Australian Therapeutic Supplies Pty., Ltd. v. Naked TM, LLC, No. 19-1567 (Fed. Cir. 2020)
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In 2000, Australian started advertising and selling condoms with the marks NAKED and NAKED CONDOM in Australia. In 2003, Australian, through its website, began advertising, selling, and shipping condoms featuring its unregistered mark to customers in the U.S. Naked owns Registration No. 3,325,577 for the mark NAKED for condoms. The companies engaged in settlement negotiations. Naked asserts that email communications demonstrate that the parties reached an agreement whereby Australian would discontinue its use of its unregistered mark in the U.S. and consent to Naked’s use and registration of its NAKED mark. Australian filed a petition to cancel the registration of the NAKED.
The Trademark Trial and Appeal Board determined that Australian lacked standing and could not show an interest in the cancellation proceeding or a reasonable belief of damage because it had contracted away its proprietary rights in its unregistered marks.
The Federal Circuit reversed. An absence of proprietary rights does not in itself negate an interest in the proceeding or a reasonable belief of damage. A petitioner seeking to cancel a trademark registration establishes an entitlement to bring a cancellation proceeding under 15 U.S.C. 1064 by demonstrating a real interest in the cancellation proceeding and a reasonable belief of damage regardless of whether the petitioner lacks a proprietary interest in an asserted unregistered mark.
The court issued a subsequent related opinion or order on December 4, 2020.
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