Opinion ID: 2443
Heading Depth: 3
Heading Rank: 2

Heading: Dilution by Tarnishment

Text: Dilution by tarnishment is an association arising from the similarity between a mark or 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, or is portrayed in an unwholesome or unsavory context, with the result that the public will associate the lack of quality or lack of prestige in the defendant's goods with the plaintiff's unrelated goods. Hormel Foods Corp. v. Jim Henson Productions, Inc., 73 F.3d 497, 507 (2d Cir.1996) (internal quotation marks omitted). A trademark may also be diluted by tarnishment if the mark loses its ability to serve as a wholesome identifier of plaintiff's product. Id.; accord Chemical Corp. v. Anheuser-Busch, Inc., 306 F.2d 433 (5th Cir. 1962) (finding that use of exterminator's slogan where there's life, ... there's Bugs tarnished the use of beer company's slogan where there's life, ... there's Bud.); Steinway & Sons v. Robert Demars & Friends, 210 U.S.P.Q. 954 (C.D.Cal.1981) (finding that use of STEIN-WAY CO. to sell clip-on beverage handles tarnished high-end musical instrument company's use of its name of STEINWAY & SONS); Eastman Kodak Co. v. Rakow, 739 F.Supp. 116 (W.D.N.Y.1989) (finding that comedian's stage name Kodak tarnished the mark of the Eastman Kodak Company because the comedian's act includes humor that relates to bodily functions and sex ... and... uses crude, off-color language repeatedly (internal quotation marks omitted)); Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 467 F.Supp. 366 (S.D.N.Y.) (finding that pornographic depiction of a Dallas Cowboys Cheerleaderstyle cheerleader in an adult film tarnished the professional mark of the Dallas Cowboys Cheerleaders), aff'd, 604 F.2d 200 (2d Cir.1979). Starbucks argues that the District Court erred by failing to find that `Charbucks' damages the positive reputation of Starbucks by evoking both `Starbucks' and negative impressions in consumers, including the image of bitter, over-roasted coffee. Starbucks reasons that it has shown dilution by tarnishment because, pursuant to its survey, (1) 30.5% of persons surveyed immediately associated `Charbucks' with `Starbucks'; and (2) 62% of those surveyed who associated Charbucks with Starbucks indicated that they would have a negative impression of a coffee named `Charbucks.' We are unpersuaded by Starbucks' reasoning. To the extent Starbucks relies on the survey, a mere association between Charbucks and Starbucks, coupled with a negative impression of the name Charbucks, is insufficient to establish a likelihood of dilution by tarnishment. That a consumer may associate a negative-sounding junior mark with a famous mark says little of whether the consumer views the junior mark as harming the reputation of the famous mark. The more relevant question, for purposes of tarnishment, would have been how a hypothetical coffee named either Mister Charbucks or Charbucks Blend would affect the positive impressions about the coffee sold by Starbucks. We will not assume that a purportedly negative-sounding junior mark will likely harm the reputation of the famous mark by mere association when the survey conducted by the party claiming dilution could have easily enlightened us on the matter. Indeed, it may even have been that Charbucks would strengthen the positive impressions of Starbucks because it brings to the attention of consumers that the Char is absent in Starbucks, and, therefore, of the two bucks, Starbucks is the un-charred and more appealing product. Juxtaposition may bring to light more appealing aspects of a name that otherwise would not have been brought to the attention of ordinary observers. Starbucks also argues that Charbucks is a pejorative term for Starbucks' coffee, and, therefore, the Charbucks  name has negative associations that consumers are likely to associate with Starbucks' coffee. Although the term Charbucks was once used pejoratively during the so-called coffee-wars [5] in Boston, Massachusetts, Black Bear is not propagating that negative meaning but, rather, is redefining Charbucks to promote a positive image for its brand of coffee. Black Bear sells Charbucks as its own product, and, consistent with its intent on profiting from selling Charbucks, the Charbucks line of coffee is of [v]ery high quality. It's our life. We put everything into it. In short, Black Bear is promoting Charbucks and not referring to it in a way as to harm the reputation of Starbucks' coffees. Cf. Deere & Co., 41 F.3d at 45 (stating that the likelihood of dilution by tarnishment means the possibility that consumers will come to attribute unfavorable characteristics to a mark and ultimately associate the mark with inferior goods and services). Moreover, that the Charbucks line of coffee is marketed as a product of [v]ery high quality  as Starbucks also purports its coffee to be  is inconsistent with the concept of tarnishment. See Hormel Foods Corp., 73 F.3d at 507 (citing cases finding tarnishment where challenged marks were either seamy or substantially of lesser quality than the famous mark). Certainly, the similarity between Charbucks and Starbucks in that they are both [v]ery high quality coffees may be relevant in determining dilution, see 15 U.S.C. 1125(c)(2)(B), (c)(2)(C), but such similarity in this case undercuts the claim that Charbucks harms the reputation of Starbucks. See Deere & Co. v. MTD Prods., Inc., 41 F.3d 39, 43 (2d Cir.1994) (`Tarnishment' generally arises when the plaintiff's trademark is linked to products of shoddy quality, or is portrayed in an unwholesome or unsavory context likely to evoke unflattering thoughts about the owner's product.). Accordingly, we conclude that the District Court did not err in rejecting Starbucks' claim of dilution by tarnishment.