Background
The plaintiff and defendant Linda Sadeghi were formerly married and jointly built a business that resulted in a USPTO-registered service mark referred to in the order as the “LAB” mark, owned by defendant Little American Businesses, Inc. After the marriage ended under a divorce settlement agreement that addressed ownership of the mark, the plaintiff sued seeking, among other things, federal cancellation of the registration and an order requiring the defendants to add him as a record owner. The plaintiff also brought a Penal Code section 502 claim arising from alleged deletion of email accounts.
The defendants previously demurred to the Second Amended Complaint with leave to amend on the four trademark-cancellation counts after the court held that the pleading lacked an independent cause of action sufficient to confer jurisdiction under 15 U.S.C. section 1119. In response, the plaintiff filed a Third Amended Complaint adding two new state-law counts — false advertising under California Business and Professions Code section 17500 and unfair competition under section 17200 — to attempt to provide that jurisdictional hook. The defendants demurred again, moved to strike portions of the Third Amended Complaint, and brought a special motion to strike under Code of Civil Procedure section 425.16. Judge Thomas J. Lo took the demurrer under submission and ruled on all three motions in the same order.
The Court’s Holding
On the anti-SLAPP motion, the court denied relief on all four challenged counts. The defendants argued that their refusal to add the plaintiff as a record owner of the LAB mark with the USPTO, and their disputing the plaintiff’s ownership rights, constituted protected petitioning activity, and pointed to deposition testimony about possible future USPTO filings. The court rejected each rationale, holding that none of the four categories of protected conduct in section 425.16, subdivision (e) was implicated. The pleading alleged a private dispute over how trademark ownership was to be determined under a divorce settlement; speculation about future USPTO activity did not satisfy the first prong, and the court relied on Baral v. Schnitt, Gaynor v. Bulen, Alfaro v. Waterhouse Management Corp., and Park v. Nazai to distinguish protected activity from “merely lead[ing] to the liability-creating activity.”
The pivotal IP ruling concerns 15 U.S.C. section 1119, which authorizes federal-court (and, by extension under California’s general jurisdiction, state-court) cancellation of registered marks only “in any action involving a registered mark.” Following SmileDirectClub, LLC v. Berkely and San Diego County Credit Union v. Citizens Equity First Credit Union, the court held that a non-infringement cause of action qualifies as “involving a trademark registration” only when it is premised on “a claim of injury caused by the offending trademark registration” itself, rather than a dispute about which party should own the mark. The plaintiff’s newly added FAL count, alleging that the defendants falsely associated their business with the LAB mark, and the UCL count, alleging the defendants falsely held themselves out as the exclusive owners of the LAB mark, both survived demurrer on their own substantive merits. But neither stated an injury caused by the registration itself; they alleged injury from the defendants’ ownership and use claims about the mark. They therefore could not anchor section 1119 cancellation jurisdiction, and the four trademark cancellation counts were dismissed without further leave to amend.
On the Penal Code section 502 count concerning alleged email deletion, the court adopted Chrisman v. City of Los Angeles over United States v. Christensen, holding that section 502 is aimed at hacking and unauthorized access, not at deletion of email by a credentialed joint owner of the underlying system. The court sustained the demurrer without leave. The tortious interference, FAL, and UCL counts were allowed to proceed, the latter two because they were adequately pleaded as substantive claims even though they could not support section 1119 jurisdiction. The motion to strike the newly added Tenth and Eleventh causes of action as exceeding the scope of leave to amend was denied.
Key Takeaways
- 15 U.S.C. section 1119 cancellation jurisdiction requires an independent cause of action that pleads injury caused by the offending registration itself, not an ownership or use dispute about who controls the mark.
- Repackaging an ownership dispute as a California FAL or UCL claim does not convert it into an action “involving a trademark registration” for section 1119 purposes — even if the FAL and UCL counts independently survive demurrer on their merits.
- Refusing to add a third party as a record owner on a USPTO registration, and disputing that party’s ownership claim in private negotiations, is not protected petitioning activity under California’s anti-SLAPP statute.
- Speculation about future USPTO filings disclosed in deposition testimony does not transform present-day private conduct into protected activity for anti-SLAPP purposes.
- California Penal Code section 502 is unavailable against a credentialed joint owner of a computer system who deletes data — the statute targets hacking, not authorized deletion.
Why It Matters
For trademark practitioners — particularly those handling family-law-driven mark ownership disputes — this order provides a clean illustration of the limit on California state-court trademark cancellation actions. Plaintiffs cannot bootstrap a section 1119 cancellation remedy onto a state-law claim that, however phrased, ultimately rests on an ownership dispute. The court’s distinction between injury caused by the registration and injury caused by the registrant’s conduct about the registration is doctrinally important and easy to overlook. Counsel drafting cancellation claims in either state or federal forum should ensure the anchor cause of action pleads concrete injury traceable to the registration’s existence or scope, not to the defendant’s contested ownership posture.
The order also reinforces that California’s anti-SLAPP statute will not protect a party simply because trademark ownership disputes can produce future USPTO filings. The conduct must itself fall within one of section 425.16, subdivision (e)’s four categories — and private ownership disputes, even those that may eventually generate trademark office filings, generally do not.