Flawed Evidence Undercuts “Charbucks” Trademark SuitNovember 27, 2013

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.