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Dumb Starbucks -- Lessons in When to Let It Go

By Gabriella Khorasanee, JD on February 14, 2014 10:56 AM

This week, social media was abuzz with a new coffee shop on the scene -- Dumb Starbucks. Yes, you read that right -- Dumb Starbucks. As a Starbucks gold card member, I love my coffee, but even I thought the idea of a Dumb Starbucks was hilarious. But what about Starbucks? Were they able to have a laugh?

Starbucks is notorious for protecting its trademarks, though sometimes unsuccessfully. Just last year, the Second Circuit ruled against Starbucks when it sued a coffee producer for naming its blend "Mr. Charbucks." Then, last month Starbucks received negative publicity after sending a cease-and-desist letter to a small Missouri beer brewery to stop using the name "Frappicino" (not to be confused with Starbucks' Frappucinio) for one of its beers.

This time? It did nothing, and it came out on top. The parody coffee shop Dumb Starbucks was closed down a few days later for operating without a license by the Los Angeles County Board of Health, reports The Guardian. Here's why for a company, sometimes letting it go is the best route.

1. Avoid the "Bully" Reputation

If your company is a large corporation and it sends cease-and-desist letters indiscriminately to the smallest businesses, your company may end up getting the reputation as a bully. And while a company's trademark is valuable, so is its reputation. Before proceeding, weigh your company's risk of trademark dilution against the affect on your company's reputation.

2. Avoid the Backlash

Yes, you could pursue legal action but that doesn't mean you can be successful. In this case, there's a pretty strong argument to be made about parody. Before you proceed with legal action, think about the legal ramifications -- in this case and future ones. Bad facts make bad law.

How do you know when you should defend your trademark or let it go? It's a tough call, but you'll need to examine each situation individually. Is your company's trademark really being diluted? Is there really a risk of customer confusion? How long will the infringement last, that is, is a marketing ploy, or a bona fide business venture? What is your company's track record on the issue?

These are just some of the questions you'll need to ask yourself as you determine whether to follow up on trademark infringement, or let it go.

Think Starbucks overstepped the mark? Let us know on Facebook.

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