United States District Court, N.D. California
ORDER DENYING PLAINTIFF'S MOTION FOR SUMMARY
JUDGMENT AND GRANTING DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT RE: DKT. NOS. 115, 124
CHHABRIA, UNITED STATES DISTRICT JUDGE
Apple's motion for summary judgment on Social Tech's
statutory trademark claim is granted. In April 2016, Social
Tech filed an intent-to-use application for the trademark
“MEMOJI” with the Patent and Trademark Office
(PTO). 15 U.S.C. § 1051(b). To complete its
registration, Social Tech filed a “verified statement
that the mark is in use in commerce” with the PTO on
June 30, 2018. § 1051(d)(1); see Trademark File
228-29, Dkt. No. 115-3. Apple challenges the validity of this
filing and seeks cancellation of Social Tech's
registration on the ground that Social Tech did not use the
MEMOJI mark in commerce.
Lanham Act defines the term “use in commerce” to
mean “the bona fide use of a mark in the ordinary
course of trade, and not made merely to reserve a right in a
mark.” 15 U.S.C. § 1127. The definition further
provides (in slightly circular fashion): “For purposes
of this chapter, a mark shall be deemed to be in use in
commerce” on goods when (i) the mark is affixed to or
practically associated with the goods and (ii) “the
goods are sold or transported in commerce.” §
1127. This analysis is undertaken in light of the totality of
the circumstances. See Chance v. Pac-Tel Teletrac
Inc., 242 F.3d 1151, 1159 (9th Cir. 2001).
no reasonable jury could find that Social Tech used the
MEMOJI mark “in commerce” as the Ninth Circuit
has applied that term. 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.
first the undisputed timeline by which Social Tech developed
its app. On June 4, 2018, Apple announced a new iPhone
function that it calls “Memoji.” Social Tech, at
this point, had written no code for its own MEMOJI app,
despite its filing of an intent-to-use application in 2016.
Bonet Dep. 134:8-20, Dkt. No. 123-8. After Apple made public
its new iPhone function, Social Tech's CEO, Samuel Bonet,
contracted with a software developer, which he directed to
design the app to satisfy the product description in the
trademark application. Id. 135:1-6, 178:3-15. Social
Tech posted its app in the Google Play store on June 28,
about three weeks after Apple's announcement.
Id. 202:4-7. As Bonet admitted, Social Tech
“had to rush” to “release a basic but
functional version of its app” to “reserve Social
Tech's rights in the Memoji mark.” Id.
174:24-175:21. One week after launching the app, Bonet wrote:
“It's better if we split up the updates, so it
looks like we have more of them for the lawsuit. To show we
are currently trying to build as we go.” Ex. 1 at 3,
Dkt. No. 123-6. Bonet noted a week later that the “app
is crashing a lot, ” but he directed the software
develop to “split” the fixes “up in to
individual updates, so it appears like we are doing more
work.” Id. at 2. As this correspondence
undisputedly illustrates, Social Tech was singularly
concerned with laying the groundwork for a lawsuit-including
manipulating the timing of updates with an eye to
litigation-in contrast to releasing a commercially viable
posted, Social Tech's app did garner around 5, 500 free
downloads from the Google Play store. Ex. 35, Dkt. No.
123-20. But the mere existence of actual sales-while in many
cases “highly persuasive”-is insufficient to
constitute use of the mark in commerce. New West Corp. v.
NYM Co. of California, Inc., 595 F.2d 1194, 1200 (9th
Cir. 1979). As Judge Friendly noted nearly half a century
ago, those courts that had “treated the question have
uniformly manifested reluctance to consider usage sufficient
when it is obviously contrived solely for trademark
maintenance”-so too when “a particular shipment
was made merely in token conformity with the statute in order
to bolster [the plaintiff's] claim for the trademark
registration.” La Societe Anonyme des Parfums
LeGalion v. Jean Patou, Inc., 495 F.2d 1265, 1273 (2d
Cir. 1974) (internal quotation marks omitted). The passage of
time has not undermined this common-sense rule. Since the
1988 amendment of the Lanham Act's definition of
“in commerce, ” the Ninth Circuit has endorsed
Judge Friendly's reasoning, thus confirming that
“the sale of a trademarked item cannot be a trademark
use if not made in the ordinary course of trade.”
Electro Source LLC v. Brandess-Kalt-Aetna Group,
Inc., 458 F.3d 931, 939 n.6 (9th Cir. 2006).
record compels the conclusion that Social Tech created and
posted its app outside the ordinary course of trade. Most
prominently, Social Tech released a defective product. Bonet
knew at the time of the launch that the app crashed and did
not properly edit images. Bonet Dep. 206:22-207:2. On this
score, he wrote: “Of course this may take a little work
to get perfect, but as long as we can get close initially, we
can start to test and put in commerce.” Ex. 2
at 4, Dkt. No. 125-2 (emphasis added). Social Tech's
half-baked app is thus more akin to a “prototype,
” which is “insufficient to establish trademark
rights.” Brookfield Communications, Inc. v. West
Coast Entertainment Corp., 174 F.3d 1036, 1052 (9th Cir.
1999). It's true that this prototype app was accessible
to the public as a free download, but the posting of an
unfinished, bad-faith app is basically costless in the
contemporaneous evidence of Social Tech's purpose for
posting the app underscores that its use of the mark was not
in the ordinary course of trade. 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!” Ex. 2 at 2. After the launch, Bonet acknowledged
that the app was not functioning properly but still remarked:
“The lawsuit is coming together nicely. We should be
done with the paperwork and forms in the next several days,
then we are just waiting for the trademark registration to
file the lawsuit and get PAID.” Ex. 1 at 2. This
correspondence only confirms what is already apparent: the
absence of a genuine commercial character to Social
Tech's use of the mark. See Chance, 242 F.3d at
response to the overwhelming evidence of its bad-faith use of
the mark, Social Tech highlights its attempts to secure
funding for a viable app before Apple's announcement.
Among other preliminary steps, Social Tech made unsuccessful
attempts to secure funding and posted a promotional video on
YouTube. Social Tech also requested and received an extension
in March 2018 to file its statement of use with the PTO.
These activities tend to show that Social Tech had (at some
point) a good-faith intention to use the mark in
commerce. 15 U.S.C. § 1051(b). But this evidence does
not speak to the question presented by Apple's motion:
Was Social Tech's actual use of the mark in the
ordinary course of trade and not merely to reserve its rights
in the MEMOJI mark? See § 1051(d). It is
well-settled law that “trademark rights are not
conveyed through mere intent to use a mark
commercially.” Brookfield, 174 F.3d at 1052.
As explained above, no reasonable jury could find that the
rushed process to release a malfunctioning app was a
good-faith attempt by Social Tech to make the mark
“sufficiently public to identify or distinguish the
marked [good] in an appropriate segment of the public mind as
those of the holder of the mark.” Chance, 242
F.3d at 1159.
cancellation is sought within 5 years from the registration
of the trademark, “any ground that would have prevented
registration in the first place qualifies as a valid ground
for cancellation.” Pinkette Clothing, Inc. v.
Cosmetic Warriors Ltd., 894 F.3d 1015, 1021 (9th Cir.
2018); see 15 U.S.C. § 1064(1). Apple is
therefore entitled to cancellation of registration 5, 566,
242 because Social Tech did not engage in bona fide use of
the mark in commerce. 15 U.S.C. §§ 1051(d), 1064.
For the same reason, Social Tech's request for a
declaration of its registration's validity is
Apple's motion for summary judgment on Social Tech's
common-law trademark claim is granted. The only potential
basis for Social Tech's claim is a putative assignment of
rights from Christopher Anthony. Apple contends that Anthony
had no remaining common-law rights to transfer. Apple
Cross-Motion at 4, 10 n.4, Dkt. No. 123-4; Apple Reply at 5
n.8, Dkt. No. 134. For instance, Anthony's app was
removed from the Apple Store in 2015, four years before he
assigned his trademark rights to Social Tech. This fact would
seem to refute the common-law element of continuous use of
the mark, a point that Social Tech itself made to the Court
on a prior occasion. See Dkt. No. 69.
this is why, in its opposition to Apple's cross-motion,
Social Tech did not mention-let alone defend-its common-law
claim. Because of this failure, Social Tech forfeited
consideration of the untimely arguments it attempted to make
at the hearing and in its post-hearing letter. Contrary to
Social Tech's representations, Dkt. No. 139, Apple made
plain that it moved for summary judgment on each of Social
Tech's infringement claims. Nor did Apple relegate its
arguments to a lone footnote. See Apple Cross-Motion
at 4. And Apple permissibly pointed to the absence of
evidence in support of the common-law infringement claim.
Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986).
In short, this claim was squarely teed up by Apple's
motion, and Social Tech did not take its swing.
Because Social Tech's claim under California's Unfair
Competition Law is derivative of its two trademark
infringement claims, Apple is entitled to summary judgment on
the UCL claim as well.
Apple represented that it would withdraw its counterclaims
for infringement if Social Tech's claims were summarily
adjudicated. See Apple Cross-Motion at 1 n.1.
Accordingly, Apple has seven days from this order to file a
notice of dismissal of these claims. This notice should
clarify whether Apple wishes to dismiss the claims with or
without prejudice (and whether a court order is requested).
See Fed. R. Civ. P. 41. At that time, the Court will