Starbucks Corp. v. Wolfe's Borough Coffee, Inc.

Rule of Law:

To establish trademark dilution by blurring under the Federal Trademark Dilution Act (FTDA) as amended by the TDRA, a plaintiff must prove that the defendant's mark is likely to cause an association arising from its similarity to the famous mark that impairs the famous mark's distinctiveness, assessed by balancing statutory and other relevant factors, where a low degree of similarity and weak actual association, especially in the context of commercial use, can defeat such a claim.

Facts:

• Starbucks Corporation, originating in Seattle in 1971, had grown to a global purveyor of specialty coffee with 8,700 retail locations worldwide and $5.3 billion in revenues by 2005.
• Starbucks U.S. Brands LLC owns at least 56 valid United States trademark registrations for the 'Starbucks Marks', which are extensively advertised, promoted, and actively policed.
• The Starbucks Marks were famous within the meaning of the FTDA well before Black Bear Micro-roastery began using the term 'Charbucks'.
• Wolfe’s Borough Coffee, Inc. (Black Bear) manufactures and sells roasted coffee beans and related goods through mail, internet order, a limited number of New England supermarkets, and a single New Hampshire retail outlet.
• In 1997, Black Bear developed a coffee blend named 'Charbucks Blend', and later sold dark-roast coffee as 'Mister Char-bucks' or 'Mr. Charbucks' (the 'Charbucks Marks').
• Black Bear was aware of the Starbucks Marks when it began manufacturing coffee using the Charbucks Marks, and one reason for using 'Charbucks' was the public perception that Starbucks roasted its beans unusually darkly, intending to evoke an image of dark-roasted coffee.
• Soon after Black Bear began selling Charbucks Blend, Starbucks demanded that Black Bear cease using the Charbucks Marks, but Black Bear continued to sell coffee under those marks.

Procedural Posture:

• In 2001, Starbucks Corporation sued Wolfe’s Borough Coffee, Inc. in the United States District Court for the Southern District of New York (trial court/court of first instance) for, among other claims, trademark dilution.
• The District Court held a two-day bench trial in March 2005.
• In December 2005, the District Court (Swain, J.) ruled in favor of Black Bear and dismissed Starbucks' complaint, finding neither actual dilution under federal law nor likelihood of dilution under New York law (Starbucks I).
• Starbucks appealed to the United States Court of Appeals for the Second Circuit.
• While the appeal was pending, Congress passed the Trademark Dilution Revision Act of 2006 (TDRA), amending the FTDA.
• In 2007, the Second Circuit Court of Appeals vacated the District Court's judgment and remanded for further proceedings in light of the TDRA (Starbucks II).
• On remand, after further briefing, the District Court again ruled in Black Bear’s favor in 2008, analyzing the federal dilution claim under the TDRA (Starbucks III).
• Starbucks again appealed to the Second Circuit Court of Appeals (Starbucks as appellant, Black Bear as appellee).
• In 2009, the Second Circuit Court of Appeals vacated the District Court's judgment and remanded for reconsideration (Starbucks IV), finding that the District Court erred in its analysis of certain statutory factors (similarity, intent to associate, actual association).
• In its opinion and order following that second remand, the District Court again ruled in Black Bear's favor in 2011, re-evaluating the factors (Starbucks V).
• Starbucks appealed this third decision to the United States Court of Appeals for the Second Circuit (Starbucks as appellant, Black Bear as appellee).