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Lecture 20

PUBPOL 373 Lecture 1: November 3rd Reading Notes

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Duke University
Public Policy Studies

Mar 23 Reading Notes Starbucks Corp. v. Wolfe’s Borough Coffee, Inc.  Black Bear began selling a “dark roasted blend” of coffee called “Charbucks Blend” and later “Mr. Charbucks”  The package also informed consumers that the coffee was roasted in New Hampshire by “The Black Bear Micro Roastery”  The number one association of the name ‘Charbucks’ in the minds of cosumers is with the brand ‘Starbucks’ … the name ‘Charbucks’ creates many negative associations in the mind of the consumer when it comes to describing coffee.  The TDRA amended the Federal Trademark Dilution Act to provide, inter alia that the owner of a famous, distinctive mark is entitled to an injunction against the use of a mark that is “likely” to cause dilution of the famous mark.  Federal dilution is actionable in two situations: dilution by blurring and dilution by tarnishment  Dilution by blurring is an association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark and may be found regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.  The Charbucks marks were minimally similar to the Starbucks marks. Although “Ch"arbucks is similar to “St”arbucks in sound and spelling, it is evident from the record that the Charbucks marks as they are presented to consumers are minimally similar to the Starbucks marks.  Black Bear’s package design for Charbucks coffee is different in imagery, color, and format from Starbucks’ logo and signage. For example, either a graphic of a bear or a male person is associated with Charbucks, and those marks are not comparable to the Starbucks graphic of a siren in pose, shape, art-style, gender, or overall impression.  It is unlikely that “Charbucks” will appear to consumers outside of the context of its normal use, since “Charbucks” is not directly identifiable with the actual product.  Our adoption of a substantially similar requirement for federal dilution claims can likely be attributed to the lack of guidance under the former federal statute and the existence of a substantially similar requirement under state dilution statutes, which were better defined.  Were we to adhere to a substantial similarity requirement for all dilution by blurring claims, the significance of the remaining five factors would be materially diminished because they would have no relevance unless the degree of similarity between the marks are initially determined to be “substantial”  Black Bear possessed the requisite intent to associate Charbucks with Starbucks but that this factor did not weigh in favor of Starbucks because Black Bear did not act in “bad faith.” This determination of an “intent to associate,” however, does not require the additional consideration of whether bad faith corresponded with that intent.  Requires only the consideration of whether the user of the mark or trade name intended to create an association with the famous mark  Dilution by tarnishment is an “association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark. A trademark may be tarnished when it is linked to products of shoddy quality or is portrayed in an unwholesome or unsavory context, with the result that the public will associate the lack of quality or lack of prestige in the defendant’s goods with the plaintiff’s unrelated goods.  That a consumer may associate a negative-sounding junior mark with a famous mark says little of whether the consumer view the junior mark as harming the reputation of the famous mark. The more relevant question, for purposes of tarnishment, would have been how a hypothetical coffee named either “Mister Charbucks” or “Charbucks Blend” would affect the positive impressions about the coffee sold by Starbucks. We will not assume that a purportedly negative-sounding junior mark will likely harm the reputation of the famous mark by mere association when the survey conducted by the party claiming dilution could have easily enlightened us on the matter.  Although the term “Charbucks” was once used pejoratively during the so-called “coffee- wars” in Boston, Massachusetts, Black Bear is not propagating that negative meaning but, rather, is redefining “Charbucks” to promote a positive image for its brand of coffee.  That the Charbucks line of coffee is marketed as a product of “very high quality” as Starbucks also purports its coffee to be is inconsistent with the concept of tarnishment.  Fair uses include advertising or promotion that permit consumers to compare goods or services; identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner; all forms of news reporting and news commentary; any noncommercial use of a mark  Black Bear’s use of the Charbucks marks cannot qualify under the parody exception because the Charbucks marks are used as a designation of source for Black Bear’s own goods  Parodying a famous mark is protected by the fair use defense only if the parody is not a designation of source for the person’s own goods or services  The defendant’s use of a parody may still be considered in determining whether the plaintiff-owner of a famous mark has proven its claim that the defendant’s use of a parody mark is likely to impair the distinctiveness of the famous mark  While a parody intentionally creates an association with the famous mark in order to be a parody, it also intentionally communicates, if it is successful, that it is not the famous mark, but rather a satire of the famous mark.  The Charbucks parody is promoted not as a satire or irreverent commentary of Starbucks but, rather, as a beacon to identify Charbucks as a coffee that competes at the same level and quality as Starbucks in producing dark-roasted coffees. Yankee Candle Company, Inc. v Bridgewater Candle Company, LLC  Yankee claimed that Bridgewater had infringed its trade dress by copying Yankee’s method of shelving and displaying candles in its stores, called the “Vertical Display System,” by copying the overall “look and feel” of Yankee’s Housewarmer line of candles, and by copying the design of Yankee’s merchandise catalog, specifically its one fragrance per page layout.  The court first held that the Vertical Display Sytem was “manifestly functional,” both in its arrangement of candles by color and in its use of wooden shelving, and concluded that Yankee cannot invoke the Lanham act to appropriate such a conventional method of presenting its wares.  Yankee had failed to introduce any survey evidence or any circumstantial evidence indicating that the public had made a conscious connection between the trade dress at issue and Yankee as the source of that trade dress.  No juror could reasonably conclude that there is a likelihood of confusion, where clearly marked company names are featured on the face of the products and catalogues.  Yankee argues that the distinct combination of elements comprising its candle sizes and shapes, quantities sold, labels, Vertical Design System, and catalog stem from “arbitrary” choices and are thus inherently distinctive  Yankee argues that because its products are candles, all the trappings associated with the sale of the candle – i.e. the candle-holders, the Vertical Display System, the labels, and the catalog – constitute product packaging  Yankee has not made a claim as to the overall appearance of an entire store but has instead isolated certain characteristics of its candle display in stores  Detachable labels are a classic case of product packaging and therefore may be inherently distinctive  Although Yankee’s Housewarmer labels have obvious similarities, they also differ significantly from one another, in that they necessarily display different pictures corresponding to their particular candle fragrance.  Yankee seeks to protect features common to a set of labels, as opposed to a specific label common to a host of Yankee goods. A trade dress plaintiff seeking to protect a ser
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