Standing Naked before the TTAB

Australian Therapeutic Supplies Pty. v. Naked TM (Fed. Cir. 2020) (en banc)

NAKED TM holds the registration for the mark NAKED that it uses to sell its luxury condoms.  However, by the time NAKED TM started its business, Australian Therapy was already selling its NAKED condoms to US customers over the internet.  In the early 2000s, the companies reached some form of a tacit agreement — although without an express contract.  Since 2003, Australian has continued to sell NAKED condoms in the US, but the TTAB found that it was never more than 48 consumers per year.

The appeal here stems from Australian Therapy’s cancellation proceeding that ended when the TTAB found the petitioner lacked standing under 15 U.S.C. § 1064 (petition to cancel may be filed by “any person who believes that he is or will be damaged … by the registration of a mark …”).  The TTAB particularly found a binding contract between the parties where Australian Therapy gave-up its rights to use the mark in the US: 

The evidence shows that the parties reached an agreement. The mutuality of intent to contract is satisfied because the parties recognized their trademark issue and they communicated and exchanged offers to resolve it. The consideration for the contract is Petitioner’s agreement not to use or register the NAKED trademark for condoms in the United States and Respondent’s agreement not to use or register the NUDE trademark for condoms.

The Board explained also that Australian must show a “proprietary rights in its unregistered mark” in order to have standing under the statute.

On appeal, the Federal Circuit reversed — holding a cancellation petition may be filed by any party who demonstrates “a real interest in the cancellation proceeding and a reasonable belief of damage regardless.” It does not require evidence of a “proprietary interest in an asserted unregistered mark.”  Here, the court found a real-interest based on the fact that Australian had filed to register its marks, and had demonstrated a belief of damage because the USPTO refused registration of both the ’237 and ’589 applications based on a likelihood of confusion with Naked’s registered mark, U.S. Registration No. 3,325,577.”

At that point, NAKED TM petitioned for en banc rehearing on two questions:

I. Whether a petitioner who has forfeited its rights in a mark pursuant to a valid settlement agreement has a real interest in the proceedings and a reasonable belief of harm for the registration of said mark so as to support a finding of statutory standing under 15 U.S.C. § 1064 to challenge the registration of the mark; and

II. Whether a petitioner in the TTAB is required to establish the pleaded basis for its standing at the commencement of an action, or whether this Court may rely on an argument that has been waived by a party in finding a basis for standing in the TTAB.

The Federal Circuit has now denied the rehearing, although the case includes an interesting dissent from Judge Wallach. Wallach argues that the decision in Australian Therapy:

  1. Conflicts with our case law requiring a “legitimate commercial interest” to have a valid cause of action under 15 U.S.C. § 1064, see Empresa Cubana Del Tabaco v. Gen. Cigar Co., 753 F.3d 1270, 1274 (Fed. Cir. 2014) (following Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014)., noting that a petitioner must have a “legitimate commercial interest sufficient to confer standing”);
  2. Undermines our case law favoring the enforcement of settlement agreements, see Wells Cargo, Inc. v. Wells Cargo, Inc., 606 F.2d 961, 965 (C.C.P.A. 1979) (“If there [is] a policy favoring challenges to trademark validity, it too has been viewed as outweighed by the policy favoring settlements.”); and
  3. Raises questions as to the impact of Supreme Court precedent on our statutory standing jurisprudence, see Lexmark, 572 U.S. at 128 n.4 (noting that statutory standing does not implicate Article III subject matter jurisdiction), 134 (providing “a direct application of the zone-of-interests test and the proximate-cause requirement [to] suppl[y] the relevant limits on who may sue”).

AusTherapy v. Naked.

13 thoughts on “Standing Naked before the TTAB

  1. 2

    A bit off topic, but it occurred to me how to explain and understand the Chiens that are being put in power by the Ds.

    The Ds have had the attitude that they will do anything they can to help Silicon Valley companies and are taking huge sums of money for it. This is similar to the Scotus’s attitude that they must help the large corporations to compete in the world.

    The Rs on the other hand are trying to serve the USA by keeping in place a structure that promotes innovation.

    It is interesting that this is the same type of fissure that happened at the downfall of the Roman Republic.

    Note that the Ds attitude about innovation is that it is not that big a deal and the corporations can handle this innovation thing. SV hires lobbyist to say exactly this to Congress. I know first hand. We hear comments once in a while that reveal this attitude like Posner saying all you have to do is give one of those nerds a pizza and they will stay up all night inventing.

    Money, of course, is part of it with the likes of Lemley pulling in 10’s of millions and Chien likely will find a way or be helped in finding a way to pull in many, many millions if she can get trade secrets for the corporations in SV.

    My prediction is that this will go on until some other country that is focusing on innovation comes up with something that changes the landscape and then we will be left out in the cold with an economy that can no longer innovate with the best of them.

    That is my prediction that if anyone that has followed me knows are deadly accurate. Anyway, the SV corporation will continue to swallow innovation whole and produce nothing new. They will stay huge and bloated and other countries will fight them with their own puppets they put up against them. But a few countries are still dedicated to innovation and a patent system and they will win out once the walls of the SV corporations are washed away by the tide.
    By the way, one way you know there is a problem is their huge profits.

    1. 2.1

      And remember that many years ago I said what SV would do is try to get trade secrets strengthened and patents weakened. On the other blog, Gene actually excoriated me for a post that where I highly criticized a lobbyist in his sphere of protection because she helped get the new trade secret bill passed.

      And…boys and girls, I can tell you first hand from when I first started out in a startup 50 years ago that trade secrets for an engineer are horrendously bad. They destroy you.

    2. 2.2

      Just remember engineers the name of Chien.

      Chien will be the one that brings in trade secrets. You will no longer be able to move to other companies. You will no longer be able to publish papers. Your salaries will half overnight.

      Remember that name.

  2. 1

    It will be interesting to see if the “standing” issues for trademark cancellation proceedings, and the apparent requirement that the petitioner have a commercial interest to satisfy Lexmark to bring the proceeding in the Trademark Office, will spill over into arguments for who can bring an IPR proceeding.

    The Federal Circuit currently imposes constitutional standing requirements for appeals from a final written decision by the PTO in an IPR proceeding, See generally, Annotated Patent Digest § 25:109.500 – Standing and other Jurisdictional Requisites to Appeal to the Federal Circuit a PTO Decision on Reexamination or Other Post-Grant Review. In dicta the court has appeared to accept that “any” person, regardless of any standing considerations, can file an IPR petition. Consumer Watchdog v. Wisconsin Alumni Research Foundation, 753 F.3d 1258, 1262 (Fed. Cir. 2014) (“The statute at issue here allowed any third party to request reexamination, and, where granted, allowed the third party to participate. 35 U.S.C. §§ 311(a), 314(b)(2) (2006).”)

    Recently, in another trademark cancellation proceeding standing opinion, the Federal Circuit instructed that the “zone-of-interests” and “proximate causation,” requirements of Lexmark apply “for ALL statutory causes of action.” (emphasis added). They apply “even where a statute does not expressly recite a proximate-causation requirement” unless “expressly negated” by Congress. This made me wonder if there are arguments that Lexmark should apply to IPR proceedings.

    Writing for the court in Corcamore, Judge Reyna explained:

    A ‘cause of action’ consists of two elements: operative facts and the right or power to seek and obtain redress for infringement of a legal right which those facts show. Congress created in § 1064 a group of operative facts that grant to ‘any person’ the right to petition for cancellation of a registered mark if that person ‘believes that he is or will be damaged … by the registration of a mark on the principal register.’ … The Lexmark analytical framework applies to § 1064 and § 1125(a) because both are statutory causes of action. As Justice Scalia exhorted, the zone-of-interests requirement ‘applies to all statutorily created causes of action’ and it ‘applies unless it is expressly negated.’

    The proximate-causation requirement generally applies to all statutory causes of action, even where a statute does not expressly recite a proximate-causation requirement.

    In view of the Supreme Court’s instructions, we see no principled reason why the analytical framework articulated by the Court in Lexmark should not apply to § 1064. …

    Lexmark established the analytical framework to be used for determining eligibility requirements for all statutory causes of action, including under § 1064, absent contrary Congressional intent. Like all lower tribunals, we are obligated to apply that framework where applicable. We thus hold that the Lexmark zone-of-interests and proximate-causation requirements control the statutory cause of action analysis under § 1064.’”

    Corcamore LLC v. SFM, LLC, 978 F.3d 1298, 1304-05 (Fed. Cir. 2020).

    Like a trademark cancellation proceeding, an IPR proceeding appears to be a statutory cause of action. But there is at least one significant differences between the statutory language of § 1064 (“A petition to cancel a registration of a mark … may … be filed … by any person who believes that he is or will be damaged …”) and the IPR statute 35 U.S.C. § 311(a) (“a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent”) Notably, §1064 expressly includes a requirement of being damaged in a certain way, which arguably establishes limitations on the “zone of interests” the trademark cancellation statute seeks to protect. In contrast, § 311(a) is silent on any aspect of the petitioner suffering any form of damage. The statute appears to only require that the petitioner not own the patent. Is this silence enough to not require the Lexmark proximate causation requirements? As quoted above, Judge Reyna instructed Lexmark’s proximate causation of an injury applies “even where a statute does not expressly recite a proximate-causation requirement.” Does the omission of any damage requirement in § 311(a) amount to Congressional intent showing a waiver of the Lexmark requirements? Perhaps.

    Given the public policy goals of removing invalid patents, one could argue that Congress intended to have the broadest pool of potential petitioners, in the first instance, so Lexmark’s requirements do not apply to petitioning for an IPR. Cf. SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348, 1353 (2018) (“Sometimes, though, bad patents slip through. Maybe the invention wasn’t novel, or maybe it was obvious all along, and the patent owner shouldn’t enjoy the special privileges it has received. To remedy these sorts of problems, Congress has long permitted parties to challenge the validity of patent claims in federal court. More recently, Congress has supplemented litigation with various administrative remedies.”); see also APD, § 15:2 Public Importance of Validity Challenges.

    1. 1.1


      You seem to have spent a lot of effort for naught.

      Congress set up the IPR system in an odd two-step, and your reference to the “standing for appeal” ONLY applies to the second step which in an Article III fora.

      The first step has no such standing barrier.


      1. 1.1.1


        Did you actually bother to make it all the way through his comment? Granted it was a bit unwieldy and difficult to follow, but it’s not at all contrary to the points you made.

        He’s clearly well aware that Art. III standing is only implicated for IPR *appeals*, but that wasn’t his point. That was just a small amount of background. In fairness though, it wasn’t strictly needed and did end up distracting from the main point somewhat.

        It’s also clear that he agrees that IPR proceedings in the first step (i.e., at the PTAB) have no standing requirement, at least *currently*. His entire point was to address the possibility of such a requirement being imposed *in the future*, given the case-law trends as discussed in the OP and his comment.

        If you have your own thoughts on that particular topic, that’s fine and I’m sure everyone here would be all ears (or eyes, as it were). But first, let’s at least get on the same page about which topic is actually under discussion.

        Putting aside whether “zone of interests” is ever a sensible doctrine in any context (constitutional, statutory/district court, or statutory/administrative), I tend to agree with Bob’s reasons why it shouldn’t apply to IPR step one. Another reason I would add is that IPRs are highly specialized and narrowly-focused proceedings. Of course they just address patents, and then only the invalidity aspect. Even within that, arguments are limited to 102/103 based on patents and publications. This is also reflected in the strict time standards. So it seems very inappropriate to foist a zone of interests inquiry on such a proceeding where that inquiry is far afield from the heartland subject matter and would tend to defeat the purpose of having expedited proceedings.

        Finally, I’m just curious why you describe the two-step process as “odd”?



          hardreaders – thank you again for a thought full (and thoughtful) post.

          But I must respectfully disagree with your overall thrust of your lead-in statement of “Did you actually bother to make it all the way through his comment? Granted it was a bit unwieldy and difficult to follow, but it’s not at all contrary to the points you made.”
          I did actually bother to make it all the way through, and took the time to unwind the details of what Bob had said in total.

          And that is precisely why I posted in the way that I did post. Bob’s final gist as to the ‘attackability’ of that Step 1 is very much contrary to both how the law works, and the points about how the law works that I have expounded upon.

          While, as you note, Bob does appear to recognize some aspects of how the AIA set up the IPR system, he – fundamentally – errs in trying to associate the Step 1 of the two-step process as being assailable as being in error for lacking a standing requirement.

          For whatever level of recognizing the type of “zone of interest” that your comment seeks to address (and I note that these are in no way intersecting with my comment – it is NOT that aspect to which my comment is drawn), Bob’s comment STILL seeks to draw scrutiny in a manner that is simply without basis.

          So I must respectfully disagree with you (on more than one level) with your statement of “ He’s clearly well aware that Art. III standing is only implicated for IPR *appeals*, but that wasn’t his point.

          One, it is not clear that he understands or even accepts that Article III standing is only implicated for the second half of the process (the half IN the Article III fora). While he may state something to the effect of how this may be presently, the GIST of his argument is that the front half (Step 1) is faulty for its lack of this aspect. And THAT very much IS his larger point here. This is very much opposite your contention of “small amount of background.” You appear to recognize ‘a page’ but do not recognize that THAT is the page to be on.

          His “…to see if the “standing” issues [__], and the apparent requirement that the petitioner have a commercial interest to satisfy Lexmark [__], will spill over into arguments for who can bring an IPR proceeding.” is nothing more than a speculation to force Article III standing versions into the non-Article III portion of the AIA process — and there is NO such requirement.


          This whole attempt of “His entire point was to address the possibility of such a requirement being imposed *in the future*, given the case-law trends as discussed in the OP and his comment.” dwells on an attempt to use case law for a position that case law CANNOT support.

          Congress is fully within their legitimate rights to set up a non-Article III fora that does NOT have the Article III standing requirement.

          And that is precisely what they did with the AIA.

          Congress – and explicitly NOT case law – would be the party to change the legislatively written CURRENT law. There is NO proper way for case law to effect this change.

          ANY ‘trend’ to do so MUST be scrutinized for the (especially in patent law, abundant – and abundantly improper – use of common law law writing).

          But at the same time that Congress MAY (and did) set up a first part ‘open to all’ system in a forum that is not an Article III forum, Congress may NOT attempt to ‘legislate’ standing in the way that some have pushed in regards to Step 2 of the AIA post grant review system.

          One may NOT bootstrap the ‘proper’ lack of standing in a non-Article III fora into being the basis of standing IN an Article III fora.

          This is precisely the ‘oddity’ that I have spoken about (in great detail – dating all the way back to when the AIA was still in formation in Congress).


          One of the main reasons the AIA does not required “standing” to file an IPR is to allow public interest challenges. An example would be a taxpayer organization attacking the validity of a pharmaceutical patent imposing high costs on the Medicare system. [An example of why Congress is unlikely to add a “standing” showing burden to IPR petitions and initiations.]


            Absolutely Paul.

            There is no doubt that Congress made the first step of the Two-Step to be a fully open process.

            Not only for such ‘noble’ items as you present (though), as the process is as equally open to those who may merely want to play ‘games’ with stock prices — for example — iirc, a certain person did shortly after the AIA went into effect.



              Thank you again for yet another cogent response. In the interests of not consuming tons more of anyone’s time, I’ll do my best to keep this one compact and thought-lite (but hopefully not thoughtless). The mark in this case might be naked, but the comments are becoming quite well-clothed.

              I think we’re in full agreement on at least these points: (1) currently there’s no Art. III standing required in IPR step one, (2) it wouldn’t be proper (for courts) to imply such a requirement, (3) Congress didn’t have to include any standing requirement in the IPR statute, and (4) if such a requirement is later deemed necessary, Congress is the only proper entity to make the change.

              But it seems like we still part ways in our descriptions of Bob’s key point.

              You say Bob makes “a speculation to force Article III standing versions into the non-Article III portion of the AIA process”. I agree it’s a speculation of course, not that it’s wrong to conjecture about possible case-law developments, else why do we have this blog?

              Maybe I’ve completely lost the plot by now (don’t rule it out!), but I took Bob as not discussing the Art. III standing requirement. Rather, it seemed like he was referring solely to the statutory/prudential/zone-of-interests/what-have-you type of non-constitutional standing as discussed in Lexmark. I think most folks around here would agree that’s a distinct concept from Art. III constitutional standing.

              As a result, I didn’t see him speculating that, just because courts have already implied an Art. III standing requirement at step two when the IPR case moves to an Art. III tribunal, they might also imply the same requirement at step one in the administrative tribunal. Conversely, I don’t see him suggesting that: (1) it’s a defect that Art. III standing isn’t present in step one of IPRs, (2) that supposed “defect” at step one necessitates courts imposing an Art. III standing requirement at step two, or (3) that otherwise Congress must remedy the purported “defect” by legislating standing at step two itself.

              Instead, as Bob himself put it, he simply “wonder[ed] if there are arguments that Lexmark should apply to IPR proceedings.” That kind of hypothetical discussion seems perfectly fine to me. And I agree that such arguments do exist, regardless of how convincing they might be.

              As you’ve seen, I’m already on record saying that such potential arguments concerning statutory etc. standing for IPRs don’t persuade me very much. But you don’t appear to have addressed that subject yet. If you have some thoughts to share, it would be great to hear them.

              (I guess I still don’t find it all that odd that IPR appeals in an Art. III tribunal require the corresponding standing, whereas first instance proceedings in an administrative tribunal don’t. To me, that seems fairly commonplace, as seen from other contexts.)



              Paul, anon,

              I agree with all these points. Although, taxpayer groups attacking branded drug patents might also not be so “noble” if they are in fact “Astroturf” as opposed to true “grass-roots” outfits. My understanding is that at least some of these groups are funded to some extent by generic makers.

              Conversely, I don’t see it as necessarily improper or manipulative for a short-seller to challenge a company’s patent while shorting the company’s stock at the same time. Unless the short-seller is somehow tampering with or influencing the actual outcome of the IPR–which in that case I agree would be improper–then it doesn’t seem that problematic. The short-seller is just taking a calculated risk (some would say it’s no different from gambling) with its own funds that may be profitable, but it might lose money too. I don’t have much sympathy either for someone who takes the other side in such a transaction, but doesn’t bother to investigate whether an IPR is filed or is likely to be.

              And it goes without saying that Congress is quite aware of all the above, so it can step in whenever it feels like it.

              But in closing, I stress my agreement that IPRs have a strong policy of “public interest” that just really isn’t present in TTAB proceedings. Everyone benefits from invalidating patents that should never have been issued to begin with. Sometimes that benefit is very difficult to quantify. In contrast, trademarks almost necessarily have an aspect of competition, such that it would be odd to speak of an invalid trademark in a vacuum, with no reference to competitors. Therefore, rotely adopting the statutory standing requirement from trademarks to patent invalidity despite these clear differences would seem like a bad move.


            Caught in a filter, but notably, this “public interest” angle is NOT so limited to a virtuous example as provided by Paul, but also includes manipulation and speculation in that really anybody is able to assert an action in the Step 1 phase outside of the Article III fora.

            IIRC, this ‘anybody, even to manipulate’ HAS been seen in Pharma or Biotech arenas.

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