On Friday, February 7, an interesting coffee shop opened in the Los Feliz neighborhood of Los Angeles. Dumb Starbucks looked exactly like a regular Starbucks, but with the word “Dumb” cleverly (note the editorial use of sarcasm here) thrown around – the menu included “Dumb Iced Coffee,” “Dumb Caramel Frappucino,” you get the idea. After a weekend’s worth of highly caffeinated speculation (see, I can make dumb jokes, too), the proprietor revealed himself as Nathan Fielder, comedian and star of the Comedy Central show Nathan For You. So, can anyone just open their own “Dumb” version of a popular chain store?
Dumb Starbucks featured an FAQ claiming that they were allowed to proceed due to “parody law.” In response, Starbucks said, according to the LA Times, “We are aware of the store. It is not affiliated with Starbucks. We are evaluating next steps, and while we appreciate the humor, they cannot use our name, which is a protected trademark.”
The shop has apparently been shut down by the Los Angeles County Board of Health due to a lack of proper licenses. Nonetheless, Fielder appeared on Jimmy Kimmel Live on February 11 and stated, “We’re an art gallery, and the coffee we’re selling is considered the art, and art galleries don’t need health permits.”
Well, I’ll leave the health permit business to the side. What about the parody issue?
An artist, no matter how pure his intentions, cannot simply escape liability for trademark infringement or trademark dilution (which are separate claims) by declaring the work to be a “parody.” Parody is a defense that needs to be proven, and it’s a complicated road to go down. I’ll try to make it as straightforward as possible.
Trademark Infringement Claim
To prove trademark infringement, a plaintiff must show (1) that it owns a valid and protectable mark; (2) that a defendant uses a reproduction, counterfeit, copy, or colorable imitation of that mark in commerce and without the plaintiff’s consent; and (3) that the defendant’s use is likely to cause confusion. 15 U.S.C.S. § 1114(1)(a). In most cases, this is all fairly straightforward. However, the third factor complicates the issue when there’s a defense of parody. A parody is intended to comment on a widely-known phenomenon (here, relating to Starbucks itself.) Fielder’s defense would boil down to, “My use of Starbucks’ trademarks wasn’t likely to cause confusion because nobody would believe that Starbucks itself was the company behind Dumb Starbucks.” And if there’s no likelihood of confusion, there’s no infringement.
Trademark Dilution Claim
Trademark dilution is a bit more tricky. I wrote about dilution in another blog post about an unrelated Starbucks trademark matter – the claim comes down to this:
Trademark Dilution is a claim by a trademark owner that the use of the mark by the defendant would diminish the goodwill embodied in the trademark – even if the defendant is not using the mark in connection with similar goods or services. What does that all mean?
First of all, a claim of trademark dilution can only be asserted by the owner of a famous trademark. The mark must be nationally well known. Ford, Disney, Coca-Cola…[and Starbucks, of course] are the types of marks that would clearly qualify…There are two forms of trademark dilution: Dilution by Blurring and Dilution by Tarnishment.
Dilution by Blurring applies where the defendant’s use of the mark would diminish the uniqueness of the mark. This is probably the most common type of trademark dilution. Let’s say you open up a computer repair shop and name it Coca-Cola Computer Repair. Even though Coke isn’t in the business of fixing your PC, the law recognizes that if there are a number of other businesses with the same name as a famous mark, the commercial impact of the mark will be impacted. As a result, Coca-Cola would have the right to bring a trademark dilution claim against your shop, even though you are not competing directly with their products.
[Dilution by Tarnishment] can be asserted when the defendant’s use of the mark would negatively impact the reputation of the mark.
Note that parody is not an automatic defense to claims of trademark dilution by either blurring or tarnishment. Perhaps the most well-known recent case on point is Louis Vuitton Malletier S.A. v. Haute Diggity Dog, in which the fashion brand unsuccessfully sued the makers of “Chewy Vuitton” dog toys.
Dilution by Blurring
The Louis Vuitton court stated:
We begin by noting that parody is not automatically a complete Defense to a claim of dilution by blurring where the defendant uses the parody as its own designation of source, i.e., as a trademark. Although the TDRA [the Trademark Dilution Revision Act, of course] does provide that fair use is a complete defense and allows that a parody can be considered fair use, it does not extend the fair use defense to parodies used as a trademark…
The TDRA, however, does not require a court to ignore the existence of a parody that is used as a trademark, and it does not preclude a court from considering parody as part of the circumstances to be considered for determining whether the plaintiff has made out a claim for dilution by blurring. Indeed, the statute permits a court to consider “all relevant factors…”
Essentially, this court held that while parody is not an automatic fair use defense to this claim, it can be considered by the court, even when the parody is being “used as a trademark” – meaning, the plaintiff’s mark is being used to sell products or services (which is more or less the case here, although apparently Fielder was giving coffee away rather than selling it – he’s clearly selling something.) The court ruled against Louis Vuitton, applying a sort of circular reasoning – essentially, that such a parody only “works” if the plaintiff’s mark remains strong and distinctive, thus it cannot be said to blur the distinctiveness of the mark.
However, the Louis Vuitton case can be distinguished from the Dumb Starbucks matter because the Louis Vuitton court heavily relied on the fact that the defendant didn’t actually use LV’s trademarks – “Chewy Vuitton” and “CV” are obviously distinct from “Louis Vuitton” and “LV.” Dumb Starbucks, on the other hand, might come a bit too close to the real thing.
I should also point out that the Louis Vuitton case is thought in some circles to be an overly favorable interpretation of the law from the defendant’s perspective, and that it was a 4th Circuit decision, so it would not be binding on a court in another Federal Circuit – and both Los Angeles and Starbucks’ home state of Washington are in the 9th Circuit.
Dilution by Tarnishment
Here, the Louis Vuitton case is less helpful, as (in the view of the court), Louis Vuitton damaged its own record by failing to introduce compelling evidence.
This claim seems to lean even more strongly in favor of Starbucks over Dumb Starbucks. If taking a company’s name, trademarks, and trade dress and simply sticking “Dumb” in front of them as a promotion for a TV show isn’t dilution by tarnishment, I don’t know what is.
Almost any example of dilution by tarnishment can be called a parody, I suppose. Finding that, essentially, all such actions are legally-protected parodies would destroy the existence of the dilution by tarnishment claim. A court could certainly do so, of course, but it’s not likely that, on appeal, a Federal court would simply eliminate a claim that existed at common law and has been enshrined in statute multiple times by Congress and held up by multiple Federal courts.
If Starbucks decides to pursue the matter – and I doubt that they will, unless Fielder insists on trying to keep his store open – my best guess is that their strongest trademark claim would be dilution by tarnishment, their weakest claim would be infringement, and dilution by blurring would fall somewhere in the middle.