U.S. Court of Appeals upholds finding of no dilution of Starbucks’s trademark (Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 736 F.3d 198 (2d Cir. 2013))

by Irene Calboli

The litigation in the case Starbucks Corp. v. Wolfe’s Borough Coffee started in the early 2000s.[1] To briefly summarize the facts, Black Bear Micro Roastery manufactured a coffee named Mr. Charbucks, which was sold (in limited quantities) in supermarkets and at Black Bear’s retail location.  As Black Bear itself admitted, the company was aware of the Starbucks trademark and named its blend Charbucks in part because of how Starbucks roasts its coffee beans.[2]  Despite Starbucks’ request to stop using the name Charbucks, Black Bear continued to market Mr. Charbucks coffee and litigation ensued. Starbucks argued, inter alia, that Black Bear’s use of Charbucks diluted the Starbucks mark by blurring.[3] In 2005, the District Court denied Starbucks’ claim and ruled in favor of Black Bear because it could not find actual dilution.[4] On appeal, however, the Second Circuit vacated the ruling and remanded the case following the adoption of the Trademark Dilution Revision Act (TDRA) in 2006—according to which a finding of dilution can be based on a likelihood of dilution and not necessarily on actual dilution.[5]

On remand the District Court ruled again in favor of Black Bear and did not find dilution of the Starbucks’ mark because even though some of the factors established in the TDRA[6] favored Starbucks, others did not.[7] Starbucks appealed, and the Second Circuit again vacated the holding and remanded the case to the District Court.[8] This time, the Second Circuit ruled that the District Court had put too much emphasis on the first factor of the TDRA and erred when requiring bad faith to find intent in addition to requiring actual evidence of confusion to prove that there was a likelihood of dilution in the case.[9] Yet on remand, the District Court again ruled that Starbucks had not shown a case of trademark dilution because even though several factors weighed in favor of Starbucks, the marks were “only minimally similar” and the sixth factor—the “actual association” between the signs—“no more than minimally” weighed in favor of Starbucks.[10]  Starbucks again appealed. In November 2013, the Second Circuit affirmed the District Court’s ruling in favor of Black Bear.

Notably, the Second Circuit confirmed the holding from 2009 that “the Charbucks [m]ark[] [was only] minimally similar to the Starbucks [m]ark[].[11] Moreover, even though Black Bear seemingly wanted to create an association with the Starbucks mark, the court did not find that this immediately weighed in the plaintiff’s favor for the sixth factor —the actual association between the signs.[12]  In particular, the court found that the results of a survey commissioned by Starbucks to assess such association was not enough to find actual association because it only concerned the word Charbucks without any specific context, and because the survey also showed only a low percentage of consumers which associated this word with Starbucks.[13] Accordingly, the court found that there was no actual association between the Starbucks mark and the Charbucks mark even though there was an intent to create an association. Ultimately, the court found that Starbucks did not prove that the use of Charbucks diluted the Starbucks mark.[14]

This case helps to demonstrate that each of the six factors established by the TRDA for a finding of dilution by blurring continues to be relevant in any judicial analysis. The Second Circuit indicated that the importance of each factor may differ based on the specific facts of the case at issue, so it remains difficult to predict how the factors could be weighed by the courts in future cases. Still, this case illustrates the importance of looking at the marks at issue in context. It also illustrates that the fact of acting in good faith when associating with a famous mark may not insulate defendants from a finding of association, and thus a finding of dilution.


[1] Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 2004 U.S. Dist. LEXIS 19239, (S.D.N.Y. Sep. 28, 2004); Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 2005 U.S. Dist. LEXIS 35578, (S.D.N.Y. Dec. 22, 2005); Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 477 F.3d 765, (2d Cir. 2007); Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 559 F. Supp. 2d 472, (S.D.N.Y. 2008); Starbucks Corp. v. Wolfe’s Borough Coffee., Inc., 588 F.3d 97, (2d Cir. 2009); Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 2011 U.S. Dist. LEXIS 148081, (S.D.N.Y. Dec. 23, 2011); Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 736 F.3d 198 (2d Cir. 2013).

[2] Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 736 F.3d 198, 201 (2d Cir. 2013).

[3] Id. at 207.

[4] Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 2005 U.S. Dist. LEXIS 35578, 26-7 (S.D.N.Y. Dec. 22, 2005); see also Mosely v. V Secret Catalogue, 537 U.S. 418, 432-33 (2003) (clarifying that trademark owners must prove “actual dilution” and not just a “likelihood of dilution.”).

[5] 15 U.S.C.S. § 1125(c)(2)(B) (LEXIS through 1/16/2014).

[6] Id. § 1125(c)(2)(B)(ii)-(iv) (LEXIS) (“The degree of inherent or acquired distinctiveness of the famous mark. . . . The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark. . . . The degree of recognition of the famous mark.”).

[7] Id. § 1125(c)(2)(B)(i), (v)-(vi) (LEXIS) (“The degree of similarity between the mark or trade name and the famous mark. . . . Whether the user of the mark or trade name intended to create an association with the famous mark. . . . Any actual association between the mark or trade name and the famous mark.”).

[8] Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 588 F.3d 97, 109-10 (2d Cir. 2009).

[9] Id. at 107-09.

[10] Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 2011 U.S. Dist. LEXIS 148081, 14 (S.D.N.Y. Dec. 23, 2011).

[11] Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 736 F.3d 198, 208 (2d. Cir. 2013) (quoting Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 588 F.3d 97, 106 (2d Cir. 2009)).

[12] Id. at 208-09.

[13] Id. at 209-11.

[14] Id. at 211-13.

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