Siding With The Big Guy

While we generally are on the side of the “little guy,” when such is engaged in legal combat with a corporate colossus, there are limits which, when exceeded, compel us to root for the “big guy.” One such case is Starbucks Corporation v. Wolfe’s Borough Coffee, Inc.

Starbucks, which was founded in 1971, is the world’s largest coffee retailer, with over 8,000 stores around the globe (it only seems that there are two Starbucks stores on every city block). Starbucks spends over $30M per year on advertising and promotion, all of which features the federally registered “STARBUCKS” marks.

Black Bear is a small coffee manufacturer and retailer with two (yes, 2) outlets, both in New Hampshire. In 1997, Black Bear began selling coffee under the marks “CHARBUCKS BLEND” and “MISTER CHARBUCKS.”

Not surprisingly, Starbucks demanded that Black Bear cease use of these marks. When Black Bear refused, Starbucks sued. In a bench trial in 2005 (“the mills of justice grind slow, but exceedingly fine”), Starbucks LOST. Again, not surprisingly, Starbucks appealed.

Much to Starbucks’ good fortune, while their appeal was pending Congress amended the trademark law. Previously, a mark holder had to prove “actual dilution” of its mark in order to qualify for “relief,” i.e. an injunction. As amended, the holder of a famous distinctive mark is entitled to an injunction against the use of a mark that is “likely” to cause dilution of the famous mark. The appeals court, therefore, reversed the trial court and awarded Starbucks an injunction.

THE LESSON TO BE LEARNED: Dilution by blurring is an “association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.” When choosing a mark or trade name, steer clear of the famous marks of your competitors.