August 30, 2014

Starbucks Loses “Charbucks” Case Against a Small Family Business

starbucks loses lawsuit

It’s something you don’t see too often these days. A small family owned business has twice prevailed against a huge international brand in court. And this David and Goliath story could have important implications for small businesses everywhere.

On their website, Annie and Jim Clark, owners and operators of The Black Bear Micro Roastery, claim:

“Simply put, the big companies won’t produce the product that we produce, because high quality and high volume just don’t mix.”

But it wasn’t the quality of the New Hampshire couple’s product that the national chain, Starbucks Corporation, took issue with. It was the name given to a particular roast the coffee maker produces.

A peek at the product description for Mister Charbucks Blend, shows the similarity to the brand name of the larger coffee retailer was no accident.

The Clarks’ website describes the coffee as having:

“…the strong “dark” notes that West Coast coffee drinkers like.”

The description together with the name of the blend are clear references to the charred roasting Starbucks has made famous all around the world.

Still, despite a phone survey taken on behalf of Starbucks which seems to indicate at least some confusion among customers, a U.S. Circuit Court of Appeals sided with Black Bear. That court agreed with an earlier ruling that the name of the blend only minimally diluted the bigger cafe chain’s brand and trademarks, reports Reuters.

So what’s the takeaway here?

The court’s decision allows the Clarks to continue selling their Charbucks Blend. But the couple were dragged into court not once but twice. This must have been costly and disruptive for both them and their business.

So unless you have the money, the time or the stomach to put up with protracted litigation, you may want to think twice. Or at least consult an attorney before straying into similar territory with your product or brand.

Starbucks Photo via Shutterstock

8 Comments ▼

Shawn Hessinger - Editor


Shawn Hessinger Shawn Hessinger is the Editor for Small Business Trends. He is a journalist and social media networker with more than a decade of experience in the traditional newspaper business before moving to the digital world. He was the former community manager of BizSugar and the former community editor at AllAnalytics, a site dedicated to professionals in the business intelligence and analytics community.

8 Reactions

  1. Unless you have the money, the time or the stomach to put up with litigation, you may want to think twice. It is best to settle amicably out of court if possible should there be any potential litigation.

  2. But that’s just sad. I am not sure how they manage to defend themselves in court. How are they able to say that their name is different from the brand when it is really similar? They would have lost more money fighting than if they just gave in.

  3. Shawn: When did they come up with the name of the blend? Before Starbucks was established in their area? A café in Gothenburg was called Starcup (with a green & black logotype), before Starbucks was established in the city. They got a letter from Starbucks’ lawyers, but I don’t think that they had to change the name.

    • Hi Martin,
      In your example, it seems a bit hard to believe Starbucks would even try such a thing. If the company was established in that market before Starbucks’ arrival, how could the chain ask them to give up the name? On the other hand, in the case of the Black Bear blend, it’s pretty clear it refers to the Starbucks name itself as being representative of Seattle-style or West Coast coffee…at least that’s the opinion I’ve formed covering the story. So the issue here is whether the name is causing any confusion for customers. Could they be buying this blend but thinking it is the Starbucks brand? And in this case, the court seems to be saying ‘no’.

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