2019-08-13 Appellants Brief Filed

Case 19-440, Document 56, 08/13/2019, 2631498, Page1 of 76
No. 19-440
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
BROKER GENIUS INC.,
Plaintiff-Counter-Defendant - Appellee,
v.
DREW GAINOR, SEAT SCOUTS LLC,
Defendants-Counter-Claimants - Appellants,
and
GUINIO VOLPONE, EVENT TICKET SALES LLC, RAY VOLPONE, 4311 N
161st St Omaha, NE 68116, STUART GAINOR, 69 Yates Rd Manalapan, NJ
07726, VOLPONE SOFTWARE LLC, 7202 Giles Road Suite 4 #330 La Vista,
NE 68128, GAINOR SOFTWARE LLC, 5706 Belmont Valley Ct. Raleigh, NC
27602,
Defendants.
On Appeal from the United States District Court

for the Southern District of New York
BRIEF FOR APPELLANTS

HINCKLEY & HEISENBERG LLP
Christoph C. Heisenberg
880 Third Avenue, Suite 15
New York, NY 10022
Phone: (212) 845-9094
Counsel for Appellants
I. FED. R. APP. P. 26.1 STATEMENT

Appellant Seat Scouts LLC does not have any parent corporations nor does any
publicly held corporation own 10% or more of its membership interests or have a
financial interest in the outcome.
i
II. TABLE OF CONTENTS

I. FED. R. APP. P. 26.1 STATEMENT ................................................................. i
II. TABLE OF CONTENTS ................................................................................... ii
III. TABLE OF AUTHORITIES ............................................................................ vi
IV. JURISDICTIONAL STATEMENT ................................................................. xi
V. STATEMENT OF ISSUES PRESENTED FOR REVIEW ............................ xii
VI. PRELIMINARY STATEMENT.........................................................................1
VII. STATEMENT OF THE CASE ...........................................................................5
A. Ticket Management Technologies .............................................................5
B. Plaintiff’s Claimed Proprietary Elements ..................................................6
1. Event Menu ..........................................................................................7
2. Inventory List Widget ..........................................................................7
3. Zones/Sections/Rows Widget ..............................................................7
4. Price by Comps Widget ........................................................................8
a) Groups Widget ...................................................................................8
b) Seasons Widget ..................................................................................9
5. Cycles ....................................................................................................9
C. Plaintiff’s Public Disclosures Of Autopricing ...........................................9
1. Disclosures In Its Unsuccessful Patent Application .............................9
2. Plaintiff’s Marketing and Demonstrations ..........................................11
D. Ticket Products In The Market .................................................................12

ii
1. The StageFront Autopricer ..................................................................12
2. Seat Metrics Autopricer ......................................................................14
E. Gainor’s 2015 Event Watcher Autopricer Design ...................................14
F. Gainor’s Use Of AutoPricer .....................................................................15
1. Plaintiff’s Terms of Use ......................................................................16
G. Seat Scouts’ Command Center .................................................................17
H. Plaintiff’s Litigation Against Competitors ...............................................18
I. Seat Scouts Is Sued, And After The Injunction, Converts Its Autopricer
Into A Non-Autopricer .............................................................................19
J. Plaintiff’s Modified Claim Based On Limited Features ..........................21
K. The Trial ...................................................................................................23
1. The Court’s Prejudicial Questioning Of Defendants ..........................23
2. The Court’s Rebukes Of Defendants’ Expert .....................................27
1. The Court’s Actions On Plaintiff’s Expert..........................................28
2. The Court’s Preclusion Of Evidence Rebutting Plaintiff’s Laptop

Argument .............................................................................................30
3. The Verdict And Permanent Injunction ..............................................31
VIII. SUMMARY OF ARGUMENT ...............................................................31
IX. ARGUMENT ...........................................................................................32
A. PLAINTIFF’S CLAIMS FAIL BECAUSE AUTOPRICER IS NOT

CONFIDENTIAL OR PROPRIETARY..................................................32
1. The Court Correctly Held That Disclosing AutoPricer To Customers

Precluded It Being Confidential ..........................................................32
iii
2. Plaintiff’s Patent Disclosures Further Precluded A Proprietary Interest

.............................................................................................................36
3. Plaintiff’s Marketing Further Precluded A Proprietary Interest .........37
4. The In-Court Demonstrations Put AutoPricer In The Public Domain

As A Matter of Law.............................................................................38
B. THE COURT APPLIED AN INCORRECT CONTRACT

INTERPRETATION ................................................................................39
1. The Court Correctly Held That “Derivative Works” References The

Copyright Exclusive Rights ................................................................40
2. The Court’s Instruction, Which Substituted “Derive” In Place Of

“Derivative Works,” Was Erroneous ..................................................41
3. At a Minimum, The Court’s Prior Reasonable Interpretation

Precluded A Finding Of Unambiguity ................................................43
4. The Interpretation Conflicts With New York’s Law On Restrictive

Covenants ............................................................................................43
C. THE MISAPPROPRIATION CLAIM FAILS AS A MATTER OF LAW

..................................................................................................................44
1. The Misappropriation Claim Is Preempted .........................................44
2. The Court’s Refusal To Consider Preemption Was Contrary To Every

Circuit Court To Address The Issue....................................................47
3. The Court Erred Permitting Plaintiff To Present An Unpleaded

Misappropriation Theory.....................................................................49
D. THE COURT’S CONDUCT DEPRIVED DEFENDANTS OF A FAIR

TRIAL ......................................................................................................50
1. The Court Impermissibly Conveyed Its Own View Of Witness

Credibility And Evidence ....................................................................50
2. The Court’s Prejudicial Questioning Of Defendants ..........................51
E. THE COURT’S CONTEMPT FINDING WAS ERRONEOUS .............53
iv
1. The Proof Of Non-Compliance Was Not Clear and Convincing .......54
F. THE COURT’S ERRONEOUS EVIDENTIARY RULINGS ................56
1. The Failure To Exclude The Non-Final Contempt Ruling .................56
2. The Preclusion Of Evidence On The Patent Rejection .......................57
G. THE DAMAGE AWARD LACKED ANY BASIS ................................57
1. Plaintiff Assumed, Rather Than Established, Causation ....................57
2. The Inconsistent Damage Awards.......................................................59
H. THE PERMANENT INJUNCTION WAS ERRONEOUS .....................60
1. Plaintiff Was Compensated With An Award Of Damages .................60
2. Public Information Cannot Be Enjoined .............................................60
3. The Permanent Injunction Fails To Identify The Violation................61
X. CONCLUSION .................................................................................................61
v
III. TABLE OF AUTHORITIES
Cases
Affiliated Enterprises v. Gruber, 86 F. 2d 958 (1st Cir. 1936) ................................32
Allied Chem. Corp. v. Mackay, 695 F.2d 854 (5th Cir. 1983).................................48
Am. Sci. & Eng'g, Inc. v. United States, 8 Cl. Ct. 129 (1985) ...................................2
Anderson v. Great Lakes Dredge & Dock Co., 509 F.2d 1119 (2d Cir. 1974) .......51
Bancorp Servs. v. Am. Gen. Life Ins. Co.,

2016 WL 4916969 (S.D.N.Y. Feb. 11, 2016)......................................................47
Barclays Capital Inc. v. Theflyonthewall.com, Inc., 650 F.3d 876 (2d Cir. 2011) .45
Big Vision Private Ltd. v. E.I. DuPont De Nemours & Co.,

1 F. Supp. 3d 224 (S.D.N.Y. 2014) .....................................................................36
BondPro Corp. v. Siemens Power Generation, Inc., 463 F.3d 702 (7th Cir. 2006) 37
Briarpatch Ltd. v. Phoenix Pictures, Inc., 373 F.3d 296 (2d Cir. 2004) .................45
Broker Genius Inc. v. Gainor, 756 F. App'x 81, 81–82 (2d Cir. 2019) .................. xii
Broker Genius, Inc. v. Seat Scouts, 2018 WL 2214708 (S.D.N.Y. May 14, 2018) 49
Broker Genius, Inc. v. Volpone, 313 F.Supp.3d 484 (S.D.N.Y. 2018)......................7
Broker Genius, Inc. v. Zalta, 280 F.Supp.3d 495 (S.D.N.Y. 2017) ............... 1, 3, 40
Carson Optical, Inc. v. Prym Consumer USA, Inc.,

11 F.Supp.3d 317 (E.D.N.Y. 2014) .....................................................................45
Compco Corp. v. Day–Brite Lighting, Inc., 376 U.S. 234 (1964) ...........................45
Computer Assocs. Int'l v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992) .........................41
Conmar Prods. Corp. v. Universal Slide Fastener Co.,

172 F.2d 150 (2d Cir. 1949).................................................................................61
Crye Precision LLC v. Duro Textiles, LLC,

2016 WL 1629343 (S.D.N.Y. Apr. 22, 2016) .....................................................44
vi
DAR & Assoc., Inc. v. Uniforce Serv., Inc., 37 F.Supp.2d 192 (E.D.N.Y. 1999) ...44
Demetriades v. Kaufmann, 698 F.Supp. 521 (S.D.N.Y. 1988) ........................ 36, 50
Doral Produce Corp. v. Paul Steinberg Assoc., Inc., 347 F.3d 36 (2d Cir. 2003) ..48
Drywall Tapers, Local 1974 v. Local 530, Operative Plasterers Int'l Ass'n,
889 F.2d 389 (2d Cir. 1989).................................................................................53
E.E.O.C. v. Local 638, 81 F.3d 1162 (2d Cir. 1996) ...............................................53
eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) ......................................60
eCommission Sols., LLC v. CTS Holdings Inc.,

2019 WL 2261457 (2d Cir. May 28, 2019) .........................................................58
Expertise, Inc. v. Aetna Fin. Co., 810 F.2d 968 (10th Cir. 1987)............................48
Fewer v. GFI Group, Inc., 2 N.Y.S.3d 428 (1st Dep't 2015) ..................................35
Friedman & Friedman, Ltd. v. Tim McCandless, Inc.,

606 F.3d 494 (8th Cir. 2010) ...............................................................................48
Frito–Lay, Inc. v. Bachman Co., 1987 WL 11555 (S.D.N.Y. May 19, 1987) ........49
Geisel v. Poynter Prod. Inc., 283 F. Supp. 261 (S.D.N.Y. 1968) ...........................54
Glaxo Inc. v. Novopharm Ltd., 931 F.Supp. 1280 (E.D.N.C. 1996) .......................39
Hargett v. Valley Fed. Sav. Bank, 60 F.3d 754 (11th Cir. 1995)..............................48
IDX Sys. Corp. v. Epic Sys. Corp., 285 F.3d 581 (7th Cir. 2002) ...........................38
In re Document Techs. Litig., 275 F.Supp.3d 454 (S.D.N.Y. 2017) .......................44
Inverness Corp. v. Whitehall Labs., 710 F. Supp. 473 (S.D.N.Y. 1989) ................54
J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc.,

534 U.S. 124 (2001) .............................................................................................37
LaserDynamics, Inc. v. Quanta Computer, 694 F.3d 51 (Fed. Cir. 2012) ..............58
Lehman v. Dow Jones & Co., Inc., 783 F. 2d 285 (2d Cir.1986) ............................32
Littlejohn v. Bic Corp., 851 F.2d 673 (3d Cir. 1988) ....................................... 39, 60
vii
Management Investors v. United Mine Workers, 610 F.2d 384 (6th Cir.1979) ......48
Mathias v. Jacobs, 167 F.Supp.2d 606 (S.D.N.Y. 2001) ........................................44
McCarthy v. Am. Int'l Group, Inc., 283 F.3d 121 (2d Cir. 2002) ............................41
Mobile Med. Int'l Corp. v. United States, 95 Fed. Cl. 706 (2010) ..........................35
Monex Financial Servs. v. Nova Information Systems,

657 F.Supp.2d 447 (S.D.N.Y. 2009) ...................................................................49
National Polymer Products v. Borg-Warner Corp., 641 F.2d 418 (6th Cir.1981) .39
Nova Chemicals, Inc. v. Sekisui Plastics Co., 579 F.3d 319 (3d Cir. 2009) ...........33
Paramedics Electromedicina Comercial, Ltd v. GE Med. Sys. Info. Techs., Inc.,

369 F.3d 645 (2d Cir. 2004).................................................................................53
Park W. Radiology v. CareCore Nat. LLC, 675 F. Supp. 2d 314 (S.D.N.Y. 2009) 57
Peregrine Myanmar Ltd. v. Segal, 89 F.3d 41 (2d Cir. 1996) .................................61
Perez v. Danbury Hosp., 347 F.3d 419 (2d Cir. 2003) ............................................53
Procter & Gamble Co. v. Colgate-Palmolive Co.,

1998 WL 788802 (S.D.N.Y. Nov. 9, 1998) .........................................................49
Pulliam v. Tallapoosa County Jail, 185 F.3d 1182 (11th Cir. 1999) ......................48
RCA Trademark Mgmt. S.A.S. v. VOXX Int'l Corp.,

2015 WL 5008762 (S.D.N.Y. Aug. 24, 2015) .....................................................47
Reed Constr. Data Inc. v McGraw-Hill Companies,

49 F. Supp.3d 385 (S.D.N.Y. 2014) ....................................................................32
Rivas v. Brattesani, 94 F.3d 802 (2nd Cir. 1996) ....................................................52
Rockwell Int'l Corp. v. United States, 549 U.S. 457 (2007) ....................................47
Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) ...............................................33
S.C. Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232 (2d Cir. 2001) ...................53
Saks v. Franklin Covey Co., 316 F.3d 337 (2d Cir. 2003).......................................49
viii
Santa Maria v. Metro-N. Commuter R.R., 81 F.3d 265 (2d Cir. 1996) ...................51
Sayers v. Rochester Tel. Corp. Supplemental Mgmt. Pension Plan,

7 F.3d 1091 (2d Cir. 1993)...................................................................................39
ScentSational Techs. v. PepsiCo, Inc.,

2017 WL 4403308 (S.D.N.Y. Oct. 2, 2017) ........................................................46
Schmidt v. Lessard, 414 U.S. 473 (1974) ................................................................53
Schroeder v Pinterest Inc., 17 N.Y.S.3d 678 (1st Dep’t 2015) ........................ 35, 50
SmithKline Beecham Consumer Healthcare v. Watson Pharmaceuticals,

211 F.3d 21 (2d Cir. 2000)...................................................................................40
Sommer v. Fed. Signal Corp., 79 N.Y.2d 540 (1992) .............................................46
Structured Capital Solutions, LLC v Commerzbank AG,

177 F.Supp.3d 816 (S.D.N.Y. 2016) ...................................................................33
Tesla Wall Systems, LLC v. Related Companies, LP,

2018 WL 2225002 (S.D.N.Y. 2018) ....................................................................35
Thoroughbred Software Int'l, Inc. v. Dice Corp., 488 F.3d 352 (6th Cir. 2007).....58
Timely Products Corporation v. Arron, 523 F. 2d 288 (2d Cir. 1975)....................61
United States v. Filani, 74 F.3d 378 (2d Cir. 1996) ......................................... 51, 52
United States v. Williams, 553 U.S. 285 (2008) ......................................................40
Valley Juice Ltd. v. Evian Waters Of France Inc., 87 F.3d 604 (2d Cir. 1996) ......41
Vaughn v. King, 167 F.3d 347 (7th Cir. 1999) ........................................................48
Victorinox AG v. B&F Sys., Inc., 709 F. App'x 44 (2d Cir.2017) ...........................61
Waldman Publishing Corp. v. Landoll, Inc., 43 F.3d 775 (2d Cir. 1994) ...............61
Walk–In Medical Centers, Inc. v. Breuer Capital Corp.,

818 F.2d 260 (2d Cir. 1987).................................................................................43
Warehouse Sols., Inc. v. Integrated Logistics, LLC,

2014 WL 12647878 (N.D. Ga. July 7, 2014) ......................................................38
ix
Woolcott v. Baratta, 2014 WL 1814130 (E.D.N.Y. May 7, 2014) .........................46
Statutes
17 U.S.C. §301(a) ....................................................................................................44
28 U.S.C. §1291 ...................................................................................................... xii
28 U.S.C. §1332 ...................................................................................................... xii
Other Authorities
C. Montville, Reforming The Law Of Proprietary Information, 56 DUKE L.J. 1159
(2007) ...................................................................................................................34
Callmann on Unfair Comp., Tr. & Mono. § 14:30 (4th Ed.) ...................................60
Restatement of Employment Law (Third) (Draft), §6.01 (2015) .............................34
Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 1:2 (4th

rev. ed., 2002) ......................................................................................................37
Rules
Fed.R.Civ.P. 16 ........................................................................................................47
Fed.R.Civ.P. 50(b) .................................................................................................. xii
Fed.R.Civ.P. 65(d) ...................................................................................................53
FRAP 4(a)(4)........................................................................................................... xii
x
IV. JURISDICTIONAL STATEMENT

Appellants appeal from the judgment and permanent injunction entered by
the District Court for the Southern District of New York (Sidney Stein, J.). 1 The
Court had subject matter jurisdiction. 28 U.S.C. §1332.
This Court has jurisdiction of this appeal pursuant to 28 U.S.C. §1291. The
appeal is timely, under F.R.A.P. 4(a)(4)(A). The Judgment was entered January 22,
2019. (Doc. 353 (SA2)). The permanent injunction was entered February 7, 2019.
(Doc. 373 (SA3-5)). On February 19, 2019, Appellants timely moved, pursuant to
Rules 50(b) for judgment, and Rule 59 for a new trial. (Doc. 388). The appeal was
filed February 20, 2019 (Doc. 391 (SA1)), and pursuant to 4(a)(4)(b)(i), stayed
until post-trial motions were resolved July 10, 2019. (Broker Genius Inc. v. Seat
Scouts LLC, 2019 WL 3000963 (S.D.N.Y. 2019)(“JNOV”).
1
Appellants previously appealed from the entry of the preliminary injunction and the
Court’s findings of contempt. The panel did not resolve the appeal, which became moot. Broker
Genius Inc. v. Gainor, 756 F.App'x 81, 81–82 (2d Cir.2019).
xi
V. STATEMENT OF ISSUES PRESENTED FOR REVIEW

1. Can a party have a proprietary interest in a product that is public and
is not confidential?
2. Did the Court err by interpreting the contract as a matter of law,
contrary to its own prior reasonable interpretation?
3. Is Plaintiff’s misappropriation claim preempted?
4. Did the Court deprive Defendants of a fair trial?
a. Did the Court err in allowing use of the non-final contempt at
trial?
5. Did the Court err in permitting Plaintiff to present a damage theory
connected to public domain features, not any proprietary features?
6. Is the permanent injunction overly broad by enjoining all conduct,
including elements in the public domain?
xii
VI. PRELIMINARY STATEMENT

This appeal arises from the third permanent injunction entered by Judge
Stein against start-ups that competed against Broker Genius’ product, AutoPricer.
The products are web-based programs that allow ticket brokers automatically to
reprice their ticket offerings based on secondary market prices, using a four-menu
sequence for selecting comparable tickets and creating pricing rules.
The process and method for autopricing is not novel, and therefore not
patented. Plaintiff originally claimed that AutoPricer was a trade secret. In the first
action, the Court held it is not confidential because Broker Genius’ license, called
Terms of Use (“ToU”), “simply does not contain a confidentiality provision.”
Broker Genius, Inc. v. Zalta, 280 F.Supp.3d 495, 522 (S.D.N.Y. 2017). In
addition, the components, process and features are detailed in its rejected 2014
patent application. AutoPricer’s components and features also were demonstrated
to the public. Plaintiff accepted the Court’s holding, dismissed its trade secret
claim, and demonstrated AutoPricer in open court.
Most fundamentally, this appeal challenges the Court’s conclusion that
AutoPricer, though in the public domain, remained proprietary, as required by
Plaintiff’s contract and misappropriation claims. That is directly contrary to
bedrock intellectual property law:
Any invention, when it is disclosed to the public without protection

of an issued patent, becomes public property, and the fact that it may
1
have been made popular by advertising and expenditure of effort,

time and money by the originator, does not alter this situation.
Am. Sci. & Eng'g, Inc. v. United States, 8 Cl.Ct. 129, 143 (1985). A
misappropriation claim expressly requires confidential material. The same concept
applies with respect to contractual restraints, which this Court has confirmed can
be enforced only to protect a proprietary interest. The District Court’s ruling that
grants exclusivity over an unpatented, non-confidential product is incorrect and
causes anticompetitive harm to consumers. Seat Scouts’ product, Command
Center, surpassed AutoPricer, because it is better: it did not crash frequently like
AutoPricer, offered 75 new features, and was not priced at a monopolistic price.
Broker Genius’ Board acknowledged that “we are offering an inferior value
proposition to our customers. Our price is up to 10X more and lacks some features
brokers perceive as valuable.” (A354). The Court’s permanent injunctions in all
three cases provides Plaintiff the exclusivity it was unable to get by patent, that is
exactly the undesirable anticompetitive result that public policy bars.
The Court’s errors were not confined to this fundament intellectual property
law error. The ToU advises that AutoPricer’s User Interface (“UI”) was
copyrighted, and requires users to agree not to “[r]eproduce, modify, display,
publicly perform, distribute or create derivative works of the Site or Apps or the
Content.” In the first action, the Court recognized that this restriction “essentially
tracks the language of the Copyright Act of 1976,” and “merely describe the
2
exclusive rights of a copyright owner…” Zalta, 280 F.Supp.3d at 522. The Court
reversed itself in this action, and held, as a matter of law, that its prior
interpretation of “derivative works” was unreasonable. Instead, the Court
determined the restriction was not the copyright rights held by Plaintiff, but
extends to unpatented or public concepts and ideas that Plaintiff does not own, and
instructed the jury accordingly. The prior interpretation was correct, or, at a
minimum, reasonable. When two reasonable interpretations exist, the provision
should have been interpreted for the consumer, not the draftsman.
Permitting the misappropriation claim was similarly incorrect. When a
misappropriation claim is based, as here, on an alleged “copycat” product, the
claim is preempted. Despite Plaintiff never disputing the defense’s availability, the
Court refused to consider it. That conclusion is contrary to every Circuit court to
address the issue.
****
Overlapping the Court’s incorrect legal interpretations were its rulings and
trial actions that deprived Defendants of a fair trial.
Foremost were the Court’s multiple interruptions during witness
examinations to express its views of the evidence and the witnesses. The Court had
formed its own unfavorable opinions of Defendants, but rather than let the jury
form its own conclusions, the Court took the lead and conducted its own
3
examination, which it candidly acknowledged was done to express to the jury its
own unflattering views. The Court also rebuked Defendants’ expert on multiple
occasions, suggesting her paid advocacy, while shielding Plaintiff’s expert from
questions about his compensation, and precluding standard questions on his lack of
investigation.
The Court reinforced this by permitting Plaintiff to utilize the non-final
contempt ruling at trial. The contempt finding was erroneous, irrelevant and not
even a final order, but the Court permitted Plaintiff to present it to the jury as a
conclusive judicial determination, which counsel did: “[t]hat is Judge Stein's
acknowledgement under the law of Seat Scouts' bad faith.” (Closing 1534 (A281)).
This left Defendants in the untenable position of having to litigate not only against
Plaintiff, but also the presiding Court.
A final fundamental error was the inconsistency in defining Plaintiff’s
proprietary claim. Plaintiff identified it as the four menu sequence used to create
pricing rules, the group and season functions, and cycle times. Plaintiff
acknowledged the public demonstration of the four menu pricing process, and its
cycle times were public. Even under the Court’s erroneous conception of
“proprietary,” these items were not proprietary. Against those admissions, the
Court credited testimony that other unspecified features remained proprietary
because they could be learned only after “hours” of use. However, those nuances
4
were not elements of its claim. Plaintiff’s claim and its damage theory were based
expressly on the disclosed process, not any nuances, meaning there was a failure to
connect damages to the claim. This inability to define what remains is shown in the
vague injunction that seemingly encompasses the acknowledged public items and
the items already known to Gainor.
The jury clearly understood and credited the Court’s unfavorable view of
Defendants, awarding damages five times in excess of Plaintiff’s calculated losses.
On an individual basis, the verdict was unjust to Defendants. But it creates a
broader danger to consumers, disrupting the previously well-developed intellectual
property scheme in which a monopoly over an idea can be gained only by keeping
it confidential or by patent. It provides a novel path to every company to gain a
monopoly over public information where it is unable to do so by the proper means
of a patent.
VII. STATEMENT OF THE CASE
A. Ticket Management Technologies
Ticket management programs operate between the user’s separate ticket
management program (called the Point of Sale, or POS) and secondary market
programs (e.g., StubHub) that provide current prices for other available tickets.
Each start with an “Event Menu” that permits the user to locate upcoming events
for which it has inventory. Once an event is located, the user can display its
5
inventory for that event in an Inventory menu. The next step permits the user to
see the corresponding secondary market for those events. By clicking on a
particular listing, the program pulls data from StubHub showing available
secondary market tickets. The user can refine those comparables (or “comps”)
using sequential filters to narrow by location (the zones/section/row filters) or
other relevant ticket identifiers (the number of tickets in that listing (“splits”), or
method of ticket delivery). Such a program is commonly known as a “marketplace
viewer.”
Other iterations add one further step, allowing the user to create a price
relationship to the chosen comps, called a pricing rule. For example, the broker
may wish to undercut the lowest comp by 10 cents, and the pricing widget
automatically shows that result. If the user likes the calculated price, it can accept
it and send (“push”) it to the POS to reprice its own ticket. This is a manual pricer.
In a final iteration, a so-called “autopricer,” the price change is made
automatically on a fixed schedule that updates and sends the new price to the POS
without user involvement.
B. Plaintiff’s Claimed Proprietary Elements
Broker Genius was formed in 2012 by Sam Sherman, a novice ticket broker.
Using other ticket management programs as a model, he had an offshore engineer
quickly code the initial version of AutoPricer in 2013. The Court described the
6
autopricing process in its preliminary injunction decision. Broker Genius, Inc. v.
Volpone, 313 F.Supp.3d 484, 493 (S.D.N.Y. 2018). For trial, Plaintiff specified its
claim as follows:
1. Event Menu (A411)
• Displays data from external POS and StubHub
• Displaying event for which the user has inventory by name, day of week,
date, time, venue, # of tickets in user’s POS;
• Chronological order by default
• Searchable by event or venue name or “at the floor.”
Clicking on an event causes Inventory List Widget to load.
2. Inventory List Widget (A412)
• Display POS data, ticket pack size, Section, Row, Floor, Cost
• Menu allows user to sort, directly edit price, select a single listing, select
multiple listings.
• Toggle broadcast status.
Selecting a single listing loads Zones/Sections/Rows Widget.
3. Zones/Sections/Rows Widget (A413)

• Select comparable zones, sections, and rows
• All zones, sections, and rows in the venue are available for selection
regardless of inventory available
• Alternative selection method using interactive map
• Section and row lists include information from StubHub
• Displays cheapest available price for that row based on comparisons to 2-

packs
7
• Cheapest available price excludes user’s own inventory
Selected comps provide basis for Price by Comps widget.
4. Price by Comps Widget (A414)

• Create, apply and save a new or revised pricing rule
• Builds on the selected comps
• Additional criteria include “splits” and delivery type.
• Pricing rule can be expressed in terms of dollars or percent.
AutoPricer’s UI, depicted below, reveals the four component widgets, their
characteristics and the process:
(A450). In addition to these standard pricing components, Plaintiff claimed two
ways to create rules for similar tickets:
a) Groups Widget (A415)

• Create a Group pricing rule by defining relationships between multiple
listings.
8
• Set anchor/lead and group order/ranking via drag-and-drop.
• Specify price difference (“spaceout” or “stagger”) based on dollars or

percentage.
• Prices are calculated following the rank order.
• Specify which listings (based on rank) will be broadcast and when
Selecting multiple listings in the Listings Widget brings to Groups Widget.

b) Seasons Widget (A416)
• Price one ticket pack across multiple events.
• Pricing rules are applied to an entire season of tickets.
• Editing season listings inline
A price rule from the Price By Comps Widget is used to initiate Season Pricing.
5. Cycles (A419)
Prioritize certain updates.
C. Plaintiff’s Public Disclosures Of Autopricing
1. Disclosures In Its Unsuccessful Patent Application

In 2013, Broker Genius filed a patent application (A304) that described
these components:
“widget” Patent (A314-315)
Inventory List [0053] The Auto-Pricer instructs the system to pull

all of a seller’s inventory data from either an
exchange server’s back end (database) or from the
seller’s POS. The system can then be configured to
filter the listings, for example, by date range and by
artist/team. A user’s imported listings include the
9
event information such as artist, date, Zone/section,

row, seats, and quantity for each event.
Events List [0053] When a user selects a listing, the user is able
to choose which tickets or type of tickets to price
against, as described above. The system receives a
selection of either all delivery methods or only the
specific delivery methods the user wants to beat (e.g.,
instant download only). The system then receives a
selection of the ticket split (e.g., if the user has a four-
pack, the user can choose to be the cheapest two-pack
or the cheapest four-pack).
Zones/Sections/Rows [0053] The Auto-Pricer application then configures

Filters the system to pull all the Zone information based on
the user criteria and displays current lowest price in
each area. The user can select the Zone(s) the user
wants to price against and Auto-Pricer application
moves the listings to those sections, which also
show the lowest pricing based on the user’s preset
criteria. The user can either select all of the sections
or specific sections to be accounted for. Finally,
after choosing the sections, the program can display
all the rows with the selected criteria. The user
selects the row range to be priced against.
Pricing Rules [0054] At this point, the user can determine whether
to be the cheapest, second-cheapest, or third-cheapest
in that criteria, for example. The user can then choose
whether to be lower or higher than the lowest price
by an amount (e.g., $0.03) or percentage. The user
can then select a price floor, which can indicate the
point at which the Auto-Pricer application will
discontinue automatically adjusting ticket prices,…
Sherman agreed that the patent application shows these functions, starting
with the event menu (Sherman 164:13-15 (A116)), the inventory menu (id.,
10
165:11-20 (A117)), which then populates data from the secondary market,
displayed by zone/section/row (Id., 165-21-166:14). It described the pricing
widget. (Id., 166:25-167:3(A118)). It also disclosed the season and group features
(A320).
Groups [0100] In some embodiments, the systems and

methods described herein can further include a
Group-Auto-Pricer application. …Once the tickets
are listed, the group of ticket listings can be auto-
priced to move up or down following the lowest
ranked listing as the basis.
Seasons [0101] In some embodiments, using the season
pricer application, a user can apply the auto-pricer
and/or group-auto-pricer to multiple games…..
(Sherman 167:12-15 (A119)), The patent has been rejected, in part for its
obviousness and lack of novelty.
2. Plaintiff’s Marketing and Demonstrations

Plaintiff demonstrated each of the above items during hundreds of marketing
presentations to potential customers that lasted 10 to 15 minutes. Salesmen
navigated the public through the UI’s process for autopricing, and “would have the
user go through and actually create a rule using [the] system,” (Sherman 133:16-18
(A106), 261 (A137)):
Q. So the steps of the process for creating the rule, going through
each of the particular components that we saw in the opening
[statements], the event list, the inventory list, interacting with the
zone, section, row picking of comparables and the creation of a rule
11
is something that you disclosed freely to any potential users without

any restrictions on them to maintain that as confidential, is that right?
A. That is correct.
(Sherman 134:14-21 (A107)).
Q. In the course of that 10 to 15 [minutes], you actually walked them

through the user interface of actually what we just said, click on the
event, populates the inventory list, pick your comps by zones,
sections, and rows, and then apply a pricing rule on that, is that
correct?
A. Yes. A salesperson would do that during the course of a demo.
Id., 305:19-25 (A140); 133:19-134 (A106). Plaintiff also discussed the group
functionality for creating a pricing rule for an entire group of tickets. Id. at 135:13-
21 (A108); 139 (A109).
The demonstrations also disclosed cycle times (Id. 143-144 (A113-114)),
and disputing his own expert – admitted they are not “confidential information.”
(Sherman 142:18 (A112)). The public or even potential competitors are not bound
by any prohibition or restriction, and could freely record any part of the process for
any purpose.
D. Ticket Products In The Market
1. The StageFront Autopricer

StageFront is an autopricer that Gainor used prior to AutoPricer. Because of
his technical expertise, StageFront asked Gainor to send marked screen shots if he
encountered issues. As a result, there were multiple images of its UI. (A329-340)
12
(A329). Plaintiff acknowledged “a screenshot of the StageFront product appears
similar [to AutoPricer ].” (Tr. 66:3-5 (A98)). It contained the same four
components: the event menu on the left, the inventory menu across the top, the
sequential zone/section/row filters at the bottom right, and the pricing menu to the
bottom left. Not only are the components similar, but users like Erik Pancheri (and
Gainor) testified that its sequence and process was very similar. (Pancheri 1398
(A259)). The user begins by selecting upcoming events from the Event List,
searchable by characteristics such as teams or venues. (Tr. 1400 (A261)). Clicking
on an event will display the user’s own ticket inventory for that event. (id.)
Clicking on those ticket listings displays the comparable tickets available on the
secondary market, displayed by their zone/section/row. The user can filter the
comps by sequential clicks through the menus, filtering further by other ticket
characteristics, such as ticket splits. (Tr. 1401:1-21 (A262)). Once the comps are
13
selected, the user creates pricing rules in the “Rules” tab. (Tr. 1402:4-19). In sum,
StageFront, used by Gainor prior to using AutoPricer, contained the same standard
autopricing process and components claimed by Plaintiff. (Tr. 1402:20-22) (“Q.
And how does that compare to the process that Broker Genius uses in its
AutoPricer? A. Very similar.”)
2. Seat Metrics Autopricer

Seat Metrics was another autopricer that used the same four-step process
used in AutoPricer and StageFront. Its UI shows the same pricing process. (A447-
448).
E. Gainor’s 2015 Event Watcher Autopricer Design

Gainor has a lengthy history in the ticket management field, having designed
ticket-related web applications since 2003. During that period, he successfully
built multiple complex ticket management platforms for multi-million dollar
companies. Gainor started a business called Ticket Evolution, and developed a
POS ticket management program named “Core” in 2012 or 2013. Core was a
marketplace viewer, using an event menu to show the user upcoming events,
linked to the user’s inventory for that event. The user compares its inventory to the
secondary market tickets, filtered by zones, sections, and rows to refine the comps.
(Volpone, at 507-508). Core did not incorporate an autopricing element.
14
Gainor joined Event Ticket in 2015, and in September, it asked him to
design an autopricer to add to its existing ticket management program called Event
Watcher. Gainor’s design documents show his conception of its UI:
(A470) The UI shows the familiar four-widget process, starting with the event
menu oval at the top left, used to search for upcoming events. The inventory list
displays the user’s inventory for the selected event. The zone/section/row menus
display the StubHub lowest comparable tickets, and permit the user to refine the
comps. The “settings” menu allow further filtering by splits, or delivery methods.
The final widget, the “create a rule” widget, allows users to create a pricing rule.
The functionality was detailed in a separate project management tool.
F. Gainor’s Use Of AutoPricer

After using StageFront and goPricer in 2015, Gainor sought alternative
programs to sell his tickets. Plaintiff offered Gainor a demonstration on May 24,
2016, at which it demonstrated AutoPricer’s functionality and its four specific

15
cycles. (Sherman 143 (A113)). When Gainor expressed reluctance, Plaintiff
offered a 30-day free trial. Plaintiff acknowledged it had no evidence to suggest
Gainor signed up for an improper purpose. (Sherman 170 (A122)).
1. Plaintiff’s Terms of Use

On May 26th Gainor acquiesced to Plaintiff’s offer of a free trial. At 5:00
p.m., Plaintiff’s customer coordinator, Alex Berrick, assisted Gainor in creating an
account. Plaintiff utilizes a 14-page single spaced ToU, which is referenced, but
not displayed, in the initial sign-in screen. Berrick didn’t “believe that the terms of
service are conspicuously displayed on the Broker Genius sign-up sheet.” (Berrick
587(A206)). Berrick directed Gainor to accept the ToU and one minute later, at
5:01 p.m., an acceptance was registered. At page 3, the ToU inform the user that
the site is copyrighted:
The Site or Apps and all data, text, designs, pages, print screens,
images, artwork, photographs, audio and video clips, and HT'ML
code, source code, or software that resides or is viewable, submitted
or otherwise discoverable on the Site or Apps (collectively, the
“Content”) is owned by us or our licensors. We own a copyright in
the Site or Apps and Content.
Following this statement, the user agrees not to “Reproduce, modify, display,
publicly perform, distribute or create derivative works of the Site or Apps or the
Content.” (A294-95)
AutoPricer’s unstable code language caused regular outages. Broker Genius’
Board hired an outside firm to audit its product, and the firm found the UI so
16
deficient it recommended that “the front end application should be rewritten.”
(Sherman 238:14-16 (A135)). Gainor’s trial use diminished significantly after June
23, 2016 due to such defects. AutoPricer failed, mistakenly selling his NFL tickets
at a loss of $3 thousand. (Sherman 199 (A127)).
G. Seat Scouts’ Command Center
A similar malfunction occurred with Seat Metrics in January 2017, and led
Gainor to write to his Event Ticket partner, Volpone, about the failures of other
products and “[m]akes me want to build [an autopricer] more than ever!” They
hired three highly experienced engineers who began designing Command Center
on May 31, 2017. Command Center was offered to the public in late October 2017,
and quickly became the favored product. It did not merely replicate existing
autopricers but used a code language that provided speed and stability. This
prompted Broker Genius’ former customers trying Command Center to report
“overall, it’s the best we’ve seen so far by a long shot. It actually works. We
really haven’t had any fundamental functional issues at all, which is pretty unique
haha.” (A327). By Plaintiff’s Board’s own admission, AutoPricer was “causing
material harm” and “material disruptions” to its customers. (Sherman 234-235
(A131-132)(A376)). Its biggest customer “left for Seat Scouts solely based on
stability and have never returned.” (A341; Sherman 250 (A136)) Command
17
Center was also unique. Rather than compress all four widgets onto the starting UI,
each was its own screen, starting with the events list.
(A449). It was also more intuitive, included at least 75 features and shortcuts not
present in AutoPricer. (Gainor 982 (A240)). For example, in selecting
zone/section/rows, users are taken by default directly to the “section” selection,
knowing users rarely select only by zone. (A460). Processes that took 9 steps in
AutoPricer were accomplished in 4 steps in Command Center. (A464).
H. Plaintiff’s Litigation Against Competitors

Plaintiff’s Board recognized it was offering an inferior value proposition to
its customers. It has preserved that inferior value by litigation, armed with $20
million in private equity investments. (Sherman 213-214 (A129-130)). In early
2017, it sought a preliminary injunction against NRZ Entertainment. After a year
of litigation, NRZ agreed to a permanent injunction. See Zalta, No. 17‐Cv‐2099
(Doc. 172). It commenced a second action against another competitor, Select Seats
18
LLC, that it had assigned to Judge Stein. The Court entered an immediate TRO.
Broker Genius, Inc. v. Berry, No. 17‐Cv‐8511 (Doc. 10). Two weeks later,
defendant agreed to a permanent injunction, protesting its innocence but stating
that it could not afford to litigate the claims. (Id., Doc. 25).
I. Seat Scouts Is Sued, And After The Injunction, Converts Its Autopricer
Into A Non-Autopricer
Plaintiff commenced this action on November 7, 2017, again assigned to
Judge Stein who issued an immediate TRO. During the preliminary injunction
hearing Gainor testified about the existence of similar features in StageFront,
goPricer and Core (he had not yet recalled his Event Watcher drawings). Plaintiff
distinguished goPricer and Core as marketplace viewers that did not automatically
update prices. The Court’s injunction never mentioned the StageFront autopricer,
but concluded that goPricer and Core were not comparable products because they
were not an “autopricer.” (Volpone, at 508). The injunction barred Defendants
from offering Command Center.
To comply with the injunction, Seat Scouts withdrew Command Center from
the market. Days later, it offered a new product, Event Watcher, that used the four
menus from the 2015 design to view the market, but did not contain an autpricing
function.
After reviewing the injunction and the opinion in the injunction many
times, we had come to the conclusion that -- well, really, the Court
19
had come to the conclusion, we believe, that the autopricer was what
the issue was and so we had concluded that if we had come up with a
product that was similar to what was a marketplace viewer in the
order then we would be in compliance.
(Aug. 21, 2018 Tr. 57 (A58)). Within a week, Defendants filed a motion
explaining the removal of autopricing functionality. (Doc. 123). To reflect the
lesser functionality, Seat Scouts provided customers a free month, and reduced its
price, but even then, 20 customers cancelled, citing the lack of autopricing:
• I will not be using Event Watcher for the foreseeable future. I am

unable to manage my inventory without having an auto prier [sic].
(A61)
• I loved your product before the change and I am patiently waiting

for the automated pricing functionality to return. (A64)
• Hopefully your situation will work out in your favor and I can use
your service again for the autopricer. (A63)
• To be honest, I do not like this product as much as the original

Seatscouts autopricer. … not having the pricing automatically push
to the POS is a HUGE difference. (A67)
• I have not used the product since it was previously an auto-pricer.

(A72)
• Are you guys able to implement the autoprocer (sic) again or is it

back to manual pricing with eventwatcher? (A73)
• the service I paid for was a service that auto‐updated my price. A

service that requires me to login multiple times a day to “push”
new prices is not what I’m looking for. (A74)
• My experience with Command Center was great, but the new

product didn't allow me to put my sales on auto-pilot. (A75)
20
Plaintiff cross-moved for contempt. (Doc. 136). At the Aug. 21, 2018
hearing, the Court refused to permit Defendants to establish that Event Watcher
was a marketplace viewer like goPricer. (Tr. 43(A54))(“The issue is not what
goPricer was or wasn't. I only want to hear what Seat Scouts did to enable the
customers to automate the pricing updates.”); (A59) (“I'm not going to let you go
into goPricer. You have your record.”)
Following the hearing, the Court made two contradictory findings. It
confirmed Defendants’ statement that the two products were not the same because
autopricing functionality was removed from Event Watcher. (SA37) Despite this
confirmation, and the extensive evidence that the change was material to
customers, the Court ruled “that Event Watcher and the specifically enjoined
Command Center are one in the same product.” (SA36). 2
J. Plaintiff’s Modified Claim Based On Limited Features

During the preliminary injunction hearing, Plaintiff asserted that Gainor had
copied its four-menu autopricing process. After fuller discovery disclosed that
StageFront and Event Watcher used a very similar process, Plaintiff could no
longer support that high-level, and refined its claim to specific features not
2
Plaintiff argued that customers could create their own software programs to automate on
their own computers, and that a small group of approximately 15% sophisticated clients used in-
house staff to developed their own software product. When asked, Seat Scouts advised that it
could not offer any assistance, to ensure that any automation programs – a key feature – not be
deemed a Seat Scouts product. (Tr. 58).
21
apparent in prior products. For example, its expert, Eric Koskinen, identified four
features that he contended StageFront lacked (a) an interactive map as an
alternative method for the selecting comps using the zone/section/row menus, (b)
group and (c) season function, and (d) the absence of differential update cycles:
(A428). Similarly, Koskinen asserted that the Event Watcher design did not show
five features: a) an interactive map, b) group and c) season functionality, d) pricing
rules appeared to allow only rules for fixed amounts, not a percentage, and e) that
it did not show differing update cycles.
22
(A421).
K. The Trial
1. The Court’s Prejudicial Questioning Of Defendants
At trial, the Court interceded at key points in the witness examinations to
express its view of the case and witnesses. Plaintiff’s counsel started Gainor’s
examination by introducing deposition testimony in which Gainor said he did not
call Command Center “software,” it was a “web application.” After the video, the
Court immediately took over examination:
THE COURT: Mr. Gainor, you listened to that just now, right?
GAINOR: Yes, I did.
THE COURT: Would you agree with me that you were doing
everything you could to avoid giving a direct answer to the question?
GAINOR: I honestly think --
THE COURT: Yes or no. Would you agree with me that you were
doing everything you could to avoid giving a direct answer to the
questioner during that deposition?
GAINOR: No, I don't agree with that.
THE COURT: Explain. Let me ask another question. It was your

testimony when that was taken that you did not know what software
was, is that correct?
GAINOR: No. I explained I didn't understand how she was asking

me about software. It was very vague, the way she was asking me.
THE COURT: In other words, how you define software is a vague

question to you, is that right?
GAINOR: It depends on the context, in my opinion.
23
(Gainor 698 (A209). The Court did not ask Gainor to clarify the contexts, but
instead redirected Gainor’s answer to challenge his honesty:
THE COURT: What about the context in a deposition when you are
being asked a question under oath, is that a vague question then?
GAINOR: The way she asked it, it was. The way she led up to that,
in my opinion -- I am not saying it's accurate.
THE COURT: I was just listening to that, as you were. I gather that
you don't know whether you communicated with your engineers
regarding code, software code that they were writing. Is that correct?
Because you said possibly.
GAINOR: We don't refer directly to code. I talk about features with

them. That's why I didn't understand her question.
THE COURT: I see. You have never used the word code with your
engineers, is that right?
GAINOR: I might have. I don't know.
THE COURT: You can't remember, is that right?
GAINOR: I'm sure I have. I don't recall.
THE COURT: You say you possibly communicated with your

engineers regarding code. Have you ever written code, sir, in your 18
years?
GAINOR: Not in probably about the last 16 years.
THE COURT: In order words, you have written code in your 18

years.
GAINOR: Very basic websites.
(A209-10) The Court turned this answer back into a derision of Gainor’s prior
answer:
24
THE COURT: What is that code? Is that code software?
GAINOR: It was HTML. I wouldn't consider it software.
THE COURT: Software to you is going to Comp USA and buying

something like a game, is that it?
GAINOR: What I was trying to explain is, I picture software as

something you can install locally on a computer, not a web
application, like we were designing. That's all I was trying to clear
up.
(A210-211). To convey its belief that Gainor’s precision was somehow dishonest,
the Court concluded:
THE COURT: You were under oath then, right?
GAINOR: Yes.
THE COURT: You are under oath now, right?
GAINOR: Correct.
(A211). The Court later interrupted questions to return to its derision of his prior
answers, such as whether he had discussed code with his developers. 3 During a
break, the Court candidly acknowledged its intention: “I was expressing my view
that he was toying with the questioner, yes.” (Tr. 743 (A231)). The Court was
successful in conveying its view to all present, and its hostile examination
headlined the news, “Ticket Resale Exec Spars With Judge At Tech Poaching
3
Gainor acknowledged that he discussed concepts he wanted coded, but not the technical
code itself. The Court disregarded the nuance, and harshly examined Gainor about the answers
as if it had been untruthful. (id. 701-02 (A212-213)).
25
Trial,” which focused on how “Judge Stein began to press Gainor as well.” (Doc.
390-3)
Apart from commenting on Gainor’s credibility, the Court used its
questioning to convey its own theory of the case. For example, Gainor testified that
he was able to create Command Center quickly based on his experience, evidenced
by his 2015 Event Watcher design and the StageFront product. The testimony did
not require clarification, but the Court apparently wished to link Command Center
instead to AutoPricer, making that link three times, even exaggerating the facts to
make its point:
THE COURT: And you had already been a customer of Broker

Genius at that point for more than a year; correct?
GAINOR: No, I believe I was a customer for about six months or so.
But it was prior to when I redid the documents in 2017, yes.
THE COURT: It was prior to when you redid the documents in 2017,
when you did new wire frames.
GAINOR: Yes.
THE COURT: In 2017 you had already been a customer of Broker

Genius; correct?
GAINOR: Yes, your Honor.
Gainor 722-723 (A215-216). The Court interjected again to suggest that Gainor’s
discovery efforts were insufficient. Addressing Plaintiff’s argument that Gainor
had not identified the Event Watcher design documents during his initial
26
production, he explained that prior counsel had handled that production. The
Court interrupted this explanation to mischaracterize and mock the answer:
GAINOR …We assumed, because we knew we did nothing wrong,

that the attorneys that we were working with, who we gave access to
everything, would take care of everything they were supposed to.
THE COURT: You feel you've done nothing wrong, so it didn't really
matter, is that what you're saying?
GAINOR: I didn't say that it didn't matter. I knew we had done

nothing wrong.
Gainor 729 (A217) (emphasis added).
2. The Court’s Rebukes Of Defendants’ Expert

The Court also interrupted the questioning of Defendants’ expert, Nitze, to
accuse her of acting as an advocate. For example, when Nitze was asked to
address Koskinen’s opinion identifying features in 2015 Event Watcher the Court
interrupted Nitze to accuse her of attempting to “make the case” for Defendants:
Q. Could you demonstrate that?
A. Sure. These are Professor Koskinen's slides where he is pointing

out items that he believes are missing from the 2015 wire frames. So
I thought these were useful to point out that he is not challenging that
there was an event list.
THE COURT: No, no, no. Just answer the question.
A. Clearly, on this wire frame there is an event list. There is an

inventory list. There is the ability to select comps by zones, sections,
and rows and the ability to set pricing rules.
THE COURT: Your job is to answer the questions.
27
A: I apologize, your Honor.
THE COURT: Not to make the case for one party or the other. You
can do that only in the context of answering the questions.
Nitze 1269-70 (A252-253). This accusation of advocacy was not isolated. Nitze
1272 (A254)(“You are not one of the litigants. You are a witness who is allowed to
answer opinion questions in the area that I have qualified you as an expert.”). Nitze
was rebuked for any minute expansion of her answers, even on direct examination.
Nitze 1319 (A255)(“I was trying to get you to do that yesterday, to no avail”). The
Court’s admonition contrasted with Plaintiff’s witnesses, who labored under no
comparable restrictions, even when they refused to answer questions that
specifically called for yes or no answers. E.g., Koskinen 521 (A17); Sherman 199
(A127).
1. The Court’s Actions On Plaintiff’s Expert

The Court’s accusations of Nitze’s bias contrasted with its treatment of
Koskinen. Unlike Nitze, Koskinen is an experienced paid expert witness. At
deposition, Koskinen evaded disclosing his compensation by claiming not to know
the amount, even though it dwarfed his academic salary. He narrowed the range,
stating it could be upwards of $400,000. When he repeated his claimed ignorance
at trial, he was asked to confirm his prior testimony that it could be upwards of
$400,000. The Court stopped the cross-examination to conduct its own gentle
examination. (Tr. 478 (A173)). It changed counsel’s question from $400,000 to a
28
less shocking $100,000, and when Koskinen still claimed it was “too hard” to
remember because it was not important to him, the Court validated the answer by
telling the jury the answer was “fine,” and then vouched for its veracity: “What
they say about computer scientists is true.” (Tr. 478-479). 4
The Court also precluded examination about Koskinen’s failure to
investigate relevant information. To avoid acknowledging StageFront’s similarity,
Koskinen claimed ignorance due to limited access to information about it. (Tr.
415). When Defendants attempted to examine Koskinen about his failure to
review available information, the Court precluded the questions. (Tr. 482-483
(A176)) (e.g., sustaining objection to “Do you recall reading any testimony of
people who have used the StageFront product?” and “Would the user experience
described by testimony of people who have used StageFront be useful to your
analysis to understanding these screenshots?”, directing counsel to “move on”).
The Court also precluded questions on Koskinen’s failure to examine the emails
that described the StageFront functionality. (Tr. 494:6-16 (A178)) (sustaining
objections to “did you look at the correspondence between Mr. Gainor and the
people at StageFront concerning the existence of group functionality?”, “did you,
4
Koskinen’s convenient memory lapse – excused by the Court – worked. On a
subsequent motion, Plaintiff disclosed Koskinen was paid $35,662.47 for a three month period
(Doc. 454), meaning the $400,000 range likely understated his compensation for the two years
of litigation.
29
in the course of your work, review correspondence between Mr. Gainor and the
people at StageFront about the product and its functionality?” and “did you review
any correspondence with StageFront?”) 5
2. The Court’s Preclusion Of Evidence Rebutting Plaintiff’s Laptop

Argument
Plaintiff asserted that Gainor hid his laptop when ordered to produce it.
(Opening, 17). In fact, the Magistrate’s discovery order denied Plaintiff’s request
that Gainor produce his laptop, and required only that he attempt to identify the
laptop’s IP address. 6 Defendants were barred from presenting the order’s
obligations. (Tr. 741-42 (A229)). As a result, Plaintiff was permitted to suggest an
effort by Gainor to hide the laptop against judicial requests.
5
The differential standard extended to counsel, even when Plaintiff’s counsel
misrepresented facts. For example, the Court precluded testimony from J. Cobb despite his
having been identified in the Rule 26 disclosures. The Court disputed that Cobb also had been
referenced at the preliminary injunction hearing, and Plaintiff’s counsel quickly claimed it could
confirm the absence. (Tr. 43) (“Melman: We also searched for Mr. Cobb, couldn't find him
referenced in the preliminary injunction. THE COURT: You did that as well? MR. MELMAN:
We couldn't find him….”). That was false, for Cobb was indeed mentioned. This tolerance for
misstatements continued to the end of trial, where Plaintiff’s counsel interrupted Defendants’
closing to falsely assert that an exhibit was not in evidence. (Tr. 1479). Defendants correctly
identified that it had been introduced on the first day, but the Court still directed Defendants to
move on with the closing.
6
This proved impossible because the laptop does not have a fixed IP address. At sidebar,
the Court assumed it reflected dishonesty by Gainor, “I thought because his wife had the laptop,
he certainly could have recovered the IP addresses, unless, of course, he has no dealings with his
wife, and I'm not prepared to say that.” (Tr. 737 (A225)). The Court declined to hear counsel’s
explanation, “Right, IP, blah, blah, blah, blah, blah.” Id.
30
3. The Verdict And Permanent Injunction

Although Plaintiff identified but a single injury on both claims, the jury
awarded $3 million against Gainor on the breach of contract claim, and a further
$1.5 million jointly against Gainor and Seat Scouts on the misappropriation claim.
Despite full compensation for all of its future injuries, the Court entered a
permanent injunction. That injunction declined to identify any specific components
or process, enjoining undefined functions derived “in whole or in part” from
AutoPricer.
VIII. SUMMARY OF ARGUMENT

The Court’s concept of property rights over items in the public domain is
contrary to basic rules governing contractual restrictions and governing
misappropriation claims. Rights to public domain items are governed by statute,
and the misappropriation claim based on copying of public domain items is
expressly preempted by that statutory scheme. The Court’s interpretation of the
contractual provision as a matter of law was contrary to its own interpretation.
The Court’s trial conduct, combined with allowing use of a non-final
contempt finding, was erroneous and deprived Defendants of a fair trial. Finally,
the Court’s failure to specify concededly public items, resulted in a (1) disconnect
between the assumptions in the damage model and the acknowledged facts, and (2)
vague, overly broad permanent injunction that encompasses public domain items.
31
IX. ARGUMENT
A. PLAINTIFF’S CLAIMS FAIL BECAUSE AUTOPRICER IS NOT

CONFIDENTIAL OR PROPRIETARY
“However good and valuable an idea, plan, scheme, or system is, the
moment it is disclosed to the public without the protection of a patent, it becomes
public property.” Affiliated Enterprises v. Gruber, 86 F.2d 958, 961 (1st Cir.
1936). The Court’s conclusion that AutoPricer was not confidential, and the
absence of a patent, precludes both claims.
1. The Court Correctly Held That Disclosing AutoPricer To

Customers Precluded It Being Confidential
Plaintiff’s ToU “do not amount to a confidentiality or non-disclosure clause
that notifies users of the secrecy of any aspect of AutoPricer v.3 or precludes them
from describing to others the software's functions, structure, and appearance.”
Zalta, 280 F.Supp.3d at 521. “[I]t is clear that Broker Genius's Terms of Use
agreement … simply does not contain a confidentiality provision.” id. The Court
correctly concluded the lack of restriction on further disclosure precludes
AutoPricer’s confidentiality. Lehman v. Dow Jones & Co., Inc., 783 F.2d 285 (2d
Cir.1986) (“Lehman was never in a position to protect the alleged secrecy of the
information as the law requires.”); Reed Constr. Data Inc. v McGraw-Hill
Companies, 49 F.Supp.3d 385, 427 (S.D.N.Y. 2014) (confidentiality lost when
given to customers “unaccompanied by any contractual restrictions on their use.”);
Nova Chemicals, Inc. v. Sekisui Plastics Co., 579 F.3d 319, 328 (3d Cir.2009)
32
(product provided to customers not confidential because “under the terms of the
License Agreement, [licensee] was not required to maintain the secrecy of any
information it had acquired from licensor.”). Any user could list each AutoPricer
component, and tell the world that, for example, it contains StubHub’s provided
interactive maps, displays events in chronologic order, or allows pricing rules not
only by dollar amounts, but by percentages, or any features that formed Koskinen’s
opinion.
This disclosure removes whatever property interest Plaintiff might have had
in AutoPricer. Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1002 (1984) (“If an
individual discloses his trade secret to others who are under no obligation to
protect the confidentiality of the information ... his property right is
extinguished.”); Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 584
(1985) (“As a matter of state law, property rights in a trade secret are extinguished
when a company discloses its trade secret to persons not obligated to protect the
confidentiality of the information.”); Structured Capital Solutions, LLC v
Commerzbank AG, 177 F.Supp.3d 816, 832 (S.D.N.Y. 2016) (“if an individual
discloses his trade secret to others who are under no obligation to protect the
confidentiality of the information, or otherwise publicly discloses the secret, his
property right is extinguished.”)
33
The Court acknowledged its prior holding that AutoPricer was not
confidential, but suggested, without citation, that some unidentified property
interest might survive the lack of confidentiality. JNOV at *6 (“[i]t can still be
proprietary and not a trade secret.”) It is true that some states, though not all 7,
recognize a slightly-broader category of confidential information that does not
satisfy the trade secret elements. Even if a “proprietary interest” is slightly
broader, that broader category still must be confidential. Structured Capital
Solutions, LLC v. Commerzbank AG, 177 F.Supp.3d 816, 832 (S.D.N.Y. 2016)
(confidential ideas disclosed without confidentiality obligations destroys property
right); C. Montville, Reforming The Law Of Proprietary Information, 56 DUKE
L.J. 1159, 1160 (2007) (“This category [is] alternately referred to as proprietary
information or confidential information.”); Restatement (Third) of Employment
Law (Draft), §6.01 (2015) (Each category, “somewhat recursively defined for both
categories, requires reasonable efforts by the firm to either keep the information
secret (for trade secrets) or confidential (for proprietary information).”) Thus,
“[i]nherent in the definition [of proprietary information] is that information is not
77
Unisource Worldwide, Inc. v. Carrara, 244 F. Supp. 2d 977, 989–90 (C.D. Ill. 2003)
(“The parties concede that under Illinois law, there is no apparent functional difference between
‘confidential information’ and ‘trade secrets.’”); Take it Away, Inc. v. Home Depot, Inc., 2009
WL 458552, at *8 (D. Mass. Feb. 6, 2009) (“trade secrets and confidential information are
essentially identical concepts.”)
34
proprietary if it is not protected. Once the information is released into the public
domain, the owner has lost its ability to protect its interest from others.” Mobile
Med. Int'l Corp. v. United States, 95 Fed. Cl. 706, 739 (2010).
That general principle is found specifically in New York law. An unfair
competition claim fails unless the information is confidential. Fewer v. GFI Group,
Inc., 2 N.Y.S.3d 428, 429 (1st Dep't 2015) (dismissing unfair competition
counterclaim because “[d]efendants failed to demonstrate that plaintiff
misappropriated or exploited confidential information”); Tesla Wall Systems, LLC
v. Related Companies, LP, 2018 WL 2225002 (S.D.N.Y. 2018) (dismissing “labor,
skill, and expenditures” claim because plaintiff could not show “why it was
confidential.”). The Court’s attempt to tease a different standard out of footnote 11
in Schroeder v Pinterest Inc., 17 N.Y.S.3d 678 (1st Dep’t 2015) was error. Rather
than suggest a different standard, it explicitly equates the two:
Like the other misappropriation causes of action, this

[misappropriation of skill, labor and expenditure] claim cannot be
premised upon misappropriation of publicly-available information.
Id, at 693 n.11. 8 Thus, “[l]ike the” trade secret misappropriation claim, the lack of
confidentiality precludes the unfair competition/misappropriation claim. Upon
8
This reflects a general retreat from common law misappropriation claims. Restatement
(Third) of the Law of Unfair Competition § 38 (1995) has completely rejected the doctrine of
misappropriation. See § 38, comment b.
35
disclosure, “whatever abstract property interest may previously have been asserted
in the [product’s] features is lost” [and] “cannot be prevented by the [owner] under
a theory of unfair competition, nor would such duplication be compensable in
damages.” Demetriades v. Kaufmann, 698 F.Supp. 521, 527-28 (S.D.N.Y. 1988).
Allowing a property right after disclosure “would be to award residential
developers a quasi-patent or copyright …, a back-door result via the law of unfair
competition we previously characterized as both pernicious and mischievous.” Id.
at 528. Accord Big Vision Private Ltd. v. E.I. DuPont De Nemours & Co., 1
F.Supp.3d 224, 269 (S.D.N.Y. 2014), aff’d, 610 F. App’x 69 (2d Cir.2015). 9
2. Plaintiff’s Patent Disclosures Further Precluded A Proprietary

Interest
In itself, the lack of restriction on users precluded a proprietary interest.
Beyond that, the additional public disclosures barred the claim. By statute, the
patent application must “contain[] a written description of the invention, and of the
manner and process of making and using it, in such full, clear, concise, and exact
terms as to enable any person skilled in the art … to make and use the same.” 35
9
The Court agreed that “proprietary” was an element of the claim, but refused to include
it in the listed elements (Tr. 1560), over defendant’ objections. (Tr. 1451) (A274)(“Since that is
an element of the claim, I think it is important to highlight that in the actual recitation of the
elements.”); Id. 1458 (A277) (“it would then be misleading to not list it as an element.”). As
could be expected, during closing Plaintiff’s counsel displayed the elements without referencing
this requirement. (A282-282). The Court’s reason for omitting this when listing the elements was
not explained.
36
U.S.C. §112(1). “The disclosure required by the Patent Act is `the quid pro quo of
the right to exclude.'“ J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International,
Inc., 534 U.S. 124, 142 (2001). Plaintiff made that patent bargain. Though the
Court barred questions on patent enablement (Sherman 164:4-7 (A116)), Sherman
acknowledged the patent described autopricing functionality and workflow. (Id.,
164:20-24). It described using the four widgets to create such pricing rules, and the
sequence and interactions for creating comps and price rules. To the extent the
combination is even protectable, the disclosure of AutoPricer’s components and
process puts them into the public domain. 10 See BondPro Corp. v. Siemens Power
Generation, Inc., 463 F.3d 702, 706–07 (7th Cir.2006).
3. Plaintiff’s Marketing Further Precluded A Proprietary Interest

Plaintiff argued that the patent disclosed only abstract ideas, but its claim
was based on those same abstract ideas. (Koskinen 340 (A142)) (“this case is, in
my opinion, … about the abstract ideas and the concepts that are embodied in these
software requirements, these descriptions of how the program should work.”)
Regardless of Plaintiff’s internal disagreement, the 10 to 15-minute
marketing demonstrations made those abstract concepts concrete. Plaintiff’s
10
“’[P]ublic domain’ is the status of an invention, creative work, commercial symbol, or any
other creation that is not protected by any form of intellectual property.” Thomas McCarthy,
McCarthy on Trademarks and Unfair Competition § 1:2 (4th rev. ed., 2002).
37
salesmen navigated the public through AutoPricer’s method of creating pricing
rules, the very components and sequenced interactions that Plaintiff identified in its
opening statement:
the steps of the process for creating the rule, going through each of
the particular components that we saw in the opening [statement], the
event list, the inventory list, interacting with the zone, section, row
picking of comparables and the creation of a rule is something that
you disclosed freely to any potential users without any restrictions on
them to maintain that as confidential
(Sherman 134:14-21 (A107)). Such navigation reveals both the menus themselves,
and their core functionality. Warehouse Sols., Inc. v. Integrated Logistics, LLC,
2014 WL 12647878, at *7 (N.D. Ga. July 7, 2014), aff'd, 610 Fed.Appx. 881 (11th
Cir. 2015)(program’s client-facing “visible output” features and functionality are
not confidential because “readily apparent to authorized users.”); IDX Sys. Corp. v.
Epic Sys. Corp., 285 F.3d 581, 584 (7th Cir. 2002) (“the appearance of data-entry
screens, are exceedingly hard to call trade secrets: things that any user or passer-by
sees at a glance are readily ascertainable by proper means”.) All was “disclosed
freely to any potential users without any restrictions on them to maintain that as
confidential.” (A107).
4. The In-Court Demonstrations Put AutoPricer In The Public

Domain As A Matter of Law
Acknowledging that AutoPricer was not confidential, Plaintiff demonstrated
it in open court before the public and press at the 2017 preliminary injunction
38
hearing and at the 2018 trial. This encompassed each feature at issue. See
Koskinen 359:6-362:18 (describing Event widget); 365:5-367:14 (describing
Inventory widget); 369:11-372:23 (describing zone/section/row widget); 375:3 –
376:24, 378:14-380:24 (describing pricing rules widget), 382:6- 385:23 (describing
group function); 388:8 - 389:5 (describing season function); 392 (discussing
“scalability”). (A142-177) Such display conclusively put AutoPricer in the public
domain:
It is well established that the release of information in open court “is

a publication of that information”
Littlejohn v. Bic Corp., 851 F.2d 673, 680 (3d Cir. 1988), quoting National
Polymer Products v. Borg-Warner Corp., 641 F.2d 418, 421 (6th Cir.1981); Glaxo
Inc. v. Novopharm Ltd., 931 F.Supp. 1280, 1301 (E.D.N.C. 1996), aff'd, 110 F.3d
1562 (Fed. Cir. 1997)(“Nothing openly disclosed in either case would now be a
secret to the relevant public.”). At the latest, AutoPricer was in the public domain
in December 2017.
B. THE COURT APPLIED AN INCORRECT CONTRACT

INTERPRETATION
Having originally determined that the phrase “derivative works” described
the exclusive Copyright rights, the Court reversed itself and held this was an
unreasonable interpretation that could not be presented to the jury. This
39
interpretation is subject to de novo review. Sayers v. Rochester Tel. Corp.
Supplemental Mgmt. Pension Plan, 7 F.3d 1091, 1094-95 (2d Cir.1993).
1. The Court Correctly Held That “Derivative Works” References

The Copyright Exclusive Rights
The meaning of the “derivative works” phrase is informed by its context and
“is given more precise content by the neighboring words with which it is
associated.” United States v. Williams, 553 U.S. 285 (2008). The phrase is found in
the middle of the ToU section advising the user “[w]e own a copyright in the Site
or Apps and Content.” The ToU concludes that section by providing that “you
agree that you will not: ... Reproduce, modify, display, publicly perform, distribute
or create derivative works of the Site or Apps or the Content.” The Court correctly
held that the passage invokes the Copyright Act’s “exclusive right to: (1)
reproduce the copyrighted work; (2) prepare derivative works; (3) distribute copies
of the work by sale or otherwise; and, with respect to certain artistic works, (4)
perform the work publicly; and (5) display the work publicly. See 17 U.S.C.
106(1)-(5).” Zalta, 280 F.Supp.3d at 522. The parallelism is undeniable, and led
the Court, quite reasonably, to conclude that the ToU “essentially tracks the
language of the Copyright Act of 1976,” and “merely describe the exclusive rights
of a copyright owner…” Id. That interpretation also has a natural purpose, to avoid
claims of an implied license to create derivative works. See SmithKline Beecham
Consumer Healthcare v. Watson Pharmaceuticals, 211 F.3d 21, 25 (2d Cir.2000).
40
Under this standard interpretation, “derivative works” is limited, because it does
not confer a patent-like “monopoly of the idea.” Computer Assocs. Int'l v. Altai,
Inc., 982 F.2d 693, 717 (2d Cir. 1992).
The Court’s new interpretation highlights the conflict in the same phrase:
Command Center is not a “derivative work” for Copyright purposes but can be a
“derivative work” for the contract claim. When there are conflicting reasonable
interpretations, and the consumer is provided a standard form contract it is unable
to negotiate, it receives the benefit of any ambiguity. McCarthy v. Am. Int'l Group,
Inc., 283 F.3d 121, 124 (2d Cir. 2002); Valley Juice Ltd. v. Evian Waters Of
France Inc., 87 F.3d 604 n.5 (2d Cir. 1996)(“the long-settled principle of contract
law that ambiguities are interpreted against the drafter.”)
2. The Court’s Instruction, Which Substituted “Derive” In Place Of

“Derivative Works,” Was Erroneous
The Court analysis of the ToU substituted the term “derived” for “derivative
works.” (Tr. 1558-1559 (A283)). Using that substituted term, the Court removed
its connection to the copyright usage, “since the provision does not limit itself to
copyrighted – or even copyrightable – elements, it may offer Broker Genius a
broader scope of protection.” (Volpone at 500, n.14). Because it determined the
meaning as a matter of law, it barred Defendants’ attempts to question Plaintiff as
to the meaning of the “derivative works” phrase. e.g., Sherman 191-92 (A124-
125).
41
The Court’s revised interpretation was the product of a confused analysis
that substituted the language being interpreted, and justified other steps with the
incorrect assertion that Defendants had agreed to those steps. The Court’s analysis
commenced by addressing “the contractual prohibition against derivative works,”
but concluded “a reasonable reading of the word ‘derive’ does not include [the
Copyright exclusive rights].” The conclusion does not follow, because the actual
phrase was “derivative works,” which the Court had recognized should be read
reasonably as the exclusive rights under the Copyright Act. To buttress its
decision, the Court implied that Defendants had not advanced the copyright
meaning, but its footnote 7 contradicted even that, acknowledging that Defendants
had advanced the Copyright Act meaning in the Pre-Hearing and the Post-Hearing
Memoranda. Both cited the Court’s interpretation in Zalta.
In a third effort to suggest agreement where none existed, the Court argued
both parties agreed to use the substituted meaning:
As for how to interpret the contractual term “derived,” both sides

apply the same definition from the Merriam-Webster Dictionary:
“something that originates from something else.” (Koskinen Report
4; Martin Report 4.)
Volpone at 500. Once again, the Court’s suggestion that Defendants had agreed to
substitute “derive” for “derivative works” was unfounded. The cited expert report
42
did nothing more than respond to the definition offered in Plaintiff report and opine
that the facts did not meet Plaintiff’s definition. 11
3. At a Minimum, The Court’s Prior Reasonable Interpretation

Precluded A Finding Of Unambiguity
At a minimum, the Court erred by defining “derivative works” as a matter of
law. Contract language is ambiguous if it is “capable of more than one meaning
when viewed objectively by a reasonably intelligent person who has examined
the context of the entire integrated agreement and who is cognizant of the customs,
practices, usages and terminology as generally understood in the particular trade or
business.” Walk–In Medical Centers, Inc. v. Breuer Capital Corp., 818 F.2d 260,
263 (2d Cir.1987). The Court had held that the phrase could reasonably be
understood to “merely describe the exclusive rights of a copyright owner.” Even if
this Court did not believe that this was the only reasonable interpretation, it still
was obliged to permit Defendants to advance that meaning for the jury. It
prohibited such attempts. (Sherman 191-92 (A124-125)).
4. The Interpretation Conflicts With New York’s Law On

Restrictive Covenants
The Court’s interpretation was incorrect because it extended the provision
beyond New York strong policy. Restrictive covenants are injurious to the public
11
The cited Report at 4 merely responded to Plaintiff’s definition, and did not agree to its use.
(“In his report, Dr. Koskinen states that he ‘shall use the term derivation to mean ….’”)(A471)
43
by restricting competition that would benefit consumers. In re Document Techs.
Litig., 275 F.Supp.3d 454, 468 (S.D.N.Y. 2017). The same policy applies to
licenses such as the ToU. Crye Precision LLC v. Duro Textiles, LLC, 2016 WL
1629343, at *3 (S.D.N.Y. Apr. 22, 2016), aff’d, 689 Fed.Appx. 104 (2d Cir. 2017);
Mathias v. Jacobs, 167 F.Supp.2d 606, 611 (S.D.N.Y. 2001); DAR & Assoc., Inc.
v. Uniforce Serv., Inc., 37 F.Supp.2d 192, 197 (E.D.N.Y. 1999).
The interpretation of derivative works as extending to items not exclusive to
Plaintiff, which the Court stated direct (“[i]t doesn't have to belong to you.” (Tr. 85
(A99)), is contrary to this Court’s decision in Crye. A party “has a legitimate
business interest in protecting its intellectual property rights”, but the restriction
becomes unenforceable if the restraint extends beyond those rights. Crye, 2016 WL
1629343, at *3 (striking down license restrictions not limited to owner’s
proprietary interest). The Court’s interpretation of “derivative works” as untied to
any proprietary requirements, was incorrect.
C. THE MISAPPROPRIATION CLAIM FAILS AS A MATTER OF LAW
1. The Misappropriation Claim Is Preempted

Plaintiff’s claim, that Defendants’ product was a “copycat” product (Tr. 75,
198), is preempted by the Copyright Act, which preempts actions “equivalent to
any of the exclusive rights” governed by the Act. 17 U.S.C. §301(a). “[W]hen an
article is unprotected by a patent or a copyright, state law may not forbid others to
44
copy that article. To forbid copying would interfere with the federal policy ... of
allowing free access to copy whatever the federal patent and copyright laws leave
in the public domain.” Compco Corp. v. Day–Brite Lighting, Inc., 376 U.S. 234,
237 (1964). The preemption includes unfair competition claims founded on
copying. “The broad misappropriation doctrine relied upon ... is therefore
equivalent to the exclusive rights in copyright law ... Indeed because the copyright
act itself provides a remedy for wrongful copying, such unfairness may be seen as
supporting a finding that the Act preempts the tort.” Barclays Capital Inc. v.
Theflyonthewall.com, Inc., 650 F.3d 876, 895 (2d Cir.2011); Carson Optical, Inc.
v. Prym Consumer USA, Inc., 11 F.Supp.3d 317, 329 (E.D.N.Y. 2014). A state law
claim is preempted:
(i) if it seeks to vindicate “legal or equitable rights that are

equivalent” to one of the bundle of exclusive rights already protected
by copyright law under 17 U.S.C. § 106—the “general scope
requirement”; and (ii) if the work in question is of the type of works
protected by the Copyright Act under 17 U.S.C. §§ 102 and 103—the
“subject matter requirement.”
Barclays Capital, 650 F.3d at 892.
The “general scope” requirement is satisfied “if the claim applies to a work
of authorship fixed in a tangible medium of expression.” Briarpatch Ltd. v.
Phoenix Pictures, Inc., 373 F.3d 296, 305 (2d Cir.2004). Here, AutoPricer, the
alleged source material, was expressly copyrighted, satisfying that prong.
45
Plaintiff’s claim also fits within the subject matter of the Copyright Act. Its
claim “involve[s] acts of reproduction, adaptation, performance, distribution or
display.” “A work need not consist entirely of copyrightable material in order to
meet the subject matter requirement, but instead need only fit into one of the
copyrightable categories in a broad sense.” Briarpatch, 373 F.3d at 305. Woolcott
v. Baratta, 2014 WL 1814130, at *10 (E.D.N.Y. May 7, 2014).
The only exception to preemption is if the claim includes additional
elements that transform the claim. This Court takes “a restrictive view of what
extra elements transform an otherwise equivalent claim into one that is
qualitatively different from a copyright infringement claim.” Briarpatch, 373 F.3d
at 305.
Plaintiff argued that Defendants exhibited “bad faith” by offering Event
Watcher after May 2018. Bad faith use of a product does not constitute the extra
element. Barclays Capital, 650 F.3d at 896 (“No matter how ‘unfair’ Motorola's
use … may have been to the NBA…, such unfairness alone is immaterial to a
determination whether a cause of action for misappropriation has been preempted
by the Copyright Act.”).
Even its original theory-- that Gainor obtained access to AutoPricer under
the ToU – is insufficient. When the party is “essentially seeking enforcement of the
bargain . . .the action should proceed under a contract theory.” Sommer v. Fed.
46
Signal Corp., 79 N.Y.2d 540 (1992); ScentSational Techs. v. PepsiCo, Inc., 2017
WL 4403308, at *18 (S.D.N.Y. Oct. 2, 2017) (dismissing unfair competition claim
premised on breach of confidentiality agreements); Bancorp Servs. v. Am. Gen.
Life Ins. Co., 2016 WL 4916969, at *9 (S.D.N.Y. Feb. 11, 2016) (dismissing unfair
competition claim “entirely based on alleged conduct that is proscribed by the
2010 NDA -- namely disclosure and use of information that was protected by the
2010 NDA[]”); RCA Trademark Mgmt. S.A.S. v. VOXX Int'l Corp., 2015 WL
5008762, at *5-6 (S.D.N.Y. Aug. 24, 2015).
2. The Court’s Refusal To Consider Preemption Was Contrary To

Every Circuit Court To Address The Issue
Plaintiff never disputed Defendants’ right to assert the preemption defense.
It consented to the Joint Pretrial Order that contained the defense. (Doc. 265 at 7,
(B)(i)(G)). The Court approved the order containing the preemption defense, which
“controls the subsequent course of the action.” Fed.R.Civ.P. 16. Plaintiff never
challenged its availability during multiple arguments specifically on the
preemption defense, before trial (Doc. 334), in the Rule 50(a) motion (Tr. 1421), or
in post-trial Rule 50(b) motion (Doc. 395). Notwithstanding any challenge to its
availability, the Court took up the argument for Plaintiff and ruled it had been
waived. (JNOV at *5). This holding is contrary to every Court of Appeals to
address the issue.
47
“[T]he final pretrial order superseded prior pleadings.” Rockwell Int'l Corp.
v. United States, 549 U.S. 457, 458 (2007). “Anything in the answer or the
complaint ... is superseded by the pretrial order.” Doral Produce Corp. v. Paul
Steinberg Assoc., Inc., 347 F.3d 36, 39 (2d Cir.2003). Because of this, defenses
asserted in the pretrial order are preserved, even if not asserted in the answer.
Wright & Miller, 6A Fed. Prac. & Proc. Civ. §1526 (3d ed.); Friedman &
Friedman, Ltd. v. Tim McCandless, Inc., 606 F.3d 494, 498 (8th Cir.2010) (“The
seller preserved its affirmative defense… by expressly including it in the final
pretrial order approved by the court, especially when the pretrial order was jointly
drafted by the parties and the buyer failed to object to the inclusion of the defense
at the final pretrial conference”…”an issue identified in the pretrial order is
properly within the scope of the trial even though it was not included in the
original pleadings.”); Management Investors v. United Mine Workers, 610 F.2d
384, 390 n.17 (6th Cir.1979) (rejecting as “clearly meritless” contention that
affirmative defense is not preserved by inclusion “in the jointly drafted Pretrial
Order”); Pulliam v. Tallapoosa County Jail, 185 F.3d 1182, 1185 (11th Cir.1999)
(an “omission of an affirmative defense is not fatal as long as it is included in the
pretrial order.”); Hargett v. Valley Fed. Sav. Bank, 60 F.3d 754, 763 (11th
Cir.1995) (“the defense is not waived if the litigant includes it in the pretrial
order.”); Porter v. Natsios, 414 F.3d 13, 19 (D.C. Cir. 2005); Expertise, Inc. v.
48
Aetna Fin. Co., 810 F.2d 968, 973 (10th Cir.1987); Allied Chem. Corp. v. Mackay,
695 F.2d 854, 855 (5th Cir.1983); Vaughn v. King, 167 F.3d 347, 352 (7th
Cir.1999). See also Frito–Lay, Inc. v. Bachman Co., 1987 WL 11555, at *3
(S.D.N.Y. May 19, 1987) (defense preserved because “both parties raised the issue
[] in the pretrial order prepared for this trial”); Procter & Gamble Co. v. Colgate-
Palmolive Co., 1998 WL 788802, at *70 (S.D.N.Y. Nov. 9, 1998), aff'd, 199 F.3d
74 (2d Cir. 1999).
Against this universal view, the Court cited Saks v. Franklin Covey Co., 316
F.3d 337, 350 (2d Cir.2003). Saks involved a specific issue where preemption was
not only a defense, but also “dictate[s] the choice of forum.” Because the defense
was jurisdictional in that specific instance, this Court pragmatically held it must be
pleaded at the outset. Recognizing that this holding ran counter to the general rule,
this Court stated “our analysis here is limited to ERISA preemption of benefits-due
actions.” Id. at 350. Subsequent decisions recognize that Saks does not alter the
general rule that defenses can be added in later pleadings. E.g., Monex Financial
Servs. v. Nova Information Systems, 657 F.Supp.2d 447 (S.D.N.Y. 2009).
3. The Court Erred Permitting Plaintiff To Present An Unpleaded

Misappropriation Theory
The Court’s rigor about pleading defenses contrasted with its laxity in
allowing Plaintiff’s unpleaded theories. The Amended Complaint advanced a
theory that Gainor used fraudulent means to access AutoPricer in May 2016, and
49
the Court sustained the claim on that basis. Broker Genius v. Seat Scouts, 2018 WL
2214708 (S.D.N.Y. May 14, 2018). In the week before trial, Plaintiff offered a
new theory that using Event Watcher after May 2018 constituted “bad faith.”
Plaintiff acknowledge that this new theory “wasn't pled.” (Tr. 21). Despite that
failure, the Court permitted Plaintiff to present it, while denying the defenses to it.
Plaintiff’s new theory – based not on misappropriation – was legally
unsound. Misappropriation requires “the wrongful appropriation of another's
property interest.” Demetriades, 698 F.Supp. at 527; Schroeder, 17 N.Y.S.3d at
693 (bad faith when defendant “obtained the information.”) A claim based solely
on wrongful use, without any wrongful appropriation, does not suffice.
D. THE COURT’S CONDUCT DEPRIVED DEFENDANTS OF A FAIR

TRIAL
1. The Court Impermissibly Conveyed Its Own View Of Witness

Credibility And Evidence
The Court held a firm unfavorable view of Defendants, ranging from
Gainor’s honesty, Volpone, 313 F.Supp.3d at 506 (“Gainor was evasive”), calling
Defendants’ counsel “disingenuous” (SA44), to accusing Gainor of stealing other
products. 12 At trial, it has a different duty:
A court must strive for “that atmosphere of perfect impartiality which

is so much to be desired in a judicial proceeding.” Glasser v. United
12
“What you're saying is you want to show that . . . he stole it from StageFront or
SeatMetrics.” (Tr. 63)(A96).
50
States, 315 U.S. 60, 82 [] (1942). Indeed, “[a] trial judge must be
especially cautious and circumspect in language and conduct during
a jury trial.” Coast-to-Coast Stores, Inc. v. Womack-Bowers, Inc., 818
F.2d 1398, 1401 (8th Cir.1987).
Santa Maria v. Metro-N. Commuter R.R., 81 F.3d 265, 273 (2d Cir.1996). Rather
than mask its views from the jury, the Court impermissibly went out of its way to
express them.
2. The Court’s Prejudicial Questioning Of Defendants

The Court’s perspective on the case was obvious through its repeated
interjection into the witness examinations.
While participation by the trial judge in interrogation of witnesses

may properly be done to clarify both legal and factual issues and thus
minimize possible confusion in the jurors' minds, ‘such intervention
should not become the rule,’ and must not be indulged in to the point
where the atmosphere ceases to be one of ‘impartiality and
detachment,’
Anderson v. Great Lakes Dredge & Dock Co., 509 F.2d 1119, 1131 (2d Cir.1974)
(citations omitted.) The court may ask clarifying questions.
Those questions, however, “may not ... convey the court's view about
the merits of a party's claim,” Berkovich, 922 F.2d at 1025, inasmuch
as the judge “may not impose his own opinions on the jury.” Care
Travel Co., 944 F.2d at 991. We have observed that…, the judge must
exercise self-restraint in his interference lest “clarification” only
create more confusion or the impression in the juror's minds that the
judge is hostile to one party's position.
id. Reversal is required where the trial judge strays beyond clarifying questions,
and “t[ook] over the role of the prosecutor and display[ed] bias” by intensely
51
examining the defendant, and demonstrating his disbelief in the defendant's
testimony. United States v. Filani, 74 F.3d 378 (2d Cir.1996).
Given the evidence that Gainor used and designed very similar products,
Plaintiff’s only path was to attack Gainor. Rather than leave that to Plaintiff, within
the first questions of examination the Court took over to state its own view that
Gainor was not candid: “[w]ould you agree with me that you were doing
everything you could to avoid giving a direct answer to the question?” This was
not incidental, but was done to “express my view” that Gainor was evasive and not
trustworthy. The subsequent questions conveyed the Court’s theory.
The Court’s harsh examination was not limited to Gainor. The treatment of
experts -- accusing Nitze of non-neutral advocacy while disarming the same
accusations against Koskinen and vouching for his answers -- was uneven.
Looking at the record as a whole, there was a persistent pattern in which the Court
“conveyed to the jury the impression that it held a fixed and unfavorable opinion of
defendants, their counsel, and their position.” Rivas v. Brattesani, 94 F.3d 802, 807
(2nd Cir.1996). Although the Court provided one weak curative, “[c]urative
instructions to the jury, to the effect that they can decide what version to believe as
sole judges of credibility, do not remove ... an impression [that the judge believes
one version of an event and not another] once it is created.” Filani, 74 F.3d at 386;
Rivas, 94 F.3d at 807.
52
E. THE COURT’S CONTEMPT FINDING WAS ERRONEOUS

Because a court’s contempt power is narrow, this court’s review of contempt
findings “is more rigorous than would be the case in other situations in which
abuse of discretion review is conducted.” E.E.O.C. v. Local 638, 81 F.3d 1162,
1171 (2d Cir.1996); Perez v. Danbury Hosp., 347 F.3d 419, 423 (2d Cir. 2003).
A party may be held in civil contempt for failure to comply with a court
order only if “(1) the order the contemnor failed to comply with is clear and
unambiguous; (2) the proof of noncompliance is clear and convincing; and (3) the
contemnor has not diligently attempted to comply in a reasonable manner.”
Paramedics Electromedicina Comercial v. GE Med. Sys. Info. Techs., 369 F.3d
645, 655 (2d Cir.2004).
“[A]n injunction must ‘be specific and definite enough to apprise those
within its scope of the conduct that is being proscribed.’” S.C. Johnson & Son, Inc.
v. Clorox Co., 241 F.3d 232, 240–41 (2d Cir.2001) (citations omitted). “[T]he
specificity provisions of Rule 65(d) are no mere technical requirements. The Rule
was designed to prevent uncertainty and confusion on the part of those faced with
injunctive orders, and to avoid the possible founding of a contempt citation on a
decree too vague to be understood.” Schmidt v. Lessard, 414 U.S. 473, 476 (1974)
(per curiam). A party “must be able to ascertain from the four corners of the order
53
precisely what acts are forbidden.” Drywall Tapers, Local 1974 v. Local 530,
Operative Plasterers Int'l Ass'n, 889 F.2d 389, 395 (2d Cir.1989).
1. The Proof Of Non-Compliance Was Not Clear and Convincing
The Preliminary Injunction specifically enjoined “the Command Center
video, product and services…” This contrasts with broader injunctions that
encompass “similar” products. e.g., Inverness Corp. v. Whitehall Labs., 710 F.
Supp. 473, 473 (S.D.N.Y. 1989) (enjoining specified product and any that “appears
similar” or is “confusingly similar”); Geisel v. Poynter Prod. Inc., 283 F. Supp.
261, 268 (S.D.N.Y. 1968) (enjoining product “or other similar product.”)
The Court found Event Watcher was different from Command Center in a
substantive way: Command Center was an autopricer. Event Watcher was not.
“Event Watcher is Command Center with the automatic pricing function
detached….” (Doc. 213, at 4.) “[U]sers of Event Watcher who want to automate
pricing updates must add that capability themselves, whereas it is included in
Command Center (and in Broker Genius's AutoPricer).” (Doc. 170 at 7). The
absence of the autopricing functionality was the basis on which the Court
distinguished goPricer in the injunction. It was material to customers. Twenty of
approximately 110 customers left. Contrary to the Court’s assertion that customers
could “easily add” that functionality, the vast majority (85%) of those that
remained used it as a manual pricer. (A56). The few others, Koskinen confirmed,
54
created separate automation programs on their own computers. 13 Given those
acknowledged differences, as well as the unacknowledged ones 14, a finding that the
two products are “the same,” was unfounded. It is equivalent to finding that a
bicycle is a motorcycle because it is just a motorcycle with the motor detached.
The Court’s findings of bad faith were equally erroneous. Defendants
promptly filed a motion that disclosed its changes. (Doc. 123). Rather than credit
the transparency, the Court concluded that “Defendants refused to even provide
Broker Genius’s attorneys with access to Event Watcher until well after briefing
for the motion for clarification had concluded.” (SA44). It was the Court, not
Defendants, that denied Broker Genius’ request for access during the briefing. “I’m
not going to order that, at this point, that Event Watcher be turned over. Let’s see
what the papers are.” (May 31, 2018 Tr.53). Ascribing bad faith to Defendants for
the Court’s own ruling was error.
The Court also called Defendants’ explanation “disingenuous.” (SA44)
When Plaintiff first presented evidence that some customers were making frequent
13
The Court pointed to Defendants’ creation of an Application Programming Interface
(“API”) protocol for the customer, but even Koskinen acknowledged an API is “it is simply a
way in which components of software communicate.” (Aug 21, 2018 Tr. 90).
14
The Court suggested Defendants “point to only one difference,” and “there is no
dispute” there were no other differences. (Doc. 170 at 2, 7). Defendants identified numerous
differences, including market historical data to permit users to see trends, which was not in
Command Center. E.g., Colich at 7,
55
price updates, Defendants’ counsel truthfully reported: “I suspect the answer is that
in some instances they may have mechanically have their separate software that
they themselves have created in order to do that. I would need to see what evidence
they have, but I can tell the Court that it is not happening on our side [of the
program].” (SA44). This proved to be accurate, and the Court found “users …
must add that capability themselves.” (Doc. 170 at 7). Further Defendants lacked
knowledge of what the customers were doing on their own, because Defendants
had not assisted customers, even when asked. (A80).
F. THE COURT’S ERRONEOUS EVIDENTIARY RULINGS
1. The Failure To Exclude The Non-Final Contempt Ruling

As an evidentiary matter, Defendants objected to Plaintiff’s using the
contempt findings at trial, both because it was not relevant to the claims, and
because it was not a conclusive final judgment (Tr. 1462). This Court agreed the
findings were not final. Broker Genius, 756 F.App'x at 81-82. It was also not
relevant, and highly prejudicial. In fact, Plaintiff presented this to the jury as a
determinative judicial finding:
Seat Scouts were held in contempt for violating the preliminary

injunction. That is Judge Stein's acknowledgement under the law of
Seat Scouts' bad faith.
(Closing 1534). The use of irrelevant and prejudicial evidence constituted error.
TVT Records v. Island Def Jam Music Group, 250 F.Supp.2d 341, 347 (S.D.N.Y.
56
2003); Park W. Radiology v. CareCore Nat. LLC, 675 F.Supp.2d 314, 324
(S.D.N.Y. 2009).
2. The Preclusion Of Evidence On The Patent Rejection
Even though Plaintiff had to establish a proprietary interest, the Court barred
Defendants from referencing the rejection of Plaintiff’s patent application. It also
barred Defendants from attempting to show that the process was obvious, holding
that obviousness was not relevant. (Tr. 64:17-18 (A96)). It refused to instruct the
jury that obvious items could not be derived. (Tr. 1437 (A269)).
G. THE DAMAGE AWARD LACKED ANY BASIS

The verdict did not match with any logical theory of damages, and appeared
to be nothing more than the jury using round numbers -- $3 million for the contract
claim, but a separate $1.5 million for the misappropriation claim -- to punish
Defendants.
1. Plaintiff Assumed, Rather Than Established, Causation

The Court permitted Plaintiff to advance a theory of damages not connected
to its evidence, over Defendants’ motion in limine. Even if one disregards the
ruling that all of AutoPricer was not confidential, which would eliminate any basis
for a judgment, Plaintiff conceded that it demonstrated publicly the specific four-
widget process for creating autopricing rules. Not only were the combinations
disclosed, but so were the individual menus that displayed items such as the
57
chronological display of upcoming events, the ability to sort columns, or the
interactive map. Under no interpretation were those proprietary. Ignoring those
specific concessions, the Court credited testimony that unspecified nuances that
might be learned only after hours of use. (Tr. 276 (A138)). Those unidentified
items cannot form the basis for the claim. “[S]pecificity is required before the
court so that the defendant can defend himself adequately against claims of trade
secret misappropriation, and can divine the line between secret and non-secret
information” Sit-Up Ltd. v IAC/Interactive Corp., 2008 WL 463884 *11 (S.D.N.Y.
2008). The admission that the specified items were publicly disclosed could not be
undermined by testimony on unspecified other items.
However, even if those unclaimed and unidentified nuances remained
private, Plaintiff made no effort to connect its damages to them. Damages must be
directly traceable to the specific acts of unfair competition. eCommission Sols.,
LLC v. CTS Holdings Inc., 2019 WL 2261457 *2 (2d Cir. May 28, 2019). Plaintiff
assumed that the entirety of its lost sales resulted from Seat Scouts offering an
autopricer, rather than from those non-public items. LaserDynamics, Inc. v. Quanta
Computer, 694 F.3d 51, 68 (Fed. Cir. 2012) (Plaintiff must present evidence that
competitor’s sales resulted from proprietary components.); Thoroughbred Software
Int'l, Inc. v. Dice Corp., 488 F.3d 352, 358 (6th Cir.2007) (“must prove the
58
existence of a causal connection between the alleged infringement and some loss
of anticipated revenue.”)
Plaintiff’s expert Stephen Dell failed to make this connection, and his
damage model expressly “assume[d] that there's effectively a finding of liability of
what the alleged claims are.” (Tr. 1150). His calculation did not matter if the
liability was the entire autopricer, or just a tiny feature: he assumed that the entire
“dynamic comp-based autopricer product” was proprietary. (Dell Tr. 1108, 1138
(A247, 248)). Plaintiff’s other evidence was of “Seat Scouts being in the market.”
Id., 1118; 1059:14-16, 1060:14 (A245-246). This assumption was inconsistent
with Plaintiff’s acknowledgement that the four-step autopricing process like
StageFront were public, and that only specific features (e.g., a menu in chronologic
order, price rules based not only on dollar figures but on percentages, or an
interactive map) were innovated. The assumption that ignored the scope of the
claim eliminated the required causation.
2. The Inconsistent Damage Awards

Lacking connection to anything broader than Seat Scouts’ “entry to the
market,” the jury arbitrarily awarded round numbers unrelated to any offered
calculation. The jury awarded $3 million on one claim, and $1.5 million on the
second. Its award was inconsistent with Plaintiff’s claim of one single indivisible
injury. Plaintiff never offered a theory of separate injuries. (Doc. 395). The Court
59
offered no rationale, addressing instead whether the two separate awards were
duplicative, not how they could be distinct.
H. THE PERMANENT INJUNCTION WAS ERRONEOUS
A permanent injunction is warranted only under the exacting test that
governs preliminary injunctions. eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388
(2006).
1. Plaintiff Was Compensated With An Award Of Damages

The Court justified the permanent injunction because Plaintiff would suffer
loss of goodwill and price erosion. Plaintiff expressly sought – and received –
compensation for those items (Tr. 1567 (A291)), explicitly as the “price erosion
extends into the future, as does the loss of goodwill.” (Tr. 1467 (A279)). The
verdict, multiples in excess of the quantifiable injury, plainly encompassed the
future harm from those items. The grant of an injunction, that eliminated such
future damages, was error.
2. Public Information Cannot Be Enjoined

The entirety of AutoPricer is in the public domain, precluding an injunction.
“It is well established that the release of information in open court … operates as a
waiver of any rights a party had to restrict its future use.” Littlejohn, 851 F.2d at
680. Upon disclosure, a restraint on the public information cannot be issued.
Callmann on Unfair Comp., Tr. & Mono. § 14:30 (4th Ed.); Conmar Prods. Corp.
60
v. Universal Slide Fastener Co., 172 F.2d 150, 154 (2d Cir.1949); Timely Products
Corporation v. Arron, 523 F.2d 288 (2d Cir.1975). At this point, the entire world
has access to the product, and the ability to build its features, meaning Broker
Genius has waived any ability to preclude Gainor from engaging in this area for
the remainder of his life.
3. The Permanent Injunction Fails Is Unconnected To The Actual

Violation
“An injunction is overbroad when it seeks to restrain the defendants from
engaging in legal conduct, or from engaging in illegal conduct that was not fairly
the subject of litigation.” Victorinox AG v. B&F Sys., Inc., 709 F.App'x 44, 51 (2d
Cir.2017). This “requires [the court] to delineate the ‘specific legal violations’ in
this case.” Peregrine Myanmar Ltd. v. Segal, 89 F.3d 41, 50 (2d Cir.1996).
Defendants sought a special verdict to assist in this process, but the Court rejected
this in favor of an opaque general verdict.
The injunction reflects this, and fails (and is unable) to delineate the specific
items prohibited. The failure to at least account for Plaintiff’s admissions about
the items that are public, renders the injunction vague and overbroad, effectively
barring use of all components, even those admitted to be in the public domain.
X. CONCLUSION
The judgment should be reversed and the two counts dismissed.
Alternatively, the judgment should be reversed and remanded for a new trial.
61
Dated: New York, New York

August 13, 2019
HINCKLEY & HEISENBERG LLP
By:
Christoph Heisenberg
880 Third Avenue, Suite 15

New York, New York 10028
Phone: (212) 845-9094
62
CERTIFICATE OF COMPLIANCE
1. This document complies with the type-volume limit of Fed. R. App. P.
32(a)(7)(B) because, excluding the parts of the document exempted by Fed. R.
App. P. 32(f) this document contains 13,995 words.
2. This document complies with the typeface requirements of Fed. R. App.
P. 32(a)(5) and the type-style requirements of Fed. R. App. P. 32(a)(6) because this
document has been prepared in a proportionally spaced typeface using Times New
Roman in 14 point font.
Dated: August 13, 2019

/s/ Christoph C. Heisenberg
Christoph C. Heisenberg
Attorney for Appellants
63

2019-08-13 Appellants Brief Filed

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Case 19-440, Document 56, 08/13/2019, 2631498, Page1 of 76

DREW GAINOR, SEAT SCOUTS LLC,

On Appeal from the United States District Court

BRIEF FOR APPELLANTS

I. FED. R. APP. P. 26.1 STATEMENT

financial interest in the outcome.

II. TABLE OF CONTENTS

II. TABLE OF CONTENTS ................................................................................... ii

III. TABLE OF AUTHORITIES ............................................................................ vi

IV. JURISDICTIONAL STATEMENT ................................................................. xi

V. STATEMENT OF ISSUES PRESENTED FOR REVIEW ............................ xii

VI. PRELIMINARY STATEMENT.........................................................................1

VII. STATEMENT OF THE CASE ...........................................................................5

A. Ticket Management Technologies .............................................................5

B. Plaintiff’s Claimed Proprietary Elements ..................................................6

1. Event Menu ..........................................................................................7

2. Inventory List Widget ..........................................................................7

3. Zones/Sections/Rows Widget ..............................................................7

4. Price by Comps Widget ........................................................................8

a) Groups Widget ...................................................................................8

b) Seasons Widget ..................................................................................9

C. Plaintiff’s Public Disclosures Of Autopricing ...........................................9

1. Disclosures In Its Unsuccessful Patent Application .............................9

2. Plaintiff’s Marketing and Demonstrations ..........................................11

D. Ticket Products In The Market .................................................................12

1. The StageFront Autopricer ..................................................................12

2. Seat Metrics Autopricer ......................................................................14

E. Gainor’s 2015 Event Watcher Autopricer Design ...................................14

F. Gainor’s Use Of AutoPricer .....................................................................15

1. Plaintiff’s Terms of Use ......................................................................16

G. Seat Scouts’ Command Center .................................................................17

H. Plaintiff’s Litigation Against Competitors ...............................................18

J. Plaintiff’s Modified Claim Based On Limited Features ..........................21

K. The Trial ...................................................................................................23

1. The Court’s Prejudicial Questioning Of Defendants ..........................23

2. The Court’s Rebukes Of Defendants’ Expert .....................................27

1. The Court’s Actions On Plaintiff’s Expert..........................................28

2. The Court’s Preclusion Of Evidence Rebutting Plaintiff’s Laptop

3. The Verdict And Permanent Injunction ..............................................31

VIII. SUMMARY OF ARGUMENT ...............................................................31

IX. ARGUMENT ...........................................................................................32

A. PLAINTIFF’S CLAIMS FAIL BECAUSE AUTOPRICER IS NOT

1. The Court Correctly Held That Disclosing AutoPricer To Customers

2. Plaintiff’s Patent Disclosures Further Precluded A Proprietary Interest

3. Plaintiff’s Marketing Further Precluded A Proprietary Interest .........37

4. The In-Court Demonstrations Put AutoPricer In The Public Domain

B. THE COURT APPLIED AN INCORRECT CONTRACT

1. The Court Correctly Held That “Derivative Works” References The

2. The Court’s Instruction, Which Substituted “Derive” In Place Of

3. At a Minimum, The Court’s Prior Reasonable Interpretation

4. The Interpretation Conflicts With New York’s Law On Restrictive

C. THE MISAPPROPRIATION CLAIM FAILS AS A MATTER OF LAW

1. The Misappropriation Claim Is Preempted .........................................44

2. The Court’s Refusal To Consider Preemption Was Contrary To Every

3. The Court Erred Permitting Plaintiff To Present An Unpleaded

D. THE COURT’S CONDUCT DEPRIVED DEFENDANTS OF A FAIR

1. The Court Impermissibly Conveyed Its Own View Of Witness

2. The Court’s Prejudicial Questioning Of Defendants ..........................51

E. THE COURT’S CONTEMPT FINDING WAS ERRONEOUS .............53

1. The Proof Of Non-Compliance Was Not Clear and Convincing .......54

F. THE COURT’S ERRONEOUS EVIDENTIARY RULINGS ................56

1. The Failure To Exclude The Non-Final Contempt Ruling .................56

2. The Preclusion Of Evidence On The Patent Rejection .......................57

G. THE DAMAGE AWARD LACKED ANY BASIS ................................57