Author Archives: Maria Crimi Speth

About Maria Crimi Speth

Maria Crimi Speth is a partner at the law firm of Jaburg & Wilk P.C. She focuses her practice on the fields of intellectual property and Internet law.

Nathan Fielder

Was Dumb Starbucks Smart?

Comedian Nathan Fielder created a media stir, and long lines, when he opened a coffee shop called Dumb Starbucks. The establishment was quickly closed down for not having a permit. In the short time that the shop was open, legal commentators everywhere speculated about whether Starbucks would sue for trademark infringement, and if it did, how the case would turn out. The shop looked virtually identical to Starbucks in every way, using the chain’s logos, product names and look and feel. The difference, of course, was the prominent placement of the word “dumb” before each of the trademarks. Another difference reported by the media was that the coffee and hot chocolate were of low quality.

The stunt makes most people wonder what the rules are and what would have happened if Starbucks had filed a lawsuit. The first concept to consider is the classic trademark infringement analysis. A trademark is a word, symbol, picture, phrase or even color scheme that identifies the source of goods or services. Starbucks is the owner of multiple federally registered trademarks, many of which were used by Dumb Starbucks without permission. It is trademark infringement to use a competitor’s trademark without permission in a manner that is likely to cause consumers to be confused as to source, sponsorship or affiliation. Also, when a trademark is famous, uses that dilute the trademark are also actionable.

The alleged infringer must be a competitor for there to be traditional trademark infringement. Thus, it is not infringement when an unhappy customer uses a company’s trademark to openly complain about the company. Had Mr. Fielder created a magazine, website or newsletter called Dumb Starbucks as a forum to express his opinion about Starbucks, it would have been highly unlikely that Starbucks could prove the competitive injury necessary to prevail in a trademark infringement claim. In that case, Starbucks might have a defamation claim if Mr. Fielder had made any false statements of fact about Starbucks in his content. Otherwise, Mr. Fielder would have clearly been protected by the First Amendment.

But Mr. Fielder opened a coffee shop; a directly competing business. And he did it using not only the Starbucks name, but also its logos, product names and color scheme. Starbucks would have had no difficulty proving he was competing with them. What would have been very difficult, if not impossible, to prove would have been a likelihood of confusion. When it is a close call, likelihood of confusion is often proven by a consumer survey. If a substantial number of consumers surveyed believe there is an affiliation or sponsorship, then there is a likelihood of confusion. Here, it really wasn’t a close call and a survey would probably not have yielded favorable results for Starbucks. No one thought that Starbucks had opened a coffee shop called Dumb Starbucks.

The only theory left for Starbucks under existing case law was a dilution claim. Anti-dilution laws only protect famous trademarks. Starbucks is a famous trademark. Anti-dilution statutes protect the value of the trademark from blurring and tarnishment. Blurring is association arising from the similarity between the two trademarks that impair the distinctiveness of the famous mark. In determining whether a trademark is likely to cause dilution by blurring, courts will consider how similar the two trademarks are, how distinct and famous the famous mark is, and whether the new user of the trademark intended to create an association with the famous mark. Dilution by tarnishment is association arising from the similarity between a trademark and a famous mark that harms the reputation of the famous mark.

So far, it sounds like Starbucks would have had a pretty good anti-dilution claim against Dumb Starbucks. If you have been following the news story, though, you know that Dumb Starbucks keeps saying “it’s a parody.” Here’s why. The federal statute on dilution has an exclusion that provides that identifying and parodying, criticizing, or commenting upon the famous mark owner or the good or services of the famous mark owner is not actionable as dilution by blurring or tarnishment. Dumb Starbucks seems to have been well-aware of the law in devising this media stunt. At first blush, it is hard to argue that Dumb Starbucks was not a parody of Starbucks. On deeper look though, I haven’t found any cases that apply the parody defense to a direct competitor selling an identical product using a trademark that is comprised of the exact famous trademark. The point of the parody defense is that the activity is protected by free speech. In America, we take our right to make fun of others very seriously. Here, however, if the activity was more about selling coffee than free speech, that might be a chink in the parody armor.

The final consideration that the Dumb Starbucks shop raised was the potential for a change in existing case law. Lawyers like the saying, “bad facts make bad law” because courts tend to want to “do the right thing” and provide a remedy for what seems like a wrong. These facts are the type of facts that might make a judge create new precedent. There is the feeling that it was wrong for Mr. Fielder to use Starbucks’ property and reputation to compete with Starbucks. It would have been interesting to see what the courts would have done with this fact pattern.

About the author: Maria Crimi Speth is an intellectual property attorney at the Phoenix law firm of Jaburg Wilk and sits on the prestigious International Trademark Association-Anticounterfeiting committee. She is the department head of the intellectual property group and has expertise in copyright law, trademark, trade name, Internet law and intellectual property litigation. She can be reached at 602-248-1000 or


Failing To Honor Copyrights On Software Could Cost Company Thousands

If you use software in your business, a little knowledge about an often misunderstood area of the law could save you tens and possibly hundreds of thousands of dollars. The area of the law is copyrights — but don’t stop reading just because you know you would never illegally copyright software. I have had many clients come to me faced with serious financial sanctions who thought they did nothing wrong.

Perhaps you have never heard of the Business Software Alliance. You are lucky. If you don’t have written agreements with your employees about computer usage, you need to reconsider. And if you have no interest in reading that long license agreement before you click “accept” … well I can’t blame you, but you should at least read it before you make any extra copies of the program.

Let’s start with the basics. Microsoft owns the copyright on Word, Auto Desk owns the copyright on AutoCAD, and Adobe owns the copyright on Acrobat. If you “bought” any of those programs or any other software, you really only licensed them. Whether you bought a CD in the store, downloaded it from the Internet for “free” or it came bundled on your new computer, your use is subject to whatever conditions the copyright owner wishes to impose. If you exceed your permission, then you are violating the copyright. Another basic — you are responsible for the actions of your employees, even if you did not know they were violating the copyright law.

Now let’s discuss a few common myths. Each of the following statements is absolutely false: (1) I can make extra copies for my own use as long as I don’t give or sell them to third parties; (2) I don’t use that computer anymore, so I can just copy the program onto the computer that I do use; (3) it was free on the Internet so it is in the public domain; and (4) they are not interested in going after a small company like mine.

The only way to really know whether an archive copy is permitted or how many different computers you can legally load the software onto is to read the terms of the license that you accepted when you downloaded or installed the software. Don’t assume. Don’t rely on the representative who sold it to you and don’t rely on your tech person. In almost every instance where one of my business clients was accused of copyright infringement, the business assumed or believed that the extra copies were permitted.

Finally, let’s discuss the myth that your business is too small to attract attention and why you should familiarize yourself with the Business Software Alliance (BSA). The BSA is a trade association for copyright owners and it has one purpose — the protection of the copyrights of its members. Its members range from big players like Adobe and AutoCAD to smaller software companies. By turning these enforcement issues over to the BSA, the companies can focus on what they do best — write and develop software. What the BSA does best is locate, negotiate with, and sue infringers. A popular source of information for the BSA is disgruntled former employees. The BSA periodically runs advertisements offering rewards for information. No case is too small and no business is too small for the BSA. Also, the BSA’s idea of negotiation is to slightly discount the full damages. Since copyright laws provide for statutory damages of up to $150,000 per infringement, plus attorney fees, the exposure is significant and the alternative to accepting their proposals is daunting.

With just a few preventative measures, you can protect your business. First, educate your employees on the dangers of unauthorized copying and implement written policies and contracts that prohibit or provide a protocol for any software downloads or copies. By having appropriate policies, you may decrease the amount of damages that can be claimed against you. You will still be responsible for your employees’ conduct so it is important to educate and re-educate your employees on the importance of following the policy.

Another preventative measure is to review your current software and licenses. Un-install any extra copies that are not authorized. When you add a new computer, do not install any software from previous computers without reading the license provisions and determining whether the new install is authorized.

Most importantly, treat copyright protected intangible property such as computer software like you would treat tangible property such as fixtures and equipment. Teach your employees to do the same. You wouldn’t steal or even borrow your neighbor’s car without permission. Respect the intangible property of others in the same way and you are far less likely to find yourself on the wrong side of a copyright infringement claim.