Oct. 12, 2012 -- Coffee giant Starbucks is in a dogfight with Starbarks, a fledgling canine day care center outside Chicago, over its name and logo's resemblance to the java chain's trademark emblem.
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.
"That's my hope. That will be easier on my wallet, it's a big burden," she said. "We're a start-up business – a dog business. We're not selling lattes."
McCarthy-Grzybek still wonders how the global coffee chain even found out about her business. Even more so, she said, of all the other "Starbarks" businesses in America, why hers? Prior to naming the doggie day care, she had made phone calls to the other businesses sharing the "Starbarks" name to inquire whether they had experienced woes with the corporate coffeehouse. She didn't come across any negative feedback.
A Google search revealed a few other "Starbarks" throughout the United States. Pet grooming is offered at both "Star Barks" venues in Bethel, Conn., and Ellsworth, Kan., while the one in Memphis trolls the streets as a mobile pet spa.
But in Phoenix, pet rescue lodge Canine Village is proof that not everyone has gone unscathed. The first hit when "Starbarks" is Googled into the search bar directs people to their old web site, where a disclaimer reads "Due to a conflict with a very famous coffee company our previous name (which we cannot mention) had to be changed to Canine Village only."
Founder Janet Cole said the "aggravation" of fighting in court wouldn't be worth it and that she was planning to change the name anyway. Cole had originally contacted Starbucks' public relations department in 2005 seeking permission to use the name "Starbarks"; once she got the green light, Starbarks Canine Village opened in 2006 and it wasn't until last year that she began to receive "incessant emails" and was "inundated with letters" from the firm. However, Cole said she never received a certified letter or a phone call.
"I have no idea what my tiny rescue has to do with coffee," Cole said. Referring to all the other businesses sharing the name "Starbarks," she added, "All of us put together, we are so small in comparison. How are we hurting them?"
This isn't the first battle over business names. The Supreme Court ruled in favor of beauty and women's wear retail company Victoria's Secret back in 1998 against Victor and Cathy Moseley over their Kentucky lingerie and adult novelty store "Victor's Secret." More recently, French luxury goods designer LVMH">Louis Vuitton Moet Hennessy sued dog toy and accessory company Haute Diggity Dog over a line of "Chewy Vuiton" canine products with a design that resembled the popular label.