Char’ed, I’m sure (updated, again, November 2013)

Updated version of the post first found here on December 8, 2009. 

starbucks-logoPoor Starbucks.  So much trademark trouble they have!  Other trouble, too.  And now the people who gave you five-dollar coffee in a paper cup had lost another one — one they thought they had won, namely the Starbucks v. Charbucks case (decision here, posted by Marty; the real name of the case is Starbucks Corp. v. Wolfe’s Borough Coffee, Inc.) involving trademark infringement and its genetic freak of a cousin, trademark dilution.

In fact, Starbucks lost this case a lot.  They lost and lost and lost.

Then, they won.  Starbucks won!

At least, they won a shot at winning.  Which, given their litigation luck these days, must be like a double espresso administered intravenously, juridically speaking.  And, brand-wise.

black-bear-coffee-insidesmall-123005That Law.com piece by Mark Hamblett in the last link is a good summary of the docket-slaloming.  For the law lesson, let’s just skip to smart person Rebecca Tushnet, who may or may not be fueled by caffeine when she blogs but all the same has done all the heavy lifting here:

As we all know, Starbucks is big and famous. Wolfe’s does business as Black Bear, a small business that sells coffee via mail order, the internet, and a limited number of New England supermarkets. In 1997, Black Bear began selling a dark roasted blend, Charbucks Blend, and later Mister Charbucks. The Charbucks Blend package showed a picture of a black bear above BLACK BEAR MICRO ROASTERY in large font, with the large slogan “You wanted it dark … You’ve got it dark!” Mister Charbucks had Black Bear’s name on it, a picture of a man walking, and the slogan “Roasted to the extreme … for those who like the extreme.”

Starbucks demanded that Black Bear stop using the Charbucks marks, but Black Bear declined. Its principal testified: “[m]y main objection was that basically this was a large corporation coming at me and saying, telling us what to do, and, oh, by the way you’re going to pay for it, too…. [S]ome of the requests that they were making were really off the wall.” . . .

Okay, stop here.  [UPDATE:   But read Rebecca's clarifying comment below. -- RDC]  You know, LIKELIHOOD OF CONFUSION® loves to represent Davids against Goliaths (and really therefore does not at all mind that Goliath keeps losing my number), and, yes, if this blog is about nothing it’s about overreaching in copyright and trademark.

But.

“Black Bear declined”?!

Whom on earth are we kidding here?  I don’t really like trademark dilution, no.  But come on.  This is a competitor just riffing on the name of the bigger stakeholder.  There comes a time when, you know, attention must be paid.  If you’re going to have a trademark dilution tort, this situation appears to be a pretty good use of it.  And when I hear a public defense based on “they’re big, we’re small” — not as a factor suggesting oppression, but as the thrust of the public relations — that’s when I reach for that ebony keyboard.

Good to the last drop

Good to the last drop

What, the names are not similar enough to cause a likelihood of dilution?  Really?  The Second Circuit, ultimately, did not agree.  The talk here is all about a concept called “substantial similarity.”  (I have ellipsed some law professor stuff):

The district court [had] concluded that dissimilarity alone was enough to defeat the [dilution by] blurring claim, and anyway weighed strongly against Starbucks. The court of appeals concluded that the first conclusion was error, and the district court may have placed “undue significance” on similarity in determining likely dilution. The existence of some, even “not substantial,” similarity between the marks may be sufficient “in some cases” to show likely dilution by blurring. Substantial similarity is not a requirement for federal dilution. . . .

Under the [Trademark Dilution Revision Act], one of the factors [when assessing liability] is the “degree of similarity” between the marks, which “does not lend itself” to a requirement of substantial similarity. If there were a substantial similarity requirement, the significance of the remaining five factors would be “materially diminished” because they’d have no relevance without substantial similarity. . . .

How sweet it is

A nice cup

Right!

Oh, and, yes, by the way… what the Second Circuit said?  It’s “substantially similar,” I think, to what I said right here last June.

How sweet it is!

UPDATE:  Nope.  This is Starbucks, fellows.  They lose again.  As Washington College of Law 2L Jeff Kettle explains:

For the third time, Judge Laura Taylor Swain of the Southern District of New York has held that Wolfe’s Charbucks brand does not dilute Starbucks’ mark.

Judge Swain defined the issue upon this last remand as “whether Defendant’s use of its ‘Mister Charbucks,’ ‘Mr. Charbucks’ and ‘Charbucks Blend’ marks . . . for one of its blended coffee products is likely to dilute Plaintiff’s ‘Starbucks’ marks by blurring.”  Looking at the six factors enumerated in the Trademark Dilution Revision Act, the court held that, despite four out of the six (“the distinctiveness of Plaintiff’s marks, Plaintiff’s exclusivity of use, the high degree of recognition of Plaintiff’s marks, and Defendant’s intent to associate its marks with the Plaintiff’s marks”) leaning towards Starbucks’ favor, the “Charbucks marks are only weakly associated with the minimally similar Starbucks marks and, thus, are not likely to impair the distinctiveness of the famous Starbucks marks.”  The court stated that “there is no dispute that four of the six factors weigh in Plaintiff’s favor,” but upon this remand the focus was on the remaining two, the degree of similarity of the marks and the evidence of actual association between the marks.

MORE WITH THE UPDATE:  Starbucks appeals.  Starbucks loses.

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Author:Ron Coleman

I write this blog.

13 Responses to “Char’ed, I’m sure (updated, again, November 2013)”

  1. December 9, 2009 at 9:14 am #

    Thanks for the mention–though we actually disagree on this, as I hope my post makes clear. If you accept that comparative advertising is a legitimate tactic for competitors, then you’ve already endorsed using a competitor’s mark to gain attention for your own. Dilution was sold to legislatures as being about the use of identical marks on noncompeting goods, not about cutting back on what competitors could do. A substantial similarity requirement helped limit the scope of dilution, including protecting competitors; I’m sad to see the Second Circuit abandon it.

    • December 9, 2009 at 12:27 pm #

      Rebecca, thanks for coming by. In my haste, distraction and legendary lack of thoroughness I neglected to mention that indeed the ellipses omit your very compelling criticism of the departure from identical goods. I say it is compelling because I am, as I have made obvious, a dilution skeptic. More than that, I have written many times and, I think, forcefully about the cultural loss that results from people in business not being able to allude to famous, fundamentally protectible trademarks or brands — such as in this piece about “unauthorized” Beatle-themed ice cream novelties, and over and over again regarding “licensed merchandise” in sports both professional and “amateur” from ancient times — even where doing so has a frankly commercial, even exploitative purpose (i.e., free riding) but there is no realistic chance of a likelihood of confusion.

      Ultimately, however, from a policy perspective it is hard for me to extend this argument to competitors except from the purely trademark point of view, i.e., there is no likelihood of confusion and no infringement of STARBUCKS from the use of CHARBUCKS. If in fact we live in a world, as we do, in which dilution is a recognized tort, however, insisting on literal identity (identicalness?) as we do with counterfeiting would seem to me to eviscerate the goal of the dilution cause of action. Exposure to liability for dilution could be fairly easily avoided by using famous marks against the competitors who made them famous, as long as the junior user makes trivial changes in the marks — even though those changes might not ameliorate the policy-identified harm at all.

      And yet you are certainly right that this is an extension of dilution beyond its fundamental or “classic” definition: the use of identical marks on non-competing goods. You are also better qualified than I to say whether or not the statute as amended bears this extension, as the Circuit says it does, much less as to whether or not that interpretation is consistent with the legislative intent, however the language was drafted. From a political and cultural point of view, however (that’s my way of saying I am about to be subject, impressionistic and imprecise — i.e., that this is a blog), given the way Congress tends to swing when Big IP waddles up to the trough, I would be surprised if a majority of those who voted for the TDRA would find this outcome offensive.

      But again, that’s just my guess. From an ethical or moral point of view, though, and in terms of maximizing welfare, even as someone who keeps arguing that assigning all this rent to heavily-armed IP stakeholders stifles more commerce than it protects, my post was meant to convey that I believe this outcome is the right one given the policy choice favoring special protection for famous marks.

  2. December 10, 2009 at 2:47 pm #

    The whole big-small argument to me is an admission of weakness. I am alot smaller than Sam Walton. Yet if I pilfered, say, $20 from a Wal-Mart cash register, you better believe that I would be arrested and punished. Theft is theft, even if the thief is “small” and the victim can afford it.

    That is not to say I think Black Bear is a thief. But to my mind, the whole “big guy – little guy” argument is just a dodge.

Trackbacks/Pingbacks

  1. Pierce Law - December 8, 2009

    RT @RonColeman Starbucks v. Charbucks (NH co) 2nd Cir orders refill in bottomless TM lawsuit http://bit.ly/7uS6BZ |LIKELIHOOD OF CONFUSION®

  2. topsy_top20k_en - December 8, 2009

    Starbucks v. Charbucks — 2nd Cir. orders refill in bottomless TM lawsuit http://bit.ly/7uS6BZ | LIKELIHOOD OF CONFUSION®

  3. clarinette - December 8, 2009

    RT @piercelaw: …Starbucks v. Charbucks … 2nd Cir orders refill in bottomless TM lawsuit http://bit.ly/7uS6BZ |LIKELIHOOD OF CONFUSION®

  4. Andrea Lamy - December 8, 2009

    RT @piercelaw: RT @RonColeman Starbucks v. Charbucks (NH co) 2nd Cir orders refill in bottomless TM lawsuit http://bit.ly/7uS6BZ |LIKELI …

  5. PostRank – Law - December 8, 2009

    Char’ed, I’m sure http://bit.ly/4RKO1L #postrank #law

  6. Daniel Villanueva - January 31, 2012

    RT @RonColeman: CHARBUCKS #TM: Starbucks loses again. Of course. | Likelihoof of Confusion http://t.co/c5q5HqQG

  7. Tom Walsh - January 31, 2012

    CHARBUCKS #TM: Starbucks loses again. Of course. http://t.co/yGwFdqM9 | LIKELIHOOD OF CONFUSION®

  8. Suffolk Media Law - January 31, 2012

    RT @RonColeman: CHARBUCKS #TM: Starbucks loses again. Of course. | Likelihoof of Confusion http://t.co/c5q5HqQG

  9. The Br@nd Ranch - February 1, 2012

    RT @roncoleman: Char'ed, I'm sure (updated, January 2012) http://t.co/ojLeBPbp

  10. Grande, Venti, De Novo. (Starbucks VI) | LIKELIHOOD OF CONFUSION® - December 10, 2013

    […] Starbucks appeals to the Supreme Court—the last word in the matter [For some previous words, start here -- […]

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