'Memoji' trademark owner created app solely to sue Apple - 9th Circ.

Apple senior vice president of Software Engineering Craig Federighi displays a sampling of new Memoji avatars at the Apple Worldwide Developer Conference (WWDC) in San Jose, California, U.S., June 4, 2018. REUTERS/Elijah Nouvelage
  • "Memoji" app maker didn't make bona fide trademark use
  • Created app solely to bolster Apple infringement case
  • User downloads didn't constitute legitimate trademark use

(Reuters) - The 9th U.S. Circuit Court of Appeals on Tuesday said an Atlanta-based app maker developed its "Memoji" app just to win a federal trademark registration and bolster an infringement case against Apple Inc over an iOS feature with the same name, affirming the tech giant's win against Social Technologies LLC.

Social Tech lacked protectable rights in its Memoji mark because it never made legitimate use of it in commerce, U.S. Senior Judge Jane Restani of the U.S. Court of International Trade, sitting by designation, wrote for a three-judge panel.

Social Tech's attorney John Pierce of Pierce Bainbridge said he would immediately begin preparing an appeal to the U.S. Supreme Court.

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Apple and its attorney Dale Cendali of Kirkland & Ellis didn't immediately respond to a request for comment.

Social Tech sued Apple in 2018, alleging Apple's Memoji personalized emoji feature infringed its trademark covering its app with the same name. U.S. District Judge Vince Chhabria ruled for Apple in 2019.

"The undisputed evidence in the record points in only one direction: Social Tech developed and posted its app with a singular focus on securing registration to sue Apple, without any good-faith regard to the commercial viability of its product," Chhabria said.

Chhabria noted, among other things, that Social Tech filed its federal trademark application in 2016, hadn't written any code by the time Apple announced its Memoji function in 2018, and released a defective app later that year.

He also cited communications from Social Tech CEO Samuel Bonet indicating that the company rushed the app after the announcement solely to reserve its rights in the mark and boost its trademark case against Apple.

"For example, Bonet wrote before the launch: 'We are lining up all of our information, in preparation for a nice lawsuit against Apple, Inc! We are looking REALLY good. Get your Lamborghini picked out!'" Chhabria said.

Restani, joined by U.S. Circuit Judges Michael Hawkins and Eric Miller, affirmed that Social Tech didn't make a bona fide use of the mark in commerce under the Lanham Act and ordered the U.S. Patent and Trademark Office to cancel Social Tech's "Memoji" trademark registration.

Social Tech's commercial activities before Apple's 2018 Memoji announcement — including its business planning, creation of a promotional website and unsuccessful solicitation of outside investors — weren't sufficiently public to establish its trademark rights, Restani said. The appeals court also agreed that Social Tech released the app just to support its lawsuit and didn't constitute a bona fide use.

"We do not suggest that rushing to develop a product or releasing a product of low quality are themselves sufficient to preclude a finding of bona fide use in commerce," Restani said. "But here, Social Tech fails to provide any evidence that its use of 'Memoji' was bona fide."

Restani also rejected Social Tech's argument that the nearly 5,000 downloads of its application created a legitimate use of the trademark in commerce.

"It is not the number of downloads that is lacking here, but a lack of any evidence whatsoever that suggests Social Tech developed its Memoji application for genuine commercial reasons," Restani said.

The case is Social Technologies LLC v. Apple Inc, 9th U.S. Circuit Court of Appeals, No. 20-15241.

For Social Tech: John Pierce of Pierce Bainbridge

For Apple: Dale Cendali of Kirkland & Ellis

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Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets. Reach him at blake.brittain@thomsonreuters.com