[00:00:00] Speaker 00:
My next case is Luca McDermott, Catena Fifth Trust versus Fructuoso Haas, 2023-1383.

[00:00:50] Speaker 00:
Where do you live, Mr. Knudsen, is it?

[00:00:53] Speaker 03:
Yes, sir.

[00:00:55] Speaker 03:
Good morning, Your Honors.

[00:00:57] Speaker 03:
Kit Knudsen from Cummins, Knudsen & Cho, representing the McDermott-Katena Limited Family Trust, who are owners of 21.6% interest in the Paul Hobbs Winery Limited Partnership, which in turn is the exclusive owner of the Paul Hobbs Trademark.

[00:01:17] Speaker 01:
We only have one appellant.

[00:01:19] Speaker 01:
The Luther MacDonald one, what about the other trusts that make up collectively the 21.6% share in the company?

[00:01:28] Speaker 03:
Your Honor, I'm not sure why you only have one appellant, but I represent all three and they are formally the 21.6% interest was owned by their parents and these are minor children and the interest was transferred to the three, but the principles apply to all three equally.

[00:01:48] Speaker 03:
It was just an estate planning function that divided them into the three trusts.

[00:01:53] Speaker 03:
Are your clients involved in the winemaking business?

[00:01:57] Speaker 03:
My clients are involved in the winemaking business.

[00:02:01] Speaker 03:
Are your clients involved in investing?

[00:02:03] Speaker 03:
Yes.

[00:02:03] Speaker 03:
The parents Laro Contena is, in fact, is a winemaker in Argentina.

[00:02:13] Speaker 03:
And they own the Contena winery, which is

[00:02:16] Speaker 03:
has been described as the Mondavi of Argentina.

[00:02:19] Speaker 03:
They make Maubach wines, so they're quite heavily involved in winemaking.

[00:02:23] Speaker 03:
And they're also part of the management of the Paul Hobbs winery to the extent that their signature is required whenever Paul Hobbs wines are

[00:02:42] Speaker 03:
whenever the use of the Paul Hobbs trademark is been granted for third parties.

[00:02:50] Speaker 03:
So they're involved in this winery and they're also very much involved in the winemaking business.

[00:02:55] Speaker 00:
But the board found that they either own the mark or use the mark in advertising as a trade name or in any other way where they have developed a trade identity.

[00:03:10] Speaker 03:
Correct.

[00:03:11] Speaker 03:
So the board has applied a strict standard where a minority shareholder interest in an entity that owns the wine can never have standing unless it has some further proprietary interest in that trademark.

[00:03:29] Speaker 03:
And appellants take issue with the fact, based on the precedent, that a minority interest can never have standing, statutory standing.

[00:03:41] Speaker 03:
And they also take issue with the fact that the board failed to recognize that there is, in fact, a proprietary interest.

[00:03:51] Speaker 03:
and listen to Judge Low's question, I agree.

[00:03:53] Speaker 03:
I mean, is there a show here that your clients use the mark, for example?

[00:03:58] Speaker 03:
No, Your Honor, but the commercial interest set forth in the two seminal cases, Corcomy from this court and in Lexmark previously, doesn't require direct use or ownership of a mark to have that commercial interest within the zone of interest on the Atlanta map.

[00:04:17] Speaker 01:
I think our case law and Let's Mark as well, they're interested in seeing the petitioner engaged in some kind of commercial activity, engaged in commerce, and then gets injured

[00:04:35] Speaker 01:
by some kind of unfair competition by someone else.

[00:04:41] Speaker 01:
And then that would give them the quote unquote statutory standing under 1064 to come forward and try to cancel that other company's mark.

[00:04:51] Speaker 01:
And here, as I understand it, you are just relying alone on the fact that you have a minority interest

[00:04:59] Speaker 01:
in this company that you say is being injured by the existence of these competing trademark registrations.

[00:05:08] Speaker 01:
And so that minority interest alone is not you, these trusts engaged in some sort of commerce, some sort of sales in the marketplace that is being in some way harmed by the existence of these registrations.

[00:05:26] Speaker 03:
Yes, Your Honor.

[00:05:27] Speaker 03:
So Lexmark and Corcomill had followed it, determined that you need a commercial interest.

[00:05:34] Speaker 03:
You don't have to be in the Hawaiian business.

[00:05:35] Speaker 03:
You have to have something more than an intermeddler's interest or a consumer's interest, which is the way they described it under the Laminate.

[00:05:44] Speaker 03:
And in this case, the board has already recognized that shareholders can have derivative interest by virtue of their ownership in the entity that owns the trademark.

[00:05:57] Speaker 03:
And there's only a handful of those cases, but those cases have recognized that derivative interest where there is no direct management of the trademark.

[00:06:08] Speaker 03:
The issue is, can there be harm

[00:06:11] Speaker 03:
when there's a threat to the trademark by virtue of that ownership interest.

[00:06:15] Speaker 03:
And it's clear that you can't have that harm without being directly involved in the management of the winery.

[00:06:23] Speaker 03:
But what was overlooked by the board here is that the partnership agreement states that where third-party use, which is a website issue here, has been approved, then that third-party use has to be approved by my clients.

[00:06:38] Speaker 03:
And that was set forth in our opening petition, but I don't think was fully appreciated by the board.

[00:06:45] Speaker 01:
That sounds like a contract claim that you have with Paul Hobbs One and the real P not, you know, whether you have standing under 1064 to bring this cancellation proceeding against these other companies.

[00:06:59] Speaker 03:
And that's exactly the interpretation the board had.

[00:07:02] Speaker 03:
But there is no dispute in this instance against Paul Hobbs Winery Limited Partnership.

[00:07:08] Speaker 03:
The board presumed that Paul Hobbs had approved these two other trademarks, the winery, and the entity has not approved it.

[00:07:16] Speaker 03:
And we know that because my clients would have had to sign off on it.

[00:07:20] Speaker 03:
In addition, there is no consent in the record.

[00:07:24] Speaker 03:
that Paul Hobbs has ever approved it.

[00:07:26] Speaker 03:
Typically, what would happen in a trademark application, especially where there was an office action, raising the Hobbs trademark as a 2D likelihood of confusion, there would have been a consent issued either in the form of a license agreement or some coexistence agreement.

[00:07:44] Speaker 03:
And Paul Hobbs' winery is not a part of these proceedings because there's no evidence that Paul Hobbs' winery consented to these two registrations.

[00:07:54] Speaker 03:
There's no dispute.

[00:07:55] Speaker 01:
Why didn't Paul Hobbs' winery file the petition to cancel these?

[00:08:00] Speaker 03:
You know, it's an excellent question because the existence of these two other trademarks

[00:08:05] Speaker 03:
utilizing the distinctive Hobbes term within their trademarks and the extensive marketing claiming to be producing Paul Hobbes wings jeopardizes the very existence of the Paul Hobbes trademark.

[00:08:20] Speaker 03:
One possible theory is because of the same attorney of record,

[00:08:25] Speaker 03:
is representing all three of these unrelated entities, that there is a conflict of interest that prevents them from somehow advising that this is... Or it could be that they just simply don't believe that there's any approximate cause of confusion.

[00:08:42] Speaker 03:
But John, in the trademark process, there was an office action that clearly raised the likelihood of confusion.

[00:08:50] Speaker 03:
The original Alvarados-Hodds version was submitted as Hodds-Alvarados.

[00:08:56] Speaker 03:
And the trademark examining attorney raised that issue.

[00:09:00] Speaker 03:
The attorney of record responded by proposing that they switch the terms.

[00:09:05] Speaker 01:
And so... And then the examiner internally accepted that amendment and withdrew the refusal and allowed the registration to occur.

[00:09:14] Speaker 01:
That's correct.

[00:09:15] Speaker 01:
So, you know, it was...

[00:09:17] Speaker 01:
It was asked and answered.

[00:09:19] Speaker 03:
One of the things in the 2D likelihood of confusion office action was they go through what's that issue.

[00:09:28] Speaker 03:
And one of the factors they cite is that marketing, the way the product is marketed, is a relevant factor for the purposes of whether there will ultimately be a likelihood of confusion.

[00:09:39] Speaker 03:
So in the event that these trademarks, Alvarado's Hobbs and Hillygen Hobbs,

[00:09:44] Speaker 03:
we're not intending to trade on the goodwill of Paul Hobbs.

[00:09:48] Speaker 03:
That would be a relevant response to the objection.

[00:09:53] Speaker 03:
But in this case, the record has extensive evidence that the only lines these two liners produce are lines purporting to be Paul Hobbs.

[00:10:04] Speaker 01:
Let me get back to the standing question.

[00:10:06] Speaker 01:
In the end,

[00:10:08] Speaker 01:
We're governed by Lex Mark and our own prior president, post-Lex Mark, which talks about how a petitioner has to be within the zone of interests that the statute was trying to protect.

[00:10:22] Speaker 01:
And the standard I see is, in particular,

[00:10:29] Speaker 01:
the point if the petitioner must allege injury to a commercial interest in reputation or sales.

[00:10:35] Speaker 01:
That's the language from Lexmark for a fast advertising claim.

[00:10:41] Speaker 01:
This case is very similar to that.

[00:10:43] Speaker 01:
We have a Menaxi case that also uses that exact same standard.

[00:10:48] Speaker 01:
Must allege injury to a commercial interest in reputation or sales.

[00:10:51] Speaker 01:
Here, your trusts are not engaged in any sales, and you know they

[00:10:59] Speaker 01:
in some kind of business where their business reputation could be injured.

[00:11:04] Speaker 01:
And let alone, you haven't alleged that kind of commercial interest injury.

[00:11:11] Speaker 01:
So under our governing precedent, I don't see what we can really do for the trusts here.

[00:11:20] Speaker 03:
Your Honor, the board has recognized in several cases, in several different instances, derivative

[00:11:28] Speaker 03:
commercial interests by virtue of the ownership.

[00:11:31] Speaker 03:
And they've come up in the context of shareholder interest, trade association interest, and in parent subsidiaries where none of those parties has a direct management operation within the winery.

[00:11:47] Speaker 03:
But all three of them have derivative rights by virtue of the harm that is presumed

[00:11:54] Speaker 03:
on those interests by virtue of an attack on the entity that owns the trademark.

[00:12:01] Speaker 03:
We have to show more than a presumption of heart.

[00:12:06] Speaker 03:
It's a very low standard.

[00:12:08] Speaker 03:
I don't think... First of all, in the Tribunal Appeals Board, there is no right to recover damages at all.

[00:12:17] Speaker 03:
So you have to allege harm.

[00:12:19] Speaker 03:
And under 12b6 standard, that allegation is presumed true.

[00:12:23] Speaker 03:
And we're not alleging it in a vacuum.

[00:12:26] Speaker 03:
It's quite different if these were... In your case, you would have to allege harm that is possibly caused by

[00:12:37] Speaker 03:
the confusing notes.

[00:12:39] Speaker 03:
Correct.

[00:12:39] Speaker 03:
That's absolutely correct.

[00:12:40] Speaker 03:
And that's exactly what they've alleged.

[00:12:43] Speaker 03:
What is that harm?

[00:12:45] Speaker 03:
The harm is that these are, without consent of Paul Hobbs, these are classic, random act cases.

[00:12:52] Speaker 03:
These are false advertising cases.

[00:12:54] Speaker 03:
and likelihood of confusion cases where they are trading directly on the goodwill of Paul Hobbs without consent.

[00:13:02] Speaker 03:
If there were consent by Paul Hobbs, it would be in the principal register.

[00:13:06] Speaker 03:
So what?

[00:13:07] Speaker 03:
Has there been a decline in the value of the company?

[00:13:11] Speaker 03:
Maybe the company is making money as a result of this, of the assignment.

[00:13:18] Speaker 03:
There's no way that the Paul Hobbs Winery would be making money from a third party, unaffiliated third party's use of its trademark.

[00:13:28] Speaker 01:
Are they unaffiliated?

[00:13:30] Speaker 01:
Absolutely.

[00:13:31] Speaker 01:
I saw some more that Paul Hobbs Winery has some ownership interest in these other two wineries.

[00:13:39] Speaker 03:
Your Honor, there was a statement made without any evidence

[00:13:43] Speaker 03:
at a 12b6 stage of these proceedings, we haven't seen any evidence of that.

[00:13:50] Speaker 03:
And if there were consent, it would be in the record.

[00:13:53] Speaker 03:
It's what the examining attorney's office action was asking for.

[00:13:57] Speaker 03:
There's a likelihood of confusion here.

[00:13:59] Speaker 03:
There is, during that application process, you are asked to identify whether there is any other interested party in the marks.

[00:14:10] Speaker 03:
And where they raise specifically the Paul Hobbs work,

[00:14:13] Speaker 03:
and you have the same attorney of record, there is knowledge on the part of that attorney of record what the marketing plan is intended for.

[00:14:23] Speaker 00:
Counsel, you're well into your bubble time.

[00:14:26] Speaker 00:
You could continue or save it.

[00:14:30] Speaker 03:
No, I'll save it.

[00:14:33] Speaker 00:
Thank you.

[00:14:34] Speaker 00:
We'll give you three minutes of rebuttal.

[00:14:38] Speaker 00:
Mr. High.

[00:14:40] Speaker 02:
On behalf of the appellees, Fructuoso Hobbs, SL, and Hilliken Hobbs Estate, LLC.

[00:14:52] Speaker 02:
Your Honor, the appellees respectfully request that this court dismiss the appeal for lack of Article III standing.

[00:14:58] Speaker 02:
Alternatively, we respectfully ask the court to affirm the opinion of the

[00:15:04] Speaker 02:
trademark and trial appeal board and dismiss the petitioner and petition to cancel for lack of statutory standing and or a failure to state a claim.

[00:15:16] Speaker 02:
As Your Honors have pointed out in the questioning of my colleague, the appellant can't show any concrete, particularized injury traceable to the appellee's trademarks.

[00:15:28] Speaker 02:
that failing goes hand-in-hand with the other issue that you pointed out, which is that they solely possess a minority interest in a third-party entity that owns the at-issue mark.

[00:15:42] Speaker 03:
Would you say Article 3 standard is a lower bar than statutory standard?

[00:15:48] Speaker 02:
It's an interesting question, Your Honor.

[00:15:50] Speaker 02:
I would say it's a higher standard, to be completely honest.

[00:15:53] Speaker 02:
It goes to the injury in fact aspect.

[00:15:58] Speaker 02:
There has to be an actual concrete specified injury that's being caused to the appellant to come before this court and seek redress.

[00:16:11] Speaker 02:
And here, in the record, we have no specified concrete particularized injury as to the petition, the appellant.

[00:16:20] Speaker 01:
I guess it depends on the statute.

[00:16:22] Speaker 01:
in a given case, and the interests that the statute is designed to protect, the statutes that are being invoked by the petitioner.

[00:16:33] Speaker 01:
Sometimes a statute can say, any person can petition to cancel something.

[00:16:39] Speaker 01:
Okay, that's pretty low bar.

[00:16:41] Speaker 01:
It's the lowest of all.

[00:16:43] Speaker 01:
And the mother might have some other standard for a party who is entitled to challenge something, some kind of federal action.

[00:16:53] Speaker 01:
And then that case, it could well be that the standard is actually a higher standard, more rigorous standard than Article III standard.

[00:17:03] Speaker 02:
I completely agree, Your Honor.

[00:17:06] Speaker 02:
I think in this particular case, when it comes to the harm, I think the harm standard at the Article III stage is a higher standard than the statutory cause of action standard for this particular likelihood of confusion or fraud on the board claim that's being made by the appellant.

[00:17:29] Speaker 02:
But I think your point goes to the zone of interest standard that's set for these types of causes of action.

[00:17:40] Speaker 02:
And that's on the statutory side.

[00:17:42] Speaker 02:
And I think that that is also an aspect that's lacking for the appellants.

[00:17:46] Speaker 02:
I don't believe that they meet the standard for the zone of interest solely by having a minority interest in the entity that controls the underlying trademark.

[00:17:59] Speaker 02:
The record, Appendix 17, I believe, Paragraphs 14 through 17, they all speak to harm that is specified as to a non-party, the third party, the owner of the actual trademark.

[00:18:17] Speaker 02:
They don't specify any harm that's being caused to the appellant.

[00:18:23] Speaker 02:
I think that my colleague

[00:18:28] Speaker 02:
undersells the need for there to be a commercial use in the zone of interest by the appellant.

[00:18:36] Speaker 02:
There has to be a, I believe the standard is a legitimate commercial interest in the Merck.

[00:18:50] Speaker 02:
And the reason why is because of

[00:18:53] Speaker 02:
this idea that we don't want parties to be coming before the TTAB, coming before your honors, that don't actually have a legitimate interest in the mark, that don't have a legitimate use, that don't have actual harm.

[00:19:13] Speaker 02:
We don't want that standard to be so low to let intermedalers or self-appointed guardians of the purity of the register

[00:19:23] Speaker 02:
be here before the court.

[00:19:24] Speaker 02:
And that's a quote from Selva and Sons, Inc.

[00:19:28] Speaker 02:
705.

[00:19:29] Speaker 03:
Does your legitimate interest have to be a commercial interest?

[00:19:33] Speaker 02:
It has to be connected to a commercial use, Your Honor.

[00:19:36] Speaker 02:
Yes.

[00:19:36] Speaker 02:
That's a zone of interest.

[00:19:37] Speaker 03:
How does that square with Kokomor and Lexmark?

[00:19:42] Speaker 03:
So Kokomor and Lexmark.

[00:19:50] Speaker 02:
Kokomor is

[00:19:53] Speaker 02:
quoting the quote that I just made.

[00:19:55] Speaker 02:
Let's mark specifically the case was decided on false advertising injury to a commercial interest, reputation, or sales, so commercial, specified commercial use of the challenge mark.

[00:20:16] Speaker 01:
I guess some of our cases have said, if your own trademark application has been denied, that can be grounds for...

[00:20:26] Speaker 01:
being authorized to file a cancellation petition.

[00:20:30] Speaker 01:
Yes, Your Honor.

[00:20:31] Speaker 01:
I mean, I guess the assumption is if you're filing a trademark application, maybe you're using that desired trademark in commerce or you have an intent to use that in commerce.

[00:20:43] Speaker 01:
But nevertheless, as a technical matter, you know, if your own trademark application gets denied, that can be good enough.

[00:20:52] Speaker 02:
Yes, and I think it goes back to the assumption there, Your Honor, that there's going to be a commercial use, or there already has been a commercial use, and they're now just trying to acquire the trademark rights associated with it.

[00:21:10] Speaker 02:
I think one of the decisions that was relied upon down below was Miller.

[00:21:15] Speaker 02:
And I think Miller was the correct standard here to apply in a case like this, Your Honors.

[00:21:20] Speaker 02:
I think that it's an appropriate case in a number of ways.

[00:21:26] Speaker 02:
One, it distinguishes between two different types of claims that could be brought.

[00:21:31] Speaker 02:
Miller was pre-RedSmart, right?

[00:21:33] Speaker 02:
Yes, Your Honor.

[00:21:36] Speaker 02:
But I wanted to mention Miller because it was relied upon by the board in its decision in this case.

[00:21:44] Speaker 02:
And it was brought up because it kind of dealt with a similar type of fact pattern.

[00:21:49] Speaker 02:
It dealt with someone was trying to bring a case

[00:21:53] Speaker 02:
Maybe individually, maybe as a derivative shareholder, and more just one right to the issue.

[00:22:00] Speaker 02:
And it just stated that, no, those are two different types of cases.

[00:22:04] Speaker 02:
And one is not even appropriate here before the TTAB.

[00:22:10] Speaker 02:
The derivative action is outside of the confines of the authority of the TTAB to even consider.

[00:22:16] Speaker 02:
It's a California corporations code.

[00:22:18] Speaker 02:
So it's not really relevant for purposes of looking at a case like this.

[00:22:23] Speaker 02:
And then also, it also reinforced the need for particularizing the injury that was being caused to the claimant.

[00:22:34] Speaker 02:
Also making reference to use or ownership of the mark.

[00:22:39] Speaker 02:
And then again, Your Honors, it just kind of reinforces that standard that we shouldn't be allowing intermeddlers

[00:22:48] Speaker 02:
people that don't actually have harm, that don't actually have a commercial use of the mark, to be bringing these types of actions before the TTAB or before your honors.

[00:23:08] Speaker 02:
We need to reach the actual claims, the underlying claims that were brought by my colleague.

[00:23:15] Speaker 02:
You'd find that there aren't any.

[00:23:17] Speaker 02:
They're both maritalists.

[00:23:20] Speaker 02:
They both more or less end at this look at the marks that are at issue.

[00:23:26] Speaker 02:
And the TTAB looked at the marks and they said they're not substantially similar.

[00:23:31] Speaker 02:
They're not identical.

[00:23:33] Speaker 02:
There's really no need to go beyond that to look into marketing efforts or declarations or anything along those lines.

[00:23:40] Speaker 02:
Once that, once that threshold cannot be met, that ends the discussion.

[00:23:46] Speaker 02:
And I think that the TTAB got that right.

[00:23:49] Speaker 02:
I think that that's, that's the right standard.

[00:23:52] Speaker 00:
They both have their own hubs and relate to winemaking.

[00:23:57] Speaker 02:
That's correct, your honor.

[00:24:00] Speaker 02:
But as the TTAB decided, once the first name, the first word was removed and put to the back end, it reduced the likelihood of confusion.

[00:24:14] Speaker 02:
It's where they had no concern.

[00:24:16] Speaker 02:
And as Judge Shen pointed out, I mean, that issue was directly looked at by the TTAB, directly addressed, directly decided.

[00:24:23] Speaker 02:
And finally, you'll notice,

[00:24:30] Speaker 02:
The TTB denied leave to amend, and I believe that they did that correctly.

[00:24:35] Speaker 02:
I believe that the authority here shows that if you can't possibly cure the underlying deficiency in your claim, which in this case I don't believe the appellant can, there's no reason to grant leave to amend.

[00:24:54] Speaker 02:
And with that, Your Honors, if you have any other questions, I'm more than happy to answer them.

[00:24:57] Speaker 00:
Thank you, counsel.

[00:24:58] Speaker 00:
We have your case.

[00:24:59] Speaker 00:
Thank you.

[00:25:00] Speaker 00:
Mr. Coulson has up to three minutes if you need it.

[00:25:04] Speaker 03:
Thank you.

[00:25:07] Speaker 03:
What Lexmark did is to review all of the circuit courts' tests for standing.

[00:25:15] Speaker 03:
and in many instances made that test easier to satisfy.

[00:25:20] Speaker 03:
And Judge Raymond, what you said in quoting Luxmark was, is that the zone of interest test is not especially demanding.

[00:25:28] Speaker 03:
The commercial interest is required under Lexmark to fall within the zone of interest.

[00:25:33] Speaker 03:
The two cases cited by the board are both pre-Lexmark and both impose standards proprietary interests that were not recognized by Lexmark or Quarkamore.

[00:25:47] Speaker 03:
and the board itself has recognized that commercial interest derivatively by virtue of shareholders in the AT&T mobility case and in the BRT holdings case where the petitioner

[00:26:01] Speaker 03:
was a shareholder, albeit a majority shareholder, in a trademark-owning entity, or in the case of BRT, in a common law trademark-holding entity.

[00:26:12] Speaker 03:
And so the commercial interest can be found indirectly, according to the board, and consistent with the Lexmark standard.

[00:26:19] Speaker 01:
Would that be factually distinct from this case, where you're a minority owner and that

[00:26:25] Speaker 01:
Treadmap board case?

[00:26:27] Speaker 01:
The majority shareholder, and therefore can be presumed to have control of the company?

[00:26:33] Speaker 03:
Once you accept, there's no reason to presume that a majority shareholder has absolute control over the operation or management of the trademark.

[00:26:43] Speaker 03:
And once you accept a derivative interest in a trademark, to say that 51%

[00:26:51] Speaker 03:
a majority shareholder has standing, where 49% does not have standing, it defies logic.

[00:26:58] Speaker 03:
If you have an interest in the trademark, and you can have a derivative commercial right, then shareholders' interests need to be evaluated, and they're not mere intermediaries.

[00:27:08] Speaker 01:
Isn't that the same argument, if the trusts have a 1% share?

[00:27:13] Speaker 03:
The analysis will be different.

[00:27:19] Speaker 03:
If you had a single share, I think it would be different.

[00:27:24] Speaker 03:
I think you have to look at the context.

[00:27:28] Speaker 03:
I think these are factual increase in closely held corporations.

[00:27:32] Speaker 03:
a 21% interest can be quite a bit more substantial than a single shareholder in Disney, for example.

[00:27:39] Speaker 03:
You wouldn't want a single shareholder in Disney trying to determine or police the trademark.

[00:27:45] Speaker 03:
But in this context, you have no evidence of consent to use the trademark, and yet all of the wines they make purport to be Paul Hoppe's wines.

[00:27:54] Speaker 03:
The principle of the landmark is to avoid consumer confusion, and there is presently a record

[00:28:01] Speaker 03:
where you have three distinct entities, all using a distinctive Hobbes term, without any apparent connection whatsoever.

[00:28:11] Speaker 03:
They are owned by different parties, all three of them.

[00:28:14] Speaker 03:
And in that context, and especially at a 12-B6 stage, there is a presumption, plaintiffs are entitled to a presumption that the allegations are true.

[00:28:26] Speaker 03:
And in this case, even if something lower than a shareholder interest were required,

[00:28:31] Speaker 03:
A proprietary interest is what these plaintiffs have because they have the right to control third-party use.

[00:28:38] Speaker 03:
And so at minimum, petitioners deserve the right to amend this complaint to try to make it clear to the board.

[00:28:45] Speaker 03:
that there is a proprietary interest, although... Does it make a difference that this is a closely-held corporation?

[00:28:54] Speaker 03:
Yes.

[00:28:55] Speaker 03:
If it's a public... Does it apply to a public corporation?

[00:28:59] Speaker 03:
It would be a different analysis in a public corporation, because you have potentially hundreds of thousands, if not millions, of shares in a corporation like Disney.

[00:29:08] Speaker 03:
In this corporation, 21.6 interest

[00:29:12] Speaker 03:
As a value, a significant value, and to the extent the degree of harm must be considered, there are tens of millions of dollars at stake here.

[00:29:21] Speaker 03:
And if there is no connection between these two... So is zone of interest dependent on extent of involvement?

[00:29:29] Speaker 03:
I don't think so, Your Honor.

[00:29:31] Speaker 03:
I think zone of interest only requires... That's what you're saying in answering Judge Chiu's questions.

[00:29:37] Speaker 03:
that there is some sliding scale of interest that is implicated.

[00:29:44] Speaker 03:
That seems to be the way the board has interpreted this.

[00:29:47] Speaker 03:
If that test were applied, then these plans would have substantial interest, because with three trademarks, with unrelated trademark owners, you have the risk of abandonment.

[00:29:59] Speaker 03:
You have the risk that they are not, in fact... Okay.

[00:30:02] Speaker 00:
Councilor, your time is well expired.

[00:30:04] Speaker 00:
Thank you, Your Honor.

[00:30:05] Speaker 00:
We will take the case on December.

[00:30:07] Speaker 03:
Thank you, Your Honor.

[00:30:10] Speaker 03:
Your Honor.