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

Filing 84

MEMORANDUM OF LAW in Support 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 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,
- against -

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

APPLE, INC.,
Defendant.

MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT’S MOTION TO
EXCLUDE ANY TESTIMONY, ARGUMENT OR EVIDENCE REGARDING
THE EXPERT REPORTS AND OPINIONS OF ROBERT T. SCHERER

TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT………………………………………………………………..1
ARGUMENT…………………………………………………………………………………….5
I.

THE STANDARDS FOR ADMITTING EXPERT TESTIMONY REQUIRE
THE EXCLUSION OF MR. SCHERER’S ANTICIPATED TESTIMONY......................5

II.

MR. SCHERER DOES NOT QUALIFY AS AN EXPERT. ..............................................6
A.
B.
C.

III.

THE MAJORITY OF MR. SCHERER’S REPORTS INCLUDE
INAPPROPRIATE EXPERT OPINIONS ON ISSUES OF LAW. ..................................11
A.
B.
C.

IV.

Mr. Scherer Is Not Qualified As An Expert On Current Trademark Law or
Trademark Searching or Clearance Practices. .........................................................7
Mr. Scherer Is Not Qualified As An Expert On Computer Software. .....................9
Mr. Scherer Is Not Qualified As An Expert On Software Patents.........................10

Section 4 Of Mr. Scherer’s Report Should Be Excluded Because It Merely
Recites Basic Trademark Principles. .....................................................................12
Mr. Scherer’s Opinion That The IBOOK Mark Assignment Was In Gross
Is An Improper Legal Conclusion..........................................................................13
Mr. Scherer’s Conclusions That Apple Purportedly Committed Fraud On
The PTO Are Inadmissible Conclusions Of Law. .................................................14

MR. SCHERER’S OPINIONS SHOULD BE EXCLUDED GENERALLY
BECAUSE THEY ARE BASED ON NUMEROUS FACTUAL ERRORS. ...................14
A.
B.
C.
D.
E.
F.

Mr. Scherer’s Search And Clearance Opinion Should Be Excluded
Because He Incorrectly Believes That There Is A Legal Duty To Conduct
A Search.................................................................................................................15
Mr. Scherer’s Assignment In Gross Analysis Should Be Excluded On The
Independent Grounds That It Rests On Numerous Factual Inaccuracies. .............16
Mr. Scherer’s Analysis Regarding Apple’s Alleged Fraud On The PTO
Should Be Excluded Because It Rests On Factual Inaccuracies............................17
Mr. Scherer’s Conclusion About Apple’s Allegedly Materially False
Statements To The PTO Is Based On Yet More Factual Errors. ...........................18
Mr. Scherer’s Opinion That The “ibooks” Imprint Is Suggestive And
Inherently Distinctive Is Unreliable.......................................................................19
Mr. Scherer’s Opinion That The “ibooks” Imprint Has Acquired
Secondary Meaning Is Based On Unsubstantiated Claims And Should Be
Excluded. ...............................................................................................................21

i

V.

MR. SCHERER’S DISCUSSION OF APPLE’S PRIOR LAWSUITS IS
IRRELEVANT AND PREJUDICIAL AND THEREFORE MUST BE
EXCLUDED. .....................................................................................................................22

VI.

MR. SCHERER’S OPINION ON APPLE’S PURPORTED BAD FAITH WAS
NOT DISCLOSED IN HIS REPORTS AND THUS SHOULD BE EXCLUDED. .........24

CONCLUSION…………………………………………………………………………………25

ii

TABLE OF AUTHORITIES
Page
CASES
Amorgianos v. Nat’l R.R. Passenger Corp.,
303 F.3d 256 (2d Cir. 2002)............................................................................................... passim
Arista Records LLC v. Lime Group LLC,
No. 06-CV-5936, 2011 WL 1674796 (S.D.N.Y. May 2, 2011)...................................... 7, 10, 11
Baker v. Urban Outfitters, Inc.,
254 F. Supp. 2d 346 (S.D.N.Y. 2003) ......................................................................................... 6
Bambu Sales, Inc. v. Sultana Crackers, Inc.,
683 F. Supp. 899 (E.D.N.Y. 1988).................................................................................. 9, 12, 15
Bd. of Trs. of AFTRA Ret. Fund v. JP Morgan Chase Bank, N.A.,
860 F. Supp. 2d 251 (S.D.N.Y. 2012) ...................................................................................... 25
Berk v. St. Vincent’s Hosp. & Med. Ctr.,
380 F. Supp. 2d 334 (S.D.N.Y. 2005) ................................................................................ passim
Daubert v. Merrell Dow Pharms., Inc.,
509 U.S. 579, 589 (1993) ........................................................................................................ 5, 6
Fernandez v. Central Mine Equip. Co.,
670 F. Supp. 2d 178 (E.D.N.Y. 2009)........................................................................................ 7
Foster v. Berwind Corp.,
No. 90-Civ. 0857, 1991 WL 83090 (E.D. Pa. May 14, 1991) ................................................. 25
In re Wellbutrin SR Antitrust Litig.,
Civ. No. 04-5525, 2010 WL 8425189 (E.D. Pa. Mar. 31, 2010) .............................................. 16
Kargo Global, Inc. v. Advance Magazine Publishers, Inc.,
No. 06-Civ.-550(JFK), 2007 WL 2258688 (S.D.N.Y. Aug. 6, 2007)........................................ 6
Kumho Tire Co., Ltd. v. Carmichael,
526 U.S. 137 (1999) .............................................................................................................. 6, 27
Lippe v. Bairnco Corp.,
288 B.R. 678 (S.D.N.Y. 2003) .................................................................................................... 5
Macaluso v. Herman Miller, Inc.,
No. 01 CIV. 11496 (JGK), 2005 WL 563169 (S.D.N.Y. Mar. 10, 2005).......................... passim
Malletier v. Dooney & Bourke, Inc.,
525 F. Supp. 2d 558 (S.D.N.Y. 2007) ................................................................................. 13, 27
iii

PaperCutter, Inc. v. Fay’s Drug Co., Inc.,
900 F.2d 558 (2d Cir. 1990)...................................................................................................... 24
Park W. Radiology v. CareCore Nat’l. LLC,
675 F. Supp. 2d 314 (S.D.N.Y. 2009) ....................................................................................... 25
Playboy Enters., Inc. v. Chuckleberry Publ’g., Inc.,
687 F.2d 563 (2d Cir. 1982)...................................................................................................... 24
Primavera Familienstiftung v. Askin,
130 F. Supp. 2d 450 (S.D.N.Y. 2001) ....................................................................................... 13
R.F.M.A.S., Inc. v. So,
748 F. Supp. 2d 244 (S.D.N.Y. 2010) ....................................................................... 6, 11, 12, 27
Rieger v. Orlor, Inc.,
427 F. Supp. 2d 99 (D. Conn. 2006) ........................................................................................ 13
Savin Corp. v. Savin Group,
391 F.3d 439 (2d Cir. 2004)..................................................................................................... 17
Snyder v. Wells Fargo Bank, N.A.,
No. 11 CIV. 4496 SAS, 2012 WL 4876938 (S.D.N.Y. Oct. 15, 2012) .................................... 13
Sports Traveler, Inc. v. Advance Magazine Publishers, Inc.,
25 F. Supp. 2d 154 (S.D.N.Y. 1998) ......................................................................................... 23
U.S. ex rel. Anti-Discrimination Ctr. of Metro N.Y., Inc. v. Westchester County, N.Y.,
No. 06 Civ. 2860 (DLC), 2009 WL 1110577 (S.D.N.Y. Apr. 22, 2009)..................... 12, 14, 15
U.S. Info. Sys., Inc. v. Int’l Bhd. of Elec. Workers Local Union No. 3 AFL-CIO,
313 F. Supp. 2d 213 (S.D.N.Y. 2004) ........................................................................... 13, 15, 27
U.S. v. Bilzerian, 926 F.2d 1285 (2d Cir. 1991) ..................................................................... 12, 13
U.S. v. Tin Yat Chin,
371 F.3d 31 (2d Cir. 2004).......................................................................................................... 7
RULES
Fed. R. Civ. P. 37(c)(1)........................................................................................................... 11, 27
Fed. R. Evid. 401 .......................................................................................................................... 26
Fed. R. Evid. 702(b)...................................................................................................................... 24
Fed. R. Evid. 801 .......................................................................................................................... 23
Federal Rule of Evidence 403......................................................................................................... 5
iv

Federal Rule of Evidence 702................................................................................................ passim

v

Defendant Apple Inc. (“Apple”) respectfully submits this memorandum of law in support
of its motion to exclude all testimony, argument or evidence relating to the opinions and reports
of Robert T. Scherer, which may be offered by Plaintiffs J.T. Colby & Co., Inc. d/b/a Brick
Tower Press, J. Boylston & Co., Publishers LLC, and ipicturebooks LLC (collectively,
“Plaintiffs”). The opinions of Mr. Scherer addressed by this motion are set forth in his expert
reports submitted on September 17 and October 26, 2012, and in his deposition of November 16,
2012. 1
PRELIMINARY STATEMENT
The “expert” testimony regarding trademark law and trademark searching and clearance
procedure proffered by Mr. Scherer does not even come close to meeting the minimum
requirements set by Federal Rule of Evidence 702. Mr. Scherer utterly lacks any specialized
knowledge on which to ground his opinions. Indeed, for the seven years preceding this suit, Mr.
Scherer has not practiced trademark law at all, cleared a single trademark through a trademark
search process, or consulted with any other trademark attorneys regarding prevailing trademark
searching or clearance procedures. Especially in the rapidly evolving field at issue in this case,
seven years is a lifetime. What is more, he acknowledges having no understanding of the
customary trademark search and clearance procedures followed by law firms today. Both before
and after his retirement from the field nearly a decade ago, Mr. Scherer never taught a class,
wrote an article, or gave any public speeches about trademark law. Mr. Scherer nevertheless

1

Mr. Scherer’s first report, Expert Report of Robert T. Scherer, submitted on September 17, 2012 (the “Scherer
Report”) is annexed to the Declaration of Jennifer Barry in Support of Defendant’s Motion to Exclude Any
Testimony, Argument or Evidence Regarding the Expert Report and Opinions of Robert Scherer, dated December
21, 2012 (“Barry Dec.”) as Exhibit 1. Mr. Scherer’s rebuttal report, Expert Rebuttal Report of Robert T. Scherer,
submitted on October 26, 2012 (the “Rebuttal Report”) (collectively, the “Scherer Reports”) is annexed to the Barry
Dec. as Exhibit 2. Relevant pages from Mr. Scherer’s November 16, 2012 deposition transcript in which he offered
an additional opinion not disclosed in his reports are annexed to the Barry Dec. as Exhibit 3.

professes to be an “expert” regarding contemporary trademark law and the prevailing trademark
searching and clearance processes used by trademark attorneys. No court has ever qualified Mr.
Scherer as an expert in any litigation matter — let alone a trademark matter. This Court should
not be the first.
Plaintiffs also rely on Mr. Scherer to provide expert opinions on computer software and
patent issues, notwithstanding that Mr. Scherer’s own description of his expert qualifications in
his report does not even mention computer software or patents among his areas of expertise. Mr.
Scherer first purports to compare the computer software products offered by Apple to those
offered by Apple’s predecessor-in-interest to the iBooks trademark, Family Systems. Yet when
asked directly whether he considered himself an expert on computer software, Mr. Scherer
himself admitted he was not, and for good reason. He has never taken a single computer science
or software class, nor has he published any articles related to the field. Worse, Mr. Scherer’s
own testimony makes clear that he lacked any factual basis to opine on the specific computer
software products in this case. He conceded that he never used either Family Systems’ IBOOK
computer software or Apple’s iBooks software before completing his report, admitted having no
understanding of how Apple’s product worked beyond that of a “layperson,” and described its
functioning as “magic to [him].” He could not even say whether Apple’s iBooks application was
software in the first place, nor describe the difference between an “app” and computer
software—perhaps unsurprisingly, given that apps as we know them today did not yet exist when
Mr. Scherer last practiced.
Underscoring how far Mr. Scherer’s proffered testimony is removed from any area in
which he actually has specialized (or current) knowledge, Mr. Scherer offers various opinions
about Family Systems’ patent and the scope of the product covered by the patent. Yet, Mr.

2

Scherer himself acknowledged that he is not a patent attorney and has no expertise in patents.
He likewise concedes that he failed to conduct any analysis of the patent claims and Family
Systems’ software. His testimony also is premised on a clearly erroneous understanding of key
legal principles of patent law impacting this case. Mr. Scherer’s utter lack of knowledge about
computer software and patents generally, and his acknowledged failure to understand the very
products about which he purported to provide an expert opinion, make clear that his testimony
about computer software and patent issues should not be admitted. Although there is nothing
wrong with thinking that Apple’s product works like “magic,” Rule 702 sets a far higher
threshold for someone purporting to come into court and offer “expert” opinions to a jury.
Although Mr. Scherer’s lack of qualifications, standing alone, warrants exclusion of his
opinions and reports in this case, much of his anticipated testimony also is inadmissible for
several additional reasons. First, it is black letter law that legal conclusions or restatements
about the law are inadmissible as expert testimony. Indeed, even Mr. Scherer acknowledges that
the determination of legal issues, such as the validity of the assignment in this case, are not for
experts, but are to “be decided by the Court.” Nevertheless, Mr. Scherer’s report is riddled with
restatements of law and opinions regarding the ultimate legal issues to be decided in this case.
For example, several sections simply quote word-for-word from or restate the Lanham Act (often
without citation) or applicable trademark treatises. Other sections impermissibly assert legal
conclusions about clear-cut questions of law, such as whether Apple committed fraud on the
PTO or whether the Family Systems’ assignment of its trademark to Apple was a valid
assignment. Because such legal determinations are properly the province of the court, not a
purported expert, they are inadmissible and should be excluded.

3

Second, Mr. Scherer’s opinions are marred by factual and legal error. Courts routinely
deem expert testimony unreliable and inadmissible when it is founded on erroneous factual and
legal assumptions. Yet much of Mr. Scherer’s reports and anticipated expert testimony derive
from a faulty understanding of the relevant facts and law. For instance, Mr. Scherer insisted in
his initial report that Apple had a legal duty to conduct a comprehensive trademark clearance
search. There is no such duty, however, as Mr. Scherer himself later acknowledged in his
deposition—rendering his ultimate conclusion groundless. Similarly, although Mr. Scherer
claims Plaintiffs’ alleged mark is suggestive, he completely omits any discussion of a key PTO
rule indicating that such a mark is presumed descriptive because he was unaware of that rule.
Mr. Scherer also grossly misrepresents key facts involving the Family Systems’ assignment of
the IBOOK mark to Apple, including misstating its date, its geographic scope, and the
motivations behind it, in order to fit those “facts” to his ultimate opinion. And Mr. Scherer’s
analysis of whether Apple committed fraud on the PTO is peppered with factual inaccuracies
about how Apple’s iBooks software works — which again is not surprising given that Mr.
Scherer has no background in computer software, nor any understanding of how Apple’s product
functions, and he did not even use Apple’s iBooks product before writing his report.
Mr. Scherer clearly is not only unqualified generally to provide his “expert” testimony,
but many of his specific opinions are premised on an erroneous or incomplete understanding of
the facts and/or relevant law. Because it falls far short of what Rule 702 requires, Mr. Scherer’s
purported “expert” testimony should be excluded. At minimum, this Court should strike those
portions of his testimony rendering opinions in areas in which he has no expertise, which merely
reflect legal conclusions, or which are premised on plain factual or legal error.

4

ARGUMENT
I.

THE STANDARDS FOR ADMITTING EXPERT TESTIMONY REQUIRE THE
EXCLUSION OF MR. SCHERER’S ANTICIPATED TESTIMONY.
As the Supreme Court emphasized in Daubert v. Merrell Dow Pharms., Inc., 509 U.S.

579, 589 (1993), Rule 702 serves as a critical gateway to the introduction of expert testimony.
Under the Rule, such testimony is admissible only if “(a) the expert’s scientific, technical, or
other specialized knowledge will help the trier of fact to understand the evidence or to determine
a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the
product of reliable principles and methods; and (d) the expert has reliably applied the principles
and methods to the facts of the case.” Fed. R. Evid. 702. Expert testimony must also comply
with Federal Rule of Evidence 403, which provides that “[t]he court may exclude relevant
evidence if its probative value is substantially outweighed by a danger of one or more of the
following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time,
or needlessly presenting cumulative evidence.” Fed. R. Evid. 403; see also Daubert, 509 U.S. at
589 (expert testimony must be “not only relevant, but reliable”).
Courts serve as the “gatekeepers” of expert evidence. See Lippe v. Bairnco Corp., 288
B.R. 678, 685 (S.D.N.Y. 2003) (excluding unreliable expert testimony). Because expert
testimony has the potential to be particularly misleading, courts must exercise greater control
over experts than over lay witnesses. See Daubert, 509 U.S. at 595. Stricter scrutiny is also
warranted where, as here, a jury rather than a bench trial is contemplated. See Kargo Global,
Inc. v. Advance Magazine Publishers, Inc., No. 06-Civ.-550(JFK), 2007 WL 2258688, at *11-12
(S.D.N.Y. Aug. 6, 2007). Mr. Scherer’s opinions do not come close to meeting Rule 702’s
minimum requirements for expert testimony. As explained below, the record shows that (1) he is
utterly unqualified to provide opinions on the specialized matters on which he opines, (2) many
5

of the opinions are legal conclusions or opinions on the ultimate issue to be decided in the case,
or (3) the opinions are based on nothing more than his say-so or are premised on erroneous and
unfounded factual assumptions. As a consequence, these opinions must be excluded.
II.

MR. SCHERER DOES NOT QUALIFY AS AN EXPERT.
The trial court is required to make an initial determination as to whether a proposed

witness qualifies as an expert. See Baker v. Urban Outfitters, Inc., 254 F. Supp. 2d 346, 352
(S.D.N.Y. 2003). In making this determination, a court should assess whether the expert at issue
has specialized knowledge that will assist the trier of fact in deciding a particular issue in the
case. See Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 157 (1999). To be qualified as an
expert, a witness should have “‘superior knowledge, education, experience or skill with the
subject matter of the proffered testimony.’” R.F.M.A.S., Inc. v. So, 748 F. Supp. 2d 244, 251-52
(S.D.N.Y. 2010) (quoting U.S. v. Tin Yat Chin, 371 F.3d 31, 40 (2d Cir. 2004); Fed. R. Evid.
702. If the offering party fails to show that the expert has superior knowledge, education,
experience or skill in the areas of testimony, then the expert’s testimony must be excluded. See,
e.g., Arista Records LLC v. Lime Group LLC, No. 06-CV-5936, 2011 WL 1674796, at *5–6
(S.D.N.Y. May 2, 2011) (finding proffered expert unqualified to offer opinion about statistics
when expert lacked degree in statistics, was unable to provide specifics about particular
statistical methodologies, and could not answer questions about statistical principles). As
explained below, Mr. Scherer does not have such superior knowledge, education, experience or
skill on the subject matters on which he opines — namely matters of trademark law, trademark
searching and clearance, computer software, and patents. Indeed, when challenged, Mr. Scherer
was forced to acknowledge that even he does not consider himself to be an expert about many of
the subjects on which he renders opinions.

6

At the outset, it is important to note that Mr. Scherer has never been admitted as an
expert. (Barry Dec., Ex. 3 (Scherer Dep. 42:23-43:6.)). Such failure can, in and of itself, be
persuasive in determining that an expert lacks the requisite qualifications to testify as an expert.
See Fernandez v. Central Mine Equip. Co., 670 F. Supp. 2d 178, 183-84 (E.D.N.Y. 2009).
Moreover, as detailed below, Mr. Scherer lacks expertise and experience as to the subjects about
which he opines. Those failings make clear that he cannot satisfy the requirements of Rule 702,
thereby requiring the exclusion of his opinions, report, and any related testimony, evidence or
argument.
A.

Mr. Scherer Is Not Qualified As An Expert On Current Trademark Law or
Trademark Searching or Clearance Practices.

Although Mr. Scherer worked as an attorney in the trademark field from 1972 to 2005, he
has never taught any classes, written any articles or given public speeches regarding trademark
searching and clearance issues. (Scherer Rep., Ex. A; Barry Dec., Ex. 3 (Scherer Dep. 59:2460:2; 60:9-12.).) Since retiring as an in-house attorney in 2005, Mr. Scherer has not practiced
trademark law or consulted with other trademark attorneys regarding trademark searching or
clearance matters. (Scherer Rep., Ex. A; Barry Dec., Ex. 3 (Scherer Dep. 34:15-16; 107:2024.).) More importantly, in the seven-plus years since his retirement, Mr. Scherer has not cleared
a single mark, and the only trademark searches he has conducted were in connection with his
work in this case and his work in another case where he drafted but did not finalize an “expert”
report. (Id. 34:15-16; 38:13-17; 62:4-8.) Finally, Mr. Scherer is not aware of the prevailing
search and clearance practices of other law firms. (Id. 108:8-110:19.) In sum, Mr. Scherer does
not have superior knowledge regarding current trademark law or trademark search and clearance
practices, and certainly should not be allowed to opine regarding such matters as an expert under
Rule 702.
7

The limited scope of Mr. Scherer’s knowledge is evident throughout his reports as he
repeatedly misstates critical points of trademark law. For example, he opines several times that
there is a duty to search and clear a trademark, when in fact there is no such duty. (See disc.
infra Part IV.A.) 2 Likewise, he mistakenly asserts that the trademark classification system used
by the PTO is motivated by the PTO’s efforts to collect more fees, when in fact, it was
implemented pursuant to an international treaty seeking to organize and make uniform trademark
registries worldwide, and to provide for a more efficient searching and clearance process within
such trademark offices. Compare Scherer Rep. at 9 n.2 with Nice Agreement Concerning the
International Classification of Goods and Services for the Purposes of the Registration of Marks,
June 15, 1957, 1154 U.N.T.S. 89; see also TMEP § 1401.02(a).
Mr. Scherer’s other testimony similarly reflects an errant understanding of key trademark
law concepts. For instance, he has no understanding of the considerations for determining
whether the assignment in gross rule applies. Although Mr. Scherer expressly claims that one
needs to acquire the patent associated with a trademarked product, the law provides that the
acquisition of such a patent is not required. See, e.g., Bambu Sales, Inc. v. Sultana Crackers,
Inc., 683 F. Supp. 899, 908 (E.D.N.Y. 1988) (holding that assignment without transfer of
tangible assets was valid). Finally, and most tellingly, before Apple’s expert submitted his
rebuttal to Mr. Scherer’s report, Mr. Scherer was not even aware of a key provision in the PTO
Trademark Manual of Examining Procedures (“TMEP”) concerning the descriptive nature of “i”formative marks — a provision that was adopted shortly before his retirement and has been
consistently applied by the PTO ever since its adoption. (Barry Dec., Ex. 3 (Scherer Dep.

2

Even if Mr. Scherer were correct about such a duty, Apple did conduct a full comprehensive trademark search that
did not reveal Plaintiffs or any current use of the alleged “ibooks” mark. (SUF ¶¶ 219-233.)

8

264:23-265:4); see also TMEP § 1209.03(d).) Given his apparent lack of contemporary
expertise about, or even basic familiarity with, modern day trademark law, Mr. Scherer should
not be allowed to testify as an “expert” regarding this subject. See Arista Records LLC, 2011
WL 1674796, at *5–6.
B.

Mr. Scherer Is Not Qualified As An Expert On Computer Software.

Whatever Mr. Scherer’s qualifications to testify about trademark law, he is plainly
unqualified to testify about computer software. In his initial report, Mr. Scherer opines that (1)
the assignment from Family Systems of the IBOOK mark is invalid, and (2) Apple committed
fraud on the PTO through its filing of a maintenance declaration for the U.S. registration for that
mark. (Scherer Rep. at 24-32.) 3 To support these conclusory legal opinions, Mr. Scherer asserts
that “Family Systems’ IBOOK software system is a very different product with a very different
use than Apple’s downloadable electronic book or e-book product.” (Id. 22, 28-29, 31.) In his
Rebuttal Report, Mr. Scherer essentially repeats that opinion. (Rebuttal Rep. at 4 (citing
“significant differences in the nature and purpose of Family Systems’ IBOOK product and the
nature and purpose of Apple’s IBOOKS product”)). Because Mr. Scherer lacks any specialized
expertise about computer software, and has candidly acknowledged that he had no understanding
of Apple’s product and had not even used it when he wrote his report, these conclusions are
inadmissible under Rule 702. See Arista Records LLC, 2011 WL 1674796, at *5–6.
3

On January 27, 2010, Apple acquired from Family Systems Registration No. 2,446,634 (“‘634 Registration”) for
the IBOOK mark for use in connection with “computer software used to support and create interactive, usermodifiable electronic books.” (Defendant’s Rule 56.1 Statement of Undisputed Facts in Support of its Motion for
Summary Judgment (“SUF”) ¶ 149.) Apple recorded that assignment with the PTO on February 4, 2010. (Id. ¶
166.) On May 17, 2010, Apple filed a Request to Amend the mark shown in the ‘634 Registration from IBOOK to
IBOOKS pursuant to Section 7 of the Lanham Act. (Id. ¶¶ 167-168.) Apple included a specimen illustrating its
current use of the IBOOKS mark as part of its Section 7 request. (Id.¶ 169.) On June 7, 2010, Apple filed a
Combined Declaration of Use and Renewal for the ‘634 Registration pursuant to Sections 8 and 9 of the Lanham
Act. In this application, Apple stated that “the mark is in use in commerce on or in connection with all of the goods
or services listed in the existing registration for this specific class.” (Id. ¶¶ 172-173.) Apple included a specimen
with its Section 8 and 9 filings showing its current use of the IBOOKS mark. (Id. ¶174.)

9

Mr. Scherer does not have the specialized knowledge necessary to conduct a comparative
analysis of the Apple and Family Systems products and he certainly should not be permitted to
present such an analysis as an “expert.” Mr. Scherer has no expertise regarding computer
software and he admitted as much during his deposition. (Barry Dec., Ex. 3 (Scherer Dep.
19:17-19.).) Indeed, Mr. Scherer has never even taken a computer science class or studied
computer software issues. (Id. 17:14-19.)
Mr. Scherer’s lack of expertise is made even more apparent when viewed in light of how
little he did to reach his conclusion that the Family Systems and Apple products were different.
Mr. Scherer never used the Family Systems’ IBOOK computer software. (Id. 141:18-23.) He
did not use the Apple iBooks software until after he had completed his report and he made no
attempt to understand how the product worked, let alone know whether it constituted “software.”
(Id. 133:11-16; 134:8-11; 226:24-227:3; 314:17-23.) And even after using Apple’s iBooks
software right before his deposition, Mr. Scherer still had no idea how that software worked. (Id.
133:3-11; 226:24-227:6.) In sum, given his lack of expertise in the applicable field and the
limited nature of his comparative analysis, Mr. Scherer should not be permitted to offer any
expert opinions regarding such a comparison. See Arista Records LLC, 2011 WL 1674796, at
*5–6.
C.

Mr. Scherer Is Not Qualified As An Expert On Software Patents.

Mr. Scherer likewise is unqualified to testify as an expert on software patents. In his
reports, Mr. Scherer reaches a series of conclusions regarding Family Systems’ software patent.
(Scherer Rep. at 23-24; Rebuttal Rep. at 3-4.) He then uses these conclusions to further support
his opinion that Family Systems’ and Apple’s products are substantially different. (Rebuttal
Rep. at 3-4.) He also argues (incorrectly) that because the patent covers Family Systems’
IBOOK product, the assignment of the patent was necessary to the assignment of the IBOOK
10

mark. (Scherer Rep. at 23-24; Barry Dec., Ex. 3 (Scherer Dep. 188:18-22.).) In fact, as
discussed above, an assignment can be valid even without the transfer of tangible assets. Bambu
Sales, 683 F. Supp. at 908.
Mr. Scherer has no specialized experience that would allow him to render expert opinions
on software patents, and he certainly does not have a basis upon which to opine that Family
Systems’ patent even covers that product in the first place. Indeed, Mr. Scherer admitted in his
deposition that he is not a patent attorney and has no expertise in patents. (Barry Dec., Ex. 3
(Scherer Dep. 162:15-20.).) Given this lack of expertise, it is not surprising that Mr. Scherer did
not conduct any analysis whatsoever regarding the claims of the patent and Family Systems’
software. (Id. 189:2-190:8; 254:6-7.) In light of his lack of expertise and failure to conduct such
analysis, Mr. Scherer cannot provide expert testimony regarding Family Systems’ patent.
R.F.M.A.S., Inc., 748 F. Supp. 2d at 251-52.
III.

THE MAJORITY OF MR. SCHERER’S REPORTS INCLUDE INAPPROPRIATE
EXPERT OPINIONS ON ISSUES OF LAW.
An expert’s testimony on issues of law is inadmissible. U.S. v. Bilzerian, 926 F.2d 1285,

1294 (2d Cir. 1991); see also U.S. ex rel. Anti-Discrimination Ctr. of Metro N.Y., Inc. v.
Westchester Cnty., N.Y., No. 06 Civ. 2860 (DLC), 2009 WL 1110577, at *2 (S.D.N.Y. Apr. 22,
2009) (Cote, J.) (stating that “expert testimony that amounts to the statement of a legal
conclusion must be excluded” and excluding such testimony). This is because “‘expert evidence
should not be permitted to usurp either the role of the trial judge in instructing the jury as to the
applicable law or the role of the jury in applying that law to the facts before it.’” U.S. Info. Sys.,
Inc. v. Int’l Bhd. of Elec. Workers Local Union No. 3 AFL-CIO, 313 F. Supp. 2d 213, 240
(S.D.N.Y. 2004) (quoting Primavera Familienstiftung v. Askin, 130 F. Supp. 2d 450, 528
(S.D.N.Y. 2001)). To be clear, “an expert is not supposed to be doing the work of counsel; an
11

expert must bring to the jury more than the lawyers can offer in argument.” Malletier v. Dooney
& Bourke, Inc., 525 F. Supp. 2d 558, 654 (S.D.N.Y. 2007) (citation omitted).
In his reports, Mr. Scherer violates this rule again and again, essentially restating
applicable law, reaching legal conclusions and/or seeking to usurp for himself the role of the
ultimate decision-maker in the case. As explained below, Sections 4, 8, 9 and 10 of his Report,
and Sections 1 and 3 of his Rebuttal Report present such legal opinions and, thus, should be
excluded. See Snyder v. Wells Fargo Bank, N.A., No. 11 CIV. 4496 SAS, 2012 WL 4876938, at
*5 (S.D.N.Y. Oct. 15, 2012) (excluding expert report in full because it was “so ridden with
improper statements and opinions”); see also Bilzerian, 926 F.2d at 1294; Anti-Discrimination
Ctr., 2009 WL 1110577, at *2; Malletier, 525 F. Supp. 2d at 654; Rieger v. Orlor, Inc., 427 F.
Supp. 2d 99, 105 (D. Conn. 2006) (granting defendant’s motion to exclude portions of the
plaintiff’s expert report because it included legal conclusions rather than opinions).
A.

Section 4 Of Mr. Scherer’s Report Should Be Excluded Because It Merely
Recites Basic Trademark Principles.

Section 4 of Mr. Scherer’s Report is titled “Trademark Principles: Trademark Rights are
Based on Use, Not Registration.” (Scherer Rep. at 6.) Within this section Mr. Scherer makes
general legal statements such as “[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 of the goods, even if that source is
unknown” and cites the Lanham Act in support. (Id.) As this Court has held, “[i]t is particularly
inappropriate for a witness to track the exact language of statutes and regulations which the
defendant is accused of violating.” Anti-Discrimination Ctr., 2009 WL 1110577, at *2. Because
this entire section merely restates applicable law, even if Mr. Scherer could qualify as an
“expert” regarding such law, he should not be allowed to provide such testimony. Id.
12

B.

Mr. Scherer’s Opinion That The IBOOK Mark Assignment Was An
Impermissible Assignment In Gross Is An Improper Legal Conclusion.

In Section 8 of his Report and Section 1 of his Rebuttal Report, Mr. Scherer concluded
that “the assignment of the IBOOK mark to Apple was an assignment in gross.” (Scherer Rep. at
29, 44; Rebuttal Rep. at 1.) This opinion also is a conclusion of law that cannot be presented
under the imprimatur of expert testimony. In fact, within the very same Rebuttal Report where
he provides this conclusion, Mr. Scherer acknowledges as much, noting that “[a]ny
determination of the validity or effectiveness of a purported assignment will be decided by the
Court.” (Rebuttal Rep. at 2.) 4 Likewise, Mr. Scherer reconfirmed during his deposition that
such a question is one of law to be resolved by the Court. (Barry Dec., Ex. 3 (Scherer Dep.
261:9-262:3.).) Apple agrees with Mr. Scherer that such legal determinations are for the Court,
not for experts. Accordingly, his conclusions on the validity or effectiveness of the Family
Systems’ assignment should be excluded. Anti-Discrimination Ctr., 2009 WL 1110577, at *2.
Mr. Scherer’s opinion regarding the assignment in gross rule also is premised upon legal
error, and should be excluded. Mr. Scherer’s conclusion that the assignment from Family
Systems to Apple was an assignment in gross was founded, in large part, on his belief that the
goodwill associated with the IBOOK mark was not transferred to Apple because Family Systems
did not transfer a patent to Apple. (Scherer Rep. at 23-24.) Specifically, during his deposition,
Mr. Scherer stated “[i]f Apple did not receive the patent in an assignment it couldn’t use the
mark on the same goods and services to which it used before . . . .” (Barry Dec., Ex. 3 (Scherer
Dep. 188:18-22.).) This assertion not only is improper expert testimony because it renders a
legal conclusion, it also misstates the applicable law. As already noted, an assignor does not
4

Mr. Scherer makes this observation while criticizing one of Apple’s experts, claiming that Apple’s expert should
not have opined on the validity of the Family Systems’ registration. In fact, unlike Mr. Scherer, Apple’s expert did
not provide such an opinion and she confirmed as much in her deposition. (Barry Dec., Ex. 4 (Kane Dep. 55:7-24.).)

13

need to assign business assets such as patents to create a valid trademark assignment. Bambu
Sales, Inc., 683 F. Supp. at 908. Moreover, while focusing on Family Systems’ patent, Mr.
Scherer wholly ignores the fact that other assets, namely Family Systems’ domain names, were
transferred to Apple. This legal error provides yet another ground to exclude that opinion. U.S.
Info. Sys., 313 F. Supp. 2d at 240.
C.

Mr. Scherer’s Conclusions That Apple Purportedly Committed Fraud On
The PTO Are Inadmissible Conclusions Of Law.

Despite Judge Forrest’s explicit statement during the February 27, 2012 Status
Conference in this case that “the trademark expert . . . wouldn’t be able to go through and [opine]
whether or not there has been fraud on the Trademark Office or anything like that,” Mr. Scherer
attempts to do just that in Section 9 of his Report and Section 3 of his Rebuttal Report in order to
support Plaintiffs’ allegation that Apple committed fraud on the PTO. (Barry Dec., Ex. 9 (Feb.
27, 2012 Conf. Tr. 18:15-9.) Other courts facing this issue have confirmed Judge Forrest’s
limitation on expert testimony. See In re Wellbutrin SR Antitrust Litig., Civ. No. 04-5525, 2010
WL 8425189, at *7 (E.D. Pa. Mar. 31, 2010) (excluding expert testimony regarding fraud on the
PTO as improper legal opinion). Notwithstanding the Court’s warning and this law, Mr. Scherer
presents legal conclusions on this very issue in both of his reports. (Scherer Rep. at 29; Rebuttal
Rep. at 2.) Such opinions should be excluded as a matter of law. 5
IV.

MR. SCHERER’S OPINIONS SHOULD BE EXCLUDED GENERALLY
BECAUSE THEY ARE BASED ON NUMEROUS FACTUAL ERRORS.
Expert testimony fails to meet the reliability requirement of Rule 702 if it is “based on

incorrect factual assumptions that render all of his subsequent conclusions purely speculative.”
Macaluso v. Herman Miller, Inc., No. 01 CIV. 11496 (JGK), 2005 WL 563169, at *8 (S.D.N.Y.
5

If Section 9 of Mr. Scherer’s Report is excluded, Apple will withdraw the expert report of Siegrun D. Kane on
similar issues and not present the portion of Philip Hampton’s rebuttal report relating to that issue.

14

Mar. 10, 2005); see also Berk v. St. Vincent’s Hosp. & Med. Ctr., 380 F. Supp. 2d 334, 352-56
(S.D.N.Y. 2005) (finding testimony inadmissible on summary judgment where expert based
opinion on several factual errors). Mr. Scherer’s Report, Rebuttal Report and anticipated expert
opinion testimony are all premised on several faulty assumptions, particularly relating to his
views on search and clearance, assignment in gross, fraud on the PTO and secondary meaning.
This provides yet another independent ground on which Mr. Scherer’s opinions should be
excluded. Amorgianos v. Nat’l R.R. Passenger Corp., 303 F.3d 256, 269 (2d Cir. 2002)
(excluding expert testimony where it rested on a “faulty assumption”).
A.

Mr. Scherer’s Search And Clearance Opinion Should Be Excluded Because
He Incorrectly Believes That There Is A Legal Duty To Conduct A Search.

Mr. Scherer claims that Apple erred in failing to conduct a comprehensive trademark
search, saying“[w]hen selecting a new trademark or materially expanding the use of an existing
mark, it is imperative that the trademark attorney conduct the necessary searches.” (Scherer Rep.
at 7.) However, as previously noted, there is no legal duty to perform a search prior to using a
mark. Indeed, the case law even goes as far as to say that the failure to conduct a trademark
search is not evidence of bad faith. See Savin Corp. v. Savin Group, 391 F.3d 439, 460 (2d Cir.
2004). Mr. Scherer himself admitted as much in his deposition, testifying that there is no duty to
conduct a comprehensive search when clearing a mark. (Barry Dec., Ex. 3 (Scherer Dep. 80:313.).) This flip-flop not only demonstrates Mr. Scherer’s lack of expertise in the subject matter
generally, but also renders his (improper) legal conclusions unreliable. See Amorgianos, 303
F.3d at 269.
In any event, Apple conducted a full comprehensive clearance search before it began
using the iBooks mark. As described in Defendant’s Rule 56.1 Statement of Undisputed Facts in
Support of its Motion for Summary Judgment, that search included: (1) searches of U.S. federal
15

and state trademark records; (2) Google searches for common law uses; (3) searches of the
trademark.com domain name database; and (4) a follow-up investigation. (SUF ¶¶ 219-223.)
Those searches and follow-up investigation did not reveal either Plaintiffs’ existence or any
current use by Plaintiffs of their alleged “ibooks” mark. (Id.)
B.

Mr. Scherer’s Assignment In Gross Analysis Should Be Excluded On The
Independent Grounds That It Rests On Numerous Factual Inaccuracies.

Mr. Scherer concludes that Apple acquired the IBOOK trademark from Family Systems
because it wanted to have priority over Plaintiffs’ “ibooks” imprint, and not because it wanted to
acquire Family Systems’goodwill in the IBOOK mark. (Scherer Rep. at 24-25; Rebuttal Rep. at
5-6; Barry Dec., Ex. 3 (Scherer Dep. 239:16-240:10.).) This conclusion, however, is premised
on a variety of incomprehensible factual errors. For instance, Mr. Scherer claims that Apple
(1) acquired the IBOOK mark from Family Systems the same day Plaintiffs contacted Apple
(Scherer Rep. at 24), and (2) “made no attempt” to acquire Family Systems’ mark in any country
other than the U.S. (id. at 28). Both statements are wrong. First, the Assignment Agreement was
initially discussed in early January 2010 and executed on January 27, 2010 (SUF ¶¶ 146-149),
and Mr. Colby did not contact Apple until January 29, 2010. (Id. ¶¶ 236-37.)
Second, Apple acquired Family Systems’ rights in the IBOOK mark “in all jurisdictions
throughout the world, including without limitations any common law rights….” (SUF ¶ 150.)
For example, the Assignment Agreement included the assignment of Family Systems’ registered
IBOOK marks in both Jamaica and Japan. (Id.) Further, the IBOOK registration in the
European Union to which Mr. Scherer refers had expired before Apple entered the agreement
with Family Systems, and therefore there was no such registration for Family Systems to assign
to Apple. (Barry Dec., Ex. 5 (Westlaw record for CTM Registration No. 001018555.).)

16

These factual errors further demonstrate that Mr. Scherer’s opinion regarding the validity
of the assignment of the IBOOK mark from Family Systems to Apple is unreliable and provides
yet another independent basis for the exclusion of his opinions. See Berk, 380 F. Supp. 2d at
352-56; Macaluso, 2005 WL 563169, at *8; Amorgianos, 303 F.3d at 269.
C.

Mr. Scherer’s Analysis Regarding Apple’s Alleged Fraud On The PTO
Should Be Excluded Because It Rests On Factual Inaccuracies.

Mr. Scherer’s analysis regarding Apple’s alleged fraud on the PTO is no better. He
claims that Apple filed a specimen in support of its Section 8 Declaration of Use for Registration
No. 2,446,634 that “shows the IBOOKS mark being used in connection with Apple’s library of
published books, not with the computer software used for creating user-modifiable books recited
in the registration.” (Scherer Rep. at 31.) But once again, the factual basis for Mr. Scherer’s
assertion is wrong.
The specimen shows that Apple uses the iBooks mark in connection with the offering of
just such an e-reader application as described in the description of goods in Registration No.
2,446,634. (Barry Dec., Ex. 6 (APPLE-IBOOKS0000085.).) The specimen is a screenshot of
Apple’s iTunes software showing the page on Apple’s App Store software download service
where customers can go to download Apple’s free iBooks e-reader interactive software
application. (Id.) This is precisely the distribution point where consumers consider and are
allowed to “purchase” Apple’s e-reader software. See TMEP § 904.04(d) (“For downloadable
computer software, an applicant may submit a specimen that shows use of the mark on an
Internet website. Such a specimen is acceptable only if it provides sufficient information to
enable the user to download the software from the website.”).
Mr. Scherer also is incorrect when he asserts that the specimen does not depict Apple’s
use of the iBooks mark in connection with “computer software used to support and create
17

interactive, user-modifiable electronic books.” (Scherer Rep. at 31.) In fact, Apple’s iBooks
software allows a user to create an electronic book that can be read on an Apple device. (Barry
Dec., Ex. 7 (Widup Dep. 210-211).) That software also allows a user to modify and interact with
the electronic book. (Id.; (Barry Dec., Ex. 8 (Gedikian Dep. 219:12-220-22.).) Indeed, Mr.
Scherer himself contradicted his own conclusions and admitted during his deposition that
Apple’s iBooks product allows for the creation of an electronic book on Apple’s iPhone device.
(Barry Dec., Ex. 3 (Scherer Dep. 227:22-228:5.).)
In sum, regardless of whether Mr. Scherer was qualified to provide expert testimony
generally, his claims that Apple’s specimen “does not support the use claimed” and that Apple
has committed fraud on the PTO should be excluded because they are based on a
demonstratively incorrect understanding of Apple’s specimen. See Berk, 380 F. Supp. 2d at 35256; Macaluso, 2005 WL 563169, at *8; Amorgianos, 303 F.3d at 269.
D.

Mr. Scherer’s Conclusion About Apple’s Allegedly Materially False
Statements To The PTO Is Based On Yet More Factual Errors.

In his Rebuttal Report, Mr. Scherer concludes that Apple’s motivation in making the
allegedly materially false statements to the PTO was to allow Apple to claim priority over the
Plaintiffs’ “ibooks” imprint. (Rebuttal Rep. at 5.) In reaching this conclusion, Mr. Scherer
rejects the possibility that Apple acquired the IBOOK mark from Family Systems to avoid
litigation with Family Systems. In Mr. Scherer’s (incorrect) view “[s]ince the 1999 Consent
Agreement between Apple and Family Systems . . . precluded Family Systems from suing Apple
for trademark infringement, Apple had no need to acquire Family Systems’ IBOOK mark to
ward off a potential lawsuit.” (Rebuttal Rep. at 5.) That again, is incorrect. Apple and Family
Systems entered the Consent Agreement in May 1999, and required each other to limit their
respective uses of the marks at issue to the goods set forth in their respective trademark
18

applications. 6 There is nothing in the Consent Agreement that prohibits either party from suing
the other for breach of contract. To the contrary, the Consent Agreement provided a contractual
basis for a lawsuit if one party used its mark in the other’s area — including if Apple used
iBooks for its newly-developed e-reader software. (SUF ¶ 118.) In fact, Mr. Scherer admitted
during his deposition that if Apple had used the iBooks mark in connection with computer
software, it would have been in breach of the Consent Agreement. (Barry Dec., Ex. 3 (Scherer
Dep. at 240:22-25.).)
More importantly, Mr. Scherer’s assertion that Apple acquired Family Systems’ mark to
gain priority over Plaintiffs is wrong because, as discussed above, the Assignment Agreement
already had been executed by the time Mr. Colby first contacted Apple. (SUF ¶¶ 149, 236-237.)
Because they are based on a factually erroneous premise, Mr. Scherer’s statements regarding
Apple’s purported motivation in making allegedly materially false statements to the PTO should
be excluded. See Berk, 380 F. Supp. 2d at 352-56; Macaluso, 2005 WL 563169, at *8;
Amorgianos, 303 F.3d at 269.
E.

Mr. Scherer’s Opinion That The “ibooks” Imprint Is Suggestive And
Inherently Distinctive Is Unreliable.

Mr. Scherer opines that Plaintiffs’ “ibooks” imprint is a suggestive trademark. (Scherer
Rep. at 34-35.) His opinion, however, is not based on sufficient facts or data and does not use
reliable principles and methods, and thus should be excluded. See Fed. R. Evid. 702 (expert
6

In 1997, Apple started to develop a laptop computer which it considered calling iBook. (SUF ¶ 114.) On
November 6, 1998, Apple filed an intent-to-use trademark application for the mark iBook in connection with
“computers, computer hardware, computer peripherals and user manuals sold therewith.” (Id. ¶ 115.) On May 7,
1999 Apple and Family Systems entered into a Consent Agreement, pursuant to which Family Systems agreed to
limit its use of the IBOOK mark to “computer hardware and software used to support and create interactive, usermodifiable electronic books and related goods and services” and Apple agreed to limit its use of the mark iBook to
“computer hardware, namely, notebook computers and related goods and services used in connection with said
notebook computers bearing Apple’s iBook mark, excluding software and software related goods and services.”
(Id.¶ 118. )

19

testimony is admissible only if “(b) the testimony is based upon sufficient facts or data; (c) the
testimony is the product of reliable principles and methods; and (d) the expert has reliably
applied the principles and methods to the facts of the case.”) .
In discussing the categorization of Plaintiffs’ “ibooks” imprint as suggestive, Mr. Scherer
simply recites general legal definitions of the various types of marks on the distinctiveness
spectrum before concluding that Plaintiffs’ imprint is not generic because “e-book” is the generic
term for Plaintiffs’ goods. (Scherer Rep. at 32-34.) He then opines that Plaintiffs’ “ibooks”
imprint does not convey an immediate, direct and unequivocal description of the goods or a
characteristic of the goods, and, on that basis, concludes the alleged mark is suggestive. (Id. at
34-35.)
Significantly, at no point in his analysis does Mr. Scherer refer to or rely on the
documents produced by Plaintiffs in the case indicating that Byron Preiss, the founder of the
“ibooks” imprint, intended to focus on the Internet in marketing and distributing books under
that imprint. (See SUF ¶¶ 6-9.). Nor, importantly, does he refer to or rely on the PTO Guideline
set forth in TMEP § 1209.03(d), which provides that “the prefix ‘i’ or ‘I’ would be understood
by purchasers to signify Internet, when used in relation to Internet-related products or services.”
That section is directly relevant to the analysis of whether Plaintiffs’ “ibooks” imprint is
descriptive or suggestive. In fact, Mr. Scherer was not even aware of this key provision of the
TMEP until Apple’s expert identified it. (Barry Dec., Ex. 3 (Scherer Dep. 264:23-265:4.).)
Given his dearth of recent trademark experience and unfamiliarity with this provision, Mr.
Scherer cannot possibly opine as an “expert” on this topic.

20

F.

Mr. Scherer’s Opinion That The “ibooks” Imprint Has Acquired Secondary
Meaning Is Based On Unsubstantiated Claims And Should Be Excluded.

Mr. Scherer opines that Plaintiffs’ “ibooks” imprint has acquired secondary meaning.
(Scherer Rep. at 35.) In determining whether there a mark has acquired secondary meaning,
courts consider: (1) consumer surveys; (2) sales success; (3) advertising expenditures; (4)
unsolicited media coverage; (5) third party attempts to plagiarize the mark; and (6) the length
and exclusivity of the use. See Sports Traveler, Inc. v. Advance Magazine Publishers, Inc., 25 F.
Supp. 2d 154, 164 (S.D.N.Y. 1998). Mr. Scherer, however, ignored nearly all of those factors,
and instead relied solely on an unsubstantiated, self-serving statement made by Ibooks, Inc., the
original owner of the “ibooks” imprint in 2002. (Scherer Rep. at 35; Barry Dec., Ex. 3 (Scherer
Dep. 278:16-279:13; 279:20-280:25.).)
The statement at issue is inadmissible hearsay and cannot be offered for the truth of the
matter asserted. See Fed. R. Evid. 801. While Rule 703 provides that an expert witness may rely
on hearsay to support his opinions, he may do so only if such reliance is reasonable. See Rule
703 (“If experts in the particular field would reasonably rely on those kinds of facts or data in
forming an opinion on the subject, they need not be admissible for the opinion to be admitted.”).
It is not reasonable to do so here because there simply is no declaration or other evidence
supporting the claim. More importantly, it would be particularly unreasonable to use this 2002
statement as the sole basis of a finding of secondary meaning as of January 2010 — the relevant
moment in time to measure secondary meaning (i.e., the date Apple announced the iBooks app).
See PaperCutter, Inc. v. Fay’s Drug Co., Inc., 900 F.2d 558, 564 (2d Cir. 1990). 7

7

Moreover, Mr. Scherer could not even pinpoint when Plaintiffs’ “ibooks” imprint had acquired secondary
meaning. (Barry Dec., Ex. 3 (Scherer Dep. 183:5-13).)

21

Because Mr. Scherer relies only on a single unsubstantiated claim of sales in 2002 to
support his conclusion that the “ibooks” imprint has acquired and retained secondary meaning
and he has not engaged in the appropriate multi-factor analysis to determine secondary meaning,
this portion of Mr. Scherer’s Report should be stricken. See Berk, 380 F. Supp. 2d at 352-56;
Macaluso, 2005 WL 563169, at *8; Amorgianos, 303 F.3d at 269; see also Fed. R. Evid. 702(b).
In sum, although Mr. Scherer is not qualified to provide an expert opinion on any of these
subjects, this Court should — at minimum — strike those portions of testimony that are premised
on factual or legal error.
V.

MR. SCHERER’S DISCUSSION OF APPLE’S PRIOR LAWSUITS IS
IRRELEVANT AND PREJUDICIAL AND THEREFORE MUST BE EXCLUDED.
In Section 15 of his Report, Mr. Scherer lists prior trademark conflicts involving Apple

and asserts that such conflicts demonstrate “either shoddy clearance procedures, corporate
arrogance or a blatant disregard for the trademark rights of others” on the part of Apple.
(Scherer Rep. at 43-44.) Any information about other trademarks or Apple’s experience with
such marks is completely irrelevant, however, because this case is about one mark: iBooks. See
Playboy Enters., Inc. v. Chuckleberry Publ’g., Inc., 687 F.2d 563, 568-69 (2d Cir. 1982) (in suit
against user of PLAYMEN for infringement of the PLAYBOY mark, the court held that
Playboy's "settlement dealings" related to PLAYGIRL were inadmissible).
Section 15 of Mr. Scherer’s Report also is unduly prejudicial to Apple because, although
Mr. Scherer’s statements are baseless, in order to defend against them, Apple would have to
produce and present evidence related to these other trademarks and essentially conduct minitrials to prove its position in each dispute. Bd. of Trs. of AFTRA Ret. Fund v. JP Morgan Chase
Bank, N.A., 860 F. Supp. 2d 251, 254 (S.D.N.Y. 2012) (“[C]ourts generally exclude evidence of
other related lawsuits.”) (citing Foster v. Berwind Corp., No. 90-Civ. 0857, 1991 WL 83090, at
22

*1 (E.D. Pa. May 14, 1991) (excluding evidence of other lawsuits because “the complaints in
these other actions are just that: allegations” and “are dispositive of nothing and would confuse
the complex issues already present”)). This would be burdensome, expensive, and time
consuming, and confusing for the jury. See Park W. Radiology v. CareCore Nat’l. LLC, 675 F.
Supp. 2d 314, 324 (S.D.N.Y. 2009) (excluding evidence of other lawsuits involving the
defendants because it was irrelevant, prejudicial, would confuse the jury and waste time). For
these reasons, Mr. Scherer’s opinions about other marks should be excluded.
Furthermore, Mr. Scherer’s opinion in Section 15 of his Report also ignores the Court’s
prior discovery orders regarding relevant evidence. Plaintiffs previously sought discovery
regarding trademarks that are unrelated to this case and tried to make arguments similar to those
made in Mr. Scherer’s Report during discovery. Such arguments were repeatedly rejected by
Judge Batts, Judge Forrest, and Judge Cote. (See Barry Dec., Ex. 10 (Endorsed Letter, Aug. 1,
2012); Id., Ex. 11 (Judge Forrest Motion Denial, Jan. 9, 2012).) Similarly, the Court granted the
parties’ request to adjourn the time for Apple to rebut Plaintiffs’ damages expert opinion because
that expert, like Mr. Scherer, relied on information about Apple’s other trademarks. (See Barry
Dec., Ex. 12 (Endorsed Letter, Oct. 1, 2012.).) Yet, Plaintiffs improperly are seeking, through
Mr. Scherer’s Report, to circumvent the Court’s prior rulings by again attempting to introduce
this evidence through an expert. Because the Court has ruled that information about Apple’s
other marks is not discoverable, Section 15 must be stricken from Mr. Scherer’s Expert Report
and he should be precluded from providing any testimony or evidence regarding such matters
even if he was somehow found qualified to provide such opinions. See Fed. R. Evid. 401.

23

VI.

MR. SCHERER’S OPINION ON APPLE’S PURPORTED BAD FAITH WAS NOT
DISCLOSED IN HIS REPORTS AND THUS SHOULD BE EXCLUDED.
In response to inappropriate leading questioning from Plaintiffs’ attorney at his

deposition, Mr. Scherer opined that Apple had acted in bad faith by commencing use of the
iBooks mark after receiving an e-mail inquiry from Mr. Colby in January 2010. (Barry Dec., Ex.
3 (Scherer Dep. 332:23-333:10.).) 8 This opinion is improper for at least two reasons. First, it is
nowhere to be found in either Mr. Scherer’s Report or Rebuttal Report. Under Federal Rule of
Civil Procedure 26(a)(2)(B)(i)-(iv), expert opinions must be disclosed in a written report that
contains “a complete statement of all opinions the witness will express and the basis and reasons
for them.” Second, “[a]ny expert testimony that is not properly supported and disclosed in a
report is presumptively inadmissible unless . . . substantially justified or harmless.” R.F.M.A.S.,
748 F. Supp. 2d at 254 (citing Fed. R. Civ. P. 37(c)(1)). Here, the delay was neither justified nor
harmless. The opinion was deliberately solicited by Plaintiffs’ counsel through an improper redirect examination at the end of Mr. Scherer’s deposition in an obvious attempt to surprise Apple
and avoid complying with the requirements of Rule 26. Mr. Scherer did not offer this opinion at
any time during the direct examination by Apple, despite having been asked to state all of the
opinions he intended to offer in this case. (Barry Dec., Ex. 3 (Scherer Dep. 193:24-194:12;
258:24-259:3.).) The questioning by Plaintiffs’ counsel also improperly went outside the scope
of Apple’s direct exam. (Id. 332:23-333:8.) It was only through this improper re-direct — and
the use of leading questions — that this new opinion was ever “disclosed.” This failure to
disclose significantly prejudiced Apple, which was prevented both from preparing to examine
Mr. Scherer about that opinion or submitting its own expert report rebutting that opinion.
8

In any case, Mr. Scherer is factually incorrect as Plaintiffs did not ask Apple to cease and desist until May 2010 —
a month after Apple launched its iBooks app. (See SUF ¶¶ 239-245.)

24

This opinion also should be excluded on the independent grounds that Mr. Scherer’s
conclusion is not premised on any asserted expertise, and because it addresses an ultimate issue
that is not properly the subject of expert testimony. See Kumho, 526 U.S. at 157; U.S. Info. Sys.,
313 F. Supp. 2d at 240. Indeed, in presenting this opinion, Mr. Scherer is acting as nothing more
than another legal advocate for Plaintiffs, not as an independent “expert” designed to assist the
trier of fact. See Malletier, 525 F. Supp. 2d at 654.
CONCLUSION
Based on the foregoing, Apple respectfully requests that all testimony, argument or
evidence relating to the opinions and Mr. Scherer’s reports be excluded.
Date: December 21, 2012

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

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

ATTORNEYS FOR DEFENDANT

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