In the end it was the Los Angeles County Health Department—not intellectual property law—that forced the “Dumb Starbucks” coffee shop in Los Angeles to close.
A satirical pop-up coffee shop called “Dumb Starbucks” opened in Los Angeles last weekend, garnering tons of media attention because it had the look and feel of a real Starbucks—but had the word “Dumb” preceding the Starbucks name on everything from a “Dumb Frappuccino” to a “Dumb Venti.” It turns out the shop was a publicity stunt by Comedy Central reality-TV show host Nathan Fielder, whose show, “Nathan for You,” revolves around Fielder giving prank advice to small business owners.
But before the Comedy Central connection was known, Starbucks Corp. made statements about its protected trademark, saying the company could not legally use its name. And Dumb Starbucks posted an FAQ in its store, defending the use of the name by saying it was parody. “Although we are a fully functioning coffee shop, for legal reasons Dumb Starbucks needs to be categorized as a work of parody art,” the FAQ said. “So, in the eyes of the law, our ‘coffee shop’ is actually an art gallery and the ‘coffee’ you’re buying is considered the art.”
It later posted a YouTube video with the same message. The shop never sold its coffee or anything else. For the few days it was operating, Dumb Starbucks offered its items for free. The health department closed the shop for operating without a license.
The uncertainty of trademark law makes it difficult to determine whether the Dumb Starbucks parody argument would prevail in court. But even if Starbucks could make a good case for trademark infringement, it might be better off doing nothing, lawyers say.
“You have to think of the ramifications,” Haynes and Boone partner and trademark practice group chair Purvi Patel told CorpCounsel.com. “It’s usually not a good idea for big companies to go after small ones—even if they have a legal case.”
Legally, a brand owner has to prove that the alleged infringing product is likely to cause confusion. Starbucks would probably have a tough time showing that, Patel said. A brand owner could also try to prove dilution of its brand, and in this case Starbucks could possibly win, Patel said.
But Patel, who has never represented Starbucks, said she and her colleagues have debated what they would advise a client to do in similar circumstances. Some felt it best to do nothing. Others said the brand owner should send a nice letter asking the infringer to stop. And still others said the brand owner should go all out—sending a demand letter and pursuing a preliminary injunction.
Jonathan Moskin, a partner who specializes in intellectual property at Foley & Lardner, said big companies are often better off letting the infringement slide—especially if action is likely to bring negative attention. “These are usually lose-lose propositions for brand owners,” he said. “If they win, they’re seen as beating up on an artist, and if they lose, then they come away with a black eye.”
Starbucks has been especially vulnerable to black eyes lately when asserting its intellectual property. In November, the company lost a 12-year legal battle with a small New England coffee producer in New Hampshire after taking issue with its “Charbucks” roast, which it claimed infringed its mark and diluted its brand. The small coffee roaster acknowledged that the Charbucks name was an unflattering reference to Starbucks’ coffee, but the U.S. Court of Appeals for the Second Circuit nonetheless said Starbucks failed to prove that consumers would be confused and found that the marks were only minimally similar.
Then, in December, Starbucks got hit with more negative publicity when it sent a cease and desist letter to a brewery in Missouri because the use of the name “Frappicino” to describe one of the brewery’s beers too closely resembled Starbucks’ Frappuccino. The letter said the similar names (albeit spelled differently) might cause customers to “mistakenly believe … that this beer is affiliated with or licensed by Starbucks.”
The brewery sent an amusing letter to Starbucks’ attorney (both Starbucks’ letter and the response are here) that purported to be an apology but clearly mocked the big company for its legal action—even sending a check for $6 for the “full amount of the profit gained from the sale” of the three beers sold under the “Frappicino” name.
The incident was covered by major media outlets, including USA Today, CNN and National Public Radio. “It went viral,” Patel said. “Starbucks has a bad history when it comes to protecting its mark.”
With the Dumb Starbucks shop in Los Angeles now closed, it’s unlikely that Seattle-based Starbucks will take legal action. But the potential exists: Nathan Fielder said he plans to open another Dumb Starbucks store in Brooklyn.
“It looks like he is trying to bait Starbucks to get more publicity,” Moskin said. “Otherwise, this Dumb Starbucks would just be pretty dumb.”