In April, 2017 Starbucks launched a pink and blue blended beverage called UNICORN FRAPPUCCINO and marketed its new drink aggresively, as a limited-time offering. It caused an immediate frenzy amongst its die hard followers.
However, not too long before, a New York city beverage shop, THE END, had already had this epiphany and created a blended fruit juice beverage featuring pink and blue colors, topped with sprinkles. It called it the UNICORN LATTE.
Recognizing that the whole whimsical and colorful play on food was a hot trend (cupcakes etc), it decided to invest six months along with the Montauk Juice Factory to come up with this particular crowd favorite - a whimsical and colorful beverage. It filed for a trademark for UNICORN LATTE in January, 2017 and took on an extensive marketing campaign successfully generating great amounts of social media interest. With a federal registration in its pocket (or docket;), if you please), it successfully established the "first in use" bit and coupled with its well documented media campaign, it was able to demostrate a substantial consumer base with the directly attributable earnings from that drink.
And so THE END arrived....at court and filed for a trademark infringement against Starbucks in E.D.N.Y. in May 2017. It based this claim on the doctrine of reverse confusion.
Reverse confusion happens, however, when a senior smaller user's mark and goods are confused as emanating from a junior user, who's mark has successfully gained commercial strength due to extensive marketing. "In reverse confusion, rather than trying to profit from the senior users mark, the junior user saturates the market and 'overwhelms the senior user." 3.J. Thomas McCarthy on Trademarks and Unfair Competition § 23:10 (2006).
To support its claim of trademark infringement, THE END had to establish consumer confusion. While the analysis for consumer confusion is the same under the doctrine of reverse confusion, the one significant difference is that the relevant consumers here are the senior mark's customer, not that of the junior user. The question asked is "Were the senior user's customers confused as to the affiliation with the junior user's mark?"
Though the parties have settled, there are some good pointers/reminders for for small business owners in particular:
- If you have a federal registration and have established first use, dont be deterred by a later entrant, albiet one catering to a larger consumer base.
- In todays day and age, it's easier to establish marketplace confusion, as THE END did by showing in evidence the consumer confusion resulting from the similarity between the two drinks on social media (On Instagram, the hashtag #unicornlatte began to be populated with pictures of Starbucks’ Unicorn Frappuccino. See Courthouse news, Para 29) )
- And law finely balances not just rights, but also whats better for society. THE END utilized all the negative press coverage over the FRAPPUCCINO being simply a sugary drink versus the LATTE actually being a blend of juices i.e., healthier for the public generally.
