Charbucks wins trademark spat

– Anjali Shankar, Attorney –

Annie Clark and her husband, Jim, own a mom-and-pop shop called Black Bear Micro Roastery in Tuftonboro, New Hampshire.  Black Bear introduced its Charbucks blend in 1997, which is a dark roast coffee.  In 2001, Black Bear was sued in federal district court in New York by Starbucks. Starbucks argued that Black Bear’s use of the name “Charbucks” infringed, blurred and tarnished its famous trademarks. Starbucks asserted various claims, including federal and state trademark infringement, unfair competition and dilution.

Starbucks appealed to the Second Circuit Court of Appeals after Black Bear prevailed in the district court, arguing that the court had erred in its conclusion that “Charbucks” was not likely to dilute Starbucks’ famous mark because the marks were only minimally similar and weak evidence of actual association.  In its most recent decision, the Second Circuit upheld the lower court’s ruling.  Despite Black Bear’s admitted intention to create an association, Starbucks failed to prove dilution due to a lack of evidence of actual association by consumers between the minimally similar marks.

In seeking an injunction, Starbucks had conducted a phone survey of 600 people by a pollster, Warren Mitofsky, which found that “the number one association of the name ‘Charbucks’ in the minds of consumers is with the brand ‘Starbucks.’” However, the Second Circuit found the survey to be fundamentally flawed and based its findings on how consumers thought of “Charbucks” in isolation.  The survey indicated that while 39.5 percent of participants thought of “Starbucks” or “coffee” when asked what came to mind when hearing “Charbucks,” only 4.4 percent said “Starbucks” or “coffee house” when asked who would likely sell a “Charbucks” product. The most popular answer to that question was, in fact, “grocery store.”

The court held that in light of Starbucks’ fame, the fact that more participants of the survey did not think of “Starbucks” upon hearing the word “Charbucks” reinforced the finding that the marks were only minimally similar.