A seller of packaged coffees was not likely to dilute the trademarks of coffee seller Starbucks Corp. by marketing a blend of roasted coffee under the names "Charbucks Blend," "Mister Charbucks," and "Mr. Charbucks," the federal district court in New York City has concluded. Starbucks' dilution by blurring claim was the last remaining claim in the case. The U.S. Court of Appeals in New York City (Trademark Law Guide ¶61,532) had affirmed the district court's dismissal of Starbucks' federal trademark infringement and dilution by tarnishment claims (Trademark Law Guide ¶61,252), but reversed dismissal of Starbucks' dilution by blurring claim, finding that the district court erred in its dilution by blurring analysis.

The court noted as undisputed, and affirmed on appeal, the finding that four of the six likelihood of dilution factors listed in Sec. 43(c)(2)(B) weighed in Starbucks' favor--namely, the distinctiveness of Starbucks' marks, Starbucks' exclusive use of its marks, the high degree of recognition of Starbucks' marks, and the owner of the "Charbucks" brand's intention to associate its marks with Starbucks' marks. The actual association factor also titled in Starbucks' favor, though only slightly, in the court's view. But the remaining factor--the degree of similarity between the parties' marks--outweighed the other five factors and tipped the scale against Starbucks, the court found.

Degree of Similarity Factor

The parties' marks bore only a minimal degree of similarity, according to the court. Although the term "Charbucks" was similar to "Starbucks" in sound and spelling, the marks as presented in commerce were not similar. In commerce, "Charbucks" always was preceded or followed by the terms "Mister," "Mr.," or "Blend." The Charbucks marks also were used in conjunction with the defendant's Black Bear mark, a large black bear, or the figure of a walking man above the words "Black Bear Micro Roastery." Further, the Charbucks' packaging used an entirely different color scheme from that employed by Starbucks and identified Black Bear as a "Micro Roastery" located in New Hampshire.

Actual Association Factor

The court ruled that the degree of actual association between "Charbucks" and "Starbucks" weighed only minimally in favor of Starbucks. Starbucks proffered telephonic survey evidence, showing that, of 600 respondents, 30.5% associated the term "Charbucks" with "Starbucks" and nine percent associated "Charbucks" with coffee. The survey was flawed, however, because it failed to measure how consumers would react to the Charbucks marks as they were actually packaged and presented in commerce. Further, the percentage of respondents who indicated a mental association between the marks was relatively low, according to the court. Survey respondents typically make an association between confusing marks between 70% and 90% of the time.

Considering the evidence as a whole, particularly in light of the dissimilarity of the marks as used in commerce, the weakness of association, and the fact that consumers encountered the defendant's "Charbucks" term only in conjunction with other marks unique to the defendant, the "Charbucks" marks were not likely to impair the distinctiveness of the famous "Starbucks" marks, the court concluded.

Starbucks Corp., SD N.Y., ¶61,931.