Caribou Coffee Learns That Even When You Win As A Trademark Bully, You Can Still Lose

from the backlash dept

Whenever we talk about trademark bullies, especially those aggressively pursuing smaller businesses on shaky claims of brand confusion, a common question arises: what can we do to make this kind of thing stop? There are potentially several answers to this question, but one of the most simple is to behave in a way that makes trademark bullying a bad business decision.

Take Caribou Coffee, for instance. America’s second-largest coffee retailer recently sued a tiny Michigan business called Blue Caribou Cafe, which is exactly the kind of small-market coffee and diner that you’re picturing in your head right now. Caribou Coffee won its lawsuit, meaning that Blue Caribou Cafe will have to change its name, its branding, its storefront signage, and pay some $5,000 in attorney’s fees. The basis for the lawsuit was the claim by Caribou Coffee that customers would be confused by the similar nature of the two names.

Well, those same customers are now speaking up, as they are mighty pissed off at Caribou Coffee’s actions.

Comments on social media show that fans of the cafe and of small businesses generally are unhappy with Caribou Coffee for bringing the legal action, and some said they would boycott the company’s stores and products. Some of the strongest criticism has been posted on Caribou’s own Facebook page.

Those comments posted on Caribou Coffee’s own Facebook page are about what you’d expect.

So, the question is whether this trademark bullying was worth it for Caribou Coffee. We can dispense with any debate over the validity of the company’s legal action, I think. Pimping some kind of customer confusion between the massive retailer and a local coffee shop and diner is beyond silly. The company trotted out the tired excuse claiming that trademark law required them to do all of this, which isn’t true. So, in light of all that, and in light of what has been a pretty clear public backlash from the very people whom it claimed would be confused, was the bullying worth it for Caribou Coffee?

It’s hard to imagine that it was. Already the company is doing some scrambling to try to put a PR lid on this whole thing. For example, the business formely known as Blue Caribou Cafe started a GoFundMe campaign to get funds for all the rebranding it must now do, and Caribou Coffee contributed to it. That’s nice, but all that does is add more to the cost of taking the unnecessary legal action to begin with. Here’s the question to ask: how many customers did Caribou Coffee gain with its trademark lawsuit, and how many did it lose?

It seems clear B is greater than A in this case, which makes this whole thing a net negative for Caribou Coffee. Perhaps next time it will think twice before trying to bully a local small business.

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Companies: blue caribou cafe, caribou coffee

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Comments on “Caribou Coffee Learns That Even When You Win As A Trademark Bully, You Can Still Lose”

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31 Comments
Davidsays:

Wrong question.

Here’s the question to ask: how many customers did Caribou Coffee gain with its trademark lawsuit, and how many did it lose?

It seems clear B is greater than A in this case, which makes this whole thing a net negative for Caribou Coffee. Perhaps next time it will think twice before trying to bully a local small business.

That’s a shortsighted question and metric and a shortsighted answer.

How many soldiers did the U.S. gain by going to WWII, and how many did it lose?

Caribou Coffee did not fight for customers but for its trademark. Trademarks only have an indirect effect on customer numbers since they are a prerequisite for brand awareness which in turn enables advertising and provides a hook for customer loyalty without which you are reduced to being cheapest in market as a selection criterion.

And according to the Caribou Coffee narrative they did not pick this fight but had it foisted on them by the Blue Caribou Caf?. For this narrative, they depend on the expertise of their legal department the employment of which in turn depends on accountable success. Which is most reliably gained over small parties.

It’s a basic facet of U.S. business life. You will not have problems finding dozens of uglier cases to highlight each day, like you will not have problems finding dozens of uglier cases of foreclosure each day.

The challenge is figuring out how to create a framework that will significantly reduce the amount of ugliness. And the basic tenet of U.S. capitalism is “money is good”.

If you don’t want that rule to hold before court, you seriously need to reconfigure the way justice is dealt out in the U.S.

PaulTsays:

Re: Wrong question.

Wow, you really defended this by comparing the bullying of a small coffee shop with a vaguely similar name to troops in World War 2?

“enables advertising and provides a hook for customer loyalty”

…in cases where there can be customer confusion. There was no such thing here, and in fact action only seems to have offended customers (read: removed their loyalty).

“If you don’t want that rule to hold before court, you seriously need to reconfigure the way justice is dealt out in the U.S.”

Well, here we can agree.

orbitalinsertionsays:

Re: Re: Wrong question.

We “gained” a huge nuclear arsenal and a whole new silo (no pun intended but there it is) in which to compete. Pretty sure the psychopathic end of the capitalism spectrum sees that as a win. And things seem to parallel rather well between extreme nationalism / war hawks and extreme corporatism / IP hawks. One cannot accuse them of making evidence-based decisions with respect to the evidence claimed to be in use, or which is theoretically supposed to be in use in their respective arenas.

It is a weird analogy, for various values of “short-sighted”. I expect the intent is to be point out the rules by which things are actually played, versus the putative rules which supposedly govern such things. Kind of like the frequent sort of argument that, e.g., calling out the NSA on grounds that it is ineffective to vacuum “intelligence” if the intent is to use it to find terrorists, when in fact they do it to control our own citizens. Sort of how i read it, anyway. But i could be both mistaken and also throwing more bad analogies on the pile.

Davidsays:

Re: Re: Re: Wrong question.

Well, the main point was that nobody actually wants customers or soldiers. They are just a means to an end.

Customers are the nutcase protecting their wallet, so you need to crack them. And that requires to some degree an actual or seeming good which you need to provide them in order to bootstrap your business until you can replace them with suckers who don’t get anything in return for their money. That’s sort of business pupation, otherwise known as IPO. But you first need to make it through the grub stage.

Richardsays:

Re: Re: Re: Re: Wrong question.

Customers are the nutcase protecting their wallet, so you need to crack them. And that requires to some degree an actual or seeming good which you need to provide them in order to bootstrap your business until you can replace them with suckers who don’t get anything in return for their money.

Nice piece of propaganda for Karl Marx!

Anonymoussays:

Re: Wrong question.

How many soldiers did the U.S. gain by going to WWII, and how many did it lose?

Since it wasn’t until this decade that we returned to the pre-WWII levels of active military service members you could argue that the US did make a net gain of solders in WWII. Your analogy is still stupid, since it should be lives saved vs lives lost, not just solder count.

Anonymoussays:

Caribou Coffee is not the legal expert here. Their lawyers talked them into it, and undoubtedly made out like bandits.

It’s useless to go after Caribou Coffee. There is an endless supply of naive companies who can be persuaded to sue, as long as there are lawyers willing to advise them that trademark law requires it.

So the way to deal with this is to deal with the lawyers’ ethics. The clients are cannon fodder just as much as that poor little cafe.

TripMNsays:

I grew up in Minnesota (as the MN at the end of my name implies). Caribou Coffee made a name for itself and grew in loyalty and favor locally because it made better coffee than Starbucks and it showed loyalty to its customers and towns. It attempted to be a very good corporate citizen (or so it seemed).

I heard about this story a few weeks back from friends in Michigan who can’t believe our court systems are so rigged that the big guy corporations can beat up a mom and pop shop that isn’t even within the geographic sphere of the corporation’s locations. It just seems ludicrous that the overlap of one word, the name of an animal, is enough to bring out the trademark lawyers, though I’m seriously agog that the USPTO granted a one-work Trademark on an animal that isn’t even the company’s full official name.

Everyone I know who still lives within coffee run distance of a Caribou Coffee is having second thoughts about the company. Let’s see if acting like a douche-canoe ends up hurting their bottom line. I hope it will, but I won’t be holding my breath.

Anonymoussays:

Everyone who says that “trademark law made them do it” is lying through their teeth. All you need to do to resolve the issue without supposedly diluting your brand is to cross license the brand for free with the other organization with the agreement that the other won’t expand without changing their name but can use the blue caribou name (not that Caribou Coffee should have any entitlement to it). You only sue if you’re listening to lawyers who want to make thousands of dollars.

John85851says:

An obvious solution

This is probably way too late, but this seems like an obvious solution:
“Blue Caribou Cafe… now proudly serving Caribou Coffee.”
The cafe gets to keep its name and the coffee company gets more customers from selling their coffee.

But this solution wouldn’t let lawyers file more billable hours with their client.

Anonymoussays:

Wrong legal analysis

The company trotted out the tired excuse claiming that trademark law required them to do all of this, which isn’t true.

I don’t think most trademark attorneys would agree with this. If a mark holder wants to protect their mark in the future, whether they protected their mark in the past is a determining factor.

wubbasays:

Re: WTF

No just you and you completely missed the whole point of this article and the lawsuit.

Caribou Coffee and Blue Caribou Cafe were similar enough for some lawyers to think they needed to protect the brand name.

Caribou Coffee and Caribou Cars or Caribou Lumber would not be confused with each other.

Davidsays:

Re: Re: WTF

Caribou Coffee and Caribou Cars […] would not be confused with each other.

Until a bird splashes on the “Caribou Cars” sign, making it “Caribou Car’s” sounding just like a Coffee Drive-in.

Fun fact: this reply started out somewhat differently exactly because of a well-placed speck of dust on my screen. I wanted to lecture about the legal perils of misplaced apostrophes.

Pronouncesays:

I Love the Internet for its Pressure on Power

Many years ago, before the Internet was a thing, a small cafe called Chilly’s in the boondocks of Alaska got sued and had to change it’s name because the Chilli’s chain saw it as a trademark infringement. It was exactly the same thing, but besides letters to the editors, people’s opinion about the abuse wasn’t known.

Now the epoch of the internet.

Guess what Power fears, and thus hates?

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