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Starbucks Corp. v. Wolfe's Borough Coffee, Inc. - 736 F.3d 198 (2d Cir. 2013)

Rule:

Under 15 U.S.C.S. § 1125(c)(1), a plaintiff must show the defendant's use of a mark in commerce that is likely to cause dilution by blurring of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury. Section 1125(c)(2)(B) defines "dilution by blurring" as association arising from the similarity between a mark and a famous mark that impairs the distinctiveness of the famous mark. The statute then instructs that, in determining whether a mark is likely to cause dilution by blurring, the court may consider all relevant factors, including the six enumerated factors. The U.S. Court of Appeals for the Second Circuit has declined to treat the factors pertinent to a trademark dilution analysis as an inflexible, mechanical test, suggesting instead that the importance of each factor will vary with the facts. Accordingly, the court need not consider all six statutory factors listed in § 1125(c)(2)(B)(i)-(vi) if some are irrelevant to the ultimate question; nor is the court limited to those six factors. Instead, the court employs a cautious and gradual approach, which favors the development of a nonexclusive list of trademark dilution factors over time.

Facts:

Starbucks Corporation and Starbucks U.S. Brands LLC (together, "Starbucks") appeal from a judgment of the United States District Court for the Southern District of New York (Swain, J.) denying Starbucks' request for an injunction pursuant to the Federal Trademark Dilution Act of 1995 (FTDA), 15 U.S.C. § 1125(c), prohibiting Wolfe's Borough Coffee, Inc., doing business as Black Bear Micro Roastery (Black Bear), from using Black Bear's "Mister Charbucks," "Mr. Charbucks," and "Charbucks Blend" marks (the "Charbucks Marks"). After a bench trial followed by additional briefing from the parties upon remand from this Court, the District Court concluded that Starbucks failed to prove that the Charbucks Marks are likely to dilute Starbucks' famous "Starbucks" marks and denied Starbucks' request for an injunction.

On appeal, Starbucks argues that the District Court erred in finding only minimal similarity and weak evidence of actual association between the Charbucks Marks and the Starbucks Marks. Starbucks also contends that the District Court erred in balancing the statutory dilution factors by giving no weight at all to three of the factors—the strong distinctiveness, exclusive use, and high degree of recognition of the Starbucks Marks—and placing undue weight on the minimal similarity between the marks.

Issue:

Did the district court err in finding minimal similarity between the marks and when it discounted the survey evidence?

Answer:

No

Conclusion:

The Court held that the district court did not err in finding minimal similarity between the marks. The district court did not err when it discounted the survey evidence because the survey measured only how respondents reacted to the isolated word "Charbucks," rather than to defendant's marks in context, and because the share of respondents who indicated an association between the marks was relatively small. Because plaintiffs' principal evidence of association, the survey, was fundamentally flawed, and because there was minimal similarity between the marks, plaintiffs failed to show that defendant's use of its marks in commerce was likely to dilute plaintiffs' marks. Plaintiffs did not demonstrate a likelihood of dilution by blurring, under 15 U.S.C.S. § 1125(c).

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