Andrea McCarthy-Grzybek, 46, who co-owns the doggie day care located at 220 North Main Street in Algonquin, Ill., with her husband Al, 44, said she'll change their business name and logo if she's pushed, but can't afford to pursue the case further in court.
In April, only a month after Starbarks' grand opening, she received a cease and desist letter from Starbucks, demanding they alter all similar aspects of their business – name, logo and color – or face legal action.
Although she has several new names in mind, McCarthy-Grzybek hopes she won't have to use any of them. For financial reasons, she said it would be a much bigger burden to change the name rather than just the sign, having already spent nearly $2,000 in legal fees.
"I never said it [Starbarks] was a play on the [Starbucks] name, ever," she said. "We have a dog business – I think it's a catchy name because for our place, it means the stars are the dogs – that's all I meant by it."
After consulting with lawyers who believed they could win the case if they chose to fight the coffee chain in court, McCarthy-Grzybek decided against it.
"The risk of not winning is scary," she said. "Then you'd have to pay the coffee giant's lawyers, and that could be one lawyer or it could be a hundred lawyers. It's crazy; I'd never do anything like that."
Since then, business at Starbarks has remained unchanged. In response to the controversy, a banner was erected outside the daycare reading "The coffee giant wants us to change our name and logo. Voice your opinion on Facebook."
Their page has received mixed comments. One user said copyright infringement was evident, while another claimed this was just another case of "bullying small businesses." The banner will be taken down after three months in accordance with local regulations, but McCarthy-Grzybek said Starbucks has already called few times requesting they take it down sooner.
Zack Hutson, a spokesperson for Starbucks, said they have a "legal obligation to protect our intellectual property," adding that if the Starbucks trademark isn't protected from infringement, the company risks losing their exclusive rights to it.
"We've made significant investments over the past 41 years to protect our trade," he said. "As a responsible trademark owner, we must take the necessary steps to protect it."
Hutson added that they prefer to resolve trademark disputes "informally and amicably" and that they hope to achieve that in this case.
If Starbucks decides to pursue this further in court, they would have to prove either "dilution" or "confusion." According to attorney and expert in trademark law Lawrence Iser of Kinsella, Weitzman, Iser , Kump and Aldisert LLP for Starbucks to prevail on grounds of "confusion," they would have to show that Starbarks is "confusingly similar" to them, causing consumers to believe that Starbucks has somehow licensed or is affiliated with Starbarks.
The second legal tactic they could pursue, he said, is dilution, in which Starbucks would have to prove that their famous mark is being diluted because Starbarks is not only using their trademark but also tarnishing it. Iser said he believed Starbucks might not prevail on trademark infringement but may have a claim for dilution.
For now, McCarthy-Grzybek hopes Starbucks will reconsider its actions and come to an agreement with them on changing Starbarks' colors, which she said most customers view as "catchy" and "pleasant." She had previously offered to change it from green to yellow and additionally to replace the stars with paw prints; Starbucks turned down her proposal.