Federal Circuit Affirms TTAB’s Finding of Lack of Statutory Entitlement for Trust with Minority Ownership Interest in Trademark’s Owner

In Luca McDermott Catena Gift Trust v. Fructuoso-Hobbs SL, No. 2023-1383 (Fed. Cir. May, 23, 2024), the Federal Circuit affirmed the TTAB’s dismissal of Luca McDermott Catena Gift Trust’s (LMCGT) challenge to marks owned by Fructuoso-Hobbs’ and Hillick & Hobbs.

LMCGT is a limited partner of Paul Hobbs Winery, which owns the registered trademark PAUL HOBBS. Winemaker Paul Hobbs is partial owner of Paul Hobbs Winery and is affiliated with Fructuoso-Hobbs and Hillick & Hobbs. LMCGT petitioned to cancel certain Fructuoso-Hobbs and Hillick & Hobbs marks under 15 U.S.C § 1064 for allegedly infringing the PAUL HOBBS mark. But the TTAB found LMCGT lacked statutory entitlement under § 1064 because LMCGT’s trustees were minority owners without rights in the PAUL HOBBS mark.

On review, the Federal Circuit first determined LMCGT had constitutional standing. The Court then reviewed the TTABs decision de novo and applied a two-part zone of interests and proximate cause test to resolve whether LMCGT may seek cancellation of Fructuoso-Hobbs and Hillick & Hobbs trademarks under § 1064.

• First, the Court found LMCGT’s minority ownership in the owner of PAUL HOBBS conveyed no direct ownership interest or use of the mark. LMCGT accordingly is outside the zone of interests § 1064 protects.
• Second, the Court found that LMCGT could not satisfy the proximate cause requirement because the alleged harm from infringement derives solely from injury (to the extent there is any) to the owner of the PAUL HOBBS mark.

The Court thus affirmed the TTAB’s decision.