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

Filing 159

DECLARATION of Bonnie L. Jarrett in Support re: 104 MOTION for Summary Judgment.. Document filed by Apple Inc.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3 (REDACTED), # 4 Exhibit 4 (REDACTED), # 5 Tab - Borden Dep, # 6 Tab - Colby 30(b)(6) Dep (REDACTED), # 7 Tab - Colby Dep, # 8 Tab - Freese Dep, # 9 Tab - Goldhor Dep, # 10 Tab - Gundersen Dep, # 11 Tab - Kvamme Dep)(Cendali, Dale)

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

No. 11-cv-4060

APPLE, INC.,
Defendant.
-----------------------------x

CONFIDENTIAL
VIDEOTAPED DEPOSITION OF
30(b)(6) JOHN T. COLBY, JR.
New York, New York
Wednesday, July 18, 2012
10:20 a.m.

Reported by:
Jennifer Ocampo-Guzman, CRR, CLR
Ref: 7845
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Confidential-Colby

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MR. CHATTORAJ:

Objection.

3

A.

I'm still confused about valuation.

4

Q.

Any analysis where a -- someone was

5

asked to quantify the financial worth of the

6

iBooks mark or the ipicturebooks mark?

7
8

A.

In that sense, yes, as it relates

to the entity.

9

Q.

Can you explain what you mean?

10

A.

Byron tried to sell the company

11
12

before the bankruptcy.
Q.

So prior to Byron Preiss' death he

13

tried to sell his company before it went into

14

bankruptcy?

15

A.

He wasn't aware it was going to go

16

into bankruptcy, but he wasn't aware that he

17

was going to get hit by the bus.

18

Q.

19

Fair enough.
But the point is you were aware

20

that Mr. Preiss had been trying to sell

21

iBooks, Inc. and Byron Preiss Visual

22

Publications; is that right?

23
24
25

A.

After the bankruptcy I learned

about it, but not before.
Q.

And what valuation documents were

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Q.

And which of your entities sold the

3

books, was it J. Boylston or was it plaintiff

4

Brick Tower?

5

A.

J. Boylston.

6

Q.

So who -- were there contracts

7

between J. Boylston and somebody reflecting

8

sales of iBooks?

9

MR. CHATTORAJ:

10

A.

No.

11

Q.

Okay.

Objection.

12

books using the iBooks mark?

13
14
15
16

How did J. Boylston sell

MR. CHATTORAJ:
A.

Objection.

Our distributor PGW sold iBooks

products.
Q.

And who -- and your distributor PGW

17

paid a fee or gave royalties to your company

18

as a result of that, right?

19

A.

In theory, yes.

20

Q.

Okay.

21

A.

Practically, no.

22

Q.

What do you mean by that?

23

A.

Just what it says.

24

Q.

Did you not receive compensation

25

from your distributor PGW?
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words, post mid-2006 when you acquired the

3

assets of iBooks, Inc. and Byron Preiss

4

Visual Publications, okay, what was the

5

source for the information contained in

6

exhibits A, B and C of that information?

7

MR. CHATTORAJ:

8

A.

9

distributor.

10

Q.

Objection.

The sales records from its

You didn't need to post

11

acquisition, write to each distributor and

12

say please give me copies of the sales

13

records, correct?

14

MR. CHATTORAJ:

Objection.

15

A.

No.

16

Q.

So do you obtain monthly or

17

quarterly sales records from distributors?

18

A.

I'm sorry.

Do I retain them?

19

Q.

Do obtain them?

20

A.

Obtain them, yes.

21

Q.

How often do you receive reports

22

from distributors?

Again, relating to sales

23

of iBooks imprint products?

24

A.

After the acquisition?

25

Q.

Correct.

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A.

Each distributor is different.

Not

3

most of them are pretty good, I get them once

4

a month.

5

so I get them once every 3 months.

6

distributors don't send them to me at all, I

7

have to go after them to get them.

8
9
10

Q.

Some distributors are not so good,
Some

What distributors have you used to

distribute iBooks' products since you
acquired the assets in mid-2006, December?

11

A.

Which -- I'm sorry, which

12

distributors?

13

Q.

With regard specifically to

14

describing iBooks' products in the United

15

States?

16

A.

PGW, NBN and Lightning Source.

17

Q.

So there are only three

18

distributors of iBooks' products since you

19

acquired the assets in mid-2006; is that

20

correct?

21

A.

That's a lot of distributors.

22

Q.

And -- but not 15?

23

A.

You're talking about the print

24

books only?

25

Q.

What distributors -- so did you --

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bought them, so they were returned and sales

3

plummeted?

4

MR. CHATTORAJ:

Objection.

5

A.

I can't say that.

I don't know.

6

Q.

But you understand that the problem

7

was that there were a -- that a lot of

8

returns in 2006 and 2005?

9

MR. CHATTORAJ:

Objection.

10

A.

That's my understanding, yes.

11

Q.

Okay.

And turning, if you would,

12

to the second page of the exhibit.

13

broke out 2005.

14

died.

15

We just

accident; is that right?

That was the year Mr. Preiss

He died on July 9 of 2005 via car

16

A.

That's about right, yeah.

17

Q.

And this indicates on a monthly

18

basis that sales in January of 2005 were much

19

better than the rest of the year.

20

that, they were roughly

Do you see

?

21

A.

Yes.

22

Q.

Yes.

23

A.

Yes, 646, yes, I see it.

24

Q.

And then they dropped in February

25

to roughly

In January of '05?

, in March to only

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, in April to roughly

.

And then

3

isn't it true then in May, June and July of

4

'05 there were no sales at all?

5

A.

According to this schedule, yeah.

6

Q.

So in July of 2005, the month that

7

Mr. Preiss died, the 2 months preceding that

8

there were no sales at all of iBooks?

9
10

MR. CHATTORAJ:
A.

Objection.

There are no shipments to -- from

11

the distributor to the retailer, but it

12

doesn't mean there weren't any retail sales

13

of iBooks in that period.

14
15

Q.

Well, there was no income earned by

iBooks, Inc. during that period, right?

16

MR. CHATTORAJ:

Objection.

17

A.

Income from what?

18

Q.

From sales of iBooks?

19
20
21
22

MR. CHATTORAJ:
A.

I can't say.

Objection.
I can't say for

certain that's true.
Q.

Well, you were attempting in

23

finding out the information in preparing the

24

spreadsheet Exhibit A to report all of the

25

sales accurately; correct?
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2

A.

That's right.

3

Q.

And you didn't find any sales for

4

those months in 2005, correct?

5
6
7
8

MR. CHATTORAJ:
A.

That's correct.

Objection.
I didn't find

them, no.
Q.

9

Correct.
Okay.

So turning back to the first

10

page of the document, again, in 2006 the

11

sales were negative; isn't that true?

12

A.

Yes, that's right.

13

Q.

And is that because there were more

14

returns than were sales?

15

A.

That's correct.

16

Q.

And then in 2007, that was the

17

first full year that -- where you owned the

18

iBooks mark; isn't that right?

19
20
21

MR. CHATTORAJ:
A.

Objection.

The first full year, that's

correct.

22

Q.

And in 2007 you had sales of

23

approximately

24

that right?

25

A.

in iBooks books; is

That's right.

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for 21st century publishing.

3

Q.

What specific documents are you

4

referring to?

5

A.

How will we find these ads?

They are in the original titles

6

launched in '99 on the back page of each book

7

announcing the iBooks launch.

8

idea behind it was that the books live and

9

are new things and new entities.

10

Q.

And the whole

There is nothing in Mr. Preiss'

11

letter announcing iBooks to USA Today that

12

says that iBooks is to refer to new ideas,

13

correct?

14

about is that this is the first publishing

15

imprint to take full advantage of the

16

promotional and distribution potential of the

17

internet?

18

Isn't it true that what he writes

MR. CHATTORAJ:

Objection.

19

A.

He does.

20

Q.

Isn't it true that you don't know

21

what the "i" in iBooks is supposed to relate

22

to?

23

A.

I do know.

24

Q.

How do you know this?

25

MR. CHATTORAJ:

Objection.

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A.

Through Byron's history of

3

publishing and the kinds of books he

4

published.

5
6

Q.

And that's a very amorphous

statement.

7

What specifically are you aware of

8

that tells you what the "i" in iBooks is

9

supposed to refer to?

10

A.

11

Books sentient beings.
MR. CHATTORAJ:

Counsel, you've

12

asked the same question three times.

13

answered the question differently

14

before.

15

MS. CENDALI:

16

Q.

The judge said

"object."

17

He

18

Go ahead.
MR. CHATTORAJ:

I'm going to direct

19

him not to answer because you are

20

badgering the witness.

21

MS. CENDALI:

22
23

I'm not badgering the

witness.
MR. CHATTORAJ:

You certainly are.

24

You've asked the question four times,

25

four times.
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MS. CENDALI:

3

MR. CHATTORAJ:

4

MS. CENDALI:

I don't care.
You don't care?
This is

5

cross-examination, he gives an amorphous

6

answer, I'm allowed to --

7

MR. CHATTORAJ:

8

He previously

answered.

9

MS. CENDALI:

And your answer is

10

objection and I will put this all before

11

Judge Cote again.

12

MR. CHATTORAJ:

13

MS. CENDALI:

And I will -Don't interrupt him.

14

Read it back before counsel started

15

interrupting his answer, when's he's

16

talking about --

17

Q.

18
19
20
21
22
23

What were you saying about a

sentient beings, sir?
A.

To Byron's world books are three

dimensional sentient beings.
Q.

So what does that have to do with

the what the "i" in iBooks stands for?
A.

The history of Byron's work with

24

Isaac Asimov, specifically the "I, Robot"

25

books and works, the "I, Robot" screenplay,
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specifically Byron is coauthor of a book

3

called "Dragon World" with Michael Reaves,

4

who is the author of "I, Alien."

5

Byron had many software products he

6

manufactured in 1990s with the help of his

7

science fiction writers that we have

8

advantage of today, Arthur Clarke and Isaac

9

Asimov.

Byron used his name next to anything

10

he could possibly produce with Isaac Asimov's

11

name or Michael Reaves of the "I, Alien"

12

genre.

13

discussion of books of standalone sentient

14

beings, that's where the "I" comes from.

15

And based on that and Byron's

Q.

You believe the "I" in iBooks

16

refers to books as standalone sentient

17

beings?

18

A.

That's right.

19

Q.

Are you aware of any documents

20

where Preiss said this?

21

A.

No.

22

Q.

Did Preiss tell you that the "i" in

23

iBooks was intended to refer to books as

24

sentient beings?

25

A.

He used the word -- he used the

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word sentient as a standalone

3

three-dimensional object.

4

Q.

There's nothing in Exhibit 18 that

5

refers to Isaac Asimov or books as sentient

6

beings, is there?

7

A.

No.

8

Q.

Instead he simply says, "iBooks is

9

the first publishing imprint designed to take

10

full disadvantage of promotional and

11

distribution potentials of the internet,"

12

right?

13
14

A.

Right, because he was trying to

sell the book.

15

Q.

Was he being truthful?

16

A.

Sure, as a marketing person.

17
18

He's

trying to sell the book.
Q.

Isn't it true that iBooks, Inc.

19

applied for a trademark registration in the

20

mark iBooks but its application was rejected

21

by the PTO?

22

A.

23
24
25

I was not aware of that until

counsel researched it.
Q.

So you weren't aware of that at the

time you bought the assets in bankruptcy; is
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