Starbucks’ Claims of Trademark Infringement and Passing-Off upheld by Maltese Court
News    ·   24-01-2022
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AUTHOR: Steve Decesare; Alexia Valenzia

On 12 January 2022, the First Hall of the Civil Court of Malta delivered two judgements in relation to proceedings instituted in Malta by Starbucks Corporation (“Starbucks” or the “Plaintiff”) against Strabuono Coffee International Limited (“Strabuono” or the “Defendant”).  The first of the two cases (case 932/2017 – the “Trademark Infringement Case”) was brought before the Court by Starbucks in terms of articles 9(2)(b) and 9(2)(c) of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trademark (the “Trademark Regulation”) and Chapter 488 of the Laws of Malta.  The second case (case 1153/2017 – the “Passing-Off Case”) was filed against Strabuono on the basis of Starbuck’s claims that, inter alia, Strabuono’s use of certain signs and marks is contrary to articles 32 to 36 of the Commercial Code (Chapter 13 of the Laws of Malta). 

In the Trademark Infringement Case, the Plaintiff’s claims included that:

i.            both Starbuck and Strabuono operate as coffeehouses and each of the companies’ core goods and services are essentially identical insofar as the relevant consumer’s perspective is concerned.  The Defendant did not refute this claim;

ii.            In its view, the likelihood of confusion (including through association) on the part of the relevant public between Starbuck’s registered trademarks and Strabuono’s marks is manifestly clear in terms of article 9(2)(b) of the Trademark Regulation;

iii.            In its view, Strabuono’s use of its marks and logos takes unjust advantage of Starbuck’s registered trademarks in terms article 9(2)(c) of the Trademark Regulation in three ways:

  • Free riding off of Starbuck’s EU-wide reputation in respect of its registered trademarks;
  • Causing detriment or dilution to Starbuck’s EU registered trademarks; and
  • Tarnishing the reputation of Starbucks’ EU registered trademarks.

In the present case, the Court held that, at least with respect to the Plaintiff’s main mark and the Defendant’s main mark, the marks in question are visually and conceptually similar as they both have the same circular logo with green colouring, the respective dominant words STARBUCKS and STRABUONO are placed in the same position, the description of the service of each of the logos (that being coffee) is the same, there are identical elements on the left and right hand side of each of the two logos and both contain a character representation in the middle of their logos.  The Court is of the view that even though Starbuck’s mark utilised and focused on an image of Sirena, while the Strabuono mark focused on an image of a lion, and the word ‘Starbucks’ is an English term while the word Strabuono is an Italian one, the marks nevertheless resulted in the overall impression on the average person being that the Strabuono mark is identical or similar to the Starbucks mark.

The Court went onto state that the words are made up of almost the same structure (STARBU and STRABU) and when placed conceptually and visually with the word ‘coffee’, both marks give the impression to the relevant public that they were the Plaintiff’s idea.  The Court held that Strabuono’s use of their marks constituted free-riding and tarnishing of the Plaintiff’s reputation and that the use of the marks prejudices the quality of the services provided under said marks as a consumer may accidentally believe that the Strabuono services are economically linked to the Plaintiff’s. 

As a result of the reasoning set out above, the Court held that within one month from the date of the Court’s decision, Strabuono must cease all use of the words, signs and figures found to be in contravention of articles (2)(b) and 9(2)(c) of the Trademark Regulation.

The Court held that no damages shall be awarded to the Plaintiff in terms of the Trademark Infringement Case. The Court stated that the Plaintiff did not present any evidence (including witness testimonies) of damage or loss of profits which it allegedly suffered due to the actions of the Defendant.  In terms of Maltese law, article 562 of the Code of Organisation and Civil Procedure (Chapter 12 of the Laws of Malta), proof of damages must be forthcoming from the person who allegedly suffered them.  While the Court accepted that it may award damages arbitrio bono viri in certain circumstances, the Court held that such discretion only applies in subsidium of probationary means and not instead of them.

In the Passing-Off Case, the Plaintiff claimed that the Defendant’s use of the Strabuono and Strapuccino marks (and variations of them) amounted to infringement of articles 32 – 36 of the Commercial Code (Chapter 13 of the Laws of Malta).  The Plaintiff requested the Court to order the Defendant to pay a penalty between €465.87 – €4,658.75 in favour of the Plaintiff’s in accordance with article 37 of the Commercial Code.

The Court held that in order for a plaintiff to succeed in a claim of passing off, the plaintiff must prove that there is similarity between the marks in question (in terms of the principles established in Sabel BV v Puma AG Rudolf Dassler Sport) and that there exists a likelihood of confusion on the part of the public, including by virtue of an economic connection between the plaintiff and the defendant.  In this case, the Court concluded that the get up and general impression of the Defendant’s marks remind the public of the Plaintiff’s marks. 

The Court went onto state that, for the purpose of awarding penalties under article 37 of the Commercial Code, the question as to whether a defendant’s activities are fraudulent or accidental is irrelevant (Dr Sansone noe vs Cassar Torreggiani).  Furthermore, the penalties catered for under the said article are independent of damages which may be awarded in respect of other claims.  In this case, the Court ordered the Defendant to pay the Plaintiff €2,000 in penalties, in addition to the Defendant having to cease all use of any names, marks or signs having the words ‘Strabuono’ or ‘Strabuono Coffee. The expression ‘Strapuccino’ was held to be ancillary and secondary to the aforesaid words.

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