In the beginning of February, the establishment “Dumb Starbucks” opened up its first faux store, pushing the boundaries of trademark law. The storefront looks like an actual Starbucks both inside and outside; complete with the Starbucks logo, drink names, and music. However, the word “Dumb” is placed in front of each of these. For example, you can order a “Dumb Grande” size of “Dumb Vanilla Latte” and buy a “Dumb Nora Jones” CD.
The store claims to avoid trademark trouble because adding the word “Dumb” in front of words is sufficient to classify the establishment as a parody. In fact, the owner is a comedian who claims that the storefront is a museum and the coffee—given out free of charge—qualifies as an art piece. Shortly after opening, however, the Los Angeles Health Department shut down the shop. The usually litigious Starbucks has not yet pressed charges. Still, this venture has tested the edges of trademark law, particularly the doctrine of dilution by blurring.
A strict reading of 15 U.S.C.§1125(c)(3)lays out exceptions to otherwise diluting uses. “Dumb Starbucks” relies on §1125(3)(a)(ii), which excludes parodic uses. By adding the word “Dumb”, it could certainly be said that the store is making fun of the famous franchise. However, employing close statutory reading, the exclusion excepts any fair use “of a famous mark by another person other than as a designation of source for the persons’ owns goods or services”. Since “Dumb Starbucks” is effectively using the Starbucks logo as its own, the argument that its use falls under this exclusion is fairly weak.
However, “Dumb Starbucks” may find solace in the §1125(c)(3)(C) “noncommercial use” exclusion. . Since the owners did not actually sell the coffee, they may have engaged in merely a noncommercial use. If they are not making money off of the venture at all or using it for another commercial purpose, “Dumb Starbucks” could perhaps avoid liability. But if “Dumb Starbucks” were to start selling merchandise or otherwise engaging in a commercial effort related to the storefront, the case would be a harder battle.
Notably, Starbucks is no stranger to dilution cases; they have been embroiled in seemingly endless litigation against Black Bear Micro Roastery, producer of “Charbucks” coffee. In the most recent decision, the Second Circuit Court of Appeals applied the federal Trademark Dilution Act of 1995 and considered relevant factors including degree of similarity, degree of recognition, intention of the user to create confusion, and actual association between the two. While the court found the marks somewhat similar, they noted that “Charbucks” was always used alongside other words such as “Charbucks Coffee” while the word Starbucks always stood alone. Furthermore, even though Black Bear admitted to choosing a similar name to Starbucks as a marketing tool, the court did not find that this was proof of actual association between the marks. In effect, consumers could separate the parody from the original. This reasoning may give “Dumb Starbucks” and similar ventures some room to maneuver should a legal challenge arise.
The idea of a parody restaurant is interesting and refreshing. However, for such projects to prevail, they must tread carefully in light of trademark dilution laws.