Starbucks Loses “Charbucks” Trademark Dispute to Underdog Coffee Seller

By Joseph Mandour on November 22, 2013

coffee_beans-200x133 Los Angeles – A federal appellate court ruling handed down last week shut down Starbuck’s efforts to try to stop Wolfe’s Borough Coffee Inc.,  a small New Hampshire coffee seller,  from producing “Charbucks” drinks.  Filed in New York District Court, Starbucks’ original complaint detailed how Wolfe’s coffee brand and its subsidiary,  Black Bear Micro Roastery, had infringed upon its famous trademark and diluted its brand.  Writing for the three judge panel, Circuit Judge Raymond Lohier held that Starbucks did not meet its burden in proving that there was a “blurring” of its brand in the minds of consumers.

The lawsuit was originally filed in 2001 before finally landing in the 2nd U.S. Circuit Court of Appeals after twelve years.   As a focal part of its argument, Starbucks presented the results of a

phone survey of 600 consumers conducted by Warren Mitofsky, which concluded that “the number one association of the name ‘Charbucks’ in the minds of consumers is with the brand ‘Starbucks.'”

The panel of judges dug deeper, however, and found that the survey was “fundamentally flawed.” They then pointed out that though it was true that nearly 40 percent of those surveyed reported that  “Charbucks” made them think of “Starbucks” or “coffee,” when they were asked who they believed might  sell a “Charbucks” product, less than 5 percent said “Starbucks” or “coffee house” .  Thus, the judges ruled that there was little to no confusion as to the source of Charbucks and that few consumers believed that Starbucks was the product’s seller.

The defeat likely comes as big surprise for the Seattle-based coffee giant, which has grown since the early 70s from one small shop to over 18,000 retail locations across the globe.   Black Bear Micro Roastery, which is owned by Wolfe’s Borough Coffee Inc. and sells the Charbucks coffee at issue, was started in 1991 in New Hampshire.  While its website only includes information for one retail location, the company ships its products nationwide, which consist of 20 coffee varieties, including, of course, its Charbucks Blend.   Starbucks, for its part, recently responded to the finality of the years long legal saga by simply stating, “We are respecting the court’s decision.”

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