Parody in Trade-mark Law - "Dumb Starbucks" Might Not Be So Dumb After All

Nathan Fielder created quite an uproar when he opened up an establishment in Los Feliz, California named "Dumb Starbucks." According to its FAQ sheet, the store claimed to legally operate under US parody laws.

"Dumb Starbucks" quickly garnered the attention of coffee lovers, intellectual property lawyers and even Starbucks themselves. As one spokesperson for the Starbucks brand commented, "we appreciate the humor, but they cannot use our name, which is a protected trademark."

The owners of "Dumb Starbucks" wholeheartedly disagree, taking the position that their use of the Starbucks registered trade-mark is permissible. The owners of the new coffee shop argue that they are operating legally, as a form of parody art - functioning as an art gallery and distributing free coffee as the "art". While "Dumb Starbucks" has since been shut down by the Los Angeles Health Department for operating without a permit, the legal buzz it created during its brief existence will not be forgotten.

Despite its comedic intention, "Dumb Starbucks" raised serious debate about the scope and extent of parody protection in the context of trade-mark law. The heart of the matter rests on the following questions. Is "Dumb Starbucks" considered a parody? If so, would it be successful in avoiding liability under current trade-mark law?

Trade-mark Infringement and Parody

Under 15 USC § 1114, infringement does not occur unless there is a likelihood of source confusion. The use of a parody argument against a claim of trade-mark infringement advances the proposition that there was no infringement in the first instance as the likelihood of confusion was improbable. Unlike the doctrine of "fair use" in US copyright law, parody is not technically considered a defence under trade-mark law. The owners of “Dumb Starbucks” may deny a claim of infringement entirely by suggesting that by placing the word “Dumb” in front of the mark “Starbucks” they are obviously engaging in an act of parody, and are expressing their views in a form of critical social commentary.

A trade-mark infringement may nonetheless be found to occur if the public could not distinguish between the parody and the original trade-mark, or the public believes that a common source is associated with both the parody and the original mark. In the case at hand, it seems rather unlikely that the public would confuse the “Dumb Starbucks” establishment as originating from the same owner of the international chain of Starbucks coffee shops. For one thing, the word “Dumb” is prominently placed in front of the word “Starbucks” and is depicted in the same font, shape and size as the rest of the mark. A Starbucks spokesperson confirmed the lack of confusion between the original and “Dumb Starbucks” by stating to a member of the press that it's “obviously not a Starbucks.” There was no evidence that the public was duped either, thousands of Twitter fans tweeted about the joke and even uploaded their own pictures with novelty items from the parody coffee shop. A novelty "Dumb Starbucks" cup recently sold on eBay to the tune of $200 (without any "dumb coffee" in it, of course).

Weak Coffee: Does “Dumb Starbucks” Dilute the Original Trade-mark?

Considering the earlier analysis, if we assume that it would be difficult to prove trade-mark infringement, Starbucks may nonetheless decide to commence legal action based on a claim for trade-mark dilution. Under the US Trademark Dilution Revision Act of 2006 (TDRA), dilution refers to a situation whereby the owner of a famous mark may prevent others from using their mark in a manner that would diminish its distinctiveness or reputation. The potential harm to the reputation of their trade-mark leaves the door open for Starbucks to pursue an action on the basis of dilution by tarnishment, even without proof of actual economic harm.

In the case at hand, the parody not only explicitly associates Starbucks with being "Dumb", but it also potentially associates the original mark with low-quality products, depending on what was being served in-store. By connecting Starbucks to products of inferior quality and by depicting the Starbucks brand in a negative light, “Dumb Starbucks” might be liable for tarnishing Starbuck’s reputation as a brand.

Wholesome or Unwholesome Parody?

Proving damages to the reputation of a mark in the face of a parody claim is not so easy. In fact, the law allows parodies to impact the reputation of a mark without necessarily tarnishing it. As Deborah Gerhardt, a professor at the University of North Carolina School of Law notes, "dilution by tarnishment claims are most likely to succeed if the court considers the subject matter unsavory." These scenarios often involve sexually explicit, profane or illegal content. With this in mind, I am of the opinion that Starbucks may not be successful even on a claim of dilution by tarnishment. While the word “Dumb” casts the Starbucks brand in an unfavourable light, it surely does not cross into the territory of being crude, immoral, or offensive.

Commercialization and Parody

The next issue which might weigh against a finding in favour of Stabucks, should they choose to litigate, is the absence of a commercial factor in the parody store. US case law suggests that parodies with a commercial element will be less likely to survive a claim for dilution. However, as the landmark case, Louis Vuitton Malletier v Haute Diggity Dog illustrates, the dog toys in question were found to be valid parodies, unlikely to cause source confusion, and therefore legal - despite a strong commercial impetus.

In my opinion, "Dumb Starbucks" was acting intelligently when it decided to give away free coffees as this should aid in avoiding liability for infringement. While the store did not make money during its time in operation per se, it remains unclear if the parody store had any intention to begin selling its products for profit. However, for the purposes of this analysis it might be useful to consider the timing between the opening of "Dumb Starbucks" and the imminent premiere of Nathan Fielder's new comedy show. Depending on how broadly the courts would interpret "commerciality", the possibility that "Dumb Starbucks" may have been a marketing ploy for his new show, rather than a genuine social commentary, might land the comedian in hot water.

Conclusion

While the closure of the parody store may have helped "Dumb Starbucks" escape litigation for now, the questions raised by the fiasco remain interesting and relevant. Hypothetically speaking, if Starbucks decides to commence legal action, US case law suggests they are unlikely to succeed on a claim for trade-mark infringement. However, Starbucks might nonetheless decide to bring a claim for dilution of their brand reputation. While it is unlikely that it will succeed on a claim of dilution by tarnishment, in the contextual, and fact-specific world of trade-marks, we have learned that almost anything can happen.

Mona Zarifian is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.