I had the same thing happen with my brilliant "mud flap condom" idea. The product would have an element of protection for the balls, much like a plastic baggie with an elastic band that cups the balls.
Genital warts is one of the only STD's you can transmit even while using a condom, and with this product I'm pretty sure it would eliminate that risk. So we can all bang hookers without worry!
So I was planning this for dayyyyys straight and I was positive it wasn't taken because I had done some searches that hadn't turned anything up. Turns out I hadn't dug deep enough, and the patent office actually has 100+ patents on products that look almost identical to what I had in mind. That was a VERY depressing day for me.