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

Filing 158

COUNTER STATEMENT TO Document filed by Apple Inc.. (Cendali, Dale)

Dale M. Cendali
Claudia Ray
Bonnie L. Jarrett
KIRKLAND & ELLIS LLP
601 Lexington Avenue
New York, New York 10022

Perry J. Viscounty
LATHAM & WATKINS LLP
140 Scott Drive
Menlo Park, CA 94025
Jennifer L. Barry
LATHAM & WATKINS LLP
600 West Broadway, Suite 1800
San Diego, CA 92101-3375

Attorneys for Defendant
APPLE INC.

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,
Plaintiffs,

Case No. 11-CIV-4060 (DLC)
ECF Case

- against APPLE INC.,

REDACTED
Defendant.

DEFENDANT APPLE INC.’S RESPONSE TO PLAINTIFFS’ RULE 56.1
STATEMENT OF ADDITIONAL UNDISPUTED FACTS

Pursuant to Local Rules 56.1(b) and (c), Defendant Apple Inc. (“Apple”) by and through
its counsel, respectfully submits the following response to Plaintiffs’ Rule 56.1 Statement of
Additional Undisputed Facts, set forth on pages 45-60 of Plaintiffs’ Statement of Controverted
Facts in Opposition to Defendant Apple Inc.’s Rule 56.1 Statement of Undisputed Facts in Support
of its Motion for Summary Judgment, dated January 25, 2013 (“Plaintiffs’ Statement of Additional
Facts”).
GENERAL OBJECTIONS
1.

Apple objects to Plaintiffs’ Statement of Additional Facts to the extent it is

argumentative and consists of legal conclusions as opposed to facts.
2.

Apple also objects to Plaintiffs’ Statement of Additional Facts to the extent it does

not comply with Local Civil Rule 56.1(a)’s requirement that the statement consist of numbered
paragraphs. Specifically, certain of Plaintiffs’ paragraphs include separate, unnumbered bullet
points that should be numbered. For the Court’s convenience, Apple has numbered those bullet
points in brackets.
3.

Apple’s agreement that a fact is undisputed is not an agreement that Plaintiffs’

citations support such fact or that such a fact is relevant or material to the motions at issue.
4.

Even if the Court were to assume arguendo that Plaintiffs’ various conclusory facts

are true, Plaintiffs would still be unable to support a finding that the assignment of the IBOOK
mark from Family Systems Ltd. (“Family Systems”) to Apple is invalid, that Plaintiffs’ alleged
marks are protectable, or that there is a likelihood of confusion.
APPLE’S RESPONSES TO PLAINTIFFS’ STATEMENT OF ADDITIONAL FACTS
1.

Richard Freese testified that, through his work as the president of both Publishers

1

Group West (“PGW”) and National Book Network (“NBN”), two of the major distributors of the
ibooks books, he was familiar with the ibooks imprint during the times when it was owned by
each Byron Preiss and John Colby. (See Chattoraj Opp. Decl. Ex. 47, Freese Dep. 26-29.)
RESPONSE: Undisputed but immaterial. Apple does not dispute that Mr. Freese testified
that he knows that Plaintiff J.T. Colby & Co., Inc. “publish[es], that they were involved in the
purchase of the Byron Preiss ibooks out of the bankruptcy.” (See Chattoraj Opp. Decl., Ex. 47,
Freese Dep., 26:4-19.) Apple further states that it does not believe the fact set forth in Paragraph 1
of Plaintiffs’ Statement of Additional Facts is material to the issues addressed in the parties’
respective motions.

2.

Mr. Freese testified that as the President of PGW during the period when Mr.

Colby was performing his due diligence in consideration of the ibooks imprint and other of
Byron Preiss’ assets, he was the main point of contact for Mr. Colby from a PGW perspective.
(See id.)
RESPONSE: Undisputed but immaterial. Apple does not dispute that Mr. Freese
testified: “As President of Publishers Group West, I was the primary contact for John on the
purchase of Byron Preiss. The primary contact from a PGW standpoint. The purchase of ibooks.”
(See Chattoraj Opp. Decl., Ex. 47, Freese Dep., 29:12-17.) Apple further states that it does not
believe the fact set forth in Paragraph 2 of Plaintiffs’ Statement of Additional Facts is material to
the issues addressed in the parties’ respective motions.

3.

Mr. Freese testified that he was responsible for bringing ibooks into PGW when it

2

was under the control of Byron Preiss. (See Chattoraj Opp. Decl. Ex. 48, Freese Dep. 40:1841:6.)
RESPONSE: Undisputed but immaterial. Apple does not dispute that Mr. Freese testified
that Mr. Freese testified that he “was part of the team that acquired Byron Preiss to bring him into
Publishers Group West. . . .” (See Chattoraj Opp. Decl., Ex. 48, Freese Dep., 40:14-41:6.) Apple
further states that it does not believe the fact set forth in Paragraph 3 of Plaintiffs’ Statement of
Additional Facts is material to the issues addressed in the parties’ respective motions.

4.

Mr. Freese testified that he found the ibooks imprint’s backlist “attractive” (see

Chattoraj Opp. Decl. Ex. 47, Freese Dep. 26: 16-19), because “the brand, especially in the
science fiction and fantasy area was very strong. They had authors like Isaac Asimov and Arthur
C. Clark and Edgar Rice Burroughs. And they had a very solid base that was well recorded in
retail.” (Chattoraj Opp. Decl. Ex. 49, Freese Dep. 48:14-21.)
RESPONSE: Undisputed but immaterial. Apple does not dispute that Mr. Freese
testified: “Well, I know that [Plaintiff J.T. Colby & Co., Inc.] publish[es], that they were involved
in the purchase of the Byron Preiss ibooks out of bankruptcy. And I am familiar with the list as it
was then. And I am familiar with that backlist specifically, because that was what was so
attractive to me.” (See Chattoraj Opp. Decl., Ex. 47, Freese Dep., 26:4-19.) Apple also does not
dispute that Mr. Freese testified that in 2010, “the brand, especially in the science fiction and
fantasy area was very strong. They had authors like Isaac Asimov and Arthur C. Clark and Edgar
Rice Burroughs. And they had a very solid author base that was well recorded in retail. And we
believed that we still had very significant opportunities.” (See Chattoraj Opp. Decl., Ex. 49,

3

Freese Dep., 48:14-22.) Apple believes, however, that Mr. Freese’s testimony is immaterial.
Apple further states that to the extent Plaintiffs are purporting to offer Mr. Freese’s testimony as
expert testimony, Apple notes that Mr. Freese was not disclosed as an expert and did not submit an
expert report. Apple had no notice of Mr. Freese’s purported expert opinions and did not have the
opportunity to rebut any such opinions. Therefore, Mr. Freese’s testimony is inadmissible
pursuant to Fed. R. Civ. P. 26(a)(2)(B). Furthermore, there has been no showing that any opinion
testimony by Mr. Freese would satisfy Fed. R. Evid. 403, 701, 702 or 703. Finally, Plaintiffs have
offered no evidence that the testimony of Mr. Freese—who is a long-time friend of John T. Colby
and has worked for distributors of “ibooks” books at certain times (see Declaration of Bonnie L.
Jarrett in Support of Defendant’s Summary Judgment Reply Brief, dated February 6, 2013
(“Jarrett 2/6 Dec.”), Freese Dep., 12:13-17; 15:21-16:2; 17:6-11; 30:17-33:5; 47:7-9)—reflects the
views of any “disinterested consumers,” and for that additional reason, his testimony is not
relevant to whether the “ibooks” imprint ever achieved secondary meaning. See Jewish Sephardic
Yellow Pages, Ltd. v. DAG Media, Inc., 478 F. Supp. 2d 340, 370 (E.D.N.Y. 2007).

5.

Mr. Freese explained the value of a brand in publishing as follows:

The way buyers of retail buy is they really look for who are their preferred
providers in different categories. And they look, if you would think of a
distributor as the equivalent of a literary agent. When an agent brings an author
to a publishing house, there is an outside validation of product, and it was fairly
similar with a distributor. When we brought in a publisher it was because there
was something that Barnes and Noble or Borders or whoever really needed to
take a look at.
(Id., Freese Dep. 49:2-15.)
RESPONSE: Undisputed but immaterial. Apple does not dispute that in response to the
question “What were those opportunities?,” i.e., for the “ibooks” imprint in 2010, Mr. Freese
4

provided the testimony set forth above. (See Chattoraj Opp. Decl., Ex. 49, Freese Dep., 49:1-15.)
Apple believes, however, that Mr. Freese’s testimony is immaterial. Apple further states that to
the extent Plaintiffs are purporting to offer Mr. Freese’s testimony as expert testimony, Apple
notes that Mr. Freese was not disclosed as an expert and did not submit an expert report. Apple
had no notice of Mr. Freese’s purported expert opinions and did not have the opportunity to rebut
any such opinions. Therefore, Mr. Freese’s testimony is inadmissible pursuant to Fed. R. Civ. P.
26(a)(2)(B). Furthermore, there has been no showing that any opinion testimony by Mr. Freese
would satisfy Fed. R. Evid. 403, 701, 702 or 703. Finally, Plaintiffs have offered no evidence that
the testimony of Mr. Freese—who is a long-time friend of Mr. Colby and has worked for
distributors of “ibooks” books at certain times (see Jarrett 2/6 Dec., Freese Dep., 12:13-17; 15:2116:2; 17:6-11; 30:17-33:5; 47:7-9)—reflects the views of any “disinterested consumers,” and for
that additional reason, his testimony is not relevant to whether the “ibooks” imprint ever achieved
secondary meaning. See Jewish Sephardic Yellow Pages, 478 F. Supp. 2d at 370.

6.

Mr. Freese testified that you can measure whether an end consumer is aware of a

brand in publishing by a publisher’s success at selling to buyers. “Basically [end consumers]
respond to brands that they know. And, when you are successful selling a publisher into a –
remember buyers buy by category. At the major accounts they buy by category. And so when
you are successful in a category – and they have limited opens to buy every month. So, when
you are getting a piece of that budget for a publisher, it is, that means that you are a success in
the category.” (Chattoraj Opp. Decl. Ex. 51, Freese Dep. 92:7-16.)

5

RESPONSE: Undisputed but immaterial. Apple does not dispute that in response to the
question “And what did you know about why your customers bought books?,” Mr. Freese testified
as set forth above. Apple believes, however, that Mr. Freese’s testimony is immaterial. Apple
further states that to the extent Plaintiffs are purporting to offer Mr. Freese’s testimony as expert
testimony, Apple notes that Mr. Freese was not disclosed as an expert and did not submit an expert
report. Apple had no notice of Mr. Freese’s purported expert opinions and did not have the
opportunity to rebut any such opinions. Therefore, Mr. Freese’s testimony is inadmissible
pursuant to Fed. R. Civ. P. 26(a)(2)(B). Furthermore, there has been no showing that any opinion
testimony by Mr. Freese would satisfy Fed. R. Evid. 403, 701, 702 or 703. Finally, Plaintiffs have
offered no evidence that the testimony of Mr. Freese— who is a long-time friend of Mr. Colby and
has worked for distributors of “ibooks” books at certain times (see Jarrett 2/6 Dec., Freese Dep.,
12:13-17; 15:21-16:2; 17:6-11; 30:17-33:5; 47:7-9)— reflects the views of any “disinterested
consumers,” and for that additional reason, his testimony is not relevant to whether the “ibooks”
imprint ever achieved secondary meaning. See Jewish Sephardic Yellow Pages, 478 F. Supp. 2d at
370.

7.

Mr. Freese further explained the value of ibooks brand in the science fiction and

fantasy genres, “And ibooks for us was a, you know, had a strong reputation in that, in the
[science fiction and fantasy] category, and had products that we knew our customers were going
to want.” (Chattoraj Opp. Decl. Ex. 49, Freese Dep. 49:16-19.)
RESPONSE: Undisputed but immaterial. Apple does not dispute that in response to the
question “What were those opportunities?,” i.e., for the “ibooks” imprint in 2010, Mr. Freese

6

provided the testimony set forth above. (See Chattoraj Opp. Decl., Ex. 49, Freese Dep., 49:16-19.)
Apple believes, however, that Mr. Freese’s testimony is immaterial. Apple further states that to
the extent Plaintiffs are purporting to offer Mr. Freese’s testimony as expert testimony, Apple
notes that Mr. Freese was not disclosed as an expert and did not submit an expert report. Apple
had no notice of Mr. Freese’s purported expert opinions and did not have the opportunity to rebut
any such opinions. Therefore, Mr. Freese’s testimony is inadmissible pursuant to Fed. R. Civ. P.
26(a)(2)(B). Furthermore, there has been no showing that any opinion testimony by Mr. Freese
would satisfy Fed. R. Evid. 403, 701, 702 or 703. Finally, Plaintiffs have offered no evidence that
the testimony of Mr. Freese— who is a long-time friend of Mr. Colby and has worked for
distributors of “ibooks” books at certain times (see Jarrett 2/6 Dec., Freese Dep., 12:13-17; 15:2116:2; 17:6-11; 30:17-33:5; 47:7-9)— reflects the views of any “disinterested consumers,” and for
that additional reason, his testimony is not relevant to whether the “ibooks” imprint ever achieved
secondary meaning. See Jewish Sephardic Yellow Pages, 478 F. Supp. 2d at 370.

8.

Mr. Freese testified that he was aware that consumers recognized the ibooks and

ipicturebooks imprints “through our retail presentations.” (Chattoraj Opp. Decl. Ex. 50, Freese
Dep. 85:21-22.) Mr. Freese explained as follows:
You know, where the buyers at the chains recognize the iBook [sic] brand
because of the authors that it represented. And they favored, you know, they
bought ibooks from us. You know, the when you look at buyers like Barnes &
Noble or, you know, Walden they look for reasons not to buy books as opposed
to buying books because there are just too many books published, and we were
successful with ibooks. So, by extension, you would say that consumers
recognize the brand.
(Id., Freese Dep. 85:22-86:11.)

7

RESPONSE: Undisputed but immaterial. Apple does not dispute that in response to the
question whether he had “any knowledge of whether consumers recognize the ipicturebooks
imprint, Mr. Freese provided the testimony set forth above. Apple believes, however, that Mr.
Freese’s testimony is immaterial. Apple further states that to the extent Plaintiffs are purporting to
offer Mr. Freese’s testimony as expert testimony, Apple notes that Mr. Freese was not disclosed as
an expert and did not submit an expert report. Apple had no notice of Mr. Freese’s purported
expert opinions and did not have the opportunity to rebut any such opinions. Therefore, Mr.
Freese’s testimony is inadmissible pursuant to Fed. R. Civ. P. 26(a)(2)(B). Furthermore, there has
been no showing that any opinion testimony by Mr. Freese would satisfy Fed. R. Evid. 403, 701,
702 or 703. Finally, Plaintiffs have offered no evidence that the testimony of Mr. Freese— who is
a long-time friend of Mr. Colby and has worked for distributors of “ibooks” books at certain times
(see Jarrett 2/6 Dec., Freese Dep., 12:13-17; 15:21-16:2; 17:6-11; 30:17-33:5; 47:7-9)— reflects
the views of any “disinterested consumers,” and for that additional reason, his testimony is not
relevant to whether the “ibooks” imprint ever achieved secondary meaning. See Jewish Sephardic
Yellow Pages, 478 F. Supp. 2d at 370.

9.

Mr. Freese testified that from the perspective of independent publishers, ibooks

was “a catch” with sales in the millions. (See Chattoraj Opp. Decl. Ex. 48, Freese Dep. 42:2-17.)
Mr. Freese explained that ibooks was a catch 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., Freese Dep. 42:13-17.)

8

RESPONSE: Undisputed but immaterial. Apple does not dispute that Mr. Freese testified
that when Publishers Group West distributed books for Ibooks, Inc. (not Plaintiffs), sales of
“ibooks” books “were in the millions.” (See Chattoraj Opp. Decl., Ex. 48, Freese Dep., 42:2-20.)
Apple further states that it does not believe the fact set forth in Paragraph 9 of Plaintiffs’ Statement
of Additional Facts is material to the issues addressed in the parties’ respective motions.

10.

Mr. Freese testified that the ibooks logo was used in consumer directed

advertising through the co-op advertising the ibooks imprint participated in with its distributor.
(See Chattoraj Opp. Decl. Ex. 116, Freese Dep. 96:8-16.)
RESPONSE: Disputed. Apple notes that Plaintiffs have misquoted Mr. Freese’s
testimony. In fact, Mr. Freese testified: “I don’t specifically remember any advertising. But, coop advertising normally would include the publisher’s logo, so I would assume that is the case.”
(See Chattoraj Opp. Decl., Ex. 116, Freese Dep., 96:8-16.) In addition, Apple believes that Mr.
Freese’s testimony is immaterial. Apple further states that to the extent Plaintiffs are purporting to
offer Mr. Freese’s testimony as expert testimony, Apple notes that Mr. Freese was not disclosed as
an expert and did not submit an expert report. Apple had no notice of Mr. Freese’s purported
expert opinions and did not have the opportunity to rebut any such opinions. Therefore, Mr.
Freese’s testimony is inadmissible pursuant to Fed. R. Civ. P. 26(a)(2)(B). Furthermore, there has
been no showing that any opinion testimony by Mr. Freese would satisfy Fed. R. Evid. 403, 701,
702 or 703. Finally, Plaintiffs have offered no evidence that the testimony of Mr. Freese— who is
a long-time friend of Mr. Colby and has worked for distributors of “ibooks” books at certain times
(see Jarrett 2/6 Dec., Freese Dep., 12:13-17; 15:21-16:2; 17:6-11; 30:17-33:5; 47:7-9)— reflects

9

the views of any “disinterested consumers,” and for that additional reason, his testimony is not
relevant to whether the “ibooks” imprint ever achieved secondary meaning. Jewish Sephardic
Yellow Pages, 478 F. Supp. 2d at 370.

11.

In 2005, Byron Preiss was suddenly and tragically killed in a car accident, and,

without his leadership, his companies, including Ibooks, Inc., entered into bankruptcy. (See
Chattoraj Opp. Decl. Ex. 54, Colby 30(b)(6) Dep. 23-24).
RESPONSE: Undisputed that Mr. Preiss died in a car accident on July 9, 2005 and that
Ibooks, Inc. and Byron Preiss Visual Publications, Inc. (“BPVP”) filed for Chapter 7 bankruptcy
on February 22, 2006. (Apple 12/21/2012 SUF, ¶¶ 44, 46.) For the sake of clarification, Apple
notes that by early 2005, Ibooks, Inc. was on the verge of bankruptcy, and e-mails from before Mr.
Preiss’s death reflect that the company did not have “cash flow to use for timely payments” and
that certain payroll taxes had been unpaid. (Declaration of Bonnie L. Jarrett in Support of
Defendant’s Motion for Summary Judgment, dated Dec. 21, 2012 (“Jarrett 12/21 Dec.”), Exs. 82
and 83, respectively; see also Apple SUF, ¶ 43.) In addition, documents indicate that the
www.ibooks.net domain name became inactive in the mid-2000s. (See Jarrett 12/21 Dec., Ex. 28.)
Apple further notes that Mr. Freese, who worked for Ibooks, Inc.’s distributor at the time, testified
that around the time Mr. Preiss died “returns started to outstrip sales, and that the returns were not
related to Mr. Preiss’s death.” (Jarrett 2/6 Dec., Freese Dep., 44:25-46:20). In addition, Plaintiffs’
30(b)(6) witness, Mr. Colby, testified that Mr. Preiss had been trying to sell Ibooks, Inc. before he
died, and that he was not aware of any sales of “ibooks” books to distributors in the two months
immediately before Mr. Preiss’s death. (Jarrett 2/6 Dec., Colby 30(b)(6) Dep., 88:12-24; 166:11-

10

168:7.) Mr. Colby also testified that Ibooks, Inc. was having financial difficulties before Mr.
Preiss’s death. (Jarrett 2/6 Dec., Colby Dep., 115:12-116:8.)

12.

Plaintiffs purchased all of the assets of Preiss’s companies, including Byron Preiss

Visual Publications Inc. and Ibooks, Inc., from the bankruptcy trustee. (See Chattoraj Opp. Decl.
Ex. 55, Colby 30(b)(6) Dep. 43:25-55:9.; see also Jarrett Decl. ¶ 56.)
RESPONSE: Undisputed that for $125,000, Plaintiffs purchased all the assets of Ibooks,
Inc. and BPVP—including all publishing rights, copyrights, trademarks, rights and licenses to
software programs, computer hardware, manuscripts, as well as more than 300,000 unsold copies
of physical books. (Apple 12/21/2012 SUF, ¶ 49.)

13.

Through a Bill of Sale, dated December 13, 2006, Mr. Colby purchased all of the

tangible and intangible assets of ibooks, Inc., including the IBOOKS mark. (See Chattoraj Opp.
Decl. Ex. 56, COLBYHD0233074.)
RESPONSE: Undisputed that for $125,000, Plaintiffs purchased all the assets of Ibooks,
Inc. and BPVP—including all publishing rights, copyrights, trademarks, rights and licenses to
software programs, computer hardware, manuscripts, as well as more than 300,000 unsold copies
of physical books. (Apple 12/21/2012 SUF, ¶ 49.)

14.

When he was asked during his deposition whether the ibooks imprint was, from a

sales perspective, not doing as well as he had expected, Mr. Colby testified, “I think it’s done, I
think from bankruptcy to a couple 100,000 a year…I think it’s done, it’s a miracle frankly.”

11

(Chattoraj Opp. Decl. Ex. 57, Colby Dep. 262:12-263:3.)
RESPONSE: Undisputed.

15.

On October 8, 1996, Family Systems Ltd. (“FS”) submitted an Intent to Use

Application to the United States Patent and Trademark Office (the “PTO”) for the mark “IBOOK”
in connection with “computer hardware and software used to create and support interactive, user
modifiable electronic books” in International Class 9; FS was awarded a Registration on April 24,
2001 (the “634 Registration”) citing a first use in commerce of October 27, 2000. (See Chattoraj
Decl. Ex. 60, Intent to Use Application Serial No. 75/182,820; see also Chattoraj Opp. Decl. Ex.
61, U.S. TM Reg. No. 2,446,634.)
RESPONSE: Undisputed, except that Apple notes, for clarity, that the description of
goods and services in the 634 Registration is actually “computer hardware and software used to
support and create interactive, user-modifiable electronic books,” rather than “computer hardware
and software used to create and support interactive, user-modifiable electronic books,” as stated
by Plaintiffs. (See Chattoraj Dec., Ex. 3 (emphasis added).)

16.

Two patents for the underlying software used in connection with the mark

covered by the 634 Registration (the “IBOOK Patents”), one filed on February 28, 2004 and
awarded to FS founder Brian Reynolds (“Reynolds”) and consultant Richard Goldhor on
November 4, 2008 (the “748 Patent”) (see Chattoraj Opp. Decl. Ex. 62, U.S. Patent No.
7,447,748.), and one filed on May 14, 2003 and awarded to Reynolds, and Mark J. Hanover on
August 4, 2009 (the “212 Patent”). (See Chattoraj Opp. Decl. Ex. 63, U.S. Patent No,

12

7,571,212.)
RESPONSE: Undisputed, except that Apple notes, for clarity, that Paragraph 16 contains
factual inaccuracies. Specifically, the United States Patent and Trademark Office (“PTO”) records
show that the 748 Patent was filed on February 20, 2004, not February 28, 2004 (see Chattoraj
Dec., Ex. 4), and the 212 Patent was awarded to Brian Reynolds and Mark J. Conway, not Mark J.
Hanover (see Chattoraj Dec., Ex. 68). Moreover, Apple notes that, although it is not disputed that
patents were issued for Family Systems’ ibook software, there is no evidence establishing (i) the
extent to which Family Systems worked those patents and (ii) whether Family Systems owns, or
owned, the 748 Patent, as the PTO’s record states that it was assigned by Brian Reynolds and
Richard S. Goldhor (the inventors) to Fasm Network Service, LLC, not Family Systems, in 2007.
(See Chattoraj Dec., Ex. 4.) Neither of these unknown facts is material to the issues addressed in
the parties’ respective motions, however.

17.

The 748 Patent was awarded for the invention of an “[i]nteractive web book

system” which is described in the abstract as, “An interactive Web book (“ibook”) system is
provided that allows material to be contributed to the World Wide Web. An ibook is a selfextending, self-sustaining information-redistributing Web robot, which is resident on a data
network such as the Internet or an intranet. Users may enroll with an ibook as viewers or
contributors. Viewers may view ibook material, such as text or multimedia content. Contributors
may contribute original material to the ibook or may create derivations of existing ibook
material. Attribution information that identifies the source of material in a derivation is
automatically generated. Information concerning the derivation of each work and its

13

characteristics can be used to help the user navigate through ibook material. The ibook
system keeps track of how often users access each work within an ibook. Contributors may
be automatically rewarded (e.g., by a monetary distribution) based on the extent to which
their contributed material is viewed by the users.” (Chattoraj Opp. Decl. Ex. 62, U.S. Patent
No. 7,447,748.)
RESPONSE: Undisputed. Apple does not dispute that the 748 Patent contains the quoted
text.

18.

The 212 Patent was awarded for the invention of “[i]nteractive web

collaboration systems and methods” which is described in the Background of the Invention
as relating to “the Internet, and more particularly, to techniques for creating and viewing
material on the World Wide Web in the form of an interactive website, and to techniques by
which multiple individuals can communicate with each other and work collaboratively on
content and materials in an interactive web site.” (Chattoraj Opp. Decl. Ex. 63, U.S. Patent No,
7,571, 212 (internal quotations omitted).)
RESPONSE: Undisputed. Apple does not dispute that the 212 Patent contains, in large
part, the quoted text, except that Apple notes, for clarity, that Plaintiffs appear to have partially
misquoted the 212 Patent as, in the 212 Patent, the word “web” appears in parentheses after the
term “World Wide Web” and the word “website” is always written as two separate words, “web
site.” (See Chattoraj Dec., Ex. 68.)

19.

The FS ibook product which bore the IBOOK mark covered by the 634

14

Registration has been described as follows by one of the listed inventors on the 748 Patent:
A: Family Systems ibook was a system and an architecture for allowing
a community to create materials, including text, but not limited to text,
and to publish it using web technologies, but also to make it possible
for multiple members of the community to edit that material, comment
on it, create their own versions of it and so forth.
Q: In some way it sounds like a precursor to Facebook; would that be
it?
A: More like a precursor to Wiki.
Q: Wikipedia?
A: Yeah. (Chattoraj Opp. Decl. Ex. 64, Goldhor Dep. 20:4-16.)
RESPONSE: Undisputed. Apple does not dispute that Dr. Goldhor’s testimony contained
the quoted text, except that Apple notes, for clarity, that Plaintiffs have partially misquoted that
testimony, in that Dr. Goldhor’s actual quote was, “Family Systems ibook was a system and an
architecture for allowing a community to create material, including text, but not limited to text,
and to publish it using web technologies, but to also make it possible for multiple members of the
community to edit that material, comment on it, create their own versions of it and so forth.” (See
Chattoraj Dec., Ex. 5 (Goldhor Dep., at 20:4-11) (emphasis added).) Apple further adds, for
clarity, that Dr. Goldhor also described the Family Systems ibook software as follows:
Q. The ibook technology, including the ibook software, would allow
users to read books created by other people, correct?
A. Any kind of content.
Q. Any kind of –
A. If someone had created a novel and put it up in – using the ibook
technology, then people could read that.

15

Q. The content that could be accessed using the ibook technology
would include both text and visual material, correct?
A. Yes, that’s correct.
***
Q. The ibook technology, including the ibook software, could have
been used by individuals to make books they had written available to
others, correct?
A. Yes.
Q. The ibook technology, including the ibook software, could be
used by commercial publishers to make their books available to
others, correct?
A. The technology certainly could be used that way. As I said, Brian
struggled with the whole notion of commercial use, and at various
times there were various limitations suggested. But as far as the
technology goes, this was technology that could be used either by an
individual or an organization.
Q. And as it was designed and made available, the ibook technology,
including the ibook software, could really be used by anybody to
make content available to others; is that correct?
A. This is anyone who agreed to the licensing terms –
Q. Assuming –
A. – and had a computer and access to the Internet.
(Declaration of Bonnie L. Jarrett in Support of Defendant’s Motion for Summary Judgment, dated
Dec. 21, 2012 (“Jarrett 12/21 Dec.”), ¶ 242 (Goldhor Dep., at 78:4-79:25).)
Dr. Goldhor also testified:
Q. And you said that the ibooks technology – excuse me, ibook
technology, including the ibook software, could be used to support
and create user-modifiable electronic books, correct?

16

A. Yes.
Q. Is it fair to say that a user could read a book or other content
using that technology?
A. You mean if someone had created – let me answer it this way. If
someone had created, let’s say, a novel, had written a novel using
the ibook technology, then a user could access the ibook and read
the novel just using that software.
Q. They could use the ibook software to look for material, find it,
decide they wanted to read it and then read it using the software?
A. That’s correct, yes.
Q. And if a user, in reading some content that they had found using
the ibook software, decided that they wanted to add to or modify that
content, for example, by adding a note, they could do that as well,
correct?
A. If they had the appropriate permissions, they could, yes.
(Declaration of Dale M. Cendali in Opposition to Plaintiffs’ Motion for Summary Judgment, dated
Jan. 25, 2013 (“Cendali Dec.”), Goldhor Dep., at 80:19-81:20.)

20.

The FS ibook product was marketed to businesses as a system to “support

individuals and distributed product groups as they work and collaborate wherever they are”,
allowing “any non-technical user [to] publish their documents and other standard personal
and office files to the Web for private or public access.” (Chattoraj Opp. Decl. Ex. 65, Press
Release, dated March 12, 2002, Family Systems launches the ibook® Family of Software
Products for a Better Way of Working Together, at Golhor Dep. Ex. 5, pp 113-14).
RESPONSE: Undisputed. Apple does not dispute that Family Systems issued a press
release containing, in large part, the quoted text, except that Apple notes, for clarity, that Plaintiffs

17

appear to have partially misquoted the press release, in that the actual quote from the Press
Release, dated March 12, 2002, states: “Family Systems has announced the launch of the ibook®
family of products, which support individuals and distributed project groups as they work and
collaborate together wherever they are.” (See Chattoraj Dec., Ex. 6 (emphasis added).) Further,
Apple adds that Family Systems’ ibook software was marketed to both individuals and businesses,
as its mission was to support the needs of “individuals and their communities, whether project
teams, affiliation groups, families, or enterprises.” (Id.) In addition, according to the press
release, the ibook system also “provide[d] interactive Web books for anyone with access to a Web
browser, a text editor, and the Internet.” (Id.)

21.

Apple’s only substantive contact with FS since entering into the 1999 Consent

Agreement – beyond the occasional requests for consents required for trademark applications
– was a single, unanswered email from Reynolds in 2008 where Reynolds informed Apple that
FS was “about to relaunch Ibook Systems V4 and V5 as cooperative projects along with
Cooperative License and Verbol, a language framework for talking to objects” which could
“potentially reshape how the Ibook trademark is used” and stated:
I would consider a sale of these trademarks to Apple with a license back
to Family Systems. My product intentions will be open and possibly more
easily described in a license to Family Systems than Apple’s in the [1999
Consent Agreement] to Apple. As I recall the license to Apple is at
present limited to notebook computers which a new IBook may be, though
perhaps it may be other things too? (Chattoraj Opp. Decl. Ex. 66,
APPLE-IBOOKS0020321; see also Chattoraj Opp. Decl. Ex. 67, La Perle
Dep. 108:5-109:9.)
RESPONSE: Undisputed but immaterial. Apple does not dispute (1) that on October 1,
2008, Brian Reynolds of Family Systems sent the e-mail described in Paragraph 21 of Plaintiffs’
18

Statement of Additional Facts to Apple, and (2) that between 1999 and January 2010, it also
communicated with Family Systems regarding consents for trademark applications. Apple states
that the phrase “substantive contact” is subjective, vague and ambiguous. In any event, Apple
does not believe that the number of communications between it and Family Systems since 1999 is
material to the issues addressed in the parties’ respective motions.

22.

Beginning on, or about January 13, 2010, and ending at some time between 2:00

and 3:00 AM on January 27, 2012, the date that the iBooks app was announced, Anthony
Lupo (“Lupo”), outside trademark counsel to Apple negotiated the assignment of the 634
Registration from FS to Apple proceeding as follows:
•

[1] On January 13, 2010, Lupo contacted FS’ outside American
trademark counsel, Brewster Taylor (“Taylor”) to see if FS was still
interested in selling the FS IBOOK mark, and if so, what sort of price
they were looking for. (See Chattoraj Opp. Decl. Ex. 68, APPLEIBOOKS0022066.)

•

[2] On January 14, Reynolds responded and asked for clarification on a
number of issues:
It was not clear from talking to Brewster which of
Family Systems ibook assets Apple are interested
in. There are multiple domain names and trademark
registrations as well as software technology and
patents which reference ibook systems.
I would appreciate an indication of the extent of
Apple’s interest in our ibook assets, and a rough
timescale and price range from Apple’s perspective.
Also, if we proceed I would appreciate an
introduction to a principal of Apple, Inc. (Chattoraj
Opp. Decl. Ex. 68, APPLE-IBOOKS0022065.)

•

[3] Lupo responded, without offering a price or introduction to a
principal at Apple:
19

thanks for the email. Apple is really only interested
in the marks and domains associated with IBOOK.
they are not trying to purchase any of the
underlying goods or services that may be associated
with the mark or domain. (Chattoraj Opp. Decl. Ex.
68, APPLE-IBOOKS0022064 (emphasis added).)
•

[4] On January 15, with Lupo refusing to make an offer Reynolds stated,
“I would have preferred that Apple make us an offer, and without any
information about Apple’s intentions and timescales or any opportunity
to take advice, I can indicate that an offer of
would most
likely be accepted and include a full transfer of rights and our
conversion costs.” (Chattoraj Opp. Decl. Ex. 68, APPLEIBOOKS0022063.)

•

[5] Lupo responded on January 18 that
was not within
“Apple’s realm of reality” and later made a counteroffer of
(
for the mark and
for the domain name registrations)
on January 20. (Chattoraj Opp. Decl. Ex. 68, APPLEIBOOKS0022062.)

•

[6] The parties arranged to discuss the matter by phone on January 22,
after which Reynolds offered to reduce his expectation to “an Apple
offer price of
.” (Chattoraj Opp. Decl. Ex. 68, APPLEIBOOKS0022059.)

•

[7] Lupo countered at 11:01PM on January 22 with an offer of
, noting that “the timing is very tight” and asking that Reynolds
“let me know if this is acceptable and I can work with Brewster to
finalize an agreement on Monday.” (Id.)

•

[8] On January 25, Reynolds suggested that the parties close at
“
” the [sic] (Chattoraj Opp. Decl. Ex 118, APPLEIBOOKS0023745), and Lupo subsequently informed Reynolds that he
had “been authorized to make a new offer to you of
.”
(Chattoraj Opp. Decl. Ex. 69, APPLE-IBOOKS0023658.)

•

[9] At about 2 AM on January 27, 2010, Apple’s attorneys received a
copy of the Assignment Agreement executed by FS, with a negotiated
price of
. (See Chattoraj Opp. Decl. Ex. 119, Lupo Dep.
117-19; see also Chattoraj Opp. Decl. Ex. 71, Gundersen Dep. 153:1014; see also Chattoraj Opp. Decl. Ex. 72, APPLE-IBOOKS0033421-32.)

•

[10] While the documents were executed prior to the announcement of
20

the iBooks app on January 27, 2010, payment was not made from Apple
to FS until February 4, 2010. (See Chattoraj Opp. Decl. Ex. 73,
APPLE-IBOOKS0023912-15.)
RESPONSE: Undisputed, except that Apple notes, for clarity, that the reference to
“January 27, 2012” in the first clause of Paragraph 22 of Plaintiffs’ Statement of Additional Facts
appears to be a typographical error, and clarifies that the correct date is January 27, 2010. Apple’s
additional responses to each bullet point set forth in Paragraph 22 of Plaintiffs’ Statement of
Additional Facts (which Apple has numbered for the Court’s convenience) are set forth below.
[1] Undisputed. Apple does not dispute that Mr. Lupo sent an e-mail to Family Systems’
outside trademark counsel on January 13, 2010, except that Apple adds, for clarity, that Mr.
Lupo’s e-mail to Mr. Taylor, which is partially quoted in the first bullet point, also stated: “Your
client reached out some time ago to see if we were interested. I thought they might have an idea of
how much they wanted since they were shooping [sic] the portfolio.” (Chattoraj Dec., Ex. 16, at
APPLE-IBOOKS0022066.) In any event, Mr. Lupo’s e-mail speaks for itself.
[2] Undisputed, except that Apple notes, for clarity, that Mr. Reynolds’ January 14, 2010 email, which is partially quoted in the second bullet point, correctly referred to Apple as “Apple
Inc.,” rather than “Apple, Inc.”
[3] Undisputed but immaterial. Apple does not dispute that Mr. Lupo made the statement
described in the third bullet point, but does not believe that it is material to the issues addressed in
the parties’ respective motions. Apple adds, for clarity, that Mr. Lupo also stated in his January
14, 2010 e-mail, a portion of which is set forth in the third bullet point, that Apple “would want to
own the domains,” and that the e-mail speaks for itself. (See Chattoraj Dec., Ex. 16, at APPLEIBOOKS0022064.) Apple further clarifies that in a subsequent e-mail dated January 15, 2010, Mr.

21

Lupo informed Mr. Reynolds that that “Apple would want all of these domains and any left over
trademark or trademark rights you have.” (Chattoraj Dec., Ex. 16, at APPLE- IBOOKS0022063.)
[4] Undisputed but immaterial. Apple does not dispute that Mr. Reynolds sent the e-mail
that is partially quoted in the fourth bullet point. Apple notes that it is unclear what Plaintiffs
mean by the use of the term “refused” in the fourth bullet point. Apple adds, for clarity, that Mr.
Reynolds’s e-mail was sent after Mr. Lupo informed Mr. Reynolds: “We do not have an idea what
the value of the marks and domains are to you so we thought you would be in the best position to
tell us what it would cost for you to move your goods and services to another domain and mark.”
(Chattoraj Dec., Ex. 16, at APPLE-IBOOK0022064 (January 14, 2010 e-mail).) Mr. Reynolds’s
and Mr. Lupo’s statements are immaterial to the issues set forth in the parties’ respective motions.
[5] Undisputed but immaterial.
[6] Undisputed but immaterial. Apple notes, for clarity, that the actual quote from the email described in the sixth bullet point is “[w]e are willing to reduce our expectation of an Apple
offer price to

.” (Chattoraj Dec., Ex. 16, at APPLE-IBOOKS0022059 (emphasis added).)

[7] Undisputed but immaterial.
[8] Undisputed but immaterial. Apple adds, for clarity, that in Mr. Reynolds’ January 25,
2010 e-mail described in the eighth bullet point, he also stated that he understood that Family
Systems had active trademark registrations for IBOOK in 24 countries. (See Chattoraj Dec., Ex.
17, at APPLE-IBOOKS0023745.) Apple further clarifies that Mr. Lupo responded on January 25,
2010, stating that the offer “reflects the fact that [Family Systems] has active trademark
registrations in only three countries,” not 24, as Mr. Reynolds believed. (See Chattoraj Dec., Ex.
18, at APPLE-IBOOKS0023658.)

22

[9] Undisputed. Apple notes, for clarity, that Mr. Lupo received a copy of the Assignment
Agreement signed by Family Systems on January 27, 2010 at 3:28 A.M. Eastern Standard Time.
(See Cendali Dec., Ex. 5.) In addition, while the ninth bullet point indicates that Exhibit 45 to Mr.
Chattoraj’s Declaration is pages 117-119 of the transcript of Mr. Lupo’s deposition testimony, that
exhibit is actually certain pages from the Family Systems website.
[10] Undisputed but immaterial. Apple does not dispute that the Assignment Agreement
was effective as of January 26, 2010, executed prior to the announcement of the iBooks app on
January 27, 2010, and that Apple paid Family Systems on or before February 3, 2010, days before
payment was due under the terms of the Assignment Agreement. (See Chattoraj Dec., Ex. 21, at
APPLE-IBOOKS0033421-32; see also Chattoraj Dec., Ex. 22, at APPLE- IBOOKS0023912-15.)

23.

Pursuant to the Assignment Agreement, no physical assets, accounts receivable,

trade secrets, copyrights, computer software, computer hardware, patents, customer lists, or
employment agreements with employees were transferred to Apple from FS. (See Chattoraj
Opp. Decl. Ex. 74, La Perle Dep. 125:10-126:9.)
RESPONSE: Undisputed but immaterial. Apple adds, for clarity, that it did acquire from
Family Systems the trademark registrations and domain names set forth in Paragraph 23 of
Plaintiffs’ Statement of Additional Facts, as well as “any common law rights [in IBOOK], and all
goodwill associated” with the trademark IBOOK and all of the trademark registrations listed in
Paragraph 23 of Plaintiffs’ Statement of Additional Facts. (See Chattoraj Dec., Ex. 21, at APPLEIBOOKS0033421-32.) Apple further states, for clarity, that any customers using those domain

23

names would be redirected to Apple’s website, as stated in Paragraph 24 of Plaintiffs’ 56.1
Statement.

24.

Today, if one attempts to go to any of the domain names conveyed as part of the

Assignment agreement, they are redirected to a page within the Apple website page for iPad
that for built-in apps where the iBooks app is shown after scrolling past two other apps. (See
www.ibook.com; www.ibook.net; www.ibook.org; www.i-book.com; www.i-book.net;
www.i-book.org; see also http://www.apple.com/ipad/built-in-apps/#ibooks?cid=oas-usdomains-ibook.net, a printout of which is attached as Chattoraj Opp. Decl. Ex. 75.)
RESPONSE: Undisputed.

25.

On April 7, 2010, Apple filed an Application for IBOOKS for a wide variety of

goods and services connected to books including “downloadable electronic publications in the
nature of books...” (Class 9); “printed matter; printed publications; periodicals; books...”
(Class 16); “retail store services in the field of books...” (Class 35); “electronic transmission
of streamed and downloadable publications for browsing over computer networks, namely
books, magazines, periodicals...” (Class 38). (Chattoraj Opp. Decl. Ex. 76, Application No.
85/008,412.)
RESPONSE: Undisputed but immaterial. Apple notes that the phrase “wide variety” is
subjective, vague and ambiguous. Apple further notes, for clarity, that Exhibit 27 to Mr.
Chattoraj’s Declaration is not a copy of the application filed by Apple on April 7, 2010, but is a
response to an office action regarding the application. In any event, Apple does not believe the

24

fact set forth in Paragraph 25 of Plaintiffs’ Statement of Additional Facts is material to the issues
addressed in the parties’ respective motions.

26.

On March 6, 2012, Plaintiffs provided Apple’s counsel with a draft amended

complaint. (See Chattoraj Opp. Decl. Ex. 77, email from Thomas Morrison to Dale Cendali, et
al., sent at 10:17 AM on March 6, 2012.)
RESPONSE: Undisputed but immaterial. Apple does not believe this fact is material to
the issues addressed in the parties’ respective motions.

27.

On March 13, 2012 Apple filed an Amendment to Allege Use pursuant to 15

U.S.C. § 1051(c) deleting Classes 16, 38, and 41 wholesale and substantially reducing the
goods listed in Classes 9, 35, and 42, including the deletion of “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” from Class 9.
(Chattoraj Opp. Decl. Ex. 76, Amendment to Allege Use, dated March 13, 2012.)
RESPONSE: Undisputed but immaterial. Apple notes, for clarity, that it is unclear what
Plaintiffs mean by the term “substantially,” which is subjective, vague and ambiguous. Apple
further clarifies that Exhibit 27 to the Chattoraj Declaration is not a copy of the Amendment to
Allege Use, dated March 13, 2012, but is a copy of a Response to an Office Action. In any event,
Apple does not believe the fact set forth in Paragraph 27 of Plaintiffs’ Statement of Additional
Facts is material.

25

28.

On March 14, 2012, Bonnie Jarrett, counsel for Apple, responded to

Mr. Morrison’s March 6 email, stating, “with respect to Apple’s ITU for IBOOKS, you
should be aware that Apple recently filed an amendment to allege use. That amendment
significantly limits the scope of the goods and services description for that mark, by removing,
inter alia, downloadable and non-downloadable electronic publications, books and
magazines.” (Chattoraj Opp. Decl. Ex. 77, Email from Bonnie L. Jarrett to Thomas Morrison,
sent at 2:23PM on March 14, 2012.)
RESPONSE: Undisputed. Apple, however, does not believe that this fact is material to
the issues addressed in the parties’ respective motions.

29.

On June 7, 2010, Apple presented the iPhone 4, announcing the availability of the

iBooks app on the iPhone and iPod touch. (See Chattoraj Opp. Decl. Ex. 78, APPLEIBOOKS0021100-03.)
RESPONSE: Undisputed but immaterial. Apple does not believe this fact is material to
the issues addressed in the parties’ respective motions.

30.

The iBooks app allows users to purchase books through the iBookstore and

download them to their iBooks enabled devices (e.g., their mobile device or computer) to be read
using the iBooks app. (See Chattoraj Opp. Decl. Ex. 78, APPLE-IBOOKS0021100-03; see also
Chattoraj Opp. Decl. Ex. 79, Gedikian Dep. 110:8-12.)
RESPONSE: Undisputed.

26

31.

Once a user has downloaded a book to their iBooks enabled device or computer,

they can manipulate certain environmental factors of that book such as:
•

[1] change the font and point size (see Chattoraj Opp. Decl. Ex. 80,
Gedikian Dep. 108:22-109:3);

•

[2] change the theme and background color (see id. at 109:8-12);

•

[3] bookmark, annotate, and highlight passages (see Chattoraj Opp.
Decl. Ex. 81, Gedikian Dep. 114:8-115:2); and

•

[4] share the title of a book and their highlights or annotations by email.
(See Chattoraj Opp. Decl. Ex. 82, Gedikian Dep. 221:1-7).

RESPONSE: Undisputed. Apple does not dispute that users of the iBooks software can
interact with and modify electronic books in various ways. Apple further notes, for clarity, that it
is unclear what Plaintiffs mean by the phrase “environmental factors,” which term is vague and
ambiguous. Apple further adds, for clarity, that when an iBooks user wants to share highlights or
annotations (as discussed in the fourth bullet point), the user can do so “directly from inside of
iBooks,” and that there is no need to open a separate app because an e-mail sheet, pre-populated
by the iBooks software, opens on top of the iBooks app such that “iBooks is still visible” after the
user sends the message. (See Chattoraj Dec., Ex. 36 (Gedikian Dep. at 221:3-5, 221:13-19).)

32.

While these environmental changes will be reflected in a book no matter which

iBooks enabled device a user chooses to read their book on, provided they have chosen to sync
their iBooks account across all enabled devices (see Chattoraj Opp. Decl. Ex. 81, Gedikian Dep.
114:17-115:14), no other user accessing the same book will see these changes unless they are
accessing the same book through the same account as the original user. (See Chattoraj Opp.
Decl. Ex. 83, Gedikian Dep. 219-220.)
27

RESPONSE: Undisputed. Apple does not dispute that while a user’s modifications to a
book, such as highlights, notes, commentary, or bookmarks, will be reflected across all of the
user’s devices that have the iBooks software, provided the user has chosen to activate that
preference (see Chattoraj Dec., Exs. 31, 35 (Gedikian Dep., at 114:8-21)), other users accessing
the same book will not see these changes unless they are accessing the book through the same
account as the original user. (See Chattoraj Dec., Ex. 37 (Gedikian Dep., at 219:25-220:4).)
Apple notes, for clarity, that the phrase “environmental changes” is vague and ambiguous. Apple
further adds, for clarity, that Mr. Gedikian testified that the ability of multiple iBooks users to
make edits and changes to electronic books that are visible to other users of the same account is
one of the ways in which Apple’s iBooks software is an “interactive Web collaboration system.”
(See Chattoraj Dec., Ex. 37 (Gedikian Dep., at 219:25-220:4).)

33.

None of these visual changes, highlighting or annotations in any way modify

the actual digital file of the actual book that was downloaded from the iBookstore and stored
on the device using the iBooks app; they are instead kept in a separate metadata file that does
not actually modify the digital book. (See Chattoraj Opp. Decl. Ex. 84, Gedikian Dep.
110:24-111:17.)
RESPONSE: Undisputed, except that Apple notes, for clarity, that “from a customer’s
perspective, there is no representation of that separate data file. From the customer’s experience
perspective, when they open the document, they are viewing a singular document.” (Cendali Dec.,
Gedikian Dep., at 112:1-11.)

28

34.

The terms of use of the iBooks app do not allow users to share accounts. (See

Chattoraj Opp. Decl. Ex. 85, iBooks License Agreement § 2(A).)
RESPONSE: Disputed. The term “accounts” is vague and ambiguous. Furthermore, the
iBooks License Agreement does not address sharing accounts, and thus neither prohibits nor
allows users to share accounts.

35.

Apple does not encourage the sharing of iTunes accounts between more than

one user either implicitly or explicitly through its marketing communications with the public.
(See Chattoraj Opp. Decl. Ex. 83, Gedikian Dep. 220:8-13; Chattoraj Opp. Decl. Ex. 86,
Kvamme Dep. 45:16-17.)
RESPONSE: Undisputed, except that Apple notes, for clarity, that neither Ms. Kvamme
nor Mr. Gedikian was shown the iBooks License Agreement at their depositions. Instead, Ms.
Kvamme, who is responsible for certain marketing of the iBooks software, was asked at her
deposition: “Does Apple encourage people to share their iTunes accounts with others so that they
can share books through the iBooks application?” (Chattoraj Dec., Ex. 59 (Kvamme Dep., at
45:12-14).) Ms. Kvamme responded: “Apple doesn’t encourage sharing of accounts.” (Chattoraj
Dec., Ex. 59 (Kvamme Dep., at 45:16-17). Mr. Gedikian, who is also responsible for certain
marketing of the iBooks software, was asked at his deposition: “Are you and your wife permitted
by Apple’s terms of use to share the same account?” (Chattoraj Dec., Ex. 37 (Gedikian Dep., at
220:5-6). Mr. Gedikian responded that he did not know. (See Chattoraj Dec., Ex. 37 (Gedikian
Dep., at 220:7).) Mr. Gedikian was then asked: “Is it part of Apple’s marketing communications
to the general public that they should share iTunes accounts?” (Chattoraj Dec., Ex. 37 (Gedikian

29

Dep., at 220:8-10).) Mr. Gedikian testified, “In my experience, when we talk about ‘accounts,’ we
talk about them in the context of one account per person.” (Chattoraj Dec., Ex. 37 (Gedikian Dep.,
at 220:11-13).) Apple further notes, for clarity, that it allows consumers to link multiple devices to
a single iTunes or iBookstore account and promotes this functionality as follows: “So you can read
one of your favorites on your iPhone during your morning commute and pick up right where you
left off on your iPad at bedtime.” (Cendali Dec., Ex. 6.) Furthermore, as noted above, the iBooks
License Agreement does not address sharing accounts, and thus neither prohibits nor allows users
to share accounts.

36.

No Apple deposition witness officered any specific details, based on personal

knowledge, about the FS ibook software or system. (See Chattoraj Opp. Decl. Ex. 87,
Gedikian Dep. 204:14-23; see also Chattoraj Opp. Decl. Ex. 88, La Perle Dep. 246:5-8; see
also Chattoraj Opp. Decl. Ex. 89, Widup Dep. 72-73; see also Chattoraj Opp. Decl. Ex. 90,
Taylor Dep. 60: 16-22; see also Chattoraj Opp. Decl. Ex. 91, Kvamme Dep. 61-62:8; see also
Chattoraj Opp. Decl. Ex. 92, Borden Dep. 140:15-141:2; see also Chattoraj Opp. Decl. Ex.
93, Gundersen Dep. 144:5-145:15.)
RESPONSE: Disputed but immaterial. Apple does not believe that Apple witnesses’
knowledge about the Family Systems ibook software or system is material to the issues addressed
in the parties’ respective motions. The phrase “specific details” is subjective, vague and
ambiguous. Plaintiffs appear to have ignored extensive testimony by Apple’s witnesses on this
point. In fact, Apple’s witnesses offered testimony about the Family Systems ibook software
based on personal knowledge. First, Mr. La Perle personally viewed Family Systems’ website and

30

trademark registrations (see Cendali Dec., La Perle Dep., at 95:6-9) and he testified that as part of
the clearance process, Apple did additional investigation into Family Systems’ business (see
Cendali Dec., La Perle Dep., at 100:13-24). Based on his review of the website and trademark
registrations and his knowledge of the 1999 Consent Agreement, Mr. La Perle testified that
“Family Systems was in the E-book reader software business” and that Family Systems made
“[s]oftware that supports and creates user-modifiable electronic books” available for download
from its website. (See Cendali Dec., La Perle Dep., at 94:22-98:2.) Mr. La Perle also testified that
he believed the ebooks created using Family Systems’ software were “hosted on the Web sites,”
that a person visiting a book owned by or made available by Family Systems could “make changes
to such ibooks,” and that “user modifiability was part of the interactiveness.” (Cendali Dec., La
Perle Dep., at 244:16-246:5.) Second, Glenn Gundersen, one of Apple’s outside trademark
counsel, also visited the Family Systems website in January 2010. (See Cendali Dec., Gundersen
Dep., at 140:6-12.) He testified that Family Systems was “offering [a] software application.”
(Chattoraj Dec. Ex. 67 (Gundersen Dep., at 144:15-23).) Finally, Hal Borden, another of Apple’s
outside trademark counsel, testified that he “saw one or more pages from Family Systems’ Web
site” and that he “would have some knowledge of [Family Systems’] products based on seeing that
Web site.” (Chattoraj Dec., Ex. 66 (Borden Dep., at 140:18-24).)

37.

Defendant is not relying on an Advice of Counsel defense in this action. (See

Chattoraj Opp. Decl. Ex. 26, The Answer and Affirmative Defenses of Defendant Apple Inc.;
see also Chattoraj Opp. Decl. Ex. 94, Gundersen Dep. 330:15-21; Chattoraj Opp. Decl. Ex. 95,
La Perle Dep. 60:7-10.)

31

RESPONSE: Undisputed but immaterial because Apple can establish that it acted in good
faith by, inter alia, conducting a thorough trademark search and detailed clearance process that as
a factual matter did not reveal the Plaintiffs’ existence. Trademark searches are “factual in
nature,” not privileged, and thus can be relied upon to demonstrate good faith even when advice of
counsel is not claimed. See THOIP v. Walt Disney Co., 736 F. Supp. 2d 689, 700, n. 73; 713-14
(S.D.N.Y. 2010).

38.

Defendant withheld documents reflecting communications between Apple and

its attorneys concerning the search and clearance of the IBOOKS mark on privilege grounds.
(See e.g., Chattoraj Opp. Decl. Ex. 96, Defendant’s Updated Privilege log, Entries 1, 6-22,
25-27, 31-34, 44-45, 59, 83-84, 155-156, 247, 293-295, 298, and 310.)
RESPONSE: Undisputed but immaterial because Apple can establish that it acted in good
faith by, inter alia, conducting a thorough trademark search and detailed clearance process that as
a factual matter did not reveal the Plaintiffs’ existence. Trademark searches are “factual in
nature,” not privileged, and thus can be relied upon to demonstrate good faith even when advice of
counsel is not claimed. See THOIP, 736 F. Supp. 2d at 700, n. 73; 713-14.

39.

During the depositions of Apple witnesses, Defendant’s counsel repeatedly

objected to questions regarding the content of the communications between Apple and its
attorneys concerning the search and clearance of the IBOOKS mark and instructed their
witnesses not to answer. (See Chattoraj Opp. Decl. Ex. 94, Gundersen Dep. 330:2-20;
Chattoraj Opp. Decl. Ex. 95, La Perle Dep. 59:25-60:10; Chattoraj Opp. Decl. Ex. 97, Borden

32

Dep. 209:17-212:13.)
RESPONSE: Undisputed but immaterial because Apple can establish that it acted in good
faith by, inter alia, conducting a thorough trademark search and detailed clearance process that as
a factual matter did not reveal the Plaintiffs’ existence. Trademark searches are “factual in
nature,” not privileged, and thus can be relied upon to demonstrate good faith even when advice of
counsel is not claimed. See THOIP, 736 F. Supp. 2d at 700, n. 73; 713-14.

40.

Apple’s witnesses testified that no documents exist, other than those contained

in the privileged communications of advice from their attorney’s to Apple, showing: (1) the
results of Dechert LLP’s search for IBOOKS plural (see Chattoraj Opp. Decl. Ex. 98,
Gundersen Dep. 350:3-12); (2) Dechert LLP’s discovery of the Ibooks, Inc. Bankruptcy (see
Chattoraj Opp. Decl. Ex. 99, Gundersen Dep. 343:4-7); (3) the discovery of Byron Preiss’ death
(see id., Gundersen Dep. 343: 8-11); or (4) the results of Dechert LLP’s search for an active
website for Ibooks, Inc. (See Chattoraj Opp. Decl. Ex. 100, Gundersen Dep. 347:7-12.)
RESPONSE: Undisputed but immaterial. For the sake of clarity, Apple notes that it has
not withheld any results of Dechert LLP’s trademark searches. The search results to which
Plaintiffs refer above were carried out online, and were not printed. (Jarrett 2/6 Dec., Borden
Dep., 108:17-109:16; 177:12-178:4; Gundersen Dep., 340:24-341:17.) Furthermore, the phrase
“the results of Dechert LLP’s search for IBOOKS plural” is vague and confusing. Apple’s
trademark searches revealed many variations of the term “ibook,” including “ibooks” and “iboox,”
among others. (Apple SUF, ¶ 222.) In any event, Apple can establish that it acted in good faith
by, inter alia, conducting a thorough trademark search and detailed clearance process that as a

33

factual matter did not reveal the Plaintiffs’ existence. Apple has produced the results of those
trademark searches, which are “factual in nature,” not privileged, and thus can be relied upon to
demonstrate good faith even when advice of counsel is not claimed. See THOIP, 736 F. Supp. 2d
at 700, n. 73; 713-14.

41.

Plaintiffs’ Expert Dr. Susan Schwartz McDonald conducted two surveys to

measure source confusion among consumers regarding the IBOOKS mark. (See Chattoraj
Opp. Decl. Ex. 101, Report of Plaintiffs’ Expert Dr. Susan Schwartz McDonald (the
“McDonald Report”); Chattoraj Opp. Decl. Ex. 102, Sur-rebuttal and Supplemental Report of
Dr. Susan Schwartz McDonald (the “McDonald Supplemental Report”).)
RESPONSE: Undisputed that Dr. McDonald conducted two surveys in connection with
this litigation. Apple has moved, however, to exclude Dr. McDonald’s report, opinions, and
testimony.

42.

Dr. McDonald’s initial Survey results prove 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.” (See Chattoraj Opp. Decl.
Ex. 101, McDonald Report at 2.)
RESPONSE: Undisputed that Dr. McDonald’s September 17, 2012 report includes the
statement quoted in ¶ 42 of Plaintiffs’ Statement of Additional Facts. Apple has moved, however,
to exclude Dr. McDonald’s reports, opinions, and testimony.

34

43.

Dr. McDonald’s Supplemental Report precisely replicated her original survey in

every respect save one: “use of the lowercase ‘b’ in both the Test and Control Arms (ibooks and
ebooks) instead of the uppercase ‘B’” (Chattoraj Opp. Decl. Ex. 102, McDonald Supplemental
Report at 1.) Based on her second survey, Dr. McDonald concluded that “it is evident that
capitalization of the ‘B’ in iBooks had no bearing on the 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 the capital ‘B’” (Id., McDonald Supplemental Report at 6.)
RESPONSE: Undisputed that Dr. McDonald conducted two surveys, on of which used
“iBooks” and “eBooks” as the test and control, respectively, and one of which used “ibooks” and
“ebooks” as the test and control, respectively. It is also undisputed that the Sur-Rebuttal and
Supplemental Report of Dr. Susan Schwartz McDonald, Ph.D., dated December 6, 2012, includes
the statement quoted in ¶ 43 of Plaintiffs’ Statement of Additional Facts. Apple has moved,
however, to exclude Dr. McDonald’s reports, opinions, and testimony.

44.

Internally, Apple has used the word “iBooks” to refer to books available for sale

through the iBookstore to be read on the iBooks app. (See Chattoraj Opp. Decl. Ex. 107,
APPLE-IBOOKS0017702 (“iBooks: Books you never have to put down”); see also Chattoraj
Opp. Decl. Ex. 108, iBooks Survey Results at page APPLE-IBOOKS0024489 (“How Many
iBooks Have You Downloaded?”); see also Chattoraj Opp. Decl. Ex. 109, email from Tom
Neumayr to Randi Wolfson, sent on September 11, 2010 at 2:10PM ( “3. What’s the average
price for a commercial book? More than 75% of our paid iBooks are priced at $9.99 or
less.” (emphasis added).)

35

RESPONSE: Undisputed but immaterial. Apple does not dispute that the three internal
documents cited above reflect the quoted text, but Apple notes that the documents are immaterial
because consumers are not aware of these internal uses of the term “iBooks.” Since those
documents were created, for reasons unrelated to this litigation, Apple has made it clear to its
employees that “iBooks” is only to be used to refer to the e-book reader software application, and
not electronic books. (Chattoraj Opp. Decl., Ex. 111.) Furthermore, Apple has not used “iBooks”
to refer to electronic books in any of its advertising or in any of its marketing materials directed to
consumers. (Jarrett 2/6 Dec., Kvamme Dep., 99:22-100:13.) Therefore, Apple does not believe
the fact set forth in Paragraph 44 of Plaintiffs’ Statement of Additional Facts is material to the
issues addressed in the parties’ respective motions.

45.

Externally, Apple has used the word “iBooks” to refer to books available for sale

through the iBookstore to be read on the iBooks app. (See Chattoraj Opp. Decl. Ex. 108, iBooks
Survey Results at page APPLE-IBOOKS0024489 at fn. (this page cites a survey question posed
to consumers in the underlying survey; Q27. “Approximately how many free and paid for
iBooks have you downloaded from the iBookstore since you started using it.”).)
RESPONSE: Undisputed but immaterial. Apple does not dispute that the survey of
iTunes users that it conducted in August 2011 for internal marketing research purposes included
the question quoted above. Since that time, for reasons unrelated to this litigation, Apple has made
it clear to its employees that “iBooks” is only to be used to refer to the e-book reader software
application, and not electronic books. (Chattoraj Opp. Decl., Ex. 111.) Furthermore, Apple has
not used the term “iBooks” to refer to electronic books in any of its advertising or any of its

36

marketing materials directed to consumers. (Jarrett 2/6 Dec., Kvamme Dep., 99:22-100:13.)
Therefore, Apple does not believe the fact set forth in Paragraph 45 of Plaintiffs’ Statement of
Additional Facts is material to the issues addressed in the parties’ respective motions.

46.

Apple’s witness Grace Kvamme, the author of the iBooks Survey Results

document (see Chattoraj Opp. Decl. Ex. 108, iBooks Survey Results), testified that while the
term “iBooks” was used in August of 2011 in outward facing materials to refer to electronic
books, Apple felt it necessary to clarify the usage of that term and had an internal marketing
meeting in 2012 to do so. (See Chattoraj Opp. Decl. Ex. 110, Kvamme Dep. 90:20-91:6, 96:1123.)
RESPONSE: Undisputed as a factual matter, except that Apple disputes Plaintiffs’
characterization of the August 2011 online survey as “outward facing materials.” Apple further
notes that this fact is immaterial because the August 2011 online survey does not constitute
consumer-directed advertising or marketing. Since that time, for reasons unrelated to this
litigation, Apple has made it clear to its employees that “iBooks” is only to be used to refer to the
e-book reader software application, and not electronic books. (Chattoraj Opp. Decl., Ex. 111.)
Furthermore, Apple has not used “iBooks” to refer to electronic books in any of its advertising or
any of its marketing materials directed to consumers. (Jarrett 2/6 Dec., Kvamme Dep., 99:22100:13.) Therefore, Apple does not believe the fact set forth in Paragraph 46 of Plaintiffs’
Statement of Additional Facts is material to the issues addressed in the parties’ respective motions.

47.

At that internal marketing meeting, held in March of 2012 to clarify usage of

37

several product and brand names in outward facing material, it was decided that: “iBook This
term is meaningless. Banned!” and “Book. What we sell in the iBookstore. It’s not an iBook,
but a book! Not capped because it’s a general term, not a branded term.” (Chattoraj Opp. Decl.
Ex. 111, email from Jennifer Robbins to Jacob Bronstein, et al., sent on March 1, 2012 at 10:24
PM at APPLE-IBOOKS0019481.)
RESPONSE: Undisputed but immaterial. Apple does not believe the fact set forth in
Paragraph 47 of Plaintiffs’ Statement of Additional Facts is material to the issues addressed in the
parties’ respective motions.

48.

Third parties also use the term “iBooks” to refer to books purchased through the

iBookstore to be read using the iBooks application on an iBooks enabled device. (See Chattoraj
Opp. Decl. Ex. 113, iPad for Dummies at 212 (“e-books, or what Apple prefers to call iBooks”
(emphasis added)); see also id. at 213 (“you can buy an iBook using iTunes…you can’t read
that iBook using iTunes…You can read iBooks only on an iPhone, iPad, or iPod touch.”
(emphasis added)); see also Chattoraj Opp. Decl. Ex. 114, iPad: The Missing Manual at 129
(“Find Free iBooks”).) Additionally, since Apple’s launch of the iPad, consumers, bloggers,
and the media have come to view iBooks as not only the name of Apple’s e-reading application,
but also the designation for the underlying books available for download through the integrated
iBookstore. (see also Amended Complaint ¶¶ 44-45.)
RESPONSE: The first sentence of Paragraph 48 is undisputed but immaterial. Apple
notes that the two third-party books described above incorrectly use the term “iBooks” to refer to
electronic books available through Apple’s iBookstore service. Apple disputes the second

38

sentence of Paragraph 48, which is not a fact, but an unsubstantiated allegation from Plaintiffs’
Amended Complaint. Apple further notes that by providing only a citation to their Amended and
Supplemental Complaint, Plaintiffs have not complied with Local Civil Rule 56.1(d), which
provides that “Each statement by the movant or opponent pursuant to Rule 56.1(a) and (b),
including each statement controverting any statement of material fact, must be followed by citation
to evidence, which would be admissible, set forth as required by Fed. R. Civ. P. 56(c).”

49.

On December 14, 2006, following Plaintiffs’ Purchase of the IBOOKs, Inc. assets

out of bankruptcy, Publisher’s Weekly ran a story announcing:
J. Boylston & Company, Publishers has acquired the assets of various
companies and imprints owned by the late Byron Preiss. Boylston, owned by
John Colby and home to the Brick Tower Press imprint, paid $125,000 for the
assets, which included more than 500 titles published under the iBooks, Milk &
Cookies Press and Byron Preiss Visual Publications names. The Preiss
properties were put into Chapter 7 Bankruptcy earlier this year.
Colby plans to release 11 books under the iBooks imprint in 2007–all titles
drawn from books that have been delayed because of the bankruptcy
proceedings. He also plans to add new titles to the Milk & Cookies line and will
continue to operate the BPVP packaging operation. As part of the acquisition,
Colby will continue to use PGW as the distributor for the former Preiss products
and he will move Brick Tower’s titles to PGW as well.
(Chattoraj Opp. Decl. Ex. 115, “J. Boylston Buys Preiss Assets” (emphasis added).)
RESPONSE: Undisputed.

50.

Apple’s iPod was launched in November 2001. (See

http://www.apple.com/pr/library/2001/11/09Apple-s-iPod-Available-in-Stores-Tomorrow.html.)

39

RESPONSE: Undisputed but immaterial. Apple further states that it does not believe the
fact set forth in Paragraph 50 of Plaintiffs’ Statement of Additional Facts is material to the issues
addressed in the parties’ respective motions.

Date: February 6, 2013

Respectfully submitted,
s/ Dale M. Cendali
Dale M. Cendali
Claudia Ray
Bonnie L. Jarrett
KIRKLAND & ELLIS LLP
601 Lexington Avenue
New York, New York 10022
Tel: [phone]
Fax: [phone]

Perry J. Viscounty
LATHAM & WATKINS LLP
140 Scott Drive
Menlo Park, CA 94025
Tel: [phone]
Fax: [phone]

Jennifer L. Barry
LATHAM & WATKINS LLP
600 West Broadway, Suite 1800
San Diego, CA 92101-3375
Tel: [phone]
Fax: [phone]
ATTORNEYS FOR DEFENDANT

40