MVS Filewrapper® Blog: Flawed Evidence Undercuts "Charbucks" Trademark Suit

In Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., the U.S. Court of Appeals for the Second Circuit affirmed a district court’s decision denying injunctive relief in Starbucks’ trademark case against Black Bear Micro Roastery over Black Bear’s use of “Charbucks” for coffee. 


Starbucks sued Black Bear in 2001, alleging, among other things, trademark dilution in violation of 15 U.S.C. §§ 1125(c), 1127.  In December 2005 the district court ruled in favor of Black Bear and dismissed Starbucks’ complaint.  Starbucks appealed this original decision, but while the appeal was pending, Congress passed the Trademark Dilution Revision Act of 2006 (“TDRA”), which amended portions of the federal trademark law relevant to the case, resulting in the case being remanded.   The district court again ruled in favor of Black Bear, and Starbucks again appealed.  On appeal, the Second Circuit remanded again, instructing the district court to reconsider Starbucks dilution claim based on its interpretation of the TDRA provisions.  Once again, the district court found in favor of Black Bear, and once again Starbucks appealed.

On appeal, the Second Circuit made its own conclusions regarding the elements of Starbucks’ dilution case, under the TDRA.  The appellate court refused to revisit its previous conclusion that the “Charbucks” mark is only minimally similar to Starbucks famous mark.  The court also rejected Starbuck’s arguments that Black Bear’s admitted intent to create an association raises a strong presumption of actual association, and that Starbuck’s proffered survey evidence proved a high degree of association.  The court then conducted its own weighing of the factors, and concluded that—although four of the six factors favored Starbucks—the overall determination based on the weight afforded each factor favored a finding that there was not a likelihood of dilution. The court concluded that what ultimately tipped the balance was that Starbucks meet its burden due to the combination of fundamentally flawed survey evidence and minimal similarity of the marks.

The full court opinion is available here.  

Second Circuit: If you want a court to order the USPTO, ask in your pleadings, not after you win

In a recent decision, the Second Circuit affirmed a district court's decision in a trademark case not to enter an order pursuant to 15 U.S.C. § 1119§ 1119 permits a court to enter an order regarding registrability and cancellation of marks at the USPTO.  The prevailing defendant asked the district court to order the USPTO to dismiss a related cancellation proceeding.  The party had not requested an order under § 1119 in its counterclaims, but instead sought it by way of a Rule 59(e) motion to amend the final judgment in the case.  The district court denied the motion, concluding the defendant could simply raise the issue as a matter of issue preclusion.

The Second Circuit affirmed.  The court held there was no abuse of discretion in denying the Rule 59(e) motion.  Further, the court noted § 1119 is permissive, such that the court was not required to grant such relief.

More detail of Empresa Cubana del Tabaco v. Culbro Corp. after the jump.


Second Circuit: Famous marks doctrine doesn't support NY unfair competition claim

In a recent decision, the Second Circuit decided the one outstanding issue from a case it had previously decided in March 2007 (previously blogged here), namely whether the "famous marks" doctrine the court held Congress has not yet incorporated into federal trademark law might support a New York common law claim for unfair competition.  The Second Circuit certified two questions to the New York Court of Appeals before resolving the issue.  With the answers back, the court affirmed the district court grant of summary judgment to the defendants in its entirety.

With the case now fully decided by the Second Circuit, the way is now clear for a possible appeal to the Supreme Court, as this case conflicts with the Ninth Circuit's 2004 decision in Grupo Gigante S.A. de C.V. v. Dallo & Co., which recognized the "famous marks" doctrine rejected by the Second Circuit in this case.

More detail of ITC Ltd. v. Punchgini, Inc. after the jump.


Ninth Circuit: PerfumeBay confusingly similar to eBay, but Perfume Bay is not

In a decision yesterday, the Ninth Circuit affirmed a district court's finding that the mark "Perfumebay" was likely to be confused with eBay, and affirmed an injunction barring the use of the domains and (as of today, both these domains are still functional).  The court also affirmed the finding that the use of "Perfume Bay" was not likely to cause confusion, in part because "PerfumeBay" incorporates the full "eBay" trademark, whereas "Perfume Bay," with the addition of the space between the words, no longer incorporates the whole eBay trademark.

The Ninth Circuit reversed the district court's finding of no likely dilution under California law, stating that "it does not appear that the district court fully considered the highly distinctive qualities of eBay's famous mark."  Perfumebay's use of the suffix "Bay" may cause consumers to "no longer associate the usage of the 'Bay' suffix with eBay's unique services," causing the "uniqueness" of eBay's mark to be "diluted in direct proportion to the extent consumers, particularly internet users, disassociate the eBay mark with eBay's services."

More detail of, Inc. v. eBay Inc. after the jump.


Second Circuit rejects famous marks doctrine

In a recent decision, the Second Circuit held that a trademark holder who has abandoned use of its mark in the United States cannot prevent others from using the mark because the mark is famous in the United States based on use in a foreign country. This concept is referred to as the "famous marks doctrine," and the court held that if it is to be incorporated into United States law, it must be done by legislation, not by judicial decision. As a result, the marks were held abandoned, and the defendants were permitted to use the marks over the original owner's objection, pending resolution of state trademark claims.

More details of the case after the jump.


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