Case Study of a Coffee War: Using the Starbucks v. Charbucks Dispute to Teach Trademark Dilution, Business Ethics, and the Strategic Value of Legal Acumen

Two years after opening their family-owned coffee bean roastery, Jim and Annie Clark had become accustomed to long work weeks and bootstrap financing. By 1997, their Black Bear Micro Roastery (“Black Bear”) was finally growing, and the Clarks were hopeful that their new specialty blend, Charbucks, would give their uniquely dark roasted coffee bean a catchy name to remember. Soon after launching their new blend, Annie Clark received a phone call from an insistent in-house lawyer at coffee giant Starbucks that threatened the very existence of their company. Starbucks claimed that the Charbucks Blend name and label infringed on their trademark and demanded that Black Bear cease the use of the name Charbucks and remove any existing products with the Charbucks Blend label from retail shelves. Yet the Clarks insisted that they had been careful to design the label with Black Bear Micro Roastery logos so that the name and label were tied to their dark roasting process and not to anything related to the name Starbucks. Despite their belief that no infringement had taken place, the Clarks entered into settlement negotiations to avoid the legal costs associated with defending a trademark lawsuit. After settlement negotiations failed, Starbucks sued Black