Court Revives Trademark Dispute Over ‘Charbucks’

(CN) - The 2nd Circuit reinstated a trademark case brought by Starbucks Corp. against a New Hampshire roasting company over its "Charbucks" line of coffee, reversing a district court finding that the products would in no way dilute Starbucks' trademark.

The Manhattan-based appeals court ruled that the lower court was wrong to find that there was no likelihood that the "Mr. Charbucks" and "Charbucks Blend" line of dark-roasted coffees, made by family-run Black Bear Micro Roastery, would dilute the Starbucks mark through "blurring," a violation of state and federal trademark laws.

The district court said the names were not similar enough to pursue a blurring claim, but the circuit ruled that the products do not have to be substantially similar to file a blurring claim.

The district court's decision that the names were not similar "likely affected its view of the importance of the other factors in analyzing the blurring claim," Judge Roger Miner wrote for the three-judge panel.

The panel agreed with the lower court that the marks were not substantially similar, but said the district court placed too much emphasis on similarity in analyzing the diluting claim.

Because the Charbuck mark was intentionally created to remind consumers of Starbucks, the court ruled, the Seattle-based coffee franchise has a strong claim for trademark dilution. The panel rejected Black Bear's claim that the mark is a parody.

However, the judges did not support Starbucks' claim that the Charbuck name tarnished its reputation by evoking "the image of bitter, over-roasted coffee." The court pointed out that Black Bear is trying to sell coffee, not harm Starbucks' reputation, and that Black Bear's owner had stated that any association with Starbucks "would be very bad for us," as the locals generally disliked large corporations.

The circuit panel vacated the lower court's decision and remanded to determine if Starbucks demonstrated a likelihood of dilution by blurring.

Wolfe's Borough Coffee operates Black Bear Micro Roastery.

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