Homework 1 - Ethics - Starbucks Case Source: Cheeseman, H 2016, Business Law, ninth ed., Parson Education, US CASE 42.2 FEDERAL COURT CASE Ethics Starbucks Corporation v. Wolfe's Borough Coffee, Inc. 736 F.3d 198, 2013 U.S. App. Lexis 23114 (2013) United States Court of Appeals for the Second Circuit "There is no question that 'Starbueks'-an arbitrary Facts mark as applied to coffee-is highly distinctive." Starbucks Corporation and Starbucks U.S. Brands -Lohier, Cireuit Judge LLC (Starbucks) is a purveyor of specialty coffees and products sold in more than 10,000 locations Language of the Court worldwide. Starbucks owns more than 60 valid There is no question that "Starbucks"-an artrademarks and service marks (marks) under which bitrary mark as applied to coffee-is highly it operates its stores and sells coffee and other prod- distinctive. The ultimate question is whether ucts. "Starbucks" is one of the most recognizable the Charbucks marks are likely to cause an brand names in the United States and around the association arising from their similarity to the world. Starbucks marks, which impairs the Starbucks Wolfe's Borough Coffee, Inc., doing business as marks' tendency to identify the source of StarBlack Bear Micro Roastery (Black Bear), manufac- bucks products in a unique way. Here, minimal tures and sells roasted coffee beans and related similarity strongly suggests a relatively lowe produets via Internet order and from a retail out- likelihood of an association diluting the senior let. Black Bear uses the trademark names "Mister mark. We agree with the district court that the Charbucks," "Mr. Charbucks," and "Charbucks distinctiveness, recognition, and exclusive use Blend." Starbueks sued Black Bear in U.S. district of the Starbucks marks do not overcome the court, alleging that the defendant caused trademark weak evidence of actual association betzeen dilution in violation of the Federal Trademark Dilu- the Charbucks and Starbucks marks. tion Aet by blurring of the name "Carbucks" with "Starbucks" and causing a likelihood of confusion. Decision Starbucks requested the court to issue an injune- The U.S. court of appeals upheld the U.S. district tion prohibiting Black Bear from using Charbucks court decision, finding that Starbucks had failed to marks. The U.S. district court found only mini- prove a likelihood of dilution and thus permitting mal similarity and weak evidence of association defendant Black Bear to continue using the "Charbetween Charbucks junior marks and Starbucks bucks" name in selling coffee and other products. senior marks, concluded that Starbucks failed to prove that Charbucks marks are likely to dilute the famous Starbucks marks, and refused to issue the requested injunetion. Starbucks appealed. Ethics Questions Issue marks when it used the "Charbucks" name? Even Did the Charbucks marks cause dilution to the Star- though Black Bear was found not to have violated bucks marks? the law, was its conduct ethical? 1. Please identify the ethical issue in this case. 2. What are the considerations of the Starbucks Corporation and Wolfe's Borough Coffee? 3. Did Wolfe's Borough Coffee act ethically in this case? Please explain Wolfe's Borough Coffee's behavior according to Kantian Ethics. 4. Do you agree with the Court's decision? Why