Case: 19-1567   Document: 35     Page: 1   Filed: 07/27/2020




   United States Court of Appeals
       for the Federal Circuit
                 ______________________

   AUSTRALIAN THERAPEUTIC SUPPLIES PTY.
                  LTD.,
                 Appellant

                            v.

                   NAKED TM, LLC,
                        Appellee
                 ______________________

                       2019-1567
                 ______________________

     Appeal from the United States Patent and Trademark
 Office, Trademark Trial and Appeal Board in No.
 92056381.
                  ______________________

                 Decided: July 27, 2020
                 ______________________

      JAMES ROBERT MENKER, Holley & Menker, P.A., Atlan-
 tic Beach, FL, argued for appellant.

    SUZANNE D. MEEHLE, Meehle & Jay PA, Orlando, FL,
 argued for appellee. Also represented by EMILY BEHZADI,
 DAVEY T. JAY.
                  ______________________

  Before O’MALLEY, REYNA, and WALLACH, Circuit Judges.
    Opinion for the court filed by Circuit Judge REYNA.
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2                   AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC




    Dissenting opinion filed by Circuit Judge WALLACH.
 REYNA, Circuit Judge.
      The Trademark Trial and Appeal Board determined
 that Australian Therapeutic Supplies Pty. Ltd. (“Austral-
 ian”) lacks standing to petition for cancellation of a trade-
 mark registration. The Board reasoned that Australian
 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. 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 interest in the cancellation proceed-
 ing and a reasonable belief of damage regardless of
 whether petitioner lacks a proprietary interest in an as-
 serted unregistered mark. Because Australian has a real
 interest in the cancellation proceeding and a reasonable be-
 lief of damage, Australian satisfies the statutory require-
 ments to seek cancellation of a registered trademark
 pursuant to § 1064. We reverse and remand.
                         BACKGROUND
                              A
     Australian first adopted the mark NAKED for condoms
 in early 2000 and started advertising, promoting, and sell-
 ing condoms with the marks NAKED and NAKED
 CONDOM (collectively, the “unregistered mark”) in Aus-
 tralia. Starting as early as April 2003, Australian, through
 its website, began advertising, selling, and shipping con-
 doms 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
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 AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC                    3



 (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 and Naked engaged in settlement
 negotiations via email correspondence.
     Naked asserts that the email communications demon-
 strate that the parties reached an agreement whereby Aus-
 tralian would discontinue use of its unregistered mark in
 the United States and consent to Naked’s use and registra-
 tion 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).
                              B
     Notwithstanding the settlement discussions, in 2006,
 Australian filed a petition to cancel registration of the
 NAKED mark. The petition, as amended, asserted Aus-
 tralian’s prior use of the mark and sought cancellation on
 the grounds of fraud, likelihood of confusion, false sugges-
 tion of a connection, and lack of bona fide intent to use the
 mark. Naked filed a response, denied the allegations in
 Australian’s amended petition, and asserted numerous af-
 firmative defenses, including that Australian lacked stand-
 ing to seek cancellation and that Australian was
 contractually and equitably estopped from pursuing the
 cancellation.
     Naked moved for summary judgment on its affirmative
 defenses of contractual and equitable estoppel, laches, ac-
 quiescence, and unclean hands. Australian cross-moved
 for summary judgment on grounds of likelihood of confu-
 sion under the Lanham Act § 2(d), 15 U.S.C. § 1052(d), and
 asserted that Naked’s affirmative defenses are inapplica-
 ble because Naked’s use of the NAKED mark would result
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4                   AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC




 in inevitable confusion with Australian’s unregistered
 mark.
     The Board denied summary judgment on grounds that
 a genuine issue of material fact existed with respect to Aus-
 tralian’s standing and with respect to Naked’s affirmative
 defense of contractual estoppel. The Board also opined that
 a finding of confusion would be likely if Australian could
 establish standing and priority. The Board advised the
 parties to focus efforts at trial on the issues of standing and
 priority.
      On December 21, 2018, following trial, the Board con-
 cluded that Australian lacked standing to bring a petition
 for cancellation. Australian Therapeutic Supplies Pty. Ltd.
 v. Naked TM, LLC, CANCELLATION No. 92056381, 2018
 WL 6929683, at *11 (T.T.A.B. Dec. 21, 2018) (hereinafter
 “Decision”). The Board reasoned that, in order to show that
 it had standing, Australian was required to establish pro-
 prietary rights in its unregistered mark. See id. at *2 (cit-
 ing Otto Roth & Co. v. Universal Foods Corp., 640 F.2d
 1317 (C.C.P.A. 1981)). The Board concluded that Austral-
 ian failed to establish proprietary rights in its unregistered
 mark and thus lacked standing. See id. at *11.
     The Board found that, although no formal written
 agreement existed, the parties entered into an informal
 agreement through email communications and the parties’
 actions. Id. at *6–8, *9. According to the Board, Australian
 agreed it would not use or register its unregistered mark
 in the United States and that Naked could use and register
 its NAKED mark in the United States. Id. at *11. The
 Board found that Australian led Naked to “reasonably be-
 lieve that [Australian] had abandoned its rights in the
 United States to the NAKED mark in connection with con-
 doms.” Id. at *9. Although the Board made no finding on
 whether Australian agreed not to challenge Naked’s use
 and registration of the NAKED mark, the Board concluded
 that Australian lacked standing to petition to cancel the
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 AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC                     5



 NAKED mark because Australian could not establish a
 real interest in the cancellation or a reasonable basis to be-
 lieve it would suffer damage from the continued registra-
 tion of the NAKED mark. Id. at *11.
    Australian timely appeals the Board’s decision. We
 have jurisdiction under 28 U.S.C. § 1295(a)(4)(B).
                         DISCUSSION
      We note at the outset that the Supreme Court has clar-
 ified that there are certain issues that are discussed in
 terms of “standing” that are more appropriately viewed as
 requirements for establishing a statutory cause of action.
 Lexmark Int’l, Inc. v. Static Control Components, Inc., 572
 U.S. 118, 128 n.4 (2014). That is the case here. The Board
 discussed the requirements to bring a cancellation proceed-
 ing under 15 U.S.C. § 1064 in terms of “standing” instead
 of a statutory entitlement to a cause of action under 15
 U.S.C. § 1064. Cf., Empresa Cubana Del Tabaco v. Gen.
 Cigar Co., 753 F.3d 1270, 1274 (Fed. Cir. 2014) (citing
 Lexmark, 572 U.S. at 125–28).
      We review de novo whether Australian has established
 entitlement to a statutory cause of action under § 1064.
 Empresa Cubana, 753 F.3d at 1274 (citing Lexmark, 572
 U.S. at 128 (applying “traditional principles of statutory in-
 terpretation” to determine whether party has a cause of ac-
 tion under the statute)). Section 1064 provides that a
 petitioner may seek cancellation of a registered trademark
 if the petitioner “believes that he is or will be damaged” by
 the registered trademark. § 1064. The statutory require-
 ments to cancel registration of a mark under § 1064 are
 substantively equal to the statutory requirements to op-
 pose the registration of a mark under § 1063: both require
 a party to demonstrate a real interest in the proceeding and
 a reasonable belief of damage. See Young v. AGB Corp.,
 152 F.3d 1377, 1380 (Fed. Cir. 1998) (“The linguistic and
 functional similarities between the opposition and cancel-
 lation provisions of the Lanham Act mandate that we
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6                   AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC




 construe the requirements of these provisions consist-
 ently.”); see also Empresa Cubana, 753 F.3d at 1275 (“A pe-
 titioner is authorized by statute to seek cancellation of a
 mark where it has both a real interest in the proceedings
 as well as a reasonable basis for its belief of damage.” (in-
 ternal quotation marks and citation omitted)).
                    A. Proprietary Rights
      The Board’s conclusion that Australian lacked entitle-
 ment to bring a cancellation proceeding against a regis-
 tered mark because it does not have proprietary rights in
 its unregistered mark is erroneous. Entitlement to a cause
 of action under § 1064 is not contingent on whether a peti-
 tioner has proprietary rights in its own mark.
      Here, the Board required that Australian establish pro-
 prietary rights in its unregistered mark in order to demon-
 strate a cause of action under § 1064. This was error.
 Neither § 1064 nor our precedent requires that a petitioner
 have a proprietary right in its own mark in order to demon-
 strate a cause of action before the Board. See Jewelers Vig-
 ilance Comm., Inc. v. Ullenberg Corp., 823 F.2d 490, 493
 (Fed. Cir. 1987). For example, in Jewelers, we explained
 that a trade association may have standing to oppose a
 mark’s registration “without [having] proprietary rights in
 a mark.” 823 F.2d at 493; see also TBMP § 309.03(b) (“A
 plaintiff need not assert proprietary rights in a term in or-
 der to have standing.”). This is true “irrespective of the
 grounds [of nonregistrability] upon which the opposer re-
 lies.” Jewelers, 823 F.2d at 493; but cf. Herbko Int’l, Inc. v.
 Kappa Books, Inc., 308 F.3d 1156, 1162 (Fed. Cir. 2002)
 (explaining that proprietary rights are necessary to show
 priority of use when petitioning for cancellation under sec-
 tion 2(d)); TBMP § 309.03(c)(2) (discussing priority of use
 and proprietary rights).
    The Board determined that Australian had contracted
 away its right to use and register its unregistered mark.
 Decision at *11. Contracting away one’s rights to use a
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 AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC                     7



 trademark does not preclude a petitioner from challenging
 a mark before the Board. See Selva & Sons, Inc. v. Nina
 Footwear, Inc., 705 F.2d 1316, 1323–25 (Fed. Cir. 1983)
 (holding that challenger established standing under § 1064
 notwithstanding the parties’ written agreement not to
 challenge each other’s registration or each other’s rights to
 use and sell goods under the mark). While an agreement
 could ultimately bar Australian from proving actual dam-
 age, § 1064 requires only a belief of damage. See id. at
 1324–25.
     The Board relied on Otto Roth & Co. v. Universal
 Foods, 640 F.2d 1317 (C.C.P.A. 1981), as support for its de-
 termination that proprietary rights are required for stand-
 ing. Decision at *2. Otto Roth, however, dealt with the
 merits of an opposition, not a party’s right to participate in
 the opposition proceedings. See Jewelers, 823 F.2d at 494
 (discussing Otto Roth). Our decision in Otto Roth does not
 require a party to establish proprietary rights in a mark in
 order to meet the statutory requirements to challenge a
 mark. Books on Tape, Inc. v. Booktape Corp., 836 F.2d 519,
 520 (Fed. Cir. 1987) (discussing the Board’s erroneous reli-
 ance on Otto Roth).
     In sum, neither § 1064 nor our precedent requires that
 a petitioner in a cancellation proceeding must prove that it
 has proprietary rights in its own mark in order to demon-
 strate a real interest in the proceeding and a belief of dam-
 age. The Board’s decision to the contrary is therefore
 erroneous. See Coach Servs., Inc. v. Triumph Learning
 LLC, 668 F.3d 1356, 1376 (Fed. Cir. 2012).
                    B. Real Interest and
                Reasonable Belief of Damage
     We next consider whether Australian has a real inter-
 est and reasonable belief of damage such that it has a cause
 of action under § 1064.
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8                   AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC




      A petitioner may demonstrate a real interest and rea-
 sonable belief of damage where the petitioner has filed a
 trademark application that is refused registration based on
 a likelihood of confusion with the mark subject to cancella-
 tion. See Empresa Cubana, 753 F.3d at 1274–75. In Em-
 presa Cubana, we held that the petitioner met the
 statutory requirements to petition for cancellation of a
 mark where the USPTO refused petitioner’s trademark ap-
 plication based on a likelihood of confusion with a regis-
 tered mark. Id. at 1275. We reasoned that petitioner’s
 trademark application constitutes a “legitimate commer-
 cial interest,” satisfying the real interest requirement. Id.
 (citing Lipton Indus., Inc. v. Ralston Purina Co., 670 F.2d
 1024, 1029 (C.C.P.A. 1982)). We also reasoned that the
 “blocking” of the petitioner’s application satisfied the belief
 of damage requirement. Id.
      A petitioner may also demonstrate a real interest and
 reasonable belief of damage by producing and selling mer-
 chandise bearing the registered mark. See Cunningham v.
 Laser Golf Corp., 222 F.3d 943, 945 (Fed. Cir. 2000) (citing
 Int’l Order of Job’s Daughters v. Lindeburg & Co., 727 F.2d
 1087, 1091 (Fed. Cir. 1984)).
      Here, like in Empresa Cubana, Australian demon-
 strates a real interest in the proceeding because it twice
 filed an application to register its unregistered mark, first
 on November 21, 2005, 1 and then on November 6, 2012. 2
 Australian also demonstrates a belief of damage because
 the USPTO refused registration of both the ’237 and ’589
 applications based on a likelihood of confusion with Na-
 ked’s registered mark, U.S. Registration No. 3,325,577. 3


     1  U.S. Application Serial No. 78,758,237.
     2  U.S. Application Serial No. 85,772,589.
    3   See March 3, 2011, Office Action, U.S. Trademark
 Application Serial No. 78/758,237 (refusing registration of
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 AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC                        9



 The USPTO has also suspended prosecution of the ’589 ap-
 plication pending termination of the present cancellation
 proceeding (J.A. 1105), further demonstrating a belief of
 damage. Australian’s applications for registration, the
 USPTO’s refusal of registration, and the USPTO’s suspen-
 sion of prosecution support a conclusion that Australian
 meets the statutory requirements under § 1064. See Em-
 presa Cubana, 753 F.3d at 1275.
      Naked argues that Australian’s applications do not
 support a cause of action under § 1064 because Australian
 abandoned its ’237 application and because Australian
 filed its ’589 application in a “post filing,” “futile attempt to
 establish its standing.” Appellee Br. 24–26. Naked also
 argues that “mere ownership of a pending application does
 not in itself provide standing to oppose other applications.”
 Id. at 24–25. We are not persuaded.
      First, a trademark owner does not abandon her rights
 in a mark by abandoning prosecution. See 37 C.F.R.
 § 2.68(b) (“[T]he fact that an application has been expressly
 abandoned shall not affect any rights that the applicant
 may have in the mark set forth in the abandoned applica-
 tion in any proceeding before the Office.”); see also C & N
 Corp. v. Kane, 953 F. Supp. 2d 903, 911 (E.D. Wis. 2013),
 aff’d sub nom. C & N Corp. v. Gregory Kane & Ill. River
 Winery, Inc., 756 F.3d 1024 (7th Cir. 2014).
     Second, Australian’s advertising and sales in the
 United States also demonstrate a real interest and reason-
 able belief of damage. The Board found that Australian
 “has proven that it has advertised and sold NAKED con-
 doms in the United States through [its] websites since
 April 2003.” Decision at *5. This finding is supported by




 the ’237 application); J.A. 1096–103 (refusing registration
 of the ’589 application).
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 10                 AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC




 substantial evidence 4 and demonstrates Australian’s real
 interest and reasonable belief of damage. See Cunning-
 ham, 222 F.3d at 945.
      Naked questions the sufficiency of Australian’s com-
 mercial activity because Australian’s marketing and adver-
 tising activities are “isolated,” “limited,” and “de minimis,”
 and its sales are “sporadic” and “nominal.” Appellee Br. 19–
 22; see also Decision at *10 (characterizing Australian’s in-
 ternet sales in the United States as “de minimis”). Section
 1064 does not, however, impose a minimum threshold of
 commercial activity, nor do we define one here. The real
 interest requirement is meant to prevent litigation where
 there is no real controversy between the parties, “where a
 plaintiff, petitioner or opposer, is no more than an inter-
 meddler.” Jewelers, 823 F.2d at 492. Australian’s adver-
 tising and sales of NAKED condoms in the United States
 since April 2003, coupled with its pending application for
 registration of its unregistered mark, demonstrates that
 Australian is not a mere intermeddler; these acts instead
 demonstrate a real interest and reasonable belief of dam-
 age, as contemplated for a cause of action under
 15 U.S.C. § 1064. The Board, therefore, erred as a matter
 of law when it determined that Australian lacks standing
 in the proceeding for cancellation of Naked’s registered
 mark.
                         CONCLUSION
     We have considered Naked’s remaining arguments and
 find them unpersuasive. We hold that the Board erred
 when it determined that Australian must have proprietary
 rights in its unregistered mark in order to establish a cause



      4 See J.A. 162–65 (images of advertisements of con-
 doms bearing the NAKED mark on Australian’s website),
 169–280 (identifying several U.S. sales from Australian’s
 website for each month between April to December 2003).
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 AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC                  11



 of action under § 1064. We also conclude that based on the
 facts established before the Board, Australian has a real
 interest in the cancellation proceeding and a reasonable be-
 lief of damage, thereby satisfying the statutory require-
 ments to seek cancellation of a registered trademark.
 We reverse and remand to the Board for further proceed-
 ings consistent with this opinion.
                REVERSED AND REMANDED
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    United States Court of Appeals
        for the Federal Circuit
                  ______________________

    AUSTRALIAN THERAPEUTIC SUPPLIES PTY.
                   LTD.,
                  Appellant

                             v.

                    NAKED TM, LLC,
                         Appellee
                  ______________________

                        2019-1567
                  ______________________

     Appeal from the United States Patent and Trademark
 Office, Trademark Trial and Appeal Board in No.
 92056381.
                  ______________________

 WALLACH, Circuit Judge, dissenting.
     The U.S. Patent and Trademark Office’s (“USPTO”)
 Trademark Trial and Appeal Board (the “Board”) con-
 cluded that Appellant Australian Therapeutic Supplies
 Pty. Ltd. (“Australian”) had “failed to prove that it has
 standing” under 15 U.S.C. § 1064 to petition for cancella-
 tion of Appellee Naked TM, LLC’s (“Naked”) registration of
 the trademark “NAKED (typed drawing) for ‘condoms,’”
 bearing the Registration Number 3,325,577. Australian
 Therapeutic Supplies Pty. Ltd., No. CANCELLATION
 9205638, 2018 WL 6929683, at *1, *11 (T.T.A.B. Dec. 21,
 2018). The Majority reverses and remands, holding that
 “the Board erred when it determined that Australian must
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 2                   AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC




 have proprietary rights” to petition for cancellation under
 § 1064, and “that[,] based on the facts established before
 the Board, Australian has a real interest in the cancella-
 tion proceeding and a reasonable belief of damage, thereby
 satisfying the statutory requirements to seek cancellation”
 under 15 U.S.C. § 1064. Maj. Op. 11. Although I agree
 with the Majority that a party is not required to prove a
 proprietary interest, I do not agree that the Board required
 a proprietary interest from Australian or that Australian
 met its burden of proving a real interest and a reasonable
 belief in damages. Because I would affirm the Board’s de-
 termination, I respectfully dissent.
                          DISCUSSION
     I. To Have a Cause of Action Under 15 U.S.C. § 1064, a
       Petitioner Need Not Have a Proprietary Interest, but
                 Must Have a Legitimate Interest
     “A petition to cancel a registration of a mark . . .
 may . . . be filed . . . by any person who believes that he is
 or will be damaged . . . by the registration of a mark[.]” 15
 U.S.C. § 1064. We have construed this to mean that “[a]
 party seeking cancellation must prove . . . that it has
 standing[.]” Cunningham v. Laser Golf Corp., 222 F.3d
 943, 945 (Fed. Cir. 2000) (citations omitted). Statutory
 standing is a question of “whether a legislatively conferred
 cause of action encompasses a particular plaintiff’s claim.”
 Lexmark Int’l, Inc. v. Static Control Components, Inc., 572
 U.S. 118, 127 (2014). For the purposes of 15 U.S.C. § 1064,
 a petitioner must show that “it has both a real interest in
 the proceedings . . . [and] a reasonable basis for its belief of
 damage.” Empresa Cubana Del Tabaco v. Gen. Cigar Co.,
 753 F.3d 1270, 1275 (Fed. Cir. 2014) (internal quotation
 marks and citation omitted). “[A] real interest in the pro-
 ceeding” means the petitioner has “a legitimate personal
 interest” in the cancellation. Coach Servs., Inc. v. Triumph
 Learning LLC, 668 F.3d 1356, 1376 (Fed. Cir. 2012) (inter-
 nal quotation marks and citation omitted). “[A] reasonable
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 AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC                        3



 basis” for belief of damage means the petitioner’s “belief of
 damage” has “a reasonable basis in fact.” Id. (internal quo-
 tation marks and citation omitted).
      “[T]he reasonableness of [a petitioner’s] belief of dam-
 age may be shown in several ways.” Ritchie v. Simpson,
 170 F.3d 1092, 1098 (Fed. Cir. 1999) (discussing statutory
 standing to oppose, under 15 U.S.C. § 1063, registration of
 a mark) 1; see Lipton Indus., Inc. v. Ralston Purina Co., 670
 F.2d 1024, 1028 (C.C.P.A. 1982) (“No absolute test can be
 laid down for what must be proved to establish standing as
 a petitioner in a cancellation proceeding or as an opposer
 in an opposition.”). “In the usual case, where [a cancella-
 tion] is brought under [15 U.S.C. § 1052(d)], the [petitioner]
 ha[s] a proprietary interest in [the] mark [at issue], and
 standing is afforded through its assertion that it will incur
 some direct injury to its own established trade identity.”
 Jewelers Vigilance Comm., Inc. v. Ullenberg Corp., 823
 F.2d 490, 493 (Fed. Cir. 1987); see 15 U.S.C. § 1052(d)
 (providing that “[n]o trademark . . . shall be refused regis-
 tration . . . unless it[] [c]onsists of . . . a mark which so re-
 sembles a mark [already] registered . . . or . . . previously
 used in the United States by another and not abandoned,
 as to be likely, when used on or in connection with the
 goods of the applicant, to cause confusion, or to cause mis-
 take, or to deceive”). However, “[p]roprietary rights . . . are
 not required.” Jewelers, 823 F.2d at 493. A reasonable be-
 lief in damage “can be shown by establishing a direct com-
 mercial interest,” Cunningham, 222 F.3d at 945 (citing
 Int’l Order of Job’s Daughters v. Lindeburg & Co., 727
 F.2d 1087, 1092 (Fed. Cir. 1984)), such as the “longtime



     1   “The linguistic and functional similarities between
 the opposition and cancellation provisions of [15 U.S.C.
 §§ 1063, 1064] mandate that we construe the requirements
 of these provisions consistently.” Young v. AGB Corp., 152
 F.3d 1377, 1380 (Fed. Cir. 1998).
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 4                  AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC




 production and sale of merchandise with the [mark]” at is-
 sue, with “an equal right [to] that of [registrant-approved
 retailers] to use the [mark],” Job’s Daughters, 727 F.2d at
 1092, or “own[er]s[hip]” and use of potentially similar
 “prior registrations,” Cunningham, 222 F.3d at 945. These
 requirements are meant to “prevent litigation where there
 is no real controversy between the parties, where a plain-
 tiff, petitioner[,] or opposer, is no more than an intermed-
 dler.” Jewelers, 823 F.2d at 492 (quoting Lipton, 670 F.2d
 at 1029–30). The Majority and I agree this far. See Maj.
 Op. 6 (“Entitlement to a cause of action under § 1064 is not
 contingent on whether a [p]etitioner has proprietary rights
 in its own mark.”).
     The Majority neglects, however, that whatever com-
 mercial interest the petitioner asserts, it must be a “legiti-
 mate commercial interest,” Empresa Cubana, 753 F.3d at
 1275; see Coach, 668 F.3d at 1376 (requiring “a legitimate
 personal interest” (internal quotation marks and citation
 omitted)); Ritchie, 170 F.3d at 1095–97 (similar); Lipton,
 670 F.2d at 1029 (similar), that is rooted in “fact[]” and “af-
 firmatively proved,” Ritchie, 170 F.3d at 1099 (citing Lip-
 ton, 670 F.2d at 1028); see Lipton, 670 F.2d at 1028 (“The
 facts regarding standing, we hold, are part of a petitioner’s
 case and must be affirmatively proved.”). A petitioner may
 be deprived of a “legitimate commercial interest” under
 § 1064 if such interest is precluded by a prior judgment, see
 Empresa Cubana, 753 F.3d at 1274–75 (explaining that a
 petitioner was not prevented from bringing cancellation
 proceedings before the Board because a relevant prior judg-
 ment “specifically did not address whether [the petitioner]
 could seek cancellation of the [registrations at issue]”), or a
 prior settlement agreement, see Danskin, Inc. v. Dan River,
 Inc., 498 F.2d 1386, 1387 (C.C.P.A. 1974) (concluding that
 a petitioner could not, as a matter of law, seek cancellation
 of a mark because it had entered a prior settlement agree-
 ment with the registrant to “not oppose or petition to cancel
 directly or indirectly any registration” by that registrant);
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 AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC                       5



 see also Wells Cargo, Inc. v. Wells Cargo, Inc., 606 F.2d 961,
 965 (C.C.P.A. 1979) (“If there [is] a policy favoring chal-
 lenges to trademark validity, it too has been viewed as out-
 weighed by the policy favoring settlements.”).
  II. Australian Failed to Prove a Real Interest and a Rea-
                 sonable Belief in Damages
     Australian was required to plead and prove “a real in-
 terest in the proceedings . . . [and] a reasonable basis for its
 belief of damage.” Empresa Cubana, 753 F.3d at 1275; see
 Ritchie, 170 F.3d at 1099. It did not. Australian argued,
 and continues to argue on appeal, that it has standing
 based on its commercial interest in the NAKED mark. Ap-
 pellant’s Br. 22 (“[Australian] has a direct commercial in-
 terest in this proceeding as a result of its prior and
 continuing use of the NAKED [and NAKED CONDOMS]
 [m]arks in the advertising, marketing, and the offering for
 sale of condoms on its websites.”); J.A. 59 (Amended Peti-
 tion to Cancel) (similar). It offered evidence that it has ad-
 vertised and sold condoms under the NAKED mark in the
 United States through its websites since at least April
 2003, see Australian, 2018 WL 6929683, at *5; see, e.g.,
 J.A. 106 (Australian’s Managing Director and Co-Owner,
 testifying that in April 2003, Australian launched an
 online marketing campaign and began receiving online or-
 ders from the United States), 168–70 (Sales Records)
 (providing records of online purchases from the United
 States of Australian products), and that it has applied for
 registration of the NAKED mark in 2003, an application
 which it subsequently abandoned, J.A. 59–60. However,
 the record also shows that, in March 2007, Australian and
 Naked entered into an agreement under which Australian
 promised to discontinue use of the NAKED mark in the
 United States and consented to Naked’s use and registra-
 tion of the NAKED mark in the United States, in exchange
 for Naked’s consent to Australian’s use and registration of
 a NUDE mark. See J.A. 1541 (Australian’s Managing Di-
 rector and Co-Owner, testifying that “in essence, I did
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 6                   AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC




 agree” to “[Naked’s] use and registration of the trademark
 Naked in the United States”), 1543 (Australian’s Managing
 Director and Co-Owner, testifying that Naked’s “forbear-
 ance” on use of the NUDE mark was “something of value”
 to Australian), 1556 (Australian’s Managing Director and
 Co-Owner, testifying that “I understood that we had a gen-
 tleman’s agreement to coexist in the marketplace”). 2
     Therefore, even if Australian has shown that it has a
 “commercial interest” in Naked’s mark, it has contracted
 away any “legitimate commercial interest” in that mark
 and, therefore, any “reasonable belief in damages” related
 to Naked’s registration of that mark. Empresa Cubana,
 753 F.3d at 1275 (emphasis added); see Ace-Fed. Reporters,
 Inc. v. Barram, 226 F.3d 1329, 1332 (Fed. Cir. 2000)



     2     Australian does not substantively challenge the
 Board’s factual findings on this point. See Australian, 2018
 WL 6929683, at *6–9 (making various factual findings “to
 determine whether the parties had reached an agreement
 regarding their respective use and registration of the
 NAKED trademark”). Rather, Australian asserts, in pass-
 ing, that “it did not” “contract[] away its proprietary
 rights.” Appellant’s Br. 19; see id. at 8 (characterizing, in
 its statement of facts, the parties’ communications as un-
 successful settlement negotiations). Even if this is con-
 strued as argument, Australian fails to develop the point.
 It is, therefore, waived. In re Baxter Int’l, Inc., 678 F.3d
 1357, 1362 (Fed. Cir. 2012) (providing that arguments
 raised only in the “background of [an] opening brief” are
 waived); SmithKline Beecham Corp. v. Apotex Corp., 439
 F.3d 1312, 1320 (Fed. Cir. 2006) (providing that “mere
 statements of disagreement with the [lower tribunal] as to
 the existence of factual disputes do not amount to a devel-
 oped argument” and that “a passing reference to an is-
 sue . . . will not suffice to bring that issue before this court”
 (internal quotation marks and citations omitted)).
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 AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC                     7



 (explaining that a “valid and enforceable” contract has
 “both consideration to ensure mutuality of obligation, and
 sufficient definiteness so as to provide a basis for determin-
 ing the existence of a breach and for giving an appropriate
 remedy” (internal quotation marks and citation omitted)).
 Indeed, Australian has specifically agreed not to challenge
 Naked’s use and registration of the NAKED mark.
 J.A. 1541 (Australian’s Managing Director and Co-Owner,
 conceding that he had agreed “to [Naked’s] use and regis-
 tration of the trademark [NAKED] in the United States”).
 As such, there is “no real controversy between the par-
 ties”—they resolved any such controversy between them-
 selves in 2007—leaving Australian “no more than an
 intermeddler” here. Coach Servs., 668 F.3d at 1376 (inter-
 nal quotation marks and citation omitted); see J.A. 1748
 (Australian’s Managing Director and Co-Owner, telling
 Naked that there was “[n]o need to put anything on paper,
 [as it] just makes the lawyers a lot of money” and explain-
 ing that “[Australian] no longer ha[d] any Naked condoms
 in [the United States], so it should be clear sailing for [Na-
 ked]”); see also J.A. 1558 (Australian’s Managing Director
 and Co-Owner, explaining that Naked “wrote us a very flip-
 pant letter” that he took to be a “breach” of their “gentle-
 men’s agreement” such that Australian filed its
 cancellation petition in response). Accordingly, the Board
 did not err in concluding that Australian failed to prove it
 has standing under 15 U.S.C. § 1064 to petition for the can-
 cellation of Naked’s registration.
      The Majority, however, reaches the opposite conclusion
 through a series of missteps. First, the Majority misreads
 the Board’s determination as erroneously requiring that
 Australian “establish proprietary rights in its unregistered
 [NAKED] mark.” Maj. Op. 6. The Majority states that
 “[t]he Board reasoned that, in order to show that it had
 standing, Australian was required to establish proprietary
 rights in its unregistered mark,” noting that Board relied
 on Otto Roth & Co. v. Universal Foods Corp., 640 F.2d 1317
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 8                  AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC




 (C.C.P.A. 1981). Maj. Op. 4 (citing Australian, 2018 WL
 6929683, at *2, *11). However, the Board only required
 that Australian prove what it pled. Compare Australian,
 2018 WL 6929683, at *2 (noting, before turning to its
 standing analysis, that Australian had brought a “likeli-
 hood of confusion case” and that, because it “filed its peti-
 tion for cancellation on the basis of its unregistered
 NAKED and NAKED CONDOM trademarks,” to make
 such a case it “must establish proprietary rights in those
 pleaded common-law marks” as reflected in the defenses
 raised by Naked (citing Otto Roth, 640 F.2d 1317)), with id.
 at *11 (“[Australian] failed to prove that it has standing to
 cancel the registration because . . . [it had] contracted away
 its right to use and register NAKED and by extension
 NAKED CONDOMS.”). As the Board explained, “[Austral-
 ian’s] standing is intrinsically connected with the question
 of whether the parties have an enforceable agreement that
 precludes [Australian] from using or registering the
 mark . . . and from challenging [Naked’s] use and registra-
 tion of the . . . mark.” Id. at *11.
     Second, while the Majority alludes to the Board’s con-
 clusion that Australian and Naked had entered into a prior
 agreement, Maj. Op. 4 (noting that the Board “found that,
 although no formal written agreement existed, the parties
 entered into an informal agreement through email commu-
 nications and the parties’ actions”), 7 (providing that “[t]he
 Board determined that Australian had contracted away its
 right to use and register its unregistered mark”), it does
 not substantively address these findings in its analysis,
 Maj. Op. 7 (stating that “[w]hile an agreement could ulti-
 mately bar Australian from proving actual damage, § 1064
 requires only a belief of damage”). Instead, the Majority
 relies on Selva & Sons, Inc. v. Nina Footwear, Inc., 705 F.2d
 1316 (Fed. Cir. 1983). Maj. Op. 7. This reliance is mis-
 placed. The Majority relies on Selva for the proposition
 “that contracting away one’s rights to use a trademark does
 not preclude challenging a mark before the Board.” Maj.
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 AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC                       9



 Op. 7 (citing Selva, 705 F.2d at 1325). This is incorrect. In
 Selva, we held that the Board erred by “[r]efus[ing] to pass”
 on the issue of contractual estoppel. Selva, 705 F.2d at
 1323. We separately held that, while the Board had not
 directly addressed the issue, it had nonetheless erred by
 requiring “proof of damage” for standing, id. at 1325, when
 it concluded that the petitioner could not be injured be-
 cause it “already ha[d] an existing,” substantially similar
 “registration” to that it sought to cancel, id. at 1321. We
 explained that proof of “real interest,” not proof of damage,
 was required to establish standing to petition for cancella-
 tion. Id. at 1325–26 (citing Lipton, 670 F.2d at1028); see
 Lipton, 670 F.2d at 1027 (“[A] party who demonstrates a
 real interest in the proceeding has standing to litigate even
 though ultimately its allegation that he is or will be dam-
 aged is refuted.”). 3 We did not reach whether a prior



     3    Selva also asserts that “proof of . . . belief of dam-
 ages” is not required. Selva, 705 F.2d at 1325. This is a
 misstatement, given 19 U.S.C. § 1064’s express language.
 See 19 U.S.C. § 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 . . . by the registration of a
 mark[.]” (emphasis added)). As we have subsequently clar-
 ified, Selva did not create a different or more lenient test
 for standing, but rather stands for the proposition that
 proof of “[a]ctual damage” is “not requisite,” rather an “op-
 poser or cancellation petitioner” must “plead and prove
 facts showing a real interest in the proceeding.” Rosso &
 Mastracco, Inc. v. Giant Food Inc., 720 F.2d 1263, 1265
 (Fed. Cir. 1983) (citing Selva, 705 F.2d 1316, 1325 n.6,
 1324–26); see Job’s Daughters, 727 F.2d at 1092 (“In recent
 cases, this court has explicitly said that there is no require-
 ment that damage be proved in order to establish standing
 or to prevail in a cancellation proceeding.”). Rather, “[t]he
 crux of the matter” remains “whether [the petitioner’s]
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 10                 AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC




 agreement could preclude standing. See Selva, 705 F.2d at
 1324 (remanding to the Board to consider “the agreement,
 its construction, [and] its validity if necessary to decide the
 issues properly before it in this cancellation proceeding, in-
 cluding the issue of estoppel”).
     Third, the Majority erroneously finds proof of Austral-
 ian’s reasonable belief in damages elsewhere in the record.
 The Majority states that Australian “demonstrates a belief
 of damage because the USPTO refused registration of both
 the [U.S. Application Serial Nos. 78,758,]237 and
 [85,772,]589 [(the ‘’237 application’ and ‘’589 application,’
 respectively)] . . . based on a likelihood of confusion with
 Naked’s registered mark[.]” Maj. Op. 8–9. In 2011, follow-
 ing rejection by the USPTO, Australian abandoned the ’237
 application, declining to pursue it further based on its dis-
 cussions with Naked. J.A. 1565 (Australian’s Managing
 Director and Co-Owner, stating that Australian abandoned
 the ’237 application based on its “negotiations” with Na-
 ked). Further, Australian did not file its ’589 application
 until after it had filed its petition against Naked’s mark,
 J.A. 44 (Petition to Cancel, dated October 29, 2012), 1091
 (Application, dated November 6, 2012), and did not raise
 this application as a basis for standing in either its initial
 petition, J.A. 37–44 (Petition to Cancel), or its subsequent
 amended petition, J.A. 52–63 (Amended Petition to Cancel,
 dated September 9, 2014); see generally Australian, 2018
 WL 6929683, at *1–11 (making no mention of the ’589 ap-
 plication). Standing “must exist at the commencement of
 the litigation,” Davis v. Fed. Election Comm’n, 554 U.S.
 724, 732 (2008) (citation omitted); see Schwendimann v.
 Arkwright Advanced Coating, Inc., 959 F.3d 1065, 1073
 (Fed. Cir. 2020) (similarly requiring statutory standing at
 the time of filing), and “[a]bsent exceptional circumstances,



 belief [in damage] is reasonable and reflects a real interest
 in the issue.” Ritchie, 170 F.3d at 1097.
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 AUSTRALIAN THERAPEUTIC v. NAKED TM, LLC                    11



 a party cannot raise on appeal legal issues not raised and
 considered [before the Board].” Hylete LLC v. Hybrid Ath-
 letics, LLC, 931 F.3d 1170, 1174 (Fed. Cir. 2019) (citation
 omitted).
                         CONCLUSION
     Because the Board correctly concluded that Australian
 had failed to prove it had a legitimate commercial interest
 on which to base its petition for cancellation of Naked’s reg-
 istration, I respectfully dissent.
