starbucks v. phil & sons.pdf

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ---------------------------------------------------------------X STARBUCKS CORPORATION d/b/a STARBUCKS COFFEE COMPANY,

Plaintiff, v.

PHIL & SONS PIZZA INC.,

Defendant. ----------------------------------------------------------------X

Case No.: COMPLAINT JURY TRIAL DEMANDED

COMPLAINT

Plaintiff Starbucks Corporation d/b/a Starbucks Coffee Company (“Starbucks”) for its

Complaint against Phil & Sons Pizza, Inc. (“Defendant” or “Phil & Sons”) alleges as follows:

NATURE OF THE CASE

This is an action for trademark infringement, unfair competition, false designation of

origin, and false description and representation arising under 15 U.S.C. § 1114 and 15 U.S.C. §

1125(a)(1)(A), 15 U.S.C. § 1125(a)(1)(B), and § 15 U.S.C. § 1125(c)(2)(C). This is also an

action for copyright infringement arising under 17 U.S.C. § 501(a).

THE PARTIES

1. Starbucks Corporation is a corporation organized and existing under the laws of

the State of Washington with its principal place in Seattle, Washington. Since 1971, it, or its

predecessor in interest, has continuously conducted business under the trade names “Starbucks,”

“Starbucks Coffee Company,” and “Starbucks Coffee.” Starbucks Corporation is the owner of

multiple federally registered trademarks promoting and protecting the Starbucks brand, as well

as federally registered copyrights in its logos.

Case 1:16-cv-01207-LDH-SMG Document 1 Filed 03/10/16 of 28 PageID #: 1

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2. On information and belief, Phil & Sons is a corporation organized and existing

under the laws of New York, and maintains a principal place of business at 5729 Main Street,

Flushing, New York 11355. On information and belief, Phil & Sons uses in commerce,

promotes, markets, advertises, sells, and offers to sell or provide coffee and espresso beverage

services bearing the federally protected intellectual property of Starbucks without permission or

authorization from Starbucks.

JURISDICTION AND VENUE

3. The Court has jurisdiction over the lawsuit under 28 U.S.C. §§ 1331 and 1338

because the suit arises under 15 U.S.C. § 1121. The Court has subject matter jurisdiction over

statutory claims pursuant to 28 U.S.C. § 1367(a).

4. On information and belief, this Court has personal jurisdiction over Defendant

because Defendant resides in, has extensive contacts with, and/or is engaged in substantial and

continuous business practices in this judicial district arising from the use in commerce,

marketing, advertising, sale, and offering to sell or provide coffee and espresso beverage services

bearing the federally protected intellectual property of Starbucks. Defendant has committed and

continues to commit acts of trademark infringement, unfair competition, trademark dilution,

trademark counterfeiting, and copyright infringement in this District.

5. The venue is proper in this District under 28 U.S.C. § 1391(b) and (c) because a

substantial part of the events or omissions giving rise to this claim occurred in this District. On

information and belief, Defendant has sold, offered to sell, and continues to sell and offer to sell

products infringing on Starbucks’s trademark rights and copyrights in this District. Each of these

sales constitutes a separate action independently sufficient for venue.


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ALLEGATIONS COMMON TO ALL CLAIMS FOR RELIEF

STARBUCKS INTELLECTUAL PROPERTY

6. For over 40 years, Starbucks has continuously used its famous and highly

distinctive trademarks, including the Starbucks® and Starbucks Coffee® marks, iterations of the

famous Siren Logo, including the 40th Anniversary Siren Logo (collectively the “Siren Logos”),

and multiple versions of a cup design featuring a green circle against a white background (the

“Cup Design”) (shown below, collectively, the “Starbucks Marks”) to identify its goods and

services and to promote its brand. The United States Patent and Trademark Office (“PTO”) has

granted Starbucks numerous trademark registrations for the Starbucks Marks. The Starbucks

Marks have been registered in over 180 countries, and, for illustrative purposes, include:

7. These registrations recognize the exclusive rights held by Starbucks in the

STARBUCKS and STARBUCKS COFFEE word marks, the Siren logos, and the Cup Design.


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8. Starbucks, through its own operations, those of its predecessor, and those of its

licensees, has consistently used the STARBUCKS trademark since 1971. For the STARBUCKS

trademark, Starbucks owns U.S. trademark Registration Numbers 1,444,549 (registration date

June 23, 1987) in connection with, inter alia, “retail store services . . . for coffee . . .; coffee café

services”; 1,452,359 (August 11, 1987) in connection with, inter alia, “coffee”; “retail outlets . . .

featuring ground and whole bean coffee, . . . and espresso beverages and beverages made with a

base of coffee, espresso, and/or milk”; 2,073,104 (June 24, 1997) in connection with “retail

outlets . . . featuring ground and whole bean coffee, . . . coffee and espresso beverages and

beverages made with a base of coffee, espresso, and/or milk,” and “restaurant, café and coffee

house services”; 2,176,977 (July 28, 1998) in connection with “electrical appliances, namely,

espresso makers and coffee makers for domestic and commercial use”; 2,696,594 (March 11,

2003) in connection with, inter alia, “dairy-based food beverages”; 3,298,944 (September 25,

2007) in connection with, inter alia, Coffee, tea, cocoa; prepared coffee and coffee-based

beverages; prepared espresso and espresso-based beverages; . . . iced tea, ready-to-drink tea,

powdered iced tea mix; chocolate food beverages not being dairy-based or vegetable based with

coffee flavors; powdered flavoring additives for non-nutritional purposes; cocoa products;

namely, cocoa mixes and cocoa powder; hot chocolate; cocoa beverages with milk; prepared

cocoa and cocoa-based beverages; preparations for making chocolate or cocoa based drinks,

namely, liquid and powdered hot chocolate mix”; and 1,372,630 (November 26, 1985),

2,086,615 (August 5, 1997), 2,189,460 (September 15, 1998) 2,236,553 (April 6, 1999),

3,027,528 (December 13, 2005), and 3,330,858 (November 6, 2007) in connection with a variety

of goods and services. These registrations are valid and subsisting and are incontestable per 15

U.S.C. § 1065. Starbucks also owns Registration Numbers 3,699,649 (October 20, 2009) and


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4,429,111 (November 5, 2013), which cover a variety of goods and services. These registrations

are valid and subsisting. Starbucks annexes copies of the registration certificates at Appendix A.

9. Starbucks, through its own operations, those of its predecessor, and those of its

licensees, has consistently used the STARBUCKS COFFEE trademark since 1971. For the

STARBUCKS COFFEE trademark, Starbucks owns U.S. trademark Registration Numbers

2,039,849 (registration date February 25, 1997) in connection with, inter alia, “retail outlet

services featuring ground and whole bean coffee; . . . coffee and espresso beverages and

beverages made with a base of coffee, espresso, and/or milk; . . . and restaurant, café and coffee

house services.” This registration is valid and subsisting and is incontestable per 15 U.S.C. §

1065. Starbucks annexes a copy of the registration certificate at Appendix A.

10. Starbucks, through its own operations and those of its licensees, has consistently

used the Starbucks Siren Logo trademark since 1992. The Starbucks Siren Logo consists of a

concentric circular design, the exterior region of which is green and white and within which

appear the words “Starbucks Coffee” in white block lettering, separated by two white stars. The

center portion of the design consists of a black and white drawing of the head and torso of a siren

(i.e., a two-tailed female half-fish, half-human) with long flowing hair, adorned by a crown.

11. For the black and white Starbucks Siren Logo, Starbucks owns U.S. trademark

Registration Numbers 1,542,775 (registration date June 6, 1989) in connection with “[r]estaurant

services featuring coffee and espresso beverages and also serving sandwiches and breakfasts”;

1,815,938 (January 11, 1994) in connection with, inter alia, “ground and whole bean coffee” and

“retail store services featuring [coffee],” and “restaurant and café services”; 2,176,976 (July 28,

1998) in connection with “electrical appliances, namely, espresso makers and coffee makers for

domestic and commercial use”; 3,298,945 (September 25, 2007) in connection with, inter alia,


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“Coffee, . . . prepared coffee and coffee-based beverages; prepared espresso and espresso-based

beverages”; 3,673,335 (August 25, 2009) in connection with “[d]airy-based food beverages”; and

1,943,361 (December 26, 1995), 2,120,653 (December 9, 1997), and 3,428,127 (May 13, 2008)

in connection with a variety of goods and services. These registrations are valid and subsisting

and are incontestable per 15 U.S.C. § 1065. Starbucks annexes copies of the registration

certificates at Appendix A.

12. For the green, black, and white Starbucks Siren Logo, Starbucks owns U.S.

trademark Registration Numbers 1,815,937 (registration date January 11, 1994) in connection

with, inter alia, “ground and whole bean coffee” and “retail store services featuring [coffee],”

and “restaurant and café services”; 2,266,351 (August 3, 1999) in connection with, inter alia,

“ground and whole bean coffee,” “coffee . . . and espresso beverages, and beverages made with a

base of coffee and/or espresso”; 2,266,352 (August 3, 1999) in connection with, inter alia,

“[r]estaurant, cafe and coffee house services”; 2,325,182 (March 7, 2000) in connection with,

inter alia, “retail outlets . . . featuring ground and whole bean coffee[,] . . . coffee and espresso

beverages and beverages made with a base of coffee, espresso, and/or milk”; and 1,893,602

(May 9, 1995), and 3,428,128 (May 13, 2008) in connection with a variety of goods and services.

These registrations are valid and subsisting and are incontestable per 15 U.S.C. § 1065.

Starbucks annexes copies of the registration certificates at Appendix A.

13. Starbucks owns United States copyright Reg. No. VA 875-932 at the United

States Copyright Office in connection with the Starbucks Siren Logo. Starbucks annexes a copy

of the copyright registration certificate at Appendix B.

14. In January 2011, Starbucks debuted its 40th Anniversary Siren Logo. The 40th

Anniversary Siren Logo dispenses with the block letters of the STARBUCKS word mark, and


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consists solely of a rendering of the famous siren. Starbucks, through its own operations and

those of its licensees, has consistently used the Starbucks Siren Logo trademark since 2011.

Starbucks has made billions of transactions under the 40th Anniversary Siren Logo in U.S.

Starbucks stores since that logo launched in January 2011.

15. For the black and white 40th Anniversary Siren Logo, Starbucks owns U.S.

trademark Registration Numbers 4,415,862 (registration date October 8, 2013) in connection

with a variety of goods and services; 4,538,053 (May 27, 2014), in connection with, inter alia,

“Electrical appliances, namely espresso makers and coffee makers for domestic or commercial

use,” “milk based beverages,” “coffee . . . and espresso beverages, . . . beverages made with a

base of coffee and/or espresso,” “retail store services in the field of coffee,” and “café, . . . coffee

bar . . ., and carry out restaurant services, . . . coffee supply services for offices”; and 4,639,908

(November 18, 2014) in connection with a variety of goods and services. These registrations are

valid and subsisting; Starbucks annexes copies of the registration certificates and application

status pages from the USPTO website at Appendix A.

16. For the green and white 40th Anniversary Siren Logo, Starbucks owns U.S.

trademark Registration Numbers 4,538,585 (registration date May 27, 2014) in connection with a

variety of goods and services; 4,572,688 (July 22, 2014), in connection with, inter alia,

“[e]lectrical appliances, namely espresso makers and coffee makers for domestic or commercial

use,” “milk based beverages,” “coffee . . . and espresso beverages, . . . beverages made with a

base of coffee and/or espresso,” “retail store services in the field of coffee,” and “café, . . . coffee

bar . . . , and carry out restaurant services, . . . coffee supply services for offices”; and 4,635,864

(November 11, 2014), in connection with a variety of goods and services. These registrations are


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valid and subsisting. Starbucks annexes copies of the registration certificates and application

status pages from the USPTO website at Appendix A.

17. Starbucks owns United States copyright Reg. No. VA 1-768-520 in connection

with the 40th Anniversary Siren Logo. Starbucks annexes a copy of the copyright registration

certificate at Appendix B. Along with Reg. No. VA 875-932, these copyrights are collectively

referred to herein as the “Starbucks Copyrights.”

18. For the one-sided cup design, Starbucks owns U.S. trademark Registration

Number 3,175,941 (registration date November 28, 2006) in connection with “coffee.” This

registration is valid and subsisting and is incontestable per 15 U.S.C. § 1065. Starbucks annexes

a copy of the registration certificate from the USPTO website at Appendix A.

19. For the three-sided cup design, Starbucks owns U.S. trademark Registration

Number 3,070,042 (registration date March 21, 2006) in connection with “coffee, tea, coffee and

tea based beverages, and cocoa.” This registration is valid and subsisting and is incontestable

per 15 U.S.C. § 1065. Starbucks annexes a copy of the registration certificate at Appendix A.

20. As a trademark and copyright owner, Starbucks has the obligation to enforce

against unauthorized uses of its intellectual property to protect itself and consumers as well as

the respective trademarks and expressions themselves.

STARBUCKS HISTORY

21. Starbucks is the country’s leading purveyor of fine Arabica coffee. Beginning in

1971 as a single, Seattle-based dry goods store, Starbucks has grown to approximately 12,000

retail locations in the United States, and more than 10,000 retail locations in over 65 foreign

countries. Starbucks retail stores serve brewed coffee, espresso-based beverages, teas, blended

beverages, soft drinks, and other foods and beverages, and carry packaged coffee, instant coffee,


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coffee equipment, mugs, and other Starbucks-branded merchandise. These stores prominently

display the Starbucks Marks.

22. These stores conducted billions of transactions in 2015. U.S. customers complete

more than 14% of those transactions using the Starbucks Card mobile app, or more than 5

million per week. Starbucks’s worldwide success is owed to its strong reputation for its fresh-

roasted specialty coffees, brewed coffees, espresso beverages and the other products and services

it provides. Starbucks has a reputation for excellence, particularly in the area of roasted coffees

and coffee beverages, and is widely recognized for its knowledgeable staff and superior service.

23. Aside from its STARBUCKS stores, Starbucks also serves coffee and other

beverages through hundreds of authorized accounts, including bookstores, cruise line ships,

hotels, theaters, sport and entertainment venues, airports, airlines, and restaurants. These

accounts display the Starbucks Marks and Starbucks Copyrights in connection with the

Starbucks coffee and other beverages that they serve.

24. Starbucks offers a range of packaged foods and beverages, including ground and

whole-bean coffee, instant coffee, canned and bottled espresso-based beverages, and canned and

instant beverages containing green coffee extract. Consumers may find these products at

Starbucks stores as well as at grocery, convenience, drug, and other physical stores, as well as

through electronic commerce, such as its website resolving at store.starbucks.com. These

entities also prominently display the Starbucks Marks and Starbucks Copyrights.

25. Starbucks also markets and sells its products on its website resolving at

store.starbucks.com. The website generates over 3 million unique visits every week. The

Starbucks Marks and Starbucks Copyrights appear on many of the individual web pages and are

prominently displayed on merchandise available for sale on the StarbucksStore.com website.


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26. Starbucks polices and monitors every one of these distribution channels to ensure

strict compliance with Starbucks’s intellectual property policies.

27. The Starbucks Facebook page has more than 36 million likes and more than 20

million visits. The Starbucks Twitter account has nearly 10 million followers. Both platforms

prominently feature the Starbucks Marks and Starbucks Copyrights

28. Numerous television programs and movies have prominently featured the

Starbucks Marks and Starbucks Copyrights, including Parks & Rec, The Voice, Ellen, Real Time,

The Devil Wears Prada, Zoolander, License to Wed, The Proposal, Clueless, 127 Hours,

Jurassic World, You’ve Got Mail, Austin Powers: The Spy Who Shagged Me, Fight Club, The

Terminal, Sex and the City, Josie and the Pussy Cats, Miss Congeniality, Clueless, Made of

Honor, Meet the Fockers, 13 Going on 30, In Good Company, and I Am Sam.

29. Brand studies routinely place Starbucks among the most recognized brands in the

world. In its most recent study, BrandZ ranked Starbucks as the 29th Most Valuable Brand in

the World in between other well-known brands like Nike and Toyota, and ahead of companies

such as BMW, Budweiser, and Samsung.

30. As a result of the foregoing sales and marketing activities, the Starbucks Marks

have become famous and highly distinctive trademarks with an unmatched reputation of

excellence.

STARBUCKS FOODSERVICE CHANNELS

31. Consumers also encounter Starbucks products through “foodservice channels,”

which focus on providing Starbucks beverages to consumers in the parts of their days when they

do not have the opportunity to visit a Starbucks store, or enjoy Starbucks coffee at home. In

foodservice channels, customers can enjoy Starbucks beverages, for instance, on flights, in


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offices, at restaurants, and through university, college, hotel, hospital, and cruise line catering

services.

32. Starbucks is highly selective in choosing which foodservice accounts it engages.

Recognizing the significant investment made to protect and grow the Starbucks brand over the

past forty-five years, Starbucks only licenses foodservice accounts that can provide the quality of

service and products that consumers have come to expect from Starbucks.

33. When assessing a potential foodservice account, Starbucks considers many

qualitative factors, including geography, proximity to other Starbucks partners, and the

reputation of affiliated and neighboring businesses.

34. Starbucks policy dictates that certain categories of locations fall outside the

boundaries of acceptable Starbucks foodservice locations due to the potential for an experience

inconsistent with the high quality expected with the Starbucks brand.

35. Foodservice accounts may serve a number of products, including brewed coffee,

espresso-based beverages, hot cocoa, blended beverages, and many others. Starbucks provides

accounts with the roasted coffee beans, cocoa powder, and sauces and syrups necessary to make

these beverages. Starbucks also provides accounts with storage, serving, cleaning, and

preparation supplies, labels, and marketing.

36. For its foodservice accounts, quality control is of highest concern to Starbucks.

Foodservice accounts use Starbucks-supplied recipes that set forth the ingredients, proportions,

and process for making beverages. In order to control the quality of beverages, Starbucks has set

coffee standards setting forth guidelines for proper coffee grinding, proportions of coffee to

water, proper water usage, and coffee freshness.


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37. Starbucks specifically approves the types of machines that can be used to produce

beverages to meet its standards, including coffee brewers and espresso machines for use “behind-

the-bar” by baristas or other trained foodservice staff at a respective venue. Starbucks

representatives or authorized agents calibrate these machines at installation, and over time as

necessary.

38. Additional quality measures for foodservice accounts include maintaining all

equipment in clean and working order and adhere to all health codes and food safety laws.

39. Foodservice accounts are required to clean equipment daily, maintain equipment

in good condition, make service stickers visible showing the model and age of equipment being

used, and keep cleaning supplies on hand. These requirements are routinely inspected by

Starbucks.

40. Starbucks has the right to cancel any foodservice accounts that fails to adhere to

Starbucks quality guidelines.

41. To distinguish a foodservice account from a Starbucks store, Starbucks

foodservice accounts use the “We Proudly Serve Starbucks” logo, shown below.


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42. The “We Proudly Serve” mark serves to distinguish the beverages offered in such

a setting from the full experience of a Starbucks cafe.

43. Starbucks closely tracks the use of its logos by its foodservice accounts to ensure

compliance with Starbucks intellectual property policies.

44. Foodservice accounts must use non-Starbucks branding as their principal

branding, so that consumers understand that the account, not Starbucks, is preparing and serving

the beverage.

45. Starbucks provides some marketing materials, such as counter display cards, for

use by foodservice accounts. All other marketing materials must come to Starbucks for review

and approval before the foodservice accounts may use them.

46. Starbucks has the right to cancel any foodservice account that fails to adhere to

Starbucks brand guidelines.

47. As a result of the foregoing sales and marketing activities, the Starbucks Marks

have become famous and highly distinctive marks representing an unmatched reputation of

excellence.

STARBUCKS CORP. v. HELLER, ET AL.

48. On August 28, 2014, Starbucks filed a trademark and copyright infringement

lawsuit against Mr. Howard Heller, and his companies, Specialty Coffees International, LLC,

and Café Nu International, Inc. in United States Federal Court for the Central District of

California, styled Starbucks Corp. v. Heller et al., Case No. 8:14-cv-1383-MMM-MRW (C.D.

Cal.) (hereinafter “Heller Lawsuit”).

49. In Heller, Starbucks alleged that the defendants’ widespread, improper, and

unauthorized sale and distribution of commercial coffee equipment, specifically a commercial


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coffee dispensing machine marketed as the “Trieste,” as well as supplies and marketing

materials, infringed on the Starbucks Marks and Starbucks Copyrights.

50. The court in Heller granted a preliminary injunction against the defendants, and

further entered findings of fact and conclusions of law in Starbucks’s favor. See Heller Lawsuit,

Dkt. No. 46 (Order Preliminary Injunction; Dkt. No. 45 (Findings of Fact and Conclusions of

Law Supporting Entry of Preliminary Injunction). Specifically, the Heller court concluded that:

(1) the Starbucks Marks were famous and highly distinctive; (2) it was a virtual certainty that the

public would mistake defendants’ use of the Starbucks Marks on commercial coffee dispensing

machines, supplies, and marketing as being associated with Starbucks, particularly since

defendants continually made false representations to their customers and encouraged customers

to ignore cease-and-desist letters from Starbucks; (3) defendants were using marks identical to

the Starbucks Marks; (4) defendants’ customers were confused as to the source of the goods they

were purchasing (i.e. the Trieste machine and associated supplies and marketing); (5) defendants

used the same marketing channels as Starbucks; (6) defendants advertised the Trieste as

purporting to brew Starbucks brand coffee beverages, catering to unsophisticated small

businesses and their customers; (7) defendants’ adoption of the Starbucks Marks in their business

intended to take advantage of the goodwill and strong reputation of Starbucks; and (8)

defendants’ infringements continued unabated. The court agreed that Starbucks demonstrated

irreparable harm due to defendants’ actions during the pendency of litigation and, accordingly,

granted a preliminary injunction to prohibit further potentially infringing activity.

51. The Heller court subsequently granted a default judgment against the defendants

for trademark infringement, false designation of origin, and copyright infringement, adopting the

same conclusions reached in its Findings of Fact and Conclusions of Law Supporting Entry of


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Preliminary Injunction. See Heller Lawsuit, Dkt. No. 54 (Order Granting in Part and Denying in

Part Plaintiff’s Motion for Default Judgment). The court permanently enjoined “defendants,

their agents, officers, directors, owners, attorneys, representatives, successor companies, related

companies, and all persons acting in concert or participation with them, and each of them,” from

the following:

a. Using any of Starbucks’s registered and common law trademarks, including the

Starbucks Marks and/or the Siren Logos in connection with the operation of

defendants’ business, promotional offers, advertising, and marketing, or on

defendants’ products;

b. Using any trademark, logo, words, or design that tends to falsely represent or is

likely to confuse, mislead, or deceive consumers, purchasers, defendants’

customers, prospective customers, or any member of the public and cause them to

believe that defendants’ promotions, advertisements, products, or services

originate from Starbucks or have been sponsored, approved, or licensed by, or are

otherwise associated with, Starbucks, or are in any way connected or affiliated

with Starbucks;

c. Otherwise competing unfairly with Starbucks in connection with the operation of

defendants’ business.

Id., Dkt. No. 55.

52. The Heller court further prohibited “defendants, their agents, employees, officers,

directors, owners, attorneys, representatives, successor companies, related companies, and all

persons acting in concert or participation with them, and each of them,” from “reproducing,


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making derivative works of, distributing, or displaying the Starbucks Copyrights or any

substantially similar materials.” Id.

53. Although the court in Heller permanently enjoined the use of the Starbucks Marks

and Starbucks Copyrights in connection with the defendants’ Trieste program, Starbucks

continues to find these commercial coffee dispensing machines, and their associated supplies and

marketing materials, to promote, market, sell, and offer to sell products bearing the Starbucks

Marks and Starbucks Copyrights.

DEFENDANT’S UNLAWFUL ACTIVITIES RELATED TO STARBUCKS INTELLECTUAL PROPERTY

54. On information and belief, Phil & Sons is a corporation operating a pizza store in

Flushing, New York.

55. In February 2015, Starbucks became aware that Defendant Phil & Sons was in

possession of an infringing Trieste machine and its associated supplies and marketing materials.

56. Counsel for Starbucks contacted Defendant Phil & Sons and informed it that the

Trieste machine and corresponding supplies and marketing it purchased or leased displays

Starbucks Marks and Starbucks Copyrights without authorization from Starbucks, and demanded

that Phil & Sons immediately remove the same.

57. As part of its routine policing and enforcement efforts, a Starbucks representative

visited Phil & Sons’s pizza store in Flushing, New York in June 2015 to confirm that Phil &

Sons had removed the Starbucks Marks and Starbucks Copyrights. The Starbucks representative

discovered that Phil & Sons was not in compliance and was without authorization continuing to

display the Starbucks Marks and Starbucks Copyrights.


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58. Phil & Sons displays the Starbucks Marks and Starbucks Copyrights on a

commercial dispensing machine, which, upon information and belief, is the Trieste, as well as

beverage cups, menus, and interior signage inside its pizza store:


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59. Phil & Sons also displayed the Starbucks Marks and Starbucks Copyrights on

exterior signage, viewable outside the pizza store:


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60. None of the displays of the Starbucks Marks and Starbucks Copyrights depicted

or described above are licensed or authorized by Starbucks.

61. On September 17, 2015, Starbucks counsel sent a cease-and-desist letter to Phil &

Sons notifying it that it was not an authorized licensee of the Starbucks Marks or Copyrights and

that use of the Starbucks Marks likely would cause confusion among consumers. See Appendix

C. The letter further informed Phil & Sons of the Heller litigation, the corresponding permanent

injunction related to the Trieste program, and the Starbucks Marks and Starbucks Copyrights.

The letter instructed Phil & Sons to immediately and completely cease use of the Starbucks

Marks. Starbucks counsel sent a second cease-and-desist letter to Phil & Sons on November 24,

2015, reiterating the same information. Id.

62. Phil & Sons did not respond to either the September 17, 2015 or November 24,

2015 letters.

63. In February 2016, a Starbucks representative visited Phil & Sons. Despite

receiving cease-and-desist letters, the Starbucks representative discovered that Phil & Sons was


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not in compliance and was without authorization continuing to display the Starbucks Marks and

Starbucks Copyrights, including on the Trieste, supplies, and exterior signage, and, additionally,

on menus and interior signage:


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64. Phil & Sons is not, and has never been, an authorized licensee of Starbucks.

65. Phil & Sons has never sought or received permission from Starbucks to use any

Starbucks intellectual property, including but not limited to the Starbucks Marks or Copyrights.

66. Phil & Sons has made no noticeable efforts to discontinue its unlawful activities

after receiving notice from its distributor, Neighborhood Marketing, or a cease-and-desist letter

from Starbucks.

67. Phil & Sons continues to misrepresent to its customers that it has the authority to

use the Starbucks Marks in the sale and offering for sale of coffee and espresso beverage services

bearing the Starbucks Marks.

68. Phil & Sons’s activities and promotion of the Starbucks Marks are false, have the

tendency, and are calculated to mislead and deceive customers.


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69. Phil & Sons’s actions are likely to cause confusion among consumers as to the

source of Phil & Sons’s goods and services.

70. Phil & Sons’s activities have been done and continue to be done willfully, with

full knowledge that such conduct violates federal law. After being notified numerous times of its

improper and unauthorized display of the Starbucks Marks and Starbucks Copyrights, Phil &

Sons has and continues to disregard the intellectual property rights of Starbucks, and is trading

on the goodwill and good reputation of Starbucks to mislead and deceive customers for monetary

gain.

COUNT I – FEDERAL TRADEMARK INFRINGEMENT

71. Starbucks repeats and realleges the allegations in preceding paragraphs 1-70 as if

fully set forth herein.

72. Defendant’s offering for sale and promotion of coffee and espresso beverage

services in interstate commerce using trademarks that are substantially and confusingly similar

and/or identical to the Starbucks Marks, without consent or authorization of Starbucks, is likely

to cause confusion, to cause mistake, or to deceive consumers, and constitutes infringement of

Starbucks’s trademark rights in violation of § 32 of the Lanham Act, 15 U.S.C. § 1114.

73. Upon information and belief, Defendant was aware of the Starbucks Marks and

Defendant committed infringement in willful, flagrant disregard of Starbucks’s lawful rights.

74. Defendant’s trademark infringement has caused and will continue to cause

immediate and irreparable injury and damage to Starbucks’s business, reputation, and goodwill.

Starbucks has no adequate remedy at law.


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COUNT II – FEDERAL UNFAIR COMPETITION, FALSE DESIGNTION OF ORIGIN, AND FALSE DESCRIPTION AND REPRESENTATION



76. Defendant’s offering for sale and promotion of coffee and espresso beverage

services in interstate commerce using trademarks that are substantially and confusingly similar

and/or identical to the Starbucks Marks, without consent or authorization of Starbucks,

constitutes unfair competition, a false designation of origin, and false description and

representation of fact as to the origin of Defendant’s goods in violation of § 43(a) of the Lanham

Act, 15 U.S.C. § 1125(a).

77. Upon information and belief, Defendant’s acts were done willfully and with full

knowledge of the falsity of such designations of origin with the express intent to cause confusion

and to mislead and deceive the purchasing public.

78. Defendant’s unfair competition, false designation of origin, and false description

and representation have caused and will continue to cause immediate and irreparable injury and

damage to Starbucks’s business, reputation, and goodwill. Starbucks has no adequate remedy at

law.

COUNT III – FEDERAL TRADEMARK COUNTERFEITING



80. Defendant has used and continues to use copies and counterfeits of registered

marks, including at least the word mark STARBUCKS (Reg. No. 2,176,977, Reg. Date July 28,

1998, in connection with “electrical appliances, namely, espresso makers and coffee makers for

domestic and commercial use”), and the Starbucks Siren Logo (Reg. No. 2,176,976, Reg. Date


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July 28, 1998, in connection with “electrical appliances, namely, espresso makers and coffee

makers for domestic and commercial use”), in commerce for purposes of sale, offering for sale,

and advertising of goods in direct violation of 15 U.S.C. § 1114(1)(a).

81. Defendant, with full knowledge that is not and was not authorized, intended to use

in commerce reproductions and counterfeits of registered marks applied to labels, signs packages

and advertisements that were and are likely to cause confusion and deceive consumers. Such

activity is in direct violation of 15 U.S.C. § 1114(1)(b).

82. Defendant’s counterfeit uses have caused and will continue to cause immediate

and irreparable injury and damage to Starbucks’s business, reputation, and goodwill. Starbucks

has no adequate remedy at law.

COUNT IV – FEDERAL TRADEMARK DILUTION

83. Starbucks repeats and realleges the allegations of Paragraphs 1- 70 as if fully set

forth herein.

84. The Starbucks Marks are famous and highly recognized by the general consuming

public, and were famous and highly recognized by the general consuming public before

Defendant’s actions complained of herein. Defendant’s actions, as described above, dilute and

are likely to continue to dilute the distinctiveness of the Starbucks Marks. Starbucks has no

adequate remedy at law.

85. Defendant has violated the Federal Trademark Dilution Act, 15 U.S.C. § 1125(c).

COUNT V – FEDERAL COPYRIGHT INFRINGEMENT

86. Starbucks repeats and realleges paragraphs 1-70 as if fully set forth herein.


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87. Starbucks enjoys exclusive rights with respect to the Starbucks Copyrights,

including the exclusive right to reproduce, distribute, display, and create derivative works based

on the same.

88. Defendant is not authorized to reproduce, publish, distribute copies of, display, or

prepare derivative works based on all or any portion of the Starbucks Copyrights.

89. Defendant’s copying, reproducing, displaying, and use of the Starbucks

Copyrights without consent or authorization of Starbucks constitutes copyright infringement

pursuant to 17 U.S.C. § 101 et seq. The works are substantially similar and/or identical and

Defendant has sufficient access to the Starbucks Copyrights.

90. Defendant’s copyright infringement has caused Starbucks immediate and

irreparable harm and has been, and continues to be, willful. Starbucks has no adequate remedy

at law.

PRAYER FOR RELIEF

Wherefore, Starbucks asks the court to award the following relief:

A. For judgment that Starbucks’s federally registered trademarks, common law

trademarks, and federally registered copyrighted works have been infringed by Defendant;

B. Preliminary and permanent injunctive relief against Defendant and those persons

or companies in active concert or participation with Defendant, including its officers, agents,

servants, employees, attorneys, and representatives from making, using, selling, offering to sell,

importing into these United States, displaying, advertising any product or service bearing or

utilizing in any way the Starbucks Marks, including but not limited to (i) using any of

Starbucks’s registered and common law trademarks including the Starbucks Marks in connection

with the operation of Defendant’s business, promotional offers, advertising, marketing, or on


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Defendant’s products; (ii) using any trademark, logo, words, or design that tends to falsely

represent or is likely to confuse, mislead, or deceive consumers, purchasers, Defendant’s

customers, prospective customers or any member of the public that Defendant’s promotions,

advertisements, products, or services originate from Starbucks or have been sponsored,

approved, or licensed by, or are otherwise associated with Starbucks or are in any way connected

or affiliated with Starbucks; and (iii) otherwise competing unfairly with Starbucks in connection

with the operation of Defendant’s business;

C. Preliminary and permanent injunctive relief against Defendant and those persons

or companies in active concert or participation with Defendant, including its officers, agents,

servants, employees, attorneys, and representatives from reproducing, making derivative works

of, distributing, or displaying the Starbucks Copyrights or any substantially similar materials;

D. Defendant be ordered, pursuant to 15 U.S.C. § 1116, to file with the Court and to

serve on counsel for Starbucks, within ten (10) days after entry of the judgment herein, a written

report under oath setting forth in detail the manner in which it has complied with the injunction

ordered by the Court including a full accounting that identifies Defendant’s distributor(s),

account(s), and others to whom they have purchased equipment, marketing materials, or other

goods bearing the Starbucks Marks;

E. Defendant be ordered, pursuant to 15 U.S.C. § 1118, to deliver up to the Court for

destruction or other disposition all labels, signs, prints, packaging, wrappers, receptacles, and

advertisements and promotional materials bearing the Starbucks Marks, and all machines,

promotional materials, stickers and other means of making the same;

F. Defendant be ordered, pursuant to 15 U.S.C. § 1117(a), to pay to Starbucks all of

its profits from the sale of coffee and espresso beverage services bearing the Starbucks Marks,


27

that such profits be enhanced on the basis of its willful infringement of the federally-registered

Starbucks Marks and willful unfair competition;

G. Defendant be ordered, pursuant to 15 U.S.C. § 1117(a), to pay to Starbucks all

damages sustained by Starbucks as a result of Defendant’s infringement of the federally-

registered and common law Starbucks Marks and unfair competition, and that such award be

trebled on the basis of Defendant’s willful infringement and willful unfair competition;

H. Defendant be ordered to pay to Starbucks its attorneys’ fees and the costs and

expenses of this action pursuant to 15 U.S.C. § 1117(a);

I. Defendants be ordered to pay to Starbucks statutory damages, including damages

under 15 U.S.C. § 1117(c);

J. Defendant be ordered to pay Starbucks actual damages, plus the amount of

Defendant’s profits attributable to the infringement, 17 U.S.C. § 504(b), or in the alternative,

Defendant pay to Starbucks statutory damages, as authorized by 17 U.S.C. § 504(c);

K. Defendants deliver to be impounded during this suit all print and electronic copies

of the Starbucks Copyrights in Defendant’s possession or control as authorized by 17 U.S.C. §

503;

L. Defendant pay Starbucks, as the prevailing party, reasonable attorney fees, costs,

and expenses pursuant to 17 U.S.C. § 505;

M. Defendant be ordered to pay damages, including exemplary and punitive

damages, for unfairly competing with Starbucks in violation of the unfair competition laws of

these United States, including 15 U.S.C. § 1125(a);

O. Pre-judgment interest at the legally allowable rate on all amounts owed; and;

P. Starbucks be awarded such further relief as this Court may deem just and proper.


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DEMAND FOR JURY TRIAL

Starbucks respectfully demands a trial by jury pursuant to Fed. R. Civ. P. 38 as to all

issues triable of right to a jury.

Dated: March 10, 2016

WESTERMAN BALL EDERER MILLER ZUCKER & SHARFSTEIN, LLP By: /s/ William E.Vita________________ William E. Vita 1201 RXR Plaza Uniondale, NY 11556 [email protected] Telephone: 516.622.9200 Facsimile: 512.622.9212 and SHOOK HARDY & BACON, LLP. Randall Haimovici (pro hac vice application forthcoming) [email protected] One Montgomery, Suite 2700 San Francisco, California Telephone: 415.544.1900 Facsimile: 415.391.0281 Trent Webb (pro hac vice application forthcoming) [email protected] Lynn Herndon (pro hac vice application forthcoming) [email protected] 2555 Grand Avenue Kansas City, Missouri 64108 Telephone: 800.821.7962 Facsimile: 816.474.6550 Attorney for Plaintiff Starbucks Corporation

1325093


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