08-3331-cv
`Starbucks Corp. v. Wolfe’s Borough
`
`UNITED STATES COURT OF APPEALS
`FOR THE SECOND CIRCUIT
`
`August Term 2008
`
`Docket No. 08-3331-cv
`
`Argued: June 22, 2009 Decided: December 3, 2009
`
`_____________________________________________________________________________
`
`STARBUCKS CORPORATION, a Washington corporation, STARBUCKS U.S. BRANDS,
`L.L.C.,
`
`Plaintiffs-Counter-Defendants-Appellants,
`
`- v.-
`
`WOLFE’S BOROUGH COFFEE, INC., a New Hampshire corporation doing business as Black
`Bear Micro Roastery,
`
`Defendant-Counter-Claimant-Appellee.
`_____________________________________________________________________________
`
`Before: MINER and LIVINGSTON, Circuit Judges, and TRAGER, District Judge.*
`
`Appeal from a judgment entered on June 5, 2008, in the United States District Court for
`the Southern District of New York (Swain, J.) in favor of defendant-appellee, the court having
`found after a bench trial that plaintiffs-appellants failed to prove, inter alia, their federal dilution
`claim brought pursuant to the Lanham Act because there was no likelihood that defendant’s use
`of “Mr. Charbucks” and “Charbucks Blend” to describe a particular type of coffee would dilute
`— by either blurring or tarnishment — plaintiffs’ “Starbucks” mark.
`
`Affirmed in part and vacated in part.
`
`MARK N. MUTTERPERL, John C. Rawls, and Sarah
`Silbert, Fulbright & Jaworski L.L.P., New York,
`New York, for plaintiffs-counter-defendants-
`appellants.
`
`CHRISTOPHER COLE and John-Mark Turner,
`Sheehan, Phinney, Bass + Green, P.A., Manchester,
`New Hampshire, for defendant-counter-claimant-
`appellee.
`
` The Honorable David G. Trager, District Judge, United States District Court for the
`*
`Eastern District of New York, sitting by designation.
`
`1
`
`

`
`MINER, Circuit Judge:
`
`Plaintiffs-appellants, Starbucks Corporation and Starbucks U.S. Brands, LLC (together,
`
`“Starbucks”), appeal from a judgment entered on June 5, 2008, in the United States District
`
`Court for the Southern District of New York (Swain, J.), following a bench trial, in favor of
`
`defendant-appellee, Wolfe’s Borough Coffee, Inc., d/b/a Black Bear Micro Roastery (“Black
`
`Bear”). The District Court found that Starbucks failed to demonstrate entitlement to relief on its
`
`(1) federal trademark infringement, dilution, and unfair competition claims brought pursuant to
`
`the Lanham Act, 15 U.S.C. §§ 1114(1), 1125, 1127; (2) state trademark dilution claims brought
`
`pursuant to New York Gen. Bus. Law § 360-l; and (3) unfair competition claim under New York
`
`common law. We vacate, in part, the District Court’s decision and remand for further
`
`proceedings on the issue of whether Starbucks demonstrated a likelihood of dilution by
`
`“blurring” under federal trademark law. In all other respects, the judgment of the learned District
`
`Court is affirmed.
`
`I.
`
`BACKGROUND
`
`A.
`
`Preliminary Facts
`
`Starbucks, a company primarily engaged in the sale of coffee products, was founded in
`
`Seattle, Washington in 1971. Since its founding, Starbucks has grown to over 8,700 retail
`
`locations in the United States, Canada, and 34 foreign countries and territories. In addition to
`
`operating its retail stores, Starbucks supplies its coffees to hundreds of restaurants, supermarkets,
`
`airlines, sport and entertainment venues, motion picture theaters, hotels, and cruise ship lines.
`
`Starbucks also maintains an internet site that generates over 350,000 “hits” per week from
`
`visitors.
`
`In conducting all of its commercial activities, Starbucks prominently displays its
`
`registered “Starbucks” marks (the “Starbucks Marks”) on its products and areas of business. The
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`Starbucks Marks include, inter alia, the tradename “Starbucks” and its logo, which is circular and
`
`generally contains a graphic of a mermaid-like siren encompassed by the phrase “Starbucks
`
`2
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`

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`Coffee.” Starbucks “has been the subject of U.S. trademark registrations continuously since
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`1985” and has approximately 60 U.S. trademark registrations. Starbucks also has foreign
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`trademark registrations in 130 countries.
`
`From fiscal years 2000 to 2003, Starbucks spent over $136 million on advertising,
`
`promotion, and marketing activities. These promotional activities included television and radio
`
`commercials, print advertising, and in-store displays, and “prominently feature[d] (or, in the case
`
`of radio, mention[ed]) the Starbucks Marks, which Starbucks considers to be critical to the
`
`maintenance of its positive public image and identity.” Starbucks also enhanced its commercial
`
`presence by permitting the use of its products and retail stores in Hollywood films and popular
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`television programs. These films and programs contained scenes in which the Starbucks Marks
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`were also “prominently displayed.”
`
`As may be expected from its spending “substantial time, effort and money advertising and
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`promoting the Starbucks Marks throughout the United States and elsewhere,” Starbucks devotes
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`“substantial effort to policing its registered Starbucks Marks.” Starbucks “has a regular practice
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`of using watch services and other methods to identify potential infringers of the Starbucks
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`Marks,” and it “routinely sends cease and desist letters and, if necessary, commences litigation in
`
`support of these efforts.”
`
`Black Bear, also a company engaged in the sale of coffee products, has its principal place
`
`of business in Tuftonboro, New Hampshire. In contrast to Starbucks, Black Bear is a relatively
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`small company owned by Jim Clark and his wife. It is a family-run business that “manufactures
`
`and sells . . . roasted coffee beans and related goods via mail order, internet order, and at a
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`limited number of New England supermarkets.” Black Bear also sold coffee products from a
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`retail outlet called “The Den,” in Portsmouth, New Hampshire. To help operate its business,
`
`Black Bear hires some part-time employees, such as “one girl who comes in two days a week and
`
`helps with packaging,” but Black Bear is otherwise operated by Mr. and Mrs. Jim Clark, with the
`
`occasional help of their two daughters.
`
`3
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`

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`In April 1997, Black Bear began selling a “dark roasted blend” of coffee called
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`“Charbucks Blend” and later “Mister Charbucks” (together, the “Charbucks Marks”). Charbucks
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`Blend was sold in a packaging that showed a picture of a black bear above the large font
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`“BLACK BEAR MICRO ROASTERY.” The package informed consumers that the coffee was
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`roasted and “Air Quenched” in New Hampshire and, in fairly large font, that “You wanted it dark
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`. . . You’ve got it dark!” Mister Charbucks was sold in a packaging that showed a picture of a
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`man walking above the large font “Mister Charbucks.” The package also informed consumers
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`that the coffee was roasted in New Hampshire by “The Black Bear Micro Roastery” and that the
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`coffee was “ROASTED TO THE EXTREME . . . FOR THOSE WHO LIKE THE EXTREME.”
`
`Not long after making its first sale of Charbucks Blend, in August 1997, Starbucks
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`demanded that Black Bear cease use of the Charbucks Marks. Having felt wrongly threatened by
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`Starbucks, and believing that “[w]e hadn’t done anything wrong,” Black Bear ultimately decided
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`to continue selling its “Charbucks Blend” and “Mister Charbucks.” Mr. Clark later testified,
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`“[m]y main objection was that basically this was a large corporation coming at me and saying,
`
`telling us what to do, and, oh, by the way you’re going to pay for it, too. . . . [S]ome of the
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`requests that they were making were really off the wall.”
`
`B.
`
`Complaint and Trial
`
`After failed negotiations with Black Bear, on July 2, 2001, Starbucks filed a complaint in
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`the District Court, alleging trademark dilution in violation of 15 U.S.C. §§ 1125(c), 1127;
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`trademark infringement in violation of 15 U.S.C. § 1114(1); unfair competition in violation of 15
`
`U.S.C. § 1125(a); trademark dilution in violation of New York Gen. Bus. Law § 360-l; deceptive
`
`acts and business practices and false advertising in violation of New York Gen. Bus. Law §§ 349,
`
`350; and unfair competition in violation of New York common law. 1
`
` In an order dated September 28, 2004, the District Court granted, in part, Black Bear’s
`1
`cross-motion for summary judgment and dismissed Starbucks’ claim under N.Y. Gen. Bus. Law
`§§ 349, 350 for deceptive acts and business practices and false advertising. On appeal, Starbucks
`does not contest this dismissal.
`
`4
`
`

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`A two-day bench trial was held on March 15, 2005, and March 17, 2005. Among the
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`evidence proffered during trial, Starbucks introduced the testimony of Warren J. Mitofsky (“Dr.
`
`Mitofsky”), a scientist in the field of consumer research and polling. His testimony explained the
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`results of his survey, which concluded in part that “[t]he number one association of the name
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`‘Charbucks’ in the minds of consumers is with the brand ‘Starbucks’ . . . [and that] [t]he name
`
`‘Charbucks’ creates many negative associations in the mind of the consumer when it comes to
`
`describing coffee.” Dr. Mitofsky testified that the surveyed sample of persons were “designed to
`
`be representative of the United States” and that he believed a telephone survey of 600 adults in
`
`the United States would “do a good job of random sampling.” Dr. Mitofsky summarized the
`
`scope of his survey: “Well, if you want to know the reaction to the name Charbucks, then the
`
`telephone is perfectly adequate. If you want to measure the reaction or the familiarity with other
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`visual cues, then it’s not the right method.”
`
`On December 22, 2005, the District Court issued an opinion and order ruling in favor of
`
`Black Bear and dismissing Starbucks’ complaint. Among its findings, the court determined that
`
`there was neither actual dilution to establish a violation of the federal trademark laws nor any
`
`likelihood of dilution to establish a violation of New York’s trademark laws. The court also
`
`found that Starbucks failed to prove its trademark infringement and unfair competition claims
`
`because there was no likelihood that consumers would confuse the Charbucks Marks for the
`
`Starbucks Marks.
`
`C.
`
`Subsequent Proceedings
`
`Starbucks appealed the District Court’s judgment, and, while the appeal was pending,
`
`Congress amended the trademark laws by passing the Trademark Dilution Revision Act of 2005
`
`(the “TDRA”). See Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 477 F.3d 765, 766 (2d Cir.
`
`2007) (per curiam). The TDRA was in response to the Supreme Court’s decision in Moseley v.
`
`V Secret Catalogue, Inc., 537 U.S. 418, 433 (2003), in which the Supreme Court held that the
`
`Federal Trademark Dilution Act required a showing of “actual dilution” in order to establish a
`
`5
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`

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`dilution claim. See Starbucks Corp., 477 F.3d at 766. The TDRA amended the Federal
`
`Trademark Dilution Act to provide, inter alia, that the owner of a famous, distinctive mark is
`
`entitled to an injunction against the use of a mark that is “likely” to cause dilution of the famous
`
`mark. 15 U.S.C. § 1125(c)(1). In light of the change in law, we vacated the judgment of the
`
`District Court and remanded for further proceedings. Starbucks Corp., 477 F.3d at 766. In so
`
`doing, we noted that “[a]lthough the district court also considered whether Starbucks had shown
`
`a likelihood of dilution under New York Gen. Bus. Law § 360-l, it is not clear that that statute is
`
`coextensive with the amended statute.” Id.
`
`On remand, the District Court accepted additional briefing from both parties. Both
`
`parties agreed that no further evidentiary proceedings were required. On June 5, 2008, the
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`District Court again entered judgment in favor of Black Bear, finding — for substantially the
`
`same reasons detailed in the court’s December 2005 decision but with additional analysis with
`
`respect to the federal dilution claim — that Starbucks failed to demonstrate an entitlement to
`
`relief on its federal and state claims. Starbucks timely appealed the District Court’s June 5, 2008
`
`judgment.
`
`On appeal, Starbucks primarily argues (1) that the District Court erred in finding that the
`
`Charbucks Marks are not likely to dilute the Starbucks Marks under federal and state law; and (2)
`
`that the District Court erred in its factual findings and balancing of the relevant factors for
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`determination of “likelihood of confusion” with respect to Starbucks’ infringement and unfair
`
`competition claims.
`
`
`
`II.
`
`DISCUSSION
`
`A.
`
`Standard of Review
`
`We ordinarily review a district court’s factual findings for clear error and its “conclusions
`
`of law and its resolution of mixed questions of law and fact” de novo. See Design Strategy, Inc.
`
`v. Davis, 469 F.3d 284, 300 (2d Cir. 2006). In the trademark context, we review the district
`
`court’s determinations as to each separate factor in Polaroid’s multifactor test, see Polaroid Corp.
`
`6
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`

`
`v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961), for clear error, while the court’s
`
`ultimate balancing of those factors is a matter of law subject to de novo review, see Star Indus. v.
`
`Bacardi & Co., Ltd., 412 F.3d 373, 384 (2d Cir. 2005).
`
`B.
`
`Federal Trademark Dilution
`
`Under federal law, an owner of a “famous, distinctive mark” is entitled to an “injunction
`
`against the user of a mark that is ‘likely to cause dilution’ of the famous mark.” Starbucks Corp.
`
`v. Wolfe’s Borough Coffee, Inc., 477 F.3d 765, 766 (2d Cir. 2007) (per curiam) (quoting 15
`
`U.S.C. § 1125(c)(1)). Although the requirement that the mark be “famous” and “distinctive”
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`significantly limits the pool of marks that may receive dilution protection, see Savin Corp. v.
`
`Savin Group, 391 F.3d 439, 449 (2d Cir. 2004), that the Starbucks Marks are “famous” within
`
`the meaning of 15 U.S.C. § 1125(c) is not disputed by the parties in this case. Rather, the focus
`
`of this appeal is on dilution itself. As specified by statute, federal dilution is actionable in two
`
`situations: (1) dilution by “blurring” and (2) dilution by “tarnishment.” 15 U.S.C. § 1125(c).
`
`1.
`
`Dilution by Blurring
`
`Dilution by blurring is an “association arising from the similarity between a mark or trade
`
`name and a famous mark that impairs the distinctiveness of the famous mark,” 15 U.S.C.
`
`§ 1125(c)(2)(B), and may be found “regardless of the presence or absence of actual or likely
`
`confusion, of competition, or of actual economic injury,” 15 U.S.C. § 1125(c)(1); see also Deere
`
`& Co. v. MTD Products, Inc., 41 F.3d 39, 43 (2d Cir. 1994); Nabisco, Inc. v. PF Brands, Inc.,
`
`191 F.3d 208, 219 (2d Cir. 1999). Some classic examples of blurring include “hypothetical
`
`anomalies as Dupont shoes, Buick aspirin tablets, Schlitz varnish, Kodak pianos, Bulova gowns,
`
`and so forth.” See Mead Data Cent., Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026,
`
`1031 (2d Cir. 1989) (internal quotation marks omitted); see also id. (stating that the primary
`
`concern in blurring actions is preventing “the whittling away of an established trademark’s
`
`selling power through its unauthorized use by others.”).
`
`Federal law specifies six non-exhaustive factors for the courts to consider in determining
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`7
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`

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`whether there is dilution by blurring:
`
`(i)
`
`(ii)
`(iii)
`
`The degree of similarity between the mark or trade name and the famous
`mark.
`The degree of inherent or acquired distinctiveness of the famous mark.
`The extent to which the owner of the famous mark is engaging in
`substantially exclusive use of the mark.
`The degree of recognition of the famous mark.
`(iv)
`(v) Whether the user of the mark or trade name intended to create an
`association with the famous mark.
`(vi) Any actual association between the mark or trade name and the famous
`mark.
`
`15 U.S.C. § 1125(c)(2)(B)(i)-(vi); cf. ITC Ltd. v. Punchgini, Inc., 482 F.3d 135, 168 (2d Cir.
`
`2007). The District Court found that the second, third, and fourth factors favored Starbucks, and
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`those findings are not challenged in this appeal.
`
`With respect to the first factor — the degree of similarity between the marks — the
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`District Court did not clearly err in finding that the Charbucks Marks were minimally similar to
`
`the Starbucks Marks. Although “Ch”arbucks is similar to “St”arbucks in sound and spelling, it is
`
`evident from the record that the Charbucks Marks — as they are presented to consumers — are
`
`minimally similar to the Starbucks Marks. The Charbucks line of products are presented as
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`either “Mister Charbucks” or “Charbucks Blend” in packaging that displays the “Black Bear”
`
`name in no subtle manner, and the packaging also makes clear that Black Bear is a “Micro
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`Roastery” located in New Hampshire. See Playtex Prods., Inc., 390 F.3d at 167-68 (considering
`
`“the differences in the ways [the marks] are presented” in determining similarity in dilution
`
`action); cf. Star Indus., 412 F.3d at 386 (“In assessing similarity [in the infringement context],
`
`courts look to the overall impression created by the logos and the context in which they are found
`
`and consider the totality of factors that could cause confusion among prospective purchasers.”
`
`(internal quotation marks omitted)). Moreover, Black Bear’s package design for Charbucks
`
`coffee is “different in imagery, color, and format from Starbucks’ logo and signage.” For
`2
`
`example, either a graphic of a bear or a male person is associated with Charbucks, and those
`
` The parties do not challenge the District Court’s determination as to the difference in
`2
`color between the two marks.
`
`8
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`

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`marks are not comparable to the Starbucks graphic of a siren in pose, shape, art-style, gender, or
`
`overall impression. Indeed, the Starbucks siren appears nowhere on the Charbucks package. To
`
`the extent the Charbucks Marks are presented to the public through Black Bear’s website, the
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`dissimilarity between the marks is still evident as the Charbucks brand of coffee is accompanied
`
`by Black Bear’s domain name, www.blackbearcoffee.com, and other products, such as shirts and
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`cups, displaying Black Bear’s name.
`
`Furthermore, we note that it is unlikely that “Charbucks” will appear to consumers
`
`outside the context of its normal use, since “Charbucks” is not directly identifiable with the
`
`actual product, i.e., coffee beans. Cf. Nabisco v. PF Brands, Inc., 191 F.3d 208, 213, 218 (2d
`
`Cir. 1999) (observing that Pepperidge Farm’s famous “goldfish” mark may be identified outside
`
`of the packaging because the goldfish cracker itself is the famous mark). The term “Charbucks”
`
`appears only on the packaging and on Black Bear’s website — both mediums in which the
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`Charbucks Marks’ similarity with Starbucks is demonstratively minimal — and Starbucks has
`
`not identified any other method by which the Charbucks Marks likely would be presented to the
`
`public outside the context of its normal use. Cf. id. at 218 (“[M]any consumers of [the
`
`defendant’s] crackers will not see the box; they will find goldfish-shaped cheddar cheese
`
`crackers served in a dish at a bar or restaurant or friend’s house, looking very much like the
`
`familiar Pepperidge Farm Goldfish product.”). To be sure, consumers may simply refer to
`
`“Mister Charbucks” or “Charbucks Blend” in conversation; however, it was not clearly erroneous
`
`for the District Court to find that the “Mister” prefix or “Blend” suffix lessened the similarity
`
`between the Charbucks Marks and the Starbucks Marks in the court’s overall assessment of
`
`similarity.
`3
`
` We acknowledge that there is some obvious similarity between the core terms
`3
`“Charbucks” and “Starbucks.” As explained below, the existence of some — but not substantial
`— similarity between the subject marks may be sufficient in some cases to demonstrate a
`likelihood of dilution by blurring. Thus, upon reconsideration of the application of the blurring
`factors, the absence of “substantial similarity” will not preclude the District Court from
`concluding that there is a likelihood of an “association arising from the similarity between [the
`Charbucks Marks and Starbucks Marks] that impairs the distinctiveness of the [Starbucks
`
`9
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`

`
`Inasmuch as Starbucks argues that the District Court clearly erred in concluding that
`
`Charbucks is not a stand-alone identifier of Black Bear’s products, we find Starbucks’ argument
`
`to be unpersuasive. Starbucks asserts that the District Court should have ignored the term
`
`“Mister” or “Blend” before or after “Charbucks” in assessing the “degree of similarity” factor
`
`because those terms are generic and “too weak to serve a brand-identifying function.” This
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`argument to ignore relevant evidence is unfounded in the law. See 15 U.S.C. § 1125(c)(2)(B);
`
`accord H.R. Report No. 109-23, at 7 (2005), reprinted in 2006 U.S.C.C.A.N. 1091, 1096
`
`(emphasizing that “a court is permitted to consider all relevant factors in determining the
`
`presence of dilution by blurring”). And in any event, even if the core term “Charbucks” were
`
`used to identify a product as a stand-alone term, such finding would not be dispositive of the
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`District Court’s overall assessment of the degree of similarity. See Playtex Prods., Inc., 390 F.3d
`
`at 167-68. In this case, the District Court’s reasons for a finding of minimal similarity between
`
`the Charbucks Marks and the Starbucks Marks were well supported by the record, as explained
`
`above.
`
`Upon its finding that the marks were not substantially similar, however, the District Court
`
`concluded that “[t]his dissimilarity alone is sufficient to defeat [Starbucks’] blurring claim, and
`
`in any event, this factor at a minimum weighs strongly against [Starbucks] in the dilution
`
`analysis.” We conclude that the District Court erred to the extent it required “substantial”
`
`similarity between the marks, and, in this connection, we note that the court may also have
`
`placed undue significance on the similarity factor in determining the likelihood of dilution in its
`
`alternative analysis.
`
`Prior to the TDRA, this Court has held that “[a] plaintiff cannot prevail on a state or
`
`federal dilution claim unless the marks at issue are ‘very’ or ‘substantially similar.’” Playtex
`
`Prods., Inc., 390 F.3d at 167. Notably, under the pre-TDRA law, the federal statute provided a
`
`remedy for dilution of famous marks but did not define “dilution,” much less inform the courts of
`
`Marks].” See 15 U.S.C. § 1125(c)(2)(B), (c)(2)(B)(i).
`
`10
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`

`
`the importance of “similarity” in the dilution analysis.
`
`The owner of a famous mark shall be entitled, subject to the principles of equity
`and upon such terms as the court deems reasonable, to an injunction against
`another person’s commercial use in commerce of a mark or trade name, if such
`use begins after the mark has become famous and causes dilution of the
`distinctive quality of the mark . . . .
`
`15 U.S.C. § 1125(c) (2000). Our adoption of a “substantially similar” requirement for federal
`
`dilution claims, see Playtex Prods., Inc., 390 F.3d at 167, can likely be attributed to the lack of
`
`guidance under the former federal statute and the existence of a “substantially similar”
`
`requirement under state dilution statutes, which were better defined, see generally Federal
`
`Express Corp. v. Federal Espresso, Inc., 201 F.3d 168, 174-76 (2d Cir. 2000); Meade Data, 875
`
`F.2d at 1028-29.
`
`The post-TDRA federal dilution statute, however, provides us with a compelling reason
`
`to discard the “substantially similar” requirement for federal trademark dilution actions. The
`
`current federal statute defines dilution by blurring as an “association arising from the similarity
`
`between a mark . . . and a famous mark that impairs the distinctiveness of the famous mark,” and
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`the statute lists six non-exhaustive factors for determining the existence of an actionable claim
`
`for blurring. 15 U.S.C. § 1125(c)(2)(B). Although “similarity” is an integral element in the
`
`definition of “blurring,” we find it significant that the federal dilution statute does not use the
`
`words “very” or “substantial” in connection with the similarity factor to be considered in
`
`examining a federal dilution claim. See 15 U.S.C. § 1125(c); Bonime v. Avaya, Inc., 547 F.3d
`
`497, 502 (2d Cir. 2008) (“In determining the proper interpretation of a statute, this court will
`
`look first to the plain language of a statute and interpret it by its ordinary, common meaning.”
`
`(internal quotation marks omitted)).
`
`Indeed, one of the six statutory factors informing the inquiry as to whether the allegedly
`
`diluting mark “impairs the distinctiveness of the famous mark” is “[t]he degree of similarity
`
`between the mark or trade name and the famous mark.” 15 U.S.C. § 1125(c)(2)(B)(i) (emphasis
`
`added). Consideration of a “degree” of similarity as a factor in determining the likelihood of
`
`11
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`

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`dilution does not lend itself to a requirement that the similarity between the subject marks must
`
`be “substantial” for a dilution claim to succeed. See Bonime, 547 F.3d at 502. Moreover, were
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`we to adhere to a substantial similarity requirement for all dilution by blurring claims, the
`
`significance of the remaining five factors would be materially diminished because they would
`
`have no relevance unless the degree of similarity between the marks are initially determined to be
`
`“substantial.” Such requirement of substantial similarity is at odds with the federal dilution
`
`statute, which lists “degree of similarity” as one of several factors in determining blurring. See
`
`United States v. Kozeny, 541 F.3d 166, 171 (2d Cir. 2008) (“Statutory enactments should . . . be
`
`read so as to give effect, if possible, to every clause and word of a statute.” (internal quotation
`
`marks omitted)); compare 15 U.S.C. § 1125(c)(2)(B)(ii) (providing “[t]he degree of inherent or
`
`acquired distinctiveness of the famous mark” as one of the factors to be considered in
`
`determining dilution), with Perfumebay.com Inc. v. Ebay, Inc., 506 F.3d 1165, 1180, 1181 n.9
`
`(9th Cir. 2007) (comparing post-TDRA federal dilution law with California’s dilution law and
`
`noting that “the similarity requirement [in a dilution action] may be less stringent in
`
`circumstances in which the senior marks is highly distinctive and the junior mark is being used
`
`for a closely related product.” (internal quotation marks omitted)). Accordingly, the District
`4
`
`Court erred to the extent it focused on the absence of “substantial similarity” between the
`
`Charbucks Marks and the Starbucks Marks to dispose of Starbucks’ dilution claim. We note that
`
`the court’s error likely affected its view of the importance of the other factors in analyzing the
`
`blurring claim, which must ultimately focus on whether an association, arising from the
`
`similarity between the subject marks, “impairs the distinctiveness of the famous mark.” 15
`
`U.S.C. § 1125(c)(2)(B); cf. Perfumebay.com, Inc., 506 F.3d at 1180-81; see supra note 4.
`
` Despite the Ninth Circuit’s relaxing of the similarity standard where the famous mark is
`4
`highly distinctive, the court nonetheless required that the subject marks be “essentially the same”
`for a dilution claim to succeed under California law. See Perfumebay.com Inc., 506 F.3d at 1181
`(stating that “eBay” is so highly distinctive that consumers likely will view a junior mark “that is
`a bit different,” such as “Perfumebay,” as “essentially the same” as “eBay” (internal quotation
`marks omitted)). The Ninth Circuit has not resolved whether this “essentially the same” standard
`also applies to federal dilution claims post-TDRA.
`
`12
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`Turning to the remaining two disputed factors — (1) whether the user of the mark
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`intended to create an association with the famous mark, and (2) whether there is evidence of any
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`actual association between the mark and the famous mark — we conclude that the District Court
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`also erred in considering these factors.
`
`The District Court determined that Black Bear possessed the requisite intent to associate
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`Charbucks with Starbucks but that this factor did not weigh in favor of Starbucks because Black
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`Bear did not act in “bad faith.” The determination of an “intent to associate,” however, does not
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`require the additional consideration of whether bad faith corresponded with that intent. The plain
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`language of section 1125(c) requires only the consideration of “[w]hether the user of the mark or
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`trade name intended to create an association with the famous mark.” See 15 U.S.C.
`
`§ 1125(c)(2)(B)(v); see also Kozeny, 541 F.3d at 171 (“We have stated time and again that courts
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`must presume that a legislature says in a statute what it means and means in a statute what it says
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`there.” (internal quotation marks omitted)). Thus, where, as here, the allegedly diluting mark
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`was created with an intent to associate with the famous mark, this factor favors a finding of a
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`likelihood of dilution.
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`The District Court also determined that there was not an “actual association” favoring
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`Starbucks in the dilution analysis. Starbucks, however, submitted the results of a telephone
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`survey where 3.1% of 600 consumers responded that Starbucks was the possible source of
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`Charbucks. The survey also showed that 30.5% of consumers responded “Starbucks” to the
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`question: “[w]hat is the first thing that comes to mind when you hear the name ‘Charbucks.’” In
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`rejecting Starbucks’ claim of actual association, the District Court referred to evidence
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`supporting the absence of “actual confusion” to conclude that “the evidence is insufficient to
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`make the . . . factor weigh in [Starbucks’] favor to any significant degree.” (internal quotation
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`marks and original alteration omitted). This was error, as the absence of actual or even of a
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`likelihood of confusion does not undermine evidence of trademark dilution. See 15 U.S.C.
`
`§ 1125(c)(2)(B); accord Nabisco, 191 F.3d at 221 (stating that while a showing of consumer
`
`13
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`

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`confusion is relevant in determining dilution by blurring, the absence of confusion “has no
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`probative value” in the dilution analysis).
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`Accordingly, in light of the foregoing, we remand to the District Court for consideration
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`of Starbucks’ claim of trademark dilution by blurring under 15 U.S.C. § 1125(c)(2)(B).
`
`2.
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`Dilution by Tarnishment
`
`Dilution by tarnishment is an “association arising from the similarity between a mark or
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`trade name and a famous mark that harms the reputation of the famous mark.” 15 U.S.C.
`
`§ 1125(c)(2)(C). “A trademark may be tarnished when it is linked to products of shoddy quality,
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`or is portrayed in an unwholesome or unsavory context, with the result that the public will
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`associate the lack of quality or lack of prestige in the defendant’s goods with the plaintiff’s
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`unrelated goods.” Hormel Foods Corp. v. Jim Henson Productions, Inc., 73 F.3d 497, 507 (2d
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`Cir. 1996) (internal quotation marks omitted). A trademark may also be diluted by tarnishment if
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`the mark loses its ability to serve as a “wholesome identifier” of plaintiff’s product. Id.; accord
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`Chemical Corp. v. Anheuser-Busch, Inc., 306 F.2d 433 (5th Cir. 1962) (finding that use of
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`exterminator’s slogan “where there’s life, . . . there’s Bugs” tarnished the use of beer company’s
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`slogan “where there’s life, . . . there’s Bud.”); Steinway & Sons v. Robert Demars & Friends, 210
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`U.S.P.Q. 954 (C.D. Cal. 1981) (finding that use of “STEIN-WAY CO.” to sell clip-on beverage
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`handles tarnished high-end musical instrument company’s use of its name of “STEINWAY &
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`SONS”); Eastman Kodak Co. v. Rakow, 739 F. Supp. 116 (W.D.N.Y. 1989) (finding that
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`comedian’s stage name “Kodak” tarnished the mark of the Eastman Kodak Company because the
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`comedian’s act “includes humor that relates to bodily functions and sex . . . and . . . uses crude,
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`off-color language repeatedly” (internal quotation marks omitted)); Dallas Cowboys
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`Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 467 F. Supp. 366 (S.D.N.Y.) (finding that
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`pornographic depiction of a Dallas Cowboys Cheerleader-style cheerleader in an adult film
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`tarnished the professional mark of the Dallas Cowboys Cheerleaders), aff’d, 604 F.2d 200 (2d
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`Cir. 1979).
`
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`Starbucks argues that the District Court “erred by failing to find that ‘Charbucks’
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`damages the positive reputation of Starbucks by evoking both ‘Starbucks’ and negative
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`impressions in consumers, including the image of bitter, over-roasted coffee.” Starbucks reasons
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`that it has shown dilution by tarnishment because, pursuant to its survey, (1) 30.5% of persons
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`surveyed “immediately associated ‘Charbucks’ with ‘Starbucks’”; and (2) 62% of those surveyed
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`who associated “Charbucks” with “Starbucks” “indicated that they would have a negative
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`impression” of a “coffee named ‘Charbucks.’” We are unpersuaded by S