A “Ruff” Turn of Events: Starbucks sends cease-and-desist letter to Illinois dog daycare center claiming the small business’s name infringes on the coffee giant’s trademark.
On October 8, 2012, the Seattle-based coffee giant Starbucks recently sent “Starbarks Dog Daycare,” an Illinois doggy-daycare, a cease and desist letter, claiming the name of the small, private company was too similar to, and was thus infringing on its world-known mark. It insisted that the “Starbarks Dog Daycare,” in Algonquin, Ill., northwest of Chicago, change its name, logo, and website (StarbarksDog.com), or else, the letter threatened, Starbucks would sue.
The current logo used by “Starbarks” is a green oval surrounded by a white border. The words “Starbarks” and “Daycare” are written in block white print surrounding a white-rimmed black oval, with block white letters spelling “Dog.” There are two white stars between “Starbarks” and “Daycare.”
The Starbucks Coffee logo, is a circle composed of a similar green color, surrounded by a thin white border, with white block writing stating “Starbucks” and “Coffee” separated by two white stars. The words surround a black circle bordered by a thin white line. The inside of the black circle is the image of a stylized mermaid, also in white.
Does Starbucks’ claim hold up to legal scrutiny, or is it barking up the wrong tree?
Because Starbucks Coffee is a nationally registered trademark, the company could have two possible claims under Federal Law. First, that the name “Starbarks Dog Daycare” is confusingly similar to its own “Starbucks Coffee” under 15 U.S.C. § 1125(a)(1)(A). Second, that the doggy daycare mark dilutes the coffee mark by blurring or tarnishment under 15 U.S.C. § 1125(c)(2).
Confusion requires use in commerce of any “any word, term, name, symbol, or device, or any combination thereof” that is “likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person.” Courts use a multi-factored test to assess a claim of confusion. While the precise factors vary from circuit to circuit, most tests focus on the similarity of the marks, the strength of each mark, as well as actual confusion, the sophistication of the customers in discerning between the two marks, and the defendants intent in adopting its mark. (See e.g. Polaroid Corp. v. Polarad Electronics Corp,.287 F.2d 492, 495 (2d Cir. 1961) (using an eight factor test)). Confusion can occur between any two marks.
Dilution, alternatively, requires that the plaintiff’s mark be famous, in that it is “widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owners.” 15 U.S.C. § 1125(c)(2)(A). With over 11, 000 outlets in the U.S. alone, and countless other coffee-related products, the “Starbucks” name an logo definitely meets that definition.
Dilution claims are made out “regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury,” but require that the defendant’s mark either “blur” or “tarnish” the plaintiff’s mark. Blurring occurs when the defendant’s mark “impairs the distinctiveness of the famous mark” because it is similar, albeit not confusing. 15 U.S.C. § 1125(c)(2)(B) lists a number of factors for a court to consider when determining when the defendant’s mark “blurs,” including the similarity of the marks, the degree to which the plaintiff exclusively uses his or her mark, the degree of recognition of the famous mark, the intent of the defendant (whether he intended to create an association with the famous mark), and whether there is actually any association between the mark. Tarnishment, under 15 U.S.C. § 1125(c)(2)(C) merely requires that the association arising from the similarity of the marks “harms the reputation of the famous mark.”
In this particular case, Starbarks Dog Daycare could likely argue that its mark is neither confusing, nor dilutes Starbucks Coffee’s mark. First, it is not confusing because as a small, one outlet, dog daycare centre outside of suburban Chicago, consumers are not likely to confuse its business with that of a mutli-national Seattle-based coffee chain. Furthermore, although the first word in both marks are phonetically similar, since the only difference is that the Dog Daycare uses an “AR” where Starbucks uses an “UC,” the rest of the mark as it appears on the logo—Dog Daycare versus Coffee—provides enough precision to consumers to show them a difference in services, especially when the scale of business for each company is considered. Where the confusion argument goes to the dogs—so to speak—is that the Dog Daycare logo is likely to confuse, since it has the same color scheme, block lettering and general layout of the Coffee logo. The Starbarks Dog Daycare owner has already offered to change the logo to yellow and black, instead of green and black, and to replace the stars with dog paws. According to reports, Starbucks has not accepted this offer. Should the Starbarks owner make this change, however, it would likely strengthen the argument that the two marks are not confusing.
Second, although Starbucks Coffee is a famous mark, it is unlikely Starbarks Dog Daycare dilutes the mark. Although on the blurring argument the marks are similar, and Starbucks Coffee likely has a large degree of recognition, it does not appear the defendant intended any association with the famous mark—except perhaps a tongue-in-cheek play on sounds—and it is also unlikely there is any actual association between the two marks, for the reasons discussed relating to confusion. It also does not tarnish the mark, since a one-outlet dog daycare service is unlikely to harm the reputation of a mutli-thousand outleted international coffee conglomerate.
Moreover, it appears there are multiple dog related businesses nationwide that somehow use the words “Star” and “Bark” or “Barks” in their name. A quick internet search shows the name “Star Barks” used for independent businesses related to pet grooming, pet supplies, and dog daycare across the U.S. and in Canada.
Given that “Starbarks Dog Daycare” is not likely to confuse consumers, and probably does not dilute the famous mark, why won’t Starbucks throw the small Illinois based business a bone?
Starbuck’s main problem with the business likely isn’t the name, but rather it’s the name used in combination with the similarly-designed logo. None of the other “Star Barks” businesses appear to use the same circular, green, white, and black logo. It might also be related to the Illinois company’s use of the one word “Starbarks,” as opposed to two distinct words, like the other business, and thus is much closer to the Starbucks name than the other dog-related companies. Last, it might just be luck. In general, mark-holders vigorously enforce their mark rights to secure dominance within their markets, and to ensure that their mark remains distinctive.
This means that although the mark holder may not be able to send cease-and-desist letters to every mom-and-pop shop in small town America (or even big city America) that uses a similar but not similarly confusing name, the mark holder can certainly institute suit (or threats of suits) against a few small business owners when it feels the use is too close to its own. This problem is expounded by the nature of trademark litigation, the cost and length of which most small business owners are not able to bear. Thus, instead of defending their use and risking an eventually victorious, but nevertheless long and expensive court battle, these small businesses acquiesce to the demands in the cease-and-desist letter.
Nearly one month later, there remains a “Paws” in the story: the “Starbarks” website is still up and running, and there have been no new reports detailing any further action by Starbucks against the dog daycare.