Starbucks' attempts to protect trademark could grow tougher
The high court last week unanimously sided with a small Kentucky adult shop formerly called Victor's Little Secret, which lingerie giant Victoria's Secret sued for violating its trademark.
To win a case under the Federal Trademark Dilution Act, the court said, a company must show it has suffered actual harm to its trademark, not just show the possibility of harm.
The ruling could have implications for Starbucks, which in the past two years has sued retailers including Sambuck's, a coffee shop in Astoria, Ore.; A&D Cafe of Brooklyn, N.Y., which sells coffee called Warbucks; and the Black Bear Micro Roastery in New Hampshire, which has a blend of coffee called Mr. Charbucks. The suits against those three are still pending.
The Supreme Court's decision "will make it much more difficult for Starbucks to win a federal (trademark) dilution case against any of these people," said David Welkowitz, a law professor at Whittier College in Costa Mesa, Calif., and author of a book on trademark law.
Still, last week's decision isn't a slam-dunk for the small retailers in the Starbucks cases, said Thomas Hoffmann, a Seattle attorney and adjunct law professor at the University of Washington.
Hoffmann, who teaches the trademark course at UW's law school, said Starbucks can still make a case for infringement by showing customers are confused about whether the retailers' coffees were somehow affiliated with Starbucks.
And the court ruled companies can prove harm through circumstantial evidence, meaning Starbucks wouldn't have to show a drop in sales or profits to prevail.
"I don't think these three people are out of the woods," Hoffmann said.
Starbucks isn't the only Northwest company that could be touched by the court's action. Microsoft has sued a San Diego company called Lindows.com, claiming the name sounds too similar to its Windows operating system. The trademark-infringement case is set for trial in December.
Starbucks spokeswoman Audrey Lincoff declined to discuss possible impact of the Supreme Court ruling, saying the company doesn't comment on pending litigation. But she said Starbucks will continue to "take legal steps to protect the value of our trademark and protect the public from confusion and deception when we are unable to resolve a matter through alternate means."
"We find it unfortunate that because of our success, others feel it is fair to trade on the goodwill that we have developed through years of hard work and investment in our products, our people and our name," Lincoff said.
In the case of Sambucks in Astoria, a coastal town of about 10,000 residents, owner Samantha Buck-Lundberg says her shop's moniker comes from her name. She said she's been known as Sam Buck in Astoria since she and her family moved there in the mid-1970s.
"It's on my birth certificate," Buck-Lundberg said.
Hoffmann, however, said trademark cases often reach beyond name similarity. Starbucks can argue that the circular logo used by Sambucks evokes the Starbucks trademark, or that the name Mr. Charbucks is disparaging because it suggests Starbucks' coffee is over-roasted.
James Clark, co-owner of Black Bear Micro Roastery, said he chose Mr. Charbucks because customers asked for a darker blend and he wanted to erase any doubt about what they were buying. He said the blend, introduced in 1997, makes up less than 4 percent of the roastery's sales.
"Our effect on Starbucks is not measurable," Clark said. "It's like taking an 8-ounce glass of water and pouring it into the Atlantic Ocean."
In June, Starbucks sued A&D Cafe of Brooklyn, N.Y., which runs a Web site that sells Warbucks coffee. Seattle attorney Warren Rheaume, A&D's local counsel, said the two sides are discussing a possible settlement.
Suing a mom-and-pop retailer can lead to unflattering publicity for a major chain. But Lincoff said Starbucks can't be selective about when to protect its trademark.
Companies have to fight when they believe their trademarks have been violated, Welkowitz said. "If you allow people to use it, courts will sometimes look skeptically on your claims for relief," Welkowitz said.
Despite the court ruling, Welkowitz said, small retailers using variations of the Starbucks name still may be liable under state trademark laws.
And while the court raised the bar for proving trademark infringement, experts say it didn't give specifics about how to measure trademark damage.
"The trademark community really needs some straightforward guidance from the Supreme Court," Hoffmann said. "I don't think the decision was that clear."
Jake Batsell: 206-464-2718 or jbatsell@seattletimes.com