Social Technologies LLC v. Apple Inc.

Background

Apple moved for attorney’s fees under the Lanham Act, which permits a court to award reasonable fees to the prevailing party in an “exceptional” trademark case. The case concerned Social Technologies’ trademark-related claims involving MEMOJI and Apple’s Memoji software.

Court’s analysis

The court applied a totality-of-the-circumstances standard. Under that standard, an exceptional case is one that stands out because of the strength of a party’s legal position and facts, or because of the unreasonable way the case was litigated.

The court described the fee issue as a very close question. It said Social Technologies had assembled a minimally functional, and often dysfunctional, app with the sole aim of filing an opportunistic lawsuit against Apple rather than competing in the marketplace. The court also said Social Technologies’ pursuit of a large payout caused it to overlook the requirement that distribution of its application occur in the ordinary course of trade.

But the court found that the conduct had to be viewed in context. Before Apple announced its Memoji software, Social Technologies had filed an intent-to-use application for MEMOJI and taken preliminary steps toward developing a phone application using the design mark. The court therefore concluded that Social Technologies had not fabricated its claims entirely. It also found that the company’s conduct during discovery and the litigation was not sufficiently egregious to make the case exceptional.

Rulings

The court denied Apple’s motion for attorney’s fees. It also granted Apple’s separate motion to seal, identified as Docket No. 161. The opinion does not state that the fee motion was granted or denied with or without prejudice.