2d Circuit Federal Trademark Dilution Act decision in Starbucks v. Charbucks dispute

The Second Circuit today revived Starbucks' Federal Trademark Dilution Act (FTDA) claim against the mark CHARBUCKS, but affirmed a judgment, entered after a bench trial, dismissing Starbucks' federal infringement and New York state dilution claims.

In Starbucks Corp. v. Wolfe's Borough Coffee, Inc., No. 08-3331-cv (Dec. 3, 2009), the Second Circuit found that the district court erred in ruling against Starbucks on the FTDA claim when it held that the "similarity" factor in the FTDA claim requires that the accused mark be "substantially similar." Rather, the latest version of the FTDA (which was amended in 2005 to address the Supreme Court's interpretation of the FTDA in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003)), contains no such requirement, providing only that the courts assess only "the degree of similarity."

The Second Circuit's opinion contained a few more interesting statements, including:

• "intent to capitalize on [the senior user's] reputation" is irrelevant to a federal infringement claim; only "intent to deceive" or "mislead" the public is relevant;
• intent to create an association is the relevant type of intent for FTDA claims;
• even if a product name sounds pejorative, that isn't necessarily a "tarnishing" use if the mark isn't marketed as a pejorative and the product is of high quality;
• Unlike the current FTDA, New York dilution law does require "substantial similarity"; and
• "Charbucks" was not a protected parody but an (unprotected) "subtle satire."