Social Technologies LLC v. Apple Inc.

Background

Social Technologies filed an intent-to-use application for the “MEMOJI” trademark in April 2016. It later filed a verified statement with the Patent and Trademark Office stating that the mark was in use in commerce. Apple challenged the validity of that filing and sought cancellation of Social Technologies’ trademark registration.

Apple also sought summary judgment on Social Technologies’ common-law trademark claim and its claim under California’s Unfair Competition Law. The court’s order denied Social Technologies’ motion for summary judgment and addressed Apple’s cross-motion.

Statutory Trademark Claim

The Lanham Act defines “use in commerce” as a genuine use of a mark in the ordinary course of trade, rather than a use made merely to reserve trademark rights. For goods, the mark must be attached to or associated with the goods, and the goods must be sold or transported in commerce. The court evaluated the issue under the totality of the circumstances.

The court held that no reasonable jury could find that Social Technologies used “MEMOJI” in commerce as required by the Lanham Act. When Apple announced its Memoji iPhone function on June 4, 2018, Social Technologies had not written code for its own app. After the announcement, Social Technologies’ chief executive, Samuel Bonet, hired a developer and directed the developer to create an app matching the trademark application’s description. Social Technologies posted the app in the Google Play store on June 28, 2018.

The court relied on undisputed evidence that Social Technologies rushed out a basic and malfunctioning app to reserve its rights and prepare a lawsuit against Apple. The app crashed and did not properly edit images. Bonet also directed that updates be divided into separate releases so the company would appear to be doing more work for the lawsuit. Although the app received about 5,500 free downloads, the court concluded that the downloads did not establish genuine commercial use because the app’s release was outside the ordinary course of trade and was primarily intended to preserve trademark rights.

The court granted Apple’s motion for summary judgment on the statutory trademark claim and held that Apple was entitled to cancellation of registration number 5,566,242. For the same reason, the court denied Social Technologies’ request for a declaration that its registration was valid. The court did not reach Apple’s alternative grounds for summary adjudication of this claim.

Common-Law Trademark Claim

The court granted Apple’s motion for summary judgment on Social Technologies’ common-law trademark claim. The only potential basis identified for that claim was an alleged assignment of rights from Christopher Anthony. Apple argued that Anthony had no remaining common-law rights to transfer, pointing among other things to the removal of Anthony’s app from the Apple Store in 2015, four years before the assignment.

The court also held that Social Technologies forfeited consideration of arguments it attempted to raise at the hearing and afterward because it did not address or defend the common-law claim in its opposition to Apple’s cross-motion. The court concluded that Apple had properly placed the claim at issue and identified the absence of supporting evidence.

California Unfair Competition Law Claim

The court granted Apple’s motion for summary judgment on Social Technologies’ claim under California’s Unfair Competition Law because that claim was derivative of the two trademark-infringement claims.

Counterclaims and Final Judgment

Apple represented that it would withdraw its infringement counterclaims if Social Technologies’ claims were resolved on summary judgment. The court gave Apple seven days to file a notice of dismissal of those claims and required the notice to state whether the dismissal would be with or without prejudice and whether Apple requested a court order. The court stated that it would then address whether Social Technologies’ counterclaim seeking a declaration of non-infringement was moot and, if appropriate, enter final judgment.