Recently, a coffee shop called “Dumb Starbucks” was opened in Los Angeles, California. Dumb Starbucks admits to using the store front, name, and logo (apart from the word: dumb) of the famous Starbucks® coffee shops while offering similar goods and services. Although Dumb Starbucks has apparently been shut for not complying with health code regulations, many have wondered about the legitimacy of the alleged parody coffee shop in view of U.S. trademark law.
“A trademark is a word, phrase or symbol that is used to identify a manufacturer or sponsor of a good or the provider of a service.” Trademarks are the property of their owners and designed to prevent the owner’s competitors from duping consumers into buying a product (good or service) they mistakenly believe is sponsored or provided by the trademark owner. In other words, trademarks prevent consumer confusion in the marketplace and, to a lesser extent, the free riding off a trademark owner’s goodwill.
Competitors of a trademark owner do not need to use the exact trademark to cause confusion in the market place and non-competitors of the owner might use the mark underlying the trademark without causing confusion in the market place. Thus, courts consider a number of factors, including the similarity of the marks and the similarity of the goods or services, to determine whether an accused infringer’s mark, when used concurrently with the trademark, causes a likelihood of confusion in the market place and a corresponding violation of the trademark owner’s rights.
When the use of a mark does not cause confusion in the market place of a trademark, the use can nevertheless violate the trademark owner’s rights if the trademark is famous under “dilution” theory. When a mark underlying a famous trademark is used in a marketplace that is different than that of the trademark, the user is violating the trademark owner’s rights by diluting the trademark owner’s goodwill (i.e., spreading the goodwill into marketplaces that are not exploited by the trademark owner).
Dumb Starbucks identifies itself as an art gallery but admits to using the trademarks of the famous Starbucks coffee shop chain, in the marketplace. Without more, this would be a clear violation of Starbucks’ trademark rights by either causing consumer confusion or diluting Starbucks’ goodwill. However, Dumb Starbucks is alleging that they are making fun of Starbucks by parody.
Sometimes trademarks develop expressive value and enter our public discourse or otherwise become part of our vocabulary. When that happens, a conflict can arise between the trademark owner’s property rights and the public’s freedom of expression, which is protected by the first amendment. Simply put, a trademark owner does not have the unabridged right to control public discourse.
Dumb Starbucks arguably uses Starbucks’ trademark for coffee related goods and services—in some capacity. Without more, these facts seemingly show a violation of Starbucks trademark rights for causing confusion or diluting Starbucks’ goodwill. But, Dumb Starbucks labels its use of Starbucks as artwork. And Dumb Starbucks’ use of the word “dumb” and giving goods and services away for free could be an expression of criticism of Starbucks’ policies of charging high prices for seemingly cheap products like coffee. However, the more profit-oriented or commercial a “parody,” the greater the likelihood that parody will not serve as a defense. In all reality, since Dumb Starbucks has shut down, it probably will not become a pivotal case. And if Starbucks is smart, it will probably just let Dumb Starbucks fade into history without angering consumers or actually setting any precedents about the first amendment exception to trademark infringement.
Buche & Associates, P.C. is a San Diego, California based law firm that specializes in patent, trademark and copyright infringement litigation. www.southerncaliforniapatents.com
By Bryce Johnson, J.D. and John Buche, J.D.
 Mattel, Inc. v. MCA Records, 296 FF.3d 894, 900 (2002)
 See Id.
 See AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979)
 Mattel at 900.