Australian Therapeutic Supplies PTY. Ltd. v. Naked TM, LLC

Australian Therapeutic Supplies PTY. Ltd. v. Naked TM, LLC

Opinion

 [*1371]  Reyna, Circuit Judge.

The Trademark Trial and Appeal Board determined that Australian Therapeutic Supplies Pty. Ltd. ("Australian") lacks standing to petition for cancellation of a trademark registration. The Board reasoned that Australian could not show an interest in the cancellation proceeding  [*1372]  or a reasonable belief of damage because it had contracted away its proprietary rights in its unregistered marks. We disagree. ] An absence of proprietary rights does not in itself negate an interest in the proceeding or a reasonable belief of damage. We hold that 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 [**2]  interest in the cancellation proceeding and a reasonable belief of damage regardless of whether petitioner lacks a proprietary interest in an asserted unregistered mark. Because Australian has a real interest in the cancellation proceeding and a reasonable belief of damage, Australian satisfies the statutory requirements to seek cancellation of a registered trademark pursuant to § 1064. We reverse and remand.

Background

Australian first adopted the mark NAKED for condoms in early 2000 and started advertising, promoting, and selling condoms with the marks NAKED and NAKED CONDOM (collectively, the "unregistered mark") in Australia. Starting as early as April 2003, Australian, through its website, began advertising, selling, and shipping condoms featuring its unregistered mark to customers in the United States. See J.A. 10.

Naked TM, LLC, ("Naked") owns Registration No. 3,325,577 for the mark NAKED for condoms. In late 2005, Australian learned that Naked's predecessor-in-interest (herein also referred to as "Naked") had filed a trademark application for NAKED condoms on September 22, 2003. On July 26, 2006, Australian contacted Naked and claimed rights in its unregistered mark. From July 26, 2006, to early 2007, Australian [**3]  and Naked engaged in settlement negotiations via email correspondence.

Naked asserts that the email communications demonstrate that the parties reached an agreement whereby Australian would discontinue use of its unregistered mark in the United States and consent to Naked's use and registration of its NAKED mark in the United States. See Appellee Br. 6 (citing J.A. 1541; J.A. 1543; J.A. 1551; J.A. 1553-56; J.A. 1587; and J.A. 1748-49). Australian disagrees and counters that no agreement exists because the parties did not agree on the final terms of a settlement. Appellant Br. 8-9 (citing J.A. 121-26, J.A. 486-508).

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