IP Law Daily, TOP STORY—TTAB: Board denies naked bid to cancel NAKED mark for condoms, (Jan 4, 2022)

By Matthew Hersh, J.D.

The decision puts an end, at least for now, to a nine-year battle between two marketers on opposite sides of the globe.

An Australian company was not entitled to cancellation of the registration for the word NAKED in connection with the sale of condoms, the Trademark Trial and Appeal Board has ruled in a nonprecedential opinion. The Board, in the latest round of a nearly decade-long battle between an American maker of condoms and its competitor from “Down Under,” found that the Australian company failed to establish a false connection between the word NAKED and its own marketing activities (Australian Therapeutic Supplies Pty. Ltd. v. Naked TM, LLC, December 16, 2021, Bergsman, M.).

The case involves a battle between two sellers of condoms on different continents. On the one side is Australian Therapeutic Supplies Pty. Ltd., which sells “naked condoms,” “nude condoms,” “Glow In The Dark Condoms,” Coloured Condoms,” and other prophylactics with names not fit for a family publication through the condoms.com.au website. The Australian company first adopted the mark NAKED for condoms in the early 2000s and has since been advertising, promoting, and selling condoms with the marks NAKED and NAKED CONDOM in Australia.

One the other side is Naked TM, LLC, which owns the U.S. registration for a variety of terms related to condoms, including GET NAKED, CUSTOM FIT CONDOM CLUB, SEX IS BETTER NAKED, and the unadorned (one might say) word NAKED. The company also has the registered trademark for www.nakedstyle.com, which redirects to www.nakedcondoms.com, which in turn offers what it terms “Naked Luxury” condoms—“respected and sold,” the website asserts, “in the finest hotels in the world.”

The Australian company filed a petition to cancel the NAKED registration on several grounds, including priority, false suggestion of a connection, and lack of bona fide intent to use the mark at the time of the underlying application. The Board denied the petition for cancellation on standing grounds, but the Federal Circuit reversed and remanded for determination of the substantive cancellation grounds, leading to this opinion.

Priority. The Board first found that the Australian company had not established priority. To establish priority, a petitioner must show proprietary rights in a mark that produces a likelihood of confusion. The American company claimed that it reached an agreement that Petitioner would not sell NAKED condoms in the United States, thus estopping the Australian company from asserting priority here. The Board agreed. Even though there was no formal agreement between the parties, the Board held, the evidence in the record showed that the Australian company had agreed to leave the U.S. market to the American company. (As one email put it: “No need to put anything on paper. Just makes lawyers a lot of money. We no longer have any Naked condoms in the USA, so it should be clear sailing for you. Good luck with the launch.”) Moreover, the Board noted, the Australian company did not interfere with the American company’s registration of the mark.

Bona fide intent. The Board also found that the American company had a bona fide intent to use the mark NAKED in connection with condoms when it filed its application. Although there was no documentary evidence expressly proving intent, thus making a prima facie case of lack intent, the Board found that the company met its burden to overcome the presumption. “Looking at the evidence as a whole, as if each piece of evidence were part of a puzzle to be fitted together,” the Board concluded, the testimony showed that the company’s managing member “perceived there was a need for a better, more comfortable condom” and to this end, “conducted research and experiments to create a more relaxed-fit condom.” To be sure, the American company did file and subsequently abandon several other related applications, both before and after the filing for NAKED, but that did not change the outcome. The evidence appeared clear, the Board found, that the company first used the NAKED trademark for condoms on a commercial basis in 2007, shortly after filing the application.

False suggestion of a connection. Finally, the Board found that the evidence failed to show that the NAKED mark falsely suggested a connection to the Australian company. The Board traditionally applies a four-part test to analyze whether a mark falsely suggests a connection with a person or an institution: (1) The mark is the same as, or a close approximation of, the name or identity previously used by another person or institution; (2) The mark would be recognized as such, in that it points uniquely and unmistakably to that person or institution; (3) The person or institution named by the mark is not connected with the activities performed by the defendant under the mark; and (4) The fame or reputation of the person or institution is such that, when the mark is used with the defendant’s goods, a connection with the person or institution would be presumed. In this case, the Board found, that parts (1), (2), and (4) of the test were not met.

As to the first element of the test, the Board observed, the Australian company is not named NAKED, nor did it even argue that consumers view NAKED as its identity or persona. Rather, the Australian company argued that it has a widespread following. But in making this argument, the Board noted, the Australian company “conflated the elements of a Section 2(d) likelihood of confusion claim with the elements of a Section 2(a) false suggestion of a connection claim.” It is not enough, the Board noted, to show that NAKED is similar to the Australian company’s mark—rather, it must show that the mark is a close approximation of the company’s identity. “Mere use of a term does not equate to establishing the term as Petitioner’s name or identity,” the Board noted.

As to the second part, the Board noted, the term NAKED did not point uniquely and unmistakably to the Australian company. The company claimed that a significant percentage of the visitors to its website are “U.S. college students or university students who pay to view animations of people having sex using Petitioner’s condoms.” To be sure, the Board noted, this might be “comical” and “funny and memorable,” but that was not enough to point “uniquely and unmistakably” to the company as “the one and only Naked Company.”

Finally, as to factor (4), the Board found that the Australian company’s fame or reputation was not such that consumers would presume a connection between the term and the company. The evidence showed only that the Australian company “has been successful enough to stay in business but not much else.” For example, the Board noted, the company did not introduce any media coverage referring to or even acknowledging it. “If Petitioner’s reputation were such that upon encountering Respondent’s NAKED condoms consumers will presume a connection with Petitioner,” the Board noted, “surely there must be more than minimal advertising and sales to support the presumption.” Thus, as three of the elements of the false suggestion test were not met, the claim failed.

The case is Cancellation No. 9205638.

Attorneys: Gabrielle A. Holloway (Holley & Menker PA) for Australian Therapeutic Supplies Pty. Ltd. Davey T. Jay (Meehle & Jay P.A.) for Naked TM, LLC.

Companies: Australian Therapeutic Supplies Pty. Ltd.; Naked TM, LLC

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