Reading the ?Starbucks going after Starbarks? post reminded me of a similar situation I read about in the New York Times last fall. A Manhattan mother, Christy Prunier, started a line of skin care products targeted towards preteen girls, named after her daughter, Willa. Proctor & Gamble, the consumer products behometh, sent Ms. Prunier a cease and desist letter, saying Willa sounded too much like Wella, their own line of hair care products. The similar names, the company argued, would confuse customers and violate their Wella trademark.?
Instead of changing her company?s name, the Willa founder sued Proctor & Gamble. The New York Times published a lengthy piece on the trademark battle, generating national support for Willa, the ?underdog.? The small company spent over $750K in legal fees, and ultimately settled with Proctor & Gamble, with Willa retaining their brand name. Experts have argued that the only way for small companies to attempt to ward off large corporation is to take their battle to the media. Proctor & Gamble, like Starbucks, likely wanted to avoid any potential PR mishaps, and therefore elected settlement.
In 1961, the Polaroid Corp. v. Polarad Electronics Corp. court listed eight factors to consider in a case of trademark infringement.
- Strength of the mark
- Proximity of the goods
- Similarity of the marks
- Evidence of actual confusion
- Marketing channels used
- Type of goods and the degree of care likely to be exercised by the purchaser
- Defendant's intent in selecting the mark
- Likelihood of expansion of the product lines?
In both cases, Starbucks and Proctor & Gamble seem to have a strong case across many of these factors. The strength of Starbucks? trademark may be stronger than Wella, but the proximity of the goods is closer for Wella vs. Willa than Starbucks vs. Starbarks. Ultimately, these factors seem broad enough that most companies could put together a credible cease and desist letter to potential trademark infringers.
Small businesses have been concerned about ?trademark bullying? for years, arguing that large corporations have the time and resources available to litigate small businesses, sometimes putting them out of business. Congress recognized the potential for abuse, and in April 2011, the United States Patent and Trademark Office introduced a study on trademark bullying. They requested comments from small businesses for over four months, but the 79 comments did not confirm whether trademark bullying is a significant problem.
What I found interesting is that large corporations have a right and responsibility to aggressively defend their trademarks. The value and protection of a trademark fluctuates over the mark?s lifetime. If a mark becomes well known, the value strengthens, and the trademark is given greater protection, but the reverse is also true. In this Starbucks case, and many trademark infringement cases, the trademarked company argues that infringement will cause mark dilution. This is a strong argument, since they will eventually lose their trademark protection if the mark becomes too generic. Therefore, I agree with Jeff that Starbucks should move to protect their strong trademark. Companies only have to be guilty of confusion or ?similar? marks to qualify as infringing, and to the average consumer, a green circle with two stars around a black and white image invokes recognition of Starbucks.
It is important to consider enforcement when considering whether trademark monitoring crosses over to trademark bullying. In the case of Starbucks vs. Starbarks, I would think Starbarks changing their name and logo would pacify Starbucks. In other cases, such as Apple vs. Samsung, companies may require monetary relief. If a large corporation requires crippling settlement amounts from much smaller businesses, they may be guilty of trademark bullying. Cease and desist letters often result in mutual resolution of the potential infringement with little to no litigation. It is the responsibility of small businesses to respond appropriately and to be flexible if they want to avoid large legal fees like those incurred by Ms. Prunier.?
Ultimately, it does not appear that there is widespread abuse by trademark holders. Only 1.5% of trademark cases filed ever reach trial; most are settled out of court. However, cease and desist letters and settlement details are usually not made public, so it is hard to determine if small businesses are treated fairly. Most cease and desist letters are sent in good faith, and despite the PR implications of engaging with a small business, corporations have a responsibility to their customers and shareholders to defend and invest in their trademarks. ?
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Sources:
http://dealbook.nytimes.com/2011/09/28/a-start-up-takes-on-procter-gamble-over-a-name/
http://boss.blogs.nytimes.com/2011/10/03/defending-david-against-goliath/
http://www.bizjournals.com/cincinnati/news/2011/10/17/procter-gamble-settles-with-startup.html
http://brandgeek.net/2011/10/05/wella-whoop-willa-tm-battle-skin-care-makers/
http://www.uspto.gov/trademarks/notices/TrademarkLitigationStudy.pdf
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