lbook:
IEEE P1583 Voting System Standards
which was created for "members of the UPA Voting and Usability Project. It
contains notes and files on the IEEE P1583 Voting System Standards sections on
usability and accessibility and work with Task Group 3 (TG3). This ibook page
was contributed by "upavoting".
"US Constitution Identity lbook"
with a further contribution titled "Life, Liberty & the Pursuit of Happiness"
contributed by "national".
"david ottershaw [ibook identity]" contributed by "yorkshireman"
"Barbara McCandless's Ibook Web Site" contributed by "funwithpix" which
includes the statement that "This is a private Web site for the exclusive use of the
CM consultants in my downline and others to whom I've given flCCess."
I also reviewed several examples of Family Systems' instruction, marketing and website
content materials. Based upon all the aforementioned material, I have concluded that Family
Systems' IBOOK system is best described as "a web content publishing tool" which allows users

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