Intellectual Property Law

New York Court Again Finds that MISTER CHARBUCKS Does Not Dilute STARBUCKS

By Michael Atkins

On June 5, the Southern District of New York decided that Wolfe’s Borough Coffee, Inc.’s use of MR. CHARBUCKS and MISTER CHARBUCKS in connection with coffee was not likely to cause dilution by blurring or dilution by tarnishment of Starbucks Corp.’s famous STARBUCKS marks. This is the same result the court reached in 2005 under the Federal Trademark Dilution Act. In 2007, the Second Circuit vacated the decision (STL post here) in light of the new standards established by the Trademark Dilution Revision Act, paving the way for last week’s decision.

The court framed the issue as follows: “…Plaintiff must demonstrate that Defendant’s use of its ‘Mr. Charbucks’ and ‘Mister Charbucks’ marks for one of its coffee blend products creates associations arising from similarity to the Starbucks marks that are likely to impair the distinctiveness of the Starbucks mark or tarnish that mark by harming its reputation.

On Starbucks’ blurring claim, the court found: “…Starbucks’ marks are distinctive and famous. Thus, several of the specified factors weigh in its favor. However, Defendant’s marks, as used in commerce, are not substantially similar to Plaintiffs’ Starbucks marks, and the association Defendant intended to evoke in consumers’ minds through its playful dissimilar mark is not one that would be likely to dilute the Starbucks marks as unique identifiers of Starbucks’ goods and services. Rather, it is dependent on an identification of those marks with Starbucks’ own products and a characteristic of the taste of those products. The record is, therefore, insufficient to demonstrate the requisite likelihood that the association arising from the similarity of the core terms is likely to impair the distinctiveness of Starbucks’ mark, and Plaintiff is not entitled to injunctive relief under that statute.”

Does that sound right to you? Let’s say I used to think solely of Starbucks when I encountered STARBUCKS coffee, but now after encountering CHARBUCKS coffee, I think of both Starbucks and Wolfe’s Borough Coffee. Isn’t that classic dilution by blurring?

As for dilution by tarnishment, the court found in a footnote that Starbucks’ own survey failed to support its claim:

“In its December 2005 Decision, the Court noted that the survey used the open-ended question ‘If the name ‘Charbucks’ were used for a type of coffee, how would you describe the coffee?,’ and found that only 6.3% of the survey respondents provided what was characterized as a ‘generally negative’ response.’ Further, while 15.2% of respondents described a hypothetical coffee named Charbucks as ‘charred,’ ‘burnt,’ ‘bitter,’ or ‘smokey,’ and 34.9% described the hypothetical flavor as ‘strong,’ ‘dark,’ ‘black,’ or ‘rich-flavoured,’ many of those same respondents expressed a favorable view of a coffee with these qualities.”

Given these stats, I agree that Starbucks didn’t make the grade on dilution by tarnishment.

The case cite is Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., No. 01-5981 (S.D.N.Y. 2008) (Swain, J.).

Props to the Las Vegas Trademark Attorney for blogging this earlier today.

Full post as published by Seattle Trademark Lawyer on June 09, 2008 (boomark / email).