Seattle Trademark Lawyer

Trademark dilution is a creature of statute.

As incorporated in the federal Lanham Act, it prohibits a later-adopter from using a trademark that is likely to dilute the earlier-adopter’s famous trademark. It doesn’t matter if the later use is likely to cause confusion — the standard for trademark infringement. What matters is the probability of whether the famous mark’s power to distinguish its owner’s goods and services from those of others has been “diluted,” or whittled away. This is called dilution by “blurring.” The statute also prohibits another form of dilution — a likelihood of dilution by “tarnishment,” or a lessening of the brand’s good reputation.

Because trademark dilution doesn’t require an owner to show likelihood of confusion — and, therefore, provides super-trademark rights — the federal statute limits such protection to the owners of truly “famous” trademarks, which the statute defines as trademarks that are widely known on a nationwide basis. In other words, the dilution cause of action is only available to the owners of household names.

STARBUCKS is clearly one such name. Therefore, Starbucks Corp. was able to avail itself of the dilution cause of action against coffee roaster Wolfe’s Borough Coffee, Inc., d/b/a Black Bear Micro Roastery, which had named some of its coffee CHARBUCKS BLEND and MISTER CHARBUCKS. Starbucks argued the roaster’s doing so was intended to and did call to mind Starbucks’ famous STARBUCKS brand, so Starbucks was entitled to an injunction stopping such use.

After much wrangling, Starbucks appears to have finally lost. The case went up and down to the Second Circuit several times, and in the middle of the litigation, the statute was re-written. But in the end, the Second Circuit found that despite having super-trademark rights, Starbucks did not prove the roaster’s marks were likely to dilute the famous STARBUCKS brand.

In making that decision, the Second Circuit weighed the factors set forth in the statute. It found the district court was not wrong when it concluded the parties’ marks were not very similar. It also found the district court was not wrong to conclude that Starbucks’ consumer survey was flawed because it did not reflect how the parties’ marks were used in the marketplace. Therefore, it found the survey “only minimally” proved that consumers actually associated the roasters’ marks with STARBUCKS.

The court found three of the statutory factors — distinctiveness, recognition, and exclusivity — favored Starbucks, but “the more important factors in the context of this case are the similarity of the marks and actual association.” 

This led the Second Circuit to conclude: “Ultimately what tips the balance in this case is that Starbucks bore the burden of showing that it was entitled to injunctive relief on this record. Because Starbucks’ principal evidence of association, the Mitofsky survey, was fundamentally flawed, and because there was minimal similarity between the marks at issue, we agree with the District Court that Starbucks failed to show that Black Bear’s use of its Charbucks Marks in commerce is likely to dilute the Starbucks Marks.”

This goes to show that while potentially powerful — really powerful — the federal dilution statute does have its limits.