Ticket Resale Exec Spars With Judge At Tech-Poaching Trial

Law360, New York (January 9, 2019, 9:50 PM EST) -- The co-founder of Seat Scouts denied pilfering
software from competitor Broker Genius Inc. as he sparred with his rival's counsel — and at times with
U.S. District Judge Sidney H. Stein — in front of a Manhattan federal jury Wednesday over technology
that lets resale brokers automatically reprice tickets.

Drew Gainor was called to the witness stand by Broker Genius, a company whose CEO Shmuel "Sam"
Sherman sued Seat Scouts for damages in 2017. Sherman contended Seat Scouts violated Broker Genius'
terms of service, swiping his real-time pricing application after taking a 2016 subscription.

The two businesses, squaring off at a civil trial on contractual claims before Judge Stein, sell the software
to resale brokers, promising it will supercharge sales by keeping them competitive as seat prices change.
Broker Genius' website says it has assisted brokers in pricing some $2 billion of ticket inventory since its
2013 launch.

Sherman said his "AutoPricer" software cost him $4.5 million to develop and improve over more than
three years. Gainor's actions cost him sales and goodwill among clients — and forced him to lay off
workers, Sherman said.

Gainor's lawyers rejected that claim, saying Sherman's software is little more than an unpatented
algorithm that can be built on the cheap. They also rejected the central assertion that Gainor breached
Broker Genius' terms of service, claiming Gainor has no memory of agreeing to the terms.

"We knew we did nothing wrong," Gainor testified Wednesday as counsel for Sherman's company
grilled him on how he brought his product to market quickly and cheaply in late 2017 after accessing
Broker Genius. "Autopricing was the simplest technology I've built in my 18 years in the industry."

But Gainor was forced to explain to Sherman's lawyer, Veronica Munoz, why he initially refused to turn
over the laptop he used to access Sherman's product. Gainor blamed his previous legal team, from
Nesenoff & Miltenberg LLP.

"I just assumed that everything I provided to my attorney would show what we needed to show," he
said, rejecting the assertion that he was trying to hide evidence.

As Gainor and Munoz sparred over that and other details — such as what "software" actually is — Judge
Stein began to press Gainor as well, asking him his reasons for doggedly parsing terms like "software,"
"development" and "web application" in front of the jury and during his deposition testimony.

"Would you agree with me that you were doing everything you could to avoid giving a direct answer in
that deposition?" Judge Stein said.

"No," Gainor replied, insisting his views on what software actually is are constrained and that he didn't
understand the questions he was asked. "I picture software as something you install locally on a
computer."

"You are under oath now, right?" the judge asked as a follow-up.

"Yes," Gainor replied.

Judge Stein also pressed Gainor to explain why he never launched autopricing software before he
accessed Sherman's product if such a task had been so simple, especially because, as emails provided to
the jury showed, Gainor's business partners wanted to make autopricing a priority back in September
2015.

"I think you said you were dying to build it out," the judge said.

Gainor said Seat Scouts ended up having to deal with more pressing priorities, which got in the way prior
to the launch of their autopricing product two years later.

In May, Judge Stein blocked Gainor's company from creating any software that is derivative of
Sherman's seat-pricing program, AutoPricer v.3, finding Sherman's side more likely to prevail.

After that, Gainor's company renamed its product from "Command Center" to "Event Watcher" and
slightly changed its functionality, causing Judge Stein to hold it in contempt.

Broker Genius Inc. is represented by Veronica M. Munoz, Daniel J. Melman and Miriam K. Tyrell of Pearl
Cohen Zedek Latzer Baratz LLP.

Seat Scouts LLC and Gainor are represented by George R. Hinckley Jr. and Christoph C. Heisenberg of
Hinckley & Heisenberg LLP.

The case is Broker Genius Inc. v. Seat Scouts LLC et al., case number 1:17-cv-08627, in the U.S. District
Court for the Southern District of New York.

--Editing by Amy Rowe.