Starbucks Trademark Infringement Dispute: Starbucks Settles for $10 Million Trademark Dispute over Unicorn Blended Beverage

The story begins in 1971 along the cobblestone street of Seattle’s historic Pike Place Market – where Starbucks Coffee Co. opened its first store. Starbucks Coffee Co. has grown to be one of the largest coffee companies in history, operating more than 24,000 retail stores in over 70 countries across the world. The name was inspired by the classic tale, “Moby Dick” evoking the seafaring tradition of the early coffee traders. Earlier in 2017, Starbucks released its “Unicorn Frappucino” for a limited time between April 19th and 23rd. During the time, unicorn-themed food and drinks have become enormously popular across social media platforms. Hence, Starbucks felt the need to join in the bandwagon and hopped in the trend. However, Starbucks was not the first company to create a commercial unicorn-themed beverage.

A small cafe located in New York City called “The End” claimed to have been the original creator of the social media sensation unicorn drink. They began selling their “Unicorn Latte” in December 2016 which soon after applied for trademark in January 2017. In May, Montauk Juice Factory Inc., the parent company of The End filed a trademark infringement lawsuit against Starbucks, demanding $10 million in damages that the unicorn beverage launched by Starbucks in April 2017 was a copycat of the colourful Unicorn Latte that The End started selling last year.

The End and Montauk Juice Factory spent more than six months in developing the unicorn drink. According to the complaint, ” despite the distinctive name, the Unicorn Latte does not contain coffee or milk, instead a freshly-made blended beverage contain fresh ingredients such as lemon juice, cold-pressed ginger, cashews, dates, blended with additional healthy, dried ingredients such as maca root, blue-green algae and vanilla bean.

While the Starbucks “Unicorn Frappucino” on the other hand, lack any indication of it being a healthy beverage. The recipe calls for a creme based Frappucino with mango syrup, coloured with unicorn pink powder, blue drizzle made from white mocha sauce, classic simple syrup and sour unicorn blue powder. The unicorn drink is then topped with whipped cream and sprinkle with blue and pink unicorn dust.

Within a month of it’s released, The End “Unicorn Latte” began to appear in in articles published by both traditional and online media outlets, including New York Times and Huffington Post. The End believe that Starbucks release their unicorn-theme drink to overshadow their original unicorn drink. With Starbucks massive launch, the unicorn drink became famous in overnight and labelled as the dominant unicorn drink. As a results, consumers were getting confused and started calling Starbucks drink the “Unicorn Latte”, hence assuming that The End rainbow drink was a knock off and began asking The End employees to serve them with “Unicorn Frappucino”. Due to this situation, The End felt that the consumers were misled into thinking that they were copying Starbucks, thus causing an irreparable damage to their reputation.

Starbucks mentioned that the claim were “without merit”. However, on August 22,2017, a one-page of filing in the U.S. District Court for the Eastern District in New York revealed that the companies have agreed to settle their trademark dispute. Starbucks have released a statement mentioning that the action have been “amicable resolved on confidential terms”. A lawyer for Montauk Juice said the parties were pleased to be able to move on from the issue. While the court documents did not mention a specific settlement amount, the record did show that both parties will pay their own cost and noted prejudice against the Defendant, Starbucks. The agreement stipulates The End have agreed not to sue Starbucks over any unicorn related drinks in the future.