ESTTA Tracking number: ESTTA1151387
BEFORE THE TRADEMARK TRIAL AND APPEAL BOARD
Proceeding 91250216
Submission Opposition/Response to Motion
Filer's Name James Bass
In the Matter of Trademark Application No. 88/312,772
Mark: TRUSCALE
JUDGMENT
Applicant, TruScale, LLC (“Applicant” or “TruScale”), pursuant to
Trademark Rule
2.127(e) and Rule 56 of the Federal Rules of Civil Procedure, by
and through its
undersigned counsel, respectfully submits this response to
Opposer’s Motion for Summary
Judgment on Count II of its Opposition against Application Ser. No.
88/312,772 (the
“Application”) owned by Applicant, erroneously alleging that
Applicant was not using the
TRUSCALE mark in commerce at least as early as of the February 22,
2019 filing date
(“Filing Date”) and that as a result the Application must be
declared void ab initio. Despite
Lenovo (Beijing) Limited’s (“Opposer” or “Lenovo”) contention to
the contrary,
Applicant’s evidence will show there exists genuine issues of
material facts in dispute that
go to the heart of the Count II issue, and the Trademark Trial and
Appeal Board should deny
Opposer’s Motion based on the facts and evidence contained
herein.
LENOVO (BEIJING) LIMITED,
2
LEGAL ARGUMENT AND POINTS OF AUTHORITY
Summary judgment is appropriate only where “there is no genuine
issue as to any material
fact and that the moving party is entitled to a judgment as a
matter of law.” Fed. R. Civ. P. 56(c);
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Matsushita
Elec. Indus. Co., Ltd. v. Zenith
Radio Corp., 475 U.S. 574, 586 (1986). Lenovo, as the party moving
for summary judgment has
the burden of demonstrating the absence of any issue of material
fact. See Celotex, 477 U.S. 317
(1986); Sweats Fashions Inc. v. Pannill Knitting Co., 833 F.2d
1560, 4 U.S.P.Q.2d 1793 (Fed. Cir.
1987). As a company reportedly valued at over $45 billion (see
Exhibit A), Opposer’s version of
the facts misconstrue and belittle Applicant as a startup company
and draw conclusions based on
its status that lead Opposer to conclude Applicant’s sales as of
the Filing Date are not sufficient to
meet the use in commerce threshold. However, as demonstrated below
and through the attached
evidence, although Applicant may have been initially confused about
which date should govern
its actual date of first use, it has met the requirement under the
Trademark Rules of Practice and
satisfied its burden of demonstrating use in commerce on or before
the Filing Date of the
TRUSCALE application.
1. The address and location of Applicant’s business has no bearing
on its use
Opposer draws many unfounded inferences from the fact that
Applicant is “a small
company with no employees, no physical address, no phone number.”
Opposer seems to mock the
fact (or infer it is somehow evidence of the status of a
non-company or lesser company) that
Applicant’s mailing address is a UPS store address. In fact, the
UPS Store advertises on its website
that it can be a resource for small business owners to receive
their mail safely and securely. See
Exhibit B. Also, according to its website, there are nearly 5,000
UPS Store locations throughout
the United States. See Id. This fact in and of itself is not
dispositive of the quality of Applicant’s
Commissioner for Trademarks
Application No. 88/312,772
3
business or whether Applicant has any use in commerce. In fact,
many well-known tech giants,
including Dell Computers and Facebook, both got their start in what
Opposer would likely
characterize as less than ideal office spaces. It is widely
reported that Michael Dell began his
company in his garage, while Mark Zuckerberg started Facebook in
his college dormitory. It is
doubtful whether either of those two startups at that time had a
listed phone number or address that
would have satisfied the Opposer’s standards, and yet, they are two
very well-known brands today.
2. Contracted sales arrangements do not negate bona fide use in
commerce
Opposer also tries to draw unfounded inferences from the fact that
Applicant has an
arrangement with Cloud Rush, LLC (“Cloud Rush”) as a channel
partner. In fact, labels aside, the
relationship between Applicant and Cloud Rush is an arrangement
many startups utilize to secure
or accelerate their sales cycle. Not all startups possess in-house
sales competency among their
founders. By partnering with outside companies who possess sales
competency, a startup can
ensure its goods or services are successfully marketed and sold to
its target consumers. Regardless
of whether the Service Agreement (“Agreement”) between TruScale and
Cloud Rush is exclusive
on paper, the parties seem to have that intent. See Exhibit C:
Excerpts from Deposition of
Christopher Scragg (“Scragg Depo”), 161:10-18 and Excerpts from
Deposition of Matthew Norris
(“Norris Depo”), 16:13. That fact aside, the Agreement does not
grant any IP or trademark rights
to Cloud Rush by operation of the sales services performed by it
under the Agreement. See Exhibit
D. Moreover, according to TMEP 1201.06(a) and the cases cited
therein, “a party that merely
distributes goods bearing the mark of a manufacturer or producer is
neither the owner nor a related-
company user of the mark” absent a written consent from the
trademark owner or an assignment
to the mark. See In re Bee Pollen from Eng. Ltd., 219 U.S.P.Q. 163
(TTAB 1983); Audioson
Vertriebs - GmbH v. Kirksaeter Audiosonics, Inc., 196 U.S.P.Q. 453
(TTAB 1977); Jean D’Albret
Commissioner for Trademarks
Application No. 88/312,772
4
v. Henkel-Khasana G.m.b.H., 185 U.S.P.Q. 317 (TTAB 1975); In re
Lettmann,183 U.S.P.Q. 369
(TTAB 1974); Bakker v. Steel Nurse of America Inc., 176 U.S.P.Q.
447 (TTAB 1972). Although
this rule applies to goods, the same rule can also be applicable to
service companies.
The evidence clearly establishes that TruScale, LLC and Cloud Rush
LLC are separate
entities with different owners and management. TruScale was formed
in May 2018, and the
operating agreement identifies a 50/50 partnership between Mr.
Scragg and Mr. Pitts. See Exhibit
E. Cloud Rush, on the other hand, is wholly owned by Mr. Norris and
was formed on February 18,
2019. See Exhibit F: Norris Affidavit, Norris Depo, 33:17,
47:10-18. According to Applicant’s
Response to Opposer’s First Set of Interrogatories
(“Interrogatories”), Mr. Scragg and Mr. Norris
did not even know each other at the time TruScale was formed. They
were introduced by Mr.
Scragg’s younger brother. See Exhibit G: Interrogatories Response
28, Affidavit of Mr. Norris.
Opposer spends a lot of time in its brief discussing how Mr. Scragg
and Mr. Pitts have
dedicated email addresses at Cloud Rush, but these facts do not
support anything other than the
fact that Cloud Rush is in fact a sales arm or channel partner for
Applicant. This is no different
than if Opposer’s counsel’s law firm were to second one of its
associates to work in one of
Lenovo’s U.S. offices. In that case, the seconded associate would
no doubt be assigned and
expected to use its assigned lenovo.com email address. In that
instance, the associate would likely
not maintain any control over the nature and quality of the goods
or services produced by Lenovo
and would not be any less of an employee delivering quality legal
services on behalf of Opposer’s
counsel’s law firm. Similarly, many solo and small firm legal
practitioners are listed as “Of
Counsel” on other law firms’ websites where their area of expertise
is needed by that law firm.
That does not negate the legitimacy of their solo or small firm
practice and the services they offer
thereunder. By entering into an “Of Counsel” agreement, they have
another opportunity to market
Commissioner for Trademarks
Application No. 88/312,772
5
their services through another distribution channel. This is
exactly the type of relationship
TruScale and Cloud Rush have entered into with each other.
Many contractors in many different industries (but especially in
the tech industry) operate
in the way in which TruScale and Cloud Rush are operating here.
Those contractors are usually
provided and assigned an email address from their host company.
That does not negate the
legitimacy of their own business endeavors, and it does not merge
their business dealings with the
host company. Even assuming arguendo, that Cloud Rush is a sort of
internal sales arm for
TruScale, this does not negate any sales of services that TruScale
has made to Cloud Rush so long
as the intracompany use was meant to further additional sales. See
Standard Pressed Steel Co. v.
Midwest Chrome Process Co., 183 U.S.P.Q. (BNA) 758 (TTAB 1974).
Similar facts are presented
here. TruScale has provided services under the TRUSCALE mark to
Cloud Rush with the intent
of Cloud Rush securing additional clients for Applicant; however,
sales have slowed due to the
pandemic. See Exhibit H: Norris Depo 46:23-25.
3. Barter revenue is revenue eligible for use in commerce
Opposer also draws many unfounded inferences regarding Applicant’s
use based on the
amount of barter revenue Applicant had with Cloud Rush in 2019.
This is also not dispositive of
use in commerce. It is well established that good faith use of a
mark in connection with the goods
and/or services is sufficient to establish use in commerce, and
Applicant has demonstrated this
through the evidence and discovery already provided in this
case.
Opposer characterizes Applicant’s use as “preparatory steps
insufficient to establish use in
commerce.” However, this is simply not true. As outlined in the
Interrogatories, Applicant
provided services in connection with the TRUSCALE mark to two
clients prior to the February
22, 2019 filing date – namely to Matt Norris as an individual prior
to forming Cloud Rush and to
Commissioner for Trademarks
Application No. 88/312,772
6
Cloud Rush as a corporation. See Exhibit I: Interrogatories
Response 16, Scragg Depo 90:1-19.
The Board has held “an initial commercial transaction is sufficient
to support the validity of a
registration so long as the initial transaction is not a sham
transaction and is followed by a
continuing effort or intent to engage in commercial use.” Fort
Howard Paper, 390 F.2d at 1017,
157 U.S.P.Q. at 57; Blue Bell, Inc. v. Jaymar-Ruby, Inc., 497 F.2d
433, 437, 182 U.S.P.Q. (BNA)
65, 67-68 (2d Cir. 1974). Moreover, the fact that TruScale only had
one or two clients is not
significant in determining use in commerce (contrast with Christian
Faith Fellowship Church v.
Adidas AG, 841 F.3d 986 (Fed. Cir. 2016) where bona fide use in
commerce was found for the
sale of two hats), since Applicant made a continued effort since
the filing of the Application to
market and sell its services, although admittedly throughout 2020
its efforts were hampered by the
pandemic. See Exhibit J: Scragg Depo, 19:21-25, 20:1-4. The Board
has also found sales of cigars
to one customer under an exclusive sales agreement were continued
use of the goods. “While
Respondent’s sales from 2010 to 2015 were admittedly slow and made
virtually exclusively to one
client, nothing in the record supports a finding that such sales
were not ‘bona fide use[s] of [the]
mark[s] in the ordinary course of trade,’ rather than ‘made merely
to reserve a right in [the]
mark[s].’” Mombacho Cigars S.A. v. Tropical Tobacco, Inc.,
Cancellation No. 92062543, July 6,
2018. Similar facts are present in this case – TruScale has sold
its services to two clients prior to
the Filing Date of the Application, but that does not discount the
use of its mark in commerce.
In January 2019 and February 2019, Applicant reported gross sales
of $2100 and $7500
respectively based on barter transactions with Cloud Rush and
reported sales of 14 and 50 hours
sold respectively. See Exhibit K: Interrogatories Response 24,
Scragg Depo 100:7-9. According
to the IRS, bartering is the exchange of goods or services at fair
marketing value and all taxpayers
must include in their income, at the time received, the fair market
value of the services received
Commissioner for Trademarks
Application No. 88/312,772
7
from bartering. See Exhibit L. Although there is some discrepancy
between the revenue listed in
the Interrogatories and in Applicant’s 2019 tax return (see Exhibit
M: Interrogatories Response
24, Scragg Depo 98:9-25, 99:1-17, 100:21-25, 101:1-14), the point
is, that Applicant had use in
commerce in 2019 and prior to the Filing Date of the TRUSCALE
application. Applicant included
the fair market value of the services received from Cloud Rush in
its 2019 taxes no matter what
the value of those sales ultimately were. See Exhibit N. The
Agreement between TruScale and
Cloud Rush contains the hourly wages for each resource to be
utilized by Cloud Rush from
TruScale. See Exhibit D, supra.
Conclusion
Contrary’s to Opposer’s contentions, as outlined above and
supported by the evidence,
genuine issues of material facts exist. For the foregoing reasons,
Opposer’s Motion for Summary
Judgment with respect to Count II should be denied.
Applicant has appointed James O. Bass, who is a member of the Bar
of the State of
Georgia and whose address is Law Offices of James O. Bass, 420
Creekstone Ridge, Woodstock,
Georgia 30188, as its duly authorized agent and attorney in the
matter of this Opposition, with
full power of substitution and revocation, to transact all business
with the U.S. Patent and
Trademark Office and elsewhere in the United States courts in
connection with this Opposition,
to sign all papers which may be hereinafter filed in connection
with this Opposition, and to
receive all communications relating to this Opposition.
Commissioner for Trademarks
Application No. 88/312,772
8
The Board and opposing counsel may communicate with Applicant’s
attorney by the
e-mail address noted below.
Date: August 5, 2021 Respectfully submitted, /s/ James O.
Bass
TruScale LLC James O. Bass, Esq. Law Offices of James O. Bass 420
Creekstone Ridge Woodstock, GA 30188 Tel: 770-874-6464 Fax:
770-874-6465 Email:
[email protected] Attorney for Applicant TruScale
LLC
9
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the
above-referenced APPLICANT’S
RESPONSE TO OPPOSER’S MOTION FOR SUMMARY JUDGMENT was served this
5th day of August, 2021 on Opposer’s counsel via email at the
address of record as follows:
JEFFREY A WAKOLBINGER KATTEN MUCHIN ROSENMAN LLP
525 W MONROE ST CHICAGO, IL 60661
UNITED STATES
[email protected] ,
[email protected] , chi-
3 A. But we've been performing to this.
4 Q. Okay. So as far as you're concerned, this is
5 an active agreement between Cloud Rush and TruScale?
6 A. Yeah. In fact, I've had a conversation, you
7 know, in recent history, like in this -- within the
8 last, you know, several months about confirming our
9 exclusivity arrangement which Matt confirmed.
10 Q. Is the exclusivity actually provided for in
11 this agreement?
13 Q. You don't have another agreement between
14 TruScale and Cloud Rush. Right?
15 A. No. Yeah. Actually, I don't see -- I just did
16 a search on it. I don't see exclusivity or
17 non-exclusive either listed here, but that's certainly
18 the auspices that we're operating under.
19 Q. Did you prepare this agreement?
20 A. Yes.
21 Q. And --
22 A. Well --
25 something, yeah.
Deposition of Chris Scragg
2 provide lead generation that hopefully then
3 translates to sales for Cloud Rush that then
4 trickles down to TruScale. So it's an investment
5 they made in time in order to get to when we are
6 able to generate business. So I would say it's more
7 of, initially, a barter agreement.
8 Q. Was there any kind of formal barter
9 agreement you had?
10 A. We set up a partner agreement when we first
11 got going just kind of, if I recall -- I haven't
12 reviewed it since I signed it. But it just stated,
13 I think, kind of exclusivity and that they're our
14 go-to based on the efforts, the sweat that they put
15 into it, you know, that when we do have
16 opportunities that they're going to get looks at
17 them, especially if it's AWS, which is their
18 specialty.
20 in the affidavit. It says, "Cloud Rush continues to
21 maintain an ongoing commercial relationship with
22 TruScale." Is that still accurate today?
23 A. Yes.
25 commercial relationship between Cloud Rush and
Page 16
Deposition of Matthew Norris
Exhibit D
SERVICE AGREEMENT
This Contract for Services is made effective as of March 26, 2019,
by and between Cloud Rush, LLC of 3423 Piedmont Rd. NE, Atlanta,
Georgia 30305 (the "Recipient"), and TruScale, LLC of 11124
Kingston Pike, Suite 119-275, Knoxville, Tennessee 37934 (the
"Provider").
1. DESCRIPTION OF SERVICES. Effective March 26, 2019, TruScale will
provide to Cloud Rush the services described in the attached
Exhibit at the published rates (collectively, the
"Services").
2. PAYMENT. Payment shall be made to Provider per the following
schedule:
Engagement Type Terms
Fixed Price Project 50% due at project start. 50% net 30 @ project
end.
Hourly Run Rate Invoiced on the 1st of each month, net 30
Cloud Managed Services Out of scope for this Contract.
Cloud Rush shall pay all costs of collection, including without
limitation, reasonable attorney fees. In addition to any other
right or remedy provided by law, if Cloud Rush fails to pay for the
Services when due, TruScale has the option to treat such failure to
pay as a material breach of this Contract, and may cancel this
Contract and/or seek legal remedies.
3. TERM. This Contract will remain in effect in perpetuity until
either party notifies the other in writing of their intent to
terminate with 60 days notice. Annually, the Exhibit and service
rates may be negotiated by either party, with all other terms
remaining in effect.
4. CONFIDENTIALITY. Provider, and its employees, agents, or
representatives will not at any time or in any manner, either
directly or indirectly, use for the personal benefit of Provider,
or divulge, disclose, or communicate in any manner, any information
that is proprietary to Recipient. Provider and its employees,
agents, and representatives will protect such information and treat
it as strictly confidential. This provision will continue to be
effective after the termination of this Contract. Any oral or
written waiver by Recipient of these confidentiality obligations
which allows Provider to disclose Recipient's confidential
information to a third party will be limited to a single occurrence
tied to the specific information disclosed to the specific third
party, and the confidentiality clause will continue to be in effect
for all other occurrences.
Upon termination of this Contract, Provider will return to
Recipient all records, notes, documentation and other items that
were used, created, or controlled by Provider during the term of
this Contract.
5. INDEMNIFICATION. Provider agrees to indemnify and hold Recipient
harmless from all claims, losses, expenses, fees including attorney
fees, costs, and judgments that may be asserted against Recipient
that result from the acts or omissions of Provider and/or
Provider's employees, agents, or representatives.
6. WARRANTY. Provider shall provide its services and meet its
obligations under this Contract in a timely and workmanlike manner,
using knowledge and recommendations for performing the services
which meet generally acceptable standards in Provider's community
and region, and will provide a standard of care equal to, or
superior to, care used by service providers similar to Provider on
similar projects.
7. DEFAULT. The occurrence of any of the following shall constitute
a material default under this Contract:
a. The failure to make a required payment when due.
b. The insolvency or bankruptcy of either party.
c. The subjection of any of either party's property to any levy,
seizure, general assignment for the benefit of creditors,
application or sale for or by any creditor or government
agency.
d. The failure to make available or deliver the Services in the
time and manner provided for in this Contract.
8. REMEDIES. In addition to any and all other rights a party may
have available according to law, if a party defaults by failing to
substantially perform any provision, term or condition of this
Contract (including without limitation the failure to make a
monetary payment when due), the other party may terminate the
Contract by providing written notice to the defaulting party. This
notice shall describe with sufficient detail the nature of the
default. The party receiving such notice shall have 30 days from
the effective date of such notice to cure the default(s). Unless
waived in writing by a party providing notice, the failure to cure
the default(s) within such time period shall result in the
automatic termination of this Contract.
9. FORCE MAJEURE. If performance of this Contract or any obligation
under this Contract is prevented, restricted, or interfered with by
causes beyond either party's reasonable control ("Force Majeure"),
and if the party unable to carry out its obligations gives the
other party prompt written notice of such event, then the
obligations of the party invoking this provision shall be suspended
to the extent necessary by such event. The term Force Majeure shall
include, without limitation, acts of God, fire, explosion,
vandalism, storm or other similar occurrence, orders or acts of
military or civil authority,
or by national emergencies, insurrections, riots, or wars, or
strikes, lock-outs, work stoppages or other labor disputes, or
supplier failures. The excused party shall use reasonable efforts
under the circumstances to avoid or remove such causes of non-
performance and shall proceed to perform with reasonable dispatch
whenever such causes are removed or ceased. An act or omission
shall be deemed within the reasonable control of a party if
committed, omitted, or caused by such party, or its employees,
officers, agents, or affiliates.
10. DISPUTE RESOLUTION. The parties will attempt to resolve any
dispute arising out of or relating to this Agreement through
friendly negotiations amongst the parties. If the matter is not
resolved by negotiation within 30 days, the parties will resolve
the dispute using the below Alternative Dispute Resolution (ADR)
procedure.
Any controversies or disputes arising out of or relating to this
Agreement will be resolved by binding arbitration under the rules
of the American Arbitration Association. The arbitrator's award
will be final, and judgment may be entered upon it by any court
having proper jurisdiction.
11. ENTIRE AGREEMENT. This Contract contains the entire agreement
of the parties, and there are no other promises or conditions in
any other agreement, whether oral or written concerning the subject
matter of this Contract. This Contract supersedes any prior written
or oral agreements between the parties.
12. SEVERABILITY. If any provision of this Contract will be held to
be invalid or unenforceable for any reason, the remaining
provisions will continue to be valid and enforceable. If a court
finds that any provision of this Contract is invalid or
unenforceable, but that by limiting such provision it would become
valid and enforceable, then such provision will be deemed to be
written, construed, and enforced as so limited.
13. AMENDMENT. This Contract may be modified or amended in writing
by mutual agreement between the parties, if the writing is signed
by the party obligated under the amendment.
14. GOVERNING LAW. This Contract shall be construed in accordance
with the laws of the State of Tennessee.
15. NOTICE. Any notice or communication required or permitted under
this Contract shall be sufficiently given if delivered in person or
by certified mail, return receipt requested, to the address set
forth in the opening paragraph or to such other address as one
party may have furnished to the other in writing.
16. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to
enforce any provision of this Contract shall not be construed as a
waiver or limitation of that party's right to subsequently enforce
and compel strict compliance with every provision of this
Contract.
17. ATTORNEY'S FEES TO PREVAILING PARTY. In any action arising
hereunder or any separate action pertaining to the validity of this
Agreement, the prevailing party shall be awarded reasonable
attorney's fees and costs, both in the trial court and on
appeal.
18. CONSTRUCTION AND INTERPRETATION. The rule requiring
construction or interpretation against the drafter is waived. The
document shall be deemed as if it were drafted by both parties in a
mutual effort.
19. ASSIGNMENT. Neither party may assign or transfer this Contract
without the prior written consent of the non-assigning party, which
approval shall not be unreasonably withheld.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized representatives as of the
date first above written.
Service Recipient: Cloud Rush, LLC
By: ________________________________________ Matt Norris, Managing
Member
Service Provider: TruScale, LLC
Resource Location Rate
Architect (Solutions, Cloud) On Shore $150.00
Data Engineer On Shore $125.00
Architect (Data) On Shore $150.00
For hourly run rate engagements, invoices will itemize each
resource, # of hours and rate.
Exhibit E
Exhibit F
1 just go with Managing Partner or President, but you
2 can fill in the blank with whatever you want to call
3 it.
4 Q. What do you call it, Managing Partner or
5 President?
8 Q. And then you're managing member of the LLC,
9 right?
11 Q. Are there any other members of the legal
12 entity?
13 A. When you say members, does that mean that
14 has ownership or was involved in the legalities of
15 setting everything up?
18 Q. Do you have any business partners in Cloud
19 Rush?
20 A. When you say business partners, what do you
21 mean?
23 A. Well, in my mind business partner would
24 mean someone that has a piece of equity and
25 ownership. And if that's what you're asking, then
Page 33
Deposition of Matthew Norris
1 they're familiar with. I would say five, 10 percent
2 maybe, probably five percent.
3 Q. So the hardware sales, setting up data
4 centers, on-prem business has been the bulk of what
5 Cloud Rush has been doing to date; is that right?
6 A. Uh-huh (affirmative).
8 TruScale, right?
9 A. No.
11 A. I guess it was probably February. I would
12 have to check to see when we legally did it, but I
13 would say --
14 Q. I don't need to test your memory. I'm
15 sorry. My record show you registered -- the
16 Secretary of State records show you registered the
17 business February 18, 2019. Does that sound right?
18 A. Yes, that sounds about right.
19 Q. And you got the Cloud Rush domain name just
20 a few days before that?
21 A. Uh-huh (affirmative).
22 Q. Whose idea was Cloud Rush? Was it yours?
23 A. As far as the company and the direction or
24 the name?
Page 47
Deposition of Matthew Norris
24
Response: Applicant objects to this Interrogatory on the basis that
it is irrelevant to
the proceedings at hand and vague. Subject to and without waiving
said objection and the
objections contained herein above, Applicant responds as
follows:
Name Start Date End Date
Chris Scragg May 18, 2018 Not applicable
Lance Pitts May 18, 2018 Not applicable
28. Describe all professional, personal, and familial relationships
between and among
TruScale LLC, Cloud Rush LLC, Christopher Scragg, Lance Pitts, and
Matthew Norris.
Response: Applicant objects to this Interrogatory on the basis that
it is irrelevant to
the proceedings at hand, vague, overly broad, and unduly
burdensome. Subject to and
without waiving said objection and the objections contained herein
above, Applicant
responds as follows:
Chris Scragg and Lance Pitts are colleagues from their employment
with Discovery and Scripps Networks Interactive. They have known
each other professionally since January 2015. In April 2018, Lance
and Chris, exchanged ideas around a startup, which lead to them
forming a company in May 2018, that focused on cloud computing,
TruScale.
Chris Scragg and Lance Pitts, through their work together over the
last 4 years, are also friends. However, as their relationship is
focused more on business, they do not spend a large quantity of
time together on a social level.
Chris Scragg and Matt Norris were introduced to each other through
Chris’ brother, Jon Scragg. Jon Scragg and Matt Norris were
colleagues from their employment at Centrics IT in Atlanta, GA.
When Jon and Matt’s employment ended at Centrics IT, Matt elected
to start a business over transitioning to another employer. On
information and belief, Matt desired to capitalize on the market
swell around cloud computing in January 2019. It is through this
shared entrepreneurial alignment that Jon connected Matt with
Chris.
Cloud Rush, LLC is a channel partner for TruScale, LLC.
25
TruScale, LLC is the exclusive fulfillment and service delivery arm
of Cloud Rush, LLC. TruScale invoices Cloud Rush for service
delivery performed for Cloud Rush customers.
In exchange for Cloud Rush molding their business model, in part,
around TruScale service offerings and going to market, TruScale
provides Cloud Rush, IT support, cloud managed services, Google G
Suite management, marketing content, business consulting, blog
postings, etc.
Chris Scragg and Matt Norris did not know each other prior January
2019. Additionally, Matt and Chris have a purely business
relationship.
Lance Pitts was introduced to Matt Norris by Chris Scragg in
January 2019. Additionally, Matt and Lance have a purely business
relationship.
Jon Scragg is not an employee, member, director or otherwise of
either, Cloud Rush or TruScale. Jon’s only involvement with
TruScale and Cloud Rush, was connecting Matt and Chris, over their
shared entrepreneurial vision.
Applicant has made a good-faith effort to respond to all
interrogatories propounded by
Opposer. Applicant reserves the right to amend these responses at
any point up to and including
the entry of any pre-trial order or hearing in this matter, as new
information is identified
Respectfully submitted this 3rd day of January 2020, by:
___________________________________ James O. Bass, Attorney for
Applicant Law Offices of James O. Bass 420 Creekstone Ridge
Woodstock, GA 30188 770-874-6464
Exhibit H
1 yeah, he was involved, but we never -- he's not been
2 as involved as Chris, especially as time passed.
3 Q. How was Lance involved?
4 A. I think he was just a complement to Chris
5 in terms of there's many pieces of cloud. It's not
6 just the architecture piece. So he's complementary
7 to the offering that TruScale can provide.
8 Q. You had mentioned the Atlanta Tech Village
9 and your neighbor there. What is that exactly?
10 A. It's like a startup incubator.
11 Q. And is that where Cloud Rush's physical
12 office is?
13 A. Yes.
14 Q. Is Cloud Rush your sole gig right now? Are
15 you employed anywhere else or anything like that?
16 A. I'm not employed anywhere else.
17 Q. Is there anyone else that's working full
18 time with Cloud Rush, or is everybody else doing
19 this in some part-time capacity?
20 A. Ryan and Scott are full time.
21 Q. What percentage of Cloud Rush's business is
22 AWS related?
23 A. Not as much as I would like. COVID
24 obviously changed things a bit and sent us back to
25 focusing on what our salespeople's roots and what
Page 46
Deposition of Matthew Norris
1 Q. Prior to the date Cloud Rush formed, what
2 services do you believe TruScale was providing I guess
3 in this case to Matt Norris? Right? Does that make
4 sense?
7 A. Well, the services are listed.
8 Q. Okay. In Row 1 of the response to Exhibit 16?
9 I mean, I'm sorry. To Interrogatory 16?
10 A. Yeah. I don't have anything to add there.
11 Q. So what's a start-up roadmap?
12 A. Start-up roadmap was that we had a board set up
13 in Trello and we're setting up -- these -- these are two
14 things -- these are critical steps that need to happen
15 in order to become a company, these are critical steps
16 that need to happen to become an Amazon web services
17 partner. So I was basically getting up a roadmap for
18 them -- for us to all execute again so that they could
19 become a company and become an AWS partner.
20 Q. Okay. You said a board set up in Trello. Is
21 that T-R-E-L-L-O?
22 A. Yeah. Yes.
23 Q. What's Trello?
24 A. Trello is a -- kind of like a combine board
25 where you can assign tasks to individual users, track
Page 90
Architect (Solutions, Cloud) On Shore $150.00
Data Engineer On Shore $125.00
Architect (Data) On Shore $150.00
15. Identify the actual prices charged for each of the goods or
services provided in
connection with Applicant's Mark.
Response: Applicant objects to this Interrogatory on the basis that
it is irrelevant to
the proceedings at hand, vague, overly broad, and unduly
burdensome. Subject to and
without waiving said objection and the objections contained herein
above, Applicant
responds as follows: See response to Interrogatory 14 above.
16. Identify (by name, address, and phone number or email address)
each person who
has purchased services from Applicant in connection with
Applicant's Mark and identify, for each
person, (a) the date(s) on which such services were purchased, (b)
the date(s) on which such
services were performed, (c) the types of services performed, and
(d) the amount paid for such
services.
Response: Applicant objects to this Interrogatory on the basis that
it is irrelevant to
the proceedings at hand, vague, overly broad, and unduly
burdensome. Subject to and
without waiving said objection and the objections contained herein
above, Applicant
responds as follows:
[email protected] 678-575-7667 Cloud Rush 3423 Piedmont Road NE
Suite 589 Atlanta GA, 30305
2/19/2019 cloud consulting, domain registration, Google G Suite
configuration and management
Matt Norris CEO mnorris@cloud- rush.com 678-575-7667 Cloud Rush
3423 Piedmont Road NE Suite 589 Atlanta GA, 30305
2/19/2019 Ongoing 2/19/2019 - present day
Management of public cloud infrastructure, Google G Suite
management, public cloud infrastructure architecture, deployment
and management
~$6,600*
Matt Norris CEO mnorris@cloud- rush.com 678-575-7667 Cloud Rush
3423 Piedmont Road NE Suite 589 Atlanta GA, 30305 Through the
channel partnership between Cloud Rush and TruScale, TruScale
delivered services sold to FitRadio.
3/8/2019 3/9/2019 Migrated a VMWare virtual machine from datacenter
to AWS.
$500*
$10,050
14
mnorris@cloud- rush.com 678-575-7667 Cloud Rush 3423 Piedmont Road
NE Suite 589 Atlanta GA, 30305 Through the channel partnership
between Cloud Rush and TruScale, TruScale delivered services sold
to SpendHQ.
development, cluster re- deployment
* Barter transactions. The United States Internal Revenue Service
considers barter transactions taxable & reportable
income.
17. Identify each launched opportunity identified m the process of
Applicant becoming
a "select" AWS consulting partner.
Response: Applicant objects to this Interrogatory on the basis that
it is irrelevant to
the proceedings at hand, vague, overly broad, and unduly
burdensome. Subject to and
without waiving said objection and the objections contained herein
above, Applicant
responds as follows: Under 2018 partner requirements, “launched
opportunities” are not
part of the process of becoming an AWS consulting partner at the
select tier. However, the
number of certifications, accreditations and the amount influenced
AWS revenue, are part
of the process.
AWS Certified Architect
AWS Certified Developer
4 Number 7, still on Exhibit 22.
5 A. Uh-huh.
6 Q. And the question to TruScale was, "For each of
7 the categories of services listed at the TruScale
8 website, identify the specific services applicants that
9 TruScale has actually provided under applicants marked
10 and the customer to whom such service was provided." So
11 I think this will get us to the answer of my last
12 question. Can you take a look at TruScale's response to
13 Interrogatory Number 7, which is presented in the form
14 of a table, and let me know if that is a complete list
15 of services TruScale has actually provided to customers
16 as of January when these interrogatories were completed?
17 A. One thing I would say about the item 21st
18 Mortgage, it says quarterly, Microsoft has to do a
19 performance tuning.
20 Q. Uh-huh.
21 A. This was included because that's what we
22 performed, but the landscape changed during Covid, and
23 so we've not yet been brought back to do additional
24 tuning, but it was agreed that they were looking to do
25 quarterly or semi-annually -- semi-annual tuning. But
Page 19
Deposition of Chris Scragg
1 at this point, we've not had a repeat of that service
2 with that customer. So it's not -- it's not an ongoing
3 thing with them right now currently, but I'm -- I
4 believe Covid is -- has some -- has had an impact there.
5 Q. Fair enough. Just so I understand. Are you
6 saying you performed SQL performance tuning once for
7 21st Mortgage --
8 A. Yes.
9 Q. -- with the intention of it being quarterly,
10 but -- but the repeat nature of the services did not
11 come to bear yet?
12 A. Not to bear yet. We still meet with them on a
13 fairly regular basis. But, yeah. We've not -- we've
14 not executed an additional tuning session yet.
15 Q. Okay. So when was the session you did do?
16 A. I don't have that available in front of me.
17 It's been a couple of years. Right? Since I developed
18 this response.
19 Q. Well, it hasn't been a couple of years. It may
20 seem like it because of Covid, but this is January 2020.
21 A. Fair. Okay.
23 Twenty -- you know, definitely 2019. Right?
24 A. It was -- yeah. It was definitely 2019. Yes.
25 2019.
Page 20
1 revenue, cost of goods sold, gross profit margin for
2 such goods or services by month from the date of first
3 sale to the present." And, again, we discussed TruScale
4 doesn't sell goods, it was only offering services.
5 Correct?
7 Q. So the unit column, is that indicative of
8 hours?
9 A. Hours. Yes.
10 Q. Okay. So it seems like perhaps this would be
11 another kind of form of presenting the information we
12 were just talking about with regard to TruScale's
13 response to Interrogatory 16. Would you agree?
14 A. It appears to be, yes.
15 Q. For example, second to last row, we've got
16 Cloud Rush, SpendHQ and there's that same amount flushed
17 out here. I guess you put 67 hours into the project or
18 your subcontractors did and got paid $10,050; is that
19 right?
22 double-check my math, but I think we're at around
23 $46,000 here. So we've got three different amounts of
24 total revenue for 2019, $20,150 in response to
25 Interrogatory 16 for all the services that TruScale
Page 100
(VMWare, Microsoft Hyper-V) Large hardware maintenance
contracts Publicly disclosed modernization
initiatives Changes in executive leadership
24. Identify, for each good and service ever offered under
Applicant's Mark in the
United States, the number of units sold, gross sales revenue, cost
of goods sold, and gross profit
margin (in U.S. dollars) for such good or service, by month, from
the date of the first sale to the
present.
Response: Applicant objects to this Interrogatory on the basis that
it is irrelevant to
the proceedings at hand, vague, overly broad, and unduly
burdensome. Subject to and
without waiving said objection and the objections contained herein
above, Applicant
responds as follows:
14 $2,100 *
February 2019
Cloud Rush
consulting, deliverable production, DNS management, G Suite Launch,
website and brand consulting, cloud managed services
March 2019 Cloud Rush (FitRadio)
VMWare virtual machine migration to the AWS (cloud).
Cloud Rush
APN partner development, cloud and business consulting, cloud
managed services
40 $6,000 *
April 2019 Cloud Rush
Cloud and business consulting, AWS account instantiation, Route 53
config, cloud managed services
15 $2,250 *
27 $4,050 *
12 $1,800 *
24 $3,600 *
August 2019
Cloud Rush
18 $2,700 *
September 2019
Cloud Rush
Cloud and business consulting, cloud managed services, pre-sales
support, SEO meetings, document production
30 $4,500 *
October 2019
67 $10,050 $780 92%
* The United States Internal Revenue Service considers barter
transactions taxable & reportable income.
25. Identify all past and present members of TruScale LLC.
Response: Applicant objects to this Interrogatory on the basis that
it is irrelevant to
the proceedings at hand. Subject to and without waiving said
objection and the objections
contained herein above, Applicant responds as follows:
Chris Scragg, Managing Member
Lance Pitts, Managing Member
26. Identify all past and present officers of TruScale LLC and
provide a description of
each officer's responsibilities in connection with TruScale
LLC.
Response: Applicant objects to this Interrogatory on the basis that
it is irrelevant to
the proceedings at hand. Subject to and without waiving said
objection and the objections
contained herein above, Applicant responds as follows:
Name Role Responsibilities
Chris Scragg Managing Member See Exhibit 1: TruScale, LLC Operating
Agreement
Lance Pitts Managing Member See Exhibit 1: TruScale, LLC Operating
Agreement
27. Identify all past and present employees of TruScale LLC and the
dates of each
employee's employment.
Exhibit L
!!! "
!!! "
Exhibit M
1 marketplace.
2 Q. Okay. And I realize this has been the only
3 deal you've had for cash payment so far with --
4 involving Cloud Rush, but is that -- that kind of
5 structure how you envision the relationship playing out
6 on other projects as well?
7 A. Yes. That's how I envisioned it with Cloud
8 Rush, yeah.
9 Q. Okay. So the -- the numbers here for 2019 add
10 up to I think about $20,000, $20,150 which is a lot less
11 than the 86,000 you reported for your 2019 taxes. Do
12 you know why or what would be missing from this list
13 we're looking at?
14 A. Well, there's a lot of -- well, for one thing,
15 for example, Line Item Number -- you know, looking in
16 that where it says -- that 6,600 number, that was 2/19
17 to present --
19 in Exhibit 22, response to Interrogatory 16, the second
20 row of the table. Right?
21 A. Right. Page 13.
22 Q. Okay. I see that, $6,600.
23 A. So $6,600, that was 2/19 through present day,
24 whenever that date was that I drafted this table was not
25 included as the rest of the year. So there were
Page 98
1 services -- this documents going to looks like 10/29 --
2 yeah. This didn't -- you know, between the end --
3 between -- by the end of the year, we had accumulated --
4 accumulated more.
6 interrogatories at the beginning of January 2020.
7 A. Yeah. I have to go back and take a look and
8 see how it was calculated.
9 Q. That's a $6,600 difference there which is a --
10 A. A substantial.
11 Q. -- a substantial one, yeah. So as you sit here
12 right now, you don't know why the total from your
13 response to Interrogatory 16 would be different than
14 what was reported on your taxes?
15 A. What was reported on my taxes, I can say was
16 backed by actual transactions as well. I'm not sure
17 what the discrepancy is here. I can't recall.
18 Q. Okay. Let's look at Interrogatory Number 9
19 please from the same document, Exhibit 22. I'm sorry.
20 Wrong one. Interrogatory 24 in Exhibit 22. Another
21 table. Let me know when you're there.
22 A. Okay.
23 Q. So the question here from Lenovo was, "Identify
24 for each good and service ever offered under applicant's
25 mark in the U.S. the number of units sold, gross sales
Page 99
1 revenue, cost of goods sold, gross profit margin for
2 such goods or services by month from the date of first
3 sale to the present." And, again, we discussed TruScale
4 doesn't sell goods, it was only offering services.
5 Correct?
7 Q. So the unit column, is that indicative of
8 hours?
9 A. Hours. Yes.
10 Q. Okay. So it seems like perhaps this would be
11 another kind of form of presenting the information we
12 were just talking about with regard to TruScale's
13 response to Interrogatory 16. Would you agree?
14 A. It appears to be, yes.
15 Q. For example, second to last row, we've got
16 Cloud Rush, SpendHQ and there's that same amount flushed
17 out here. I guess you put 67 hours into the project or
18 your subcontractors did and got paid $10,050; is that
19 right?
22 double-check my math, but I think we're at around
23 $46,000 here. So we've got three different amounts of
24 total revenue for 2019, $20,150 in response to
25 Interrogatory 16 for all the services that TruScale
Page 100
1 provided in 2019. For the response to Interrogatory 24,
2 Interrogatory 24, it's $46,350, and then on the 2019 tax
3 return, it's $86,151. Do you have any idea why those
4 three amounts are so different?
5 A. My best inclination here is going to be that
6 there was a sharpening of the pencil in this particular
7 table here. I've got specific hours now associated with
8 each of these whereas before were generalizations of
9 those services and the amount of time spent on them.
10 I'm still kind of at a lost of why or what the -- what
11 the difference between this is and our tax forms. I'd
12 actually have to go back and look and see what I
13 provided to the CPA. It could've been on his end. I
14 don't know.
15 Q. Okay. I may ask you to do that at some point
16 later, but I assume that answer is not going to come to
17 you as you're sitting here today. Right?
18 A. True.
20 Interrogatory Number 9 please in Exhibit 22. No dollar
21 amounts on this one.
22 A. Twenty-two, okay.
23 Q. So the question here from Lenovo was, for each
24 service, identified in the TruScale trademark
25 application we were talking earlier and that we looked
Page 101
(VMWare, Microsoft Hyper-V) Large hardware maintenance
contracts Publicly disclosed modernization
initiatives Changes in executive leadership
24. Identify, for each good and service ever offered under
Applicant's Mark in the
United States, the number of units sold, gross sales revenue, cost
of goods sold, and gross profit
margin (in U.S. dollars) for such good or service, by month, from
the date of the first sale to the
present.
Response: Applicant objects to this Interrogatory on the basis that
it is irrelevant to
the proceedings at hand, vague, overly broad, and unduly
burdensome. Subject to and
without waiving said objection and the objections contained herein
above, Applicant
responds as follows:
14 $2,100 *
February 2019
Cloud Rush
consulting, deliverable production, DNS management, G Suite Launch,
website and brand consulting, cloud managed services
March 2019 Cloud Rush (FitRadio)
VMWare virtual machine migration to the AWS (cloud). Cloud
Rush
APN partner development, cloud and business consulting, cloud
managed services
40 $6,000 *
April 2019 Cloud Rush
Cloud and business consulting, AWS account instantiation, Route 53
config, cloud managed services
15 $2,250 *
27 $4,050 *
12 $1,800 *
24 $3,600 *
August 2019
Cloud Rush
18 $2,700 *
September 2019
Cloud Rush
Cloud and business consulting, cloud managed services, pre-sales
support, SEO meetings, document production
30 $4,500 *
October 2019
67 $10,050 $780 92%
* The United States Internal Revenue Service considers barter
transactions taxable & reportable income.
25. Identify all past and present members of TruScale LLC.
Response: Applicant objects to this Interrogatory on the basis that
it is irrelevant to
the proceedings at hand. Subject to and without waiving said
objection and the objections
contained herein above, Applicant responds as follows:
Chris Scragg, Managing Member
Lance Pitts, Managing Member
26. Identify all past and present officers of TruScale LLC and
provide a description of
each officer's responsibilities in connection with TruScale
LLC.
Response: Applicant objects to this Interrogatory on the basis that
it is irrelevant to
the proceedings at hand. Subject to and without waiving said
objection and the objections
contained herein above, Applicant responds as follows:
Name Role Responsibilities
Chris Scragg Managing Member See Exhibit 1: TruScale, LLC Operating
Agreement
Lance Pitts Managing Member See Exhibit 1: TruScale, LLC Operating
Agreement
27. Identify all past and present employees of TruScale LLC and the
dates of each
employee's employment.
Exhibit N