A Local Brooklyn cafe The End (with co-plaintiff Montauk Juice Factory Inc.) recently filed a trademark infringement lawsuit against corporate behemoth Starbucks, claiming that one of their most popular drinks – the Unicorn Latte – was infringed by the release of Starbucks’ limited edition Unicorn Frappuccino.

It’s easy to see how this conflict began: both drinks have a similar aesthetic and boast a colourful palette of blue, green, purple and pink swirls and sparkly finesse – all of which align with this recent thematic food trend. However, there are some notable differences between the drinks and the brand protection behind them.

The backlash over Starbucks’ actions seemingly stems from the problems of differentiating between both the drinks and who is responsible for the original creation. The IP issues that come into play make this an interesting trademark case study.

The Backstory

The End began selling its version of the Unicorn Latte back in December of 2016, and it was marketed as a superfood health drink made from natural plant-based ingredients. They saw a lot of success with their creation within the local community and over social media, which led them to file for a trademark on January 20 of this year.

Starbucks began selling their sweet whip-cream topped Unicorn Frappuccino on a limited run in April 2017, four months later as part of their happy hour line of specialty drinks. Their Frappuccino is made from a mango-based crème, blue syrups and features a colour-changing experience as the drinker stirs the drink. In typical Starbucks fashion, they ran an expansive marketing campaign leading up to the release of the product that was made available in the U.S., Canada and Mexico.

The Lawsuit

The lawsuit filed by The End claims that Starbucks’ Unicorn Frappuccino beverage has a “name deceptively similar to Unicorn Latte” and that it was “aggressively” marketed to eclipse The End’s drink (See Montauk Juice Factory Inc., The End Brooklyn v. Starbucks Corporation, Starbucks Coffee Company, 1:17-cv-02678, PDF here, “the Lawsuit”).

At paragraph 1 of the Lawsuit, the Plaintiffs claim that:

“The size of and scope of Starbucks’ product launch was designed so that the Unicorn Frappuccino would eclipse the Unicorn Latte in the market, thereby harming Plaintiffs and confusing their customers.”

In the Lawsuit, the plaintiffs seek unspecified compensation for “infringing, diluting, and otherwise diminishing the value of the Plaintiffs’ intellectual property.”

Starbucks has indicated that they were simply inspired by the online trend of unicorn-themed foods in coming up with the Unicorn Frappuccino, and that the Lawsuit has no merit.

IP Case Study

From an IP perspective, there are a few things at play.

The reader should first note that before a trademark is registered, rights are limited geographically to where the mark has been used in commerce. Pending trademark applications are publically searchable through the U.S. Patent and Trademark Office’s (“USPTO”) website. The End (or its co-plaintiff) apparently filed a trademark application for “Unicorn Latte”, but it had not yet registered when Starbucks started selling its drink (See Lawsuit at para. 4). By searching the USPTO site, Starbucks could have known that The End’s trademark had not yet been approved, making it possible for Starbucks to sell a drink with the name “Unicorn”, without much risk of trademark infringement during the drink’s limited run outside of Brooklyn where it was in use by The End.

The immense brand power of the word “Frappuccino” helps to solidify Starbucks’ position in this lawsuit. The “Frappuccino” name is itself a trademark of Starbucks that is close to 25 years old – dating back to at least 1993 when Coffee Connection, an Eastern Massachusetts Coffee Chain, registered U.S. Trademark No. 1745953. Coffee Connection was ultimately purchased by Starbucks, at which point its trademarks would have presumably changed hands. Starbucks could argue that the word “Frappuccino”, through its widespread use, has acquired distinctiveness to Starbucks as a source of beverages, and further that “Frappuccino” in “Unicorn Frappuccino” dominates the commercial impression left by the mark on viewers. Since 1993, the Frappuccino has been one Starbucks’ differentiating factors in the realm of iced coffee drinks and has helped Starbucks build a formidable brand. The Frappuccino accounts for 20 percent of Starbuck’s coffee sales to this day. This in turn, has enabled them to produce 28 varieties of the drink and numerous limited editions. Starbucks has, for example, at various times had trademarks for “Power Frappuccino” (US TM 2213117), “Rhumba Frappuccino” (USTM 2283531) and filed for “Bambino Frappuccino” (US TM Application No. 74689254).

An additional illustrative type of argument Starbucks could make to counter the lawsuit would be that the trademark “Unicorn Latte” has a commonly understood meaning to coffee buyers, and that the overall mark is thus ‘descriptive’ or ‘suggestive’ of the goods in association with which it is used. To put it simply, Starbucks could argue that upon seeing “Unicorn Latte”, a coffee buyer would understand that the branding pertains to a latte (a well-known type of coffee drink) with a specific ‘unicorn’ colour theme (evoked by the word “Unicorn”). In this particular case this argument seems like quite a stretch, but it’s useful for illustration purposes. If the argument was proven, this could mean that The End has minimal trademark protection in “Unicorn Latte” due to longstanding trademark protection requirements, essentially because by being ‘descriptive’ it may be incapable of distinguishing The End as the source of the drink. To make this more clear, it would be quite difficult to register a trademark to simply the words “Neapolitan Ice Cream”, for a shop that serves the namesake ice cream, because ‘Neapolitan’ is a well-known type of ice cream, such that the mark would be descriptive of the goods the proposed shop would sell and would be thereby unsuitable for trademark protection.

This raises an interesting note about the evolution of words used in commerce (and trademarks) over time. Perhaps the word “unicorn” doesn’t yet evoke any meaning in the context of – for example – beverages, but it may at some point be evocative of a particular colour theme and taste profile.

Of note, The End is not the only establishment serving unicorn-themed drinks. Toronto-based bakery, Cutiepie Cupcakes & Co., has allegedly been serving Unicorn Lattes even earlier than the Brooklyn-based cafe, and online. There are also several U.S.-based companies that have their own versions of unicorn-themed drinks. The author has reached out to Cutiepie Cupcakes & Co. for comment, owner Melanie says:

We actually had the idea for Unicorn Latte first; we have been using that branding since before the New York store. But overall, we have actually enjoyed a boost of sales from the attention this has gotten!

Further, this use of “Unicorn” to denote a specific colour theme doesn’t appear unique to drinks. Kristy Therrien, owner and creator of Sweet Insanity Bakeshop in Pomona, California, managed to find a balance between distinctiveness and this budding food trend to differentiate her unicorn-themed food from the rest. She invented Unicorn poop in 2012, and successfully trademarked it. It saw immense success virally, caused a heavy boost in sales and has been featured countless times in the media.

It Pays to Trademark Early

Regardless of the outcome of the lawsuit, there is a clear take away from all this. Emerging business owners need to pay close attention to their IP rights from the beginning of building a brand. The worth of intangible assets like trademarks is evident in this case and has helped put Starbucks in a relatively strong position, regardless of whether The End used the Unicorn name first. Factors like timing of registration, trademark distinctiveness and years of use have a significant impact on how trademark infringement concerns unfold.

The End could have solidified their position by registering their mark early, giving them presumptive ownership rights. Had The End registered its trademark early, a trademark search by an IP law professional could have warned Starbucks to the possible trademark infringement concern before venturing out into the marketplace and building a brand.

Robert Tremblay is an associate lawyer at BHOLE IP LAW. He helps companies resolve their IP concerns.

BHOLE IP LAW is a boutique IP firm located in downtown Toronto, Canada and practices in all areas of IP, including developing business-minded trademark strategies for startups, small and medium-sized businesses. BHOLE IP LAW provides competitive fees and, importantly, takes pride in its responsive and advisory approach.

**The information provided herein is a general background of intellectual property law concepts, does not constitute legal advice, and should not be relied upon as legal advice. Bhole IP Law, and the author, make no express or implied representations or warranties in respect of the information, including but not limited to the accuracy of the information. Note that while Bhole IP Law is a firm of Canadian lawyers authorized to practice before the United States Patent and Trademark Office, we are not U.S. lawyers nor lawyers in any other jurisdiction. As such, other foreign counsel may need to be consulted for U.S. or foreign legal matters.**

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