How to protect your bar or cafe from a Starbucks lawsuit
Last December, the Starbucks Coffee Co.’s attorneys sent a cease and desist letter to Exit 6, a small brewery and pub outside of Saint Louis, Missouri. The brewpub’s transgression?
Naming one of its stouts “Frappicino.”
Starbucks’s lawyers felt the name may “deceive” consumers into believing that the beer is affiliated with the coffee giant and its trademarked “Frappuccino” – a sugary, iced “blended beverage” that itself routinely deceives consumers into thinking they are drinking coffee.
Jeff Britton, the owner of Exit 6, sent a hilarious letter back to Starbucks apologizing for the trademark violation (which was only “similar” to “Frappuccino” because “we meant to call it the same thing”) and enclosing the $6 in profits that the bar saw from using the “Frappicino” name.
Britton ironically closes the letter with the sentiment that he only wants to “help a business like Starbucks” and “us small business owners need to stick together.”
But if this situation teaches us anything, it’s that small business owners do need to stick together. What would happen to your coffee shop if you found yourself in the midst of a trademark fight with a corporate chain that didn’t play so nice?
If you already have small business insurance, you’d likely have the protection you needed.
General liability insurance: Protecting local coffee shops from the cost of non-physical damages
It’s likely that your coffee shop already carries general liability insurance for those times when you accidentally damage a customer’s property or someone gets injured on your premises and decides to file a claim. Those are what we call “physical” injuries and damages. But did you know your general liability insurance can also cover “non-physical” damages?
Non-physical damages are sometimes called “personal injuries” or “advertising injuries” and they include incidents that harm a third party emotionally or fiscally, even though the injury does not have a physical manifestation. Examples of personal injuries include:
Trademark, copyright, and brand infringement
In other words, the Starbucks case. Another common variation of this is when a small business finds out it’s been operating under (and profiting from) a named that is already trademarked by another business.
Libel and slander
This is when your business “defames” someone’s character, through the written or spoken word, respectively. Libel is becoming a bigger issue for businesses who use social media. Check out “How commercial general liability insurance can protect you from an $82,630 tweet” for more information.
This might not be as big an issue for coffee shops, but it’s not unheard-of. One common example is if your coffee shop used a patron’s image for an advertising campaign without proper permission.
Many of these injuries happen unintentionally when small businesses aren’t aware of laws that deal with things like copyright. In other situations, a small business owner, like Jeff Britton of Frappicino fame, will violate the law with the idea that, in the grand scheme of things, the transgression won’t have an impact and will go unnoticed.
But as this case shows, these violations do not need to financially injure a corporate giant before the lawyers take action – and they are (apparently) watching.
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