Starbucks Settles $10 Million Trademark Dispute Over Unicorn Blended Beverages

By: Elle Nainstein

Since the 1971 opening of its first store in Seattle’s historic Pike Place Market, 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 globe. Earlier this year, Starbucks released its “Unicorn Frappuccino” for a limited time between April 19th and 23rd. As of late, unicorn-themed foods have become increasingly popular across social media platforms, so it is no surprise that Starbucks felt the need to join in on the trend. However, Starbucks was not the first to create a commercially sold unicorn-themed beverage.

The End, a small cafe located in New York City, claims to have been the originators of the unicorn drink social media sensation. The End began selling its “Unicorn Latte” in December 2016, and soon after applied for a 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 and asserting that the rainbow beverage that Starbucks launched in April was a copycat of the colorful “Unicorn Latte” that the shop started selling last year.

The End’s “Unicorn Latte” was formulated in conjunction with Montauk Juice Factory. The two invested more than six months into the development of the beverage. According to the complaint, “[d]espite the distinctive name, the Unicorn Latte contained no coffee or milk and was instead a freshly-made blended beverage containing fresh ingredients such as cold-pressed ginger, lemon juice, dates, cashews, blended with additional healthy, dried ingredients such as maca root, blue-green algae, and vanilla bean.”

Within a month of its release, The End’s “Unicorn Latte” began appearing in articles published by both traditional and online media outlets, including both the New York Times and the Huffington Post. The End states that “[t]he press, coupled with advertising efforts and broad social media exposure on Facebook and Instagram (via the hashtag #unicornlatte), made the Unicorn Latte name and product famous.”

As for the Starbucks “Unicorn Frappuccino,” it lacks any indication of being healthy. The recipe calls for a crème based Frappuccino with mango syrup, colored with unicorn pink powder, blue drizzle made from white mocha sauce, classic simple syrup, and sour unicorn blue powder. The drink is then topped with whipped cream and sprinkled with a blue and pink unicorn dust.

The End believes that Starbucks released its unicorn-themed drink to overshadow their own. As per the complaint, “Starbucks’ massive and public launch of the Unicorn Frappuccino . . . meant that its product became the dominant ‘Unicorn’ beverage overnight . . . This, in turn, immediately caused consumer confusion whereby customers began referring to Starbucks’ product as a ‘Unicorn Latte,’ began assuming that [The End’s] product was a copy-cat or knockoff, and began asking employees at The End to serve them a ‘Unicorn Frappuccino.’” As a result, The End feels that consumers were misled to believe that it was copying Starbucks, ultimately causing irreparable damage to The End’s reputation and claim to fame.

Starbucks said the claims were “without merit.” Yet, on August 22, 2017, a one-page filing in the U.S. District Court for the Eastern District on New York revealed that the companies have agreed to settle their trademark dispute. Starbucks released a statement saying the action has been “amicably resolved on confidential terms.” A lawyer for Montauk Juice said the parties were “pleased to be able to move on.” While the court documents do not specify a settlement amount, the record shows that each party will pay their own costs and noted prejudice against the Defendant, Starbucks. As such, the agreement stipulates that The End has agreed not to sue Starbucks over any unicorn related drinks in the future.

Cites:

Complaint, Montauk Juice Factory Inc., The End Brooklyn v. Starbucks Corporation d/b/a Starbucks Coffee Company, WL 1747128 (E.D.N.Y. 2017).) (No. 1:17-cv-02678).

Corinne Ramey, Starbucks and Brooklyn Cafe Settle Unicorn-Drink Lawsuit, Fox Business (Sept. 5, 2017), http://www.foxbusiness.com/features/2017/09/05/starbucks-and-brooklyn-cafe-settle-unicorn-drink-lawsuit.html

Dave Simpson, Starbucks, NY Cafe Settle ‘Unicorn Frappuccino’ TM Row, Law360 (Sept. 5, 2017, 10:04 PM), https://www.law360.com/articles/960858/starbucks-ny-cafe-settle-unicorn-frappuccino-tm-row.

Stipulation of Voluntary Dismissal with Prejudice Pursuant to F.R.C.P. 41(a)(1)(A)(ii), Montauk Juice Factory Inc., The End Brooklyn v. Starbucks Corporation d/b/a Starbucks Coffee Company, No. 1:17-cv-02678 (E.D.N.Y. Sept. 5, 2017).

Starbucks Company Profile, Starbucks, https://www.starbucks.com/about-us/company-information/starbucks-company-profile (last visited Oct. 17, 2017).

Pumpkin, Spice, and Everything Nice

By: Rachel Theodorou

Every fall, a financial epidemic sweeps through the country, costing Americans over $500 million – this is what has become known as the “Pumpkin Spice Economy.” Since it’s launch by Starbucks in 2003, the Pumpkin Spice Latte (“PSL”) has created a hype, an obsession, that is unparalleled. Not only does Starbucks see a massive spike in profits during the fall months, but other cafes that serve their take on the drink benefit immensely as well.

The hype doesn’t stop there; pumpkin flavored yogurt, cereal, beer, home fragrance products, and even pumpkin flavored vodka become objects of the highest desire. One question persists – why are people so obsessed with pumpkin? The answer is quite scientific. Scientists have determined that approximately 80% of flavor is actually odor, and when an odor or flavor is combined with sugar consumption in a hungry person, a physiological reaction takes place on a subconscious level. People start associating that flavor with feeling satisfied, and crave more. It’s similar to the way drug addiction affects the body, only different neural mechanisms are at play with the PSL.

The obsession continues each and every year, and no one expects it to fall anytime soon.

Cites:

Jacqueline Howard, What is “pumpkin spice,” anyway? And why do we crave it?, Cnn (last visited Sept. 23, 2017), http://www.cnn.com/2017/09/13/health/pumpkin-spice-ingredients-science-explainer/index.html.

Clare O’Connor, The Pumpkin Spice Economy: How Starbucks Lattes Fueled a $500 Million Craze, Forbes, (last visited Sept. 23, 2017), https://www.forbes.com/sites/clareoconnor/2015/11/10/the-pumpkin-spice-economy-how-starbucks-lattes-fueled-a-500-million-craze/.

Legal Battle Between Qualcomm and Apple Escalates

Cecilia Santostefano

Earlier this month, Qualcomm confirmed that it has filed lawsuits in an intellectual property court in Beijing, China, where most iPhones are built. In its claim, the company asserted patent infringement and requested remedy in the form of an injunction, which has not been sought before and will delay the production and sale of Apple products in China.

According to Qualcomm, Apple is not compensating Qualcomm for the technology that it developed and licensed to Apple to use in its iPhones and similar models. Currently, Qualcomm is awarded royalties based on the total selling price of iPhones. For example, Apple buys 4G LTE chips from Intel, which uses Qualcomm’s technology. Therefore, Apple pays Qualcomm for the licensing of these processors, but it has to pay Qualcomm based on the $650 value of the iPhone, not $20 for the chip which, technically, Qualcomm also produces.

Qualcomm is alleging infringement on three non-standard essential patents, which cover power management and the Force Touch technology; Apple incorporates the latter into its touch screens. But, this is not the first time we are hearing of these allegations; Apple and Qualcomm began a feud earlier this year regarding whether Apple had to pay Qualcomm licensing fees.

In January 2017, Apple sued Qualcomm for $1 billion, accusing the company of charging unfair royalties for “technologies they have nothing to do with” and failing to pay for quarterly rebates. Additionally, Apple alleged Qualcomm charged excessive licensing fees by requesting a percentage of an iPhones entire value. It was at this time that Apple and its suppliers stopped paying Qualcomm all licensing fees. Qualcomm disagreed and justified its licensing fees by stating that its “inventions are at the heart of every iPhone and extend well beyond modern technologies or cellular standards.” Additionally, it is Qualcomm’s position that Apple continues to use its technology while refusing to pay for it.

Following these incidents, Qualcomm filed a counterclaim and withheld all payments to iPhone manufacturers. Qualcomm even turned to the United States International Trade Commission in July, seeking to block the imports of “illegal” iPhone and iPad models into the United States. If this ban on imports were to become effective, it is unclear as to which iPhone models would be affected. As a result, the ITC began looking into Qualcomm’s battle with Apple surrounding its patents. The company is currently facing an FTC lawsuit in the United States for utilizing anticompetitive tactics in order to remain the dominant supplier of baseband processors for smartphones.

As of right now, the claims have not been made public in China. Apple believes Qualcomm’s assertions are meritless and will fail in China, as they have in other theaters, including the United States.

Juli Clover, Qualcomm Asks China to Stop Manufacturing and Selling iPhones via New Lawsuits, Mac Rumors, (Oct. 13, 2017, 10:28 PDT), https://www.macrumors.com/2017/10/13/apple-qualcomm-china-lawsuits/.

Christian de Looper, Apple vs. Qualcomm: Everything you need to know, Digital Trends, (Oct. 13, 2017, 1:24 PM), https://www.digitaltrends.com/business/apple-vs-qualcomm-news/.

Luke Dormehl, Apple sues Qualcomm for charging massive licensing fees, Cult of Mac, (Jan. 23, 2017, 5:00 AM), https://www.cultofmac.com/463631/apple-sues-qualcomm/.

Mike Freeman, Qualcomm sues Apple in China to ban assembly and sale of iPhones, The San Diego Union-Tribune, (Oct. 13, 2017, 3:25 PM) http://www.sandiegouniontribune.com/business/technology/sd-fi-china-iphoneapple-20171013-story.html.

David Lumb, Qualcomm files lawsuit in China to stop production of iPhones, Engadget, (Oct. 13, 2017), https://www.engadget.com/2017/10/13/qualcomm-files-lawsuit-in-china-to-stop-production-of-iphones/.

Qualcomm files lawsuits in China to ban iPhones, Reuters, (Oct. 13, 2017, 1:13 PM), https://www.reuters.com/article/us-apple-qualcomm-china/qualcomm-files-lawsuits-in-china-to-ban-iphones-idUSKBN1CI2E9.

Nintendo Wii Infringes Medical Device Patents, Jury Says

By: Nick Dellefave

A jury in the Northern District of Texas has found video game giant Nintendo guilty of patent infringement in connection with technology used in its Wii and Wii U controllers.

The suit, filed by medical device technology company iLife in 2013, alleged that the motion-sensing systems used in the controllers infringe six of iLife’s patents, including those titled Systems for Evaluating Movement of a Body and Methods of Operating the Same, System and Method for Detecting Motions of a Body, and Systems Within a Communications Device for Evaluating Movement of a Body and Methods of Operating the Same, issued between 2001 and 2009.

The systems Nintendo is alleged to have infringed include the use of accelerometers to track the movement of the body. According to iLife, the covered technologies were used in medical monitors intended to detect when elderly patients fell or infants were at risk of death from sudden infant death syndrome and to call an ambulance. iLife also filed suit against Under Armour and FitBit for using similar technologies in their products, though both suits were ultimately settled out of court.

In the lawsuit, iLife sought a $4 royalty on each Wii controller sold in the six years before the suit was filed – a total of 36 million units, or $144 million. While the jury did find infringement, it awarded iLife a relatively more modest sum of $1.1 million.

Nintendo has indicated that it intends to appeal, stating publicly that “Nintendo disagrees with the decision, as Nintendo does not infringe iLife’s patent and the patent is invalid. Nintendo looks forward to raising those issues with the district court and with the court of appeals.”

Cites:

Brian Crecente, Wii Remote Lawsuit Ends in $10M Verdict Against Nintendo, Rolling Stone, http://www.rollingstone.com/glixel/features/wii-remote-lawsuit-ends-in-10m-verdict-against-nintendo-w500619 (August 31, 2017).

Nintendo loses court case over Wii motion controllers, BBC News, http://www.bbc.com/news/technology-41147512 (September 4, 2017).

Will Yakowicz, Nintendo Loses Patent Lawsuit, Ordered to Pay $10 Million, Inc., https://www.inc.com/will-yakowicz/nintendo-loses-patent-infringement-case-wii.html (September 5, 2017).

Face ID: A Technological Advancement and a New Legal Battle

By: Christopher McIlveen

On September 12, 2017, Apple unveiled what they proclaim to be the greatest leap in the advancement of the smartphone since Steve Jobs introduced the original iPhone. However, throughout the grandiose flaunting of the new features such as improved cameras and the ability to project oneself as an animated poop emoji, the new iPhone X poses a unique legal dilemma yet to be addressed in the courts.

Apple’s original innovation in the smartphone market of security was a slide to unlock feature, followed by the security feature of entering a user generated pin. However, this changed over time with the advancement of the technology in the iPhone. The iPhone improved from slide to unlock to the famous Touch ID fingerprint scanning, which brought with it a whole new realm of legal problems and implications under the Fifth Amendment.

Throughout its existence, Apple’s security measures have withstood the test of time as court cases have secured the protection status of a digital pin. Citizens derive their protection through the Fifth Amendment in which people cannot be compelled to testify against themselves. The progression of Apple’s devices lead to Touch ID, a feature that functioned as a fingerprint scanner that would unlock one’s smartphone. This feature, while undeniably a more convenient way of unlocking a phone, put Apple’s protection measures at risk. The Touch ID feature does not give the same protection under the Fifth Amendment as a pin. Nevertheless, Touch ID is still protected under the Fifth Amendment in which police cannot force someone to use their finger to unlock their phone, as this would force one to give evidence against themselves, circumventing their Fifth Amendment rights. Apple, with a desire to stay ahead in the smartphone market and building upon its convenience features, has now unveiled their newest addition, the Face ID feature, which further risks their user’s protection under the Fifth Amendment.

This new high tech feature poses a unique problem for Apple users. A pin is a user-generated protection and a fingerprint requires physically engaging with the device. However, with Face ID, one walks around daily with their password in plain view of everyone. Unlocking the new iPhone with Face ID simply requires glancing at the phone, providing the unique facial recognition password that is required, and swiping up. It is quite clear that this type of feature leaves room for exploitation. Will the police be able to unlock someone’s phone to retrieve evidence by holding it in front of their face? These questions have already raised concern from Apple’s critics and even their more cautious users. To their credit, Apple has implemented a shortcut to disable Face ID, carried out by holding down the left and right side buttons on the device. This reverts the phone’s unlocking method to the pin entry backup. However, most users will not know about this feature, let alone have the opportunity or even the chance to remember to do it if the need arises. Regardless of this major step in technological advancement for a smartphone, there will still be some users opting to disable Face ID to simply use the old and trusty user generated pin.

There may yet be hope for Apple’s innovative unlocking feature. The Supreme Court held that while police can search without a warrant in an effort to protect an officer and preserve evidence, they cannot do so for digital data. With this holding, Apple may have hope for the future of Face ID. While it is uncertain, the future is relatively safe in that the police do not have the right to seize an iPhone without warrant, and thus cannot access a protected phone.

Cites:

Apple, iPhone X, https://www.apple.com/iphone-x/ (last visited Sept. 18, 2017).

U.S. Const. amend. V.

Riley v California, 134 S.Ct. 2473 (2014).

The iPhone X

By: Nicholas P. Fedorka

The internet is buzzing about Apple’s new release of its iPhone X, the latest version of Apple’s hottest product. Announced earlier this week, it’s thinner, faster, and has a better screen than the previous model, or at least that is what Apple is saying. Yet, Apple seems to follow a trend of reducing core features rather than advancing them. For instance, the new iPhone will no longer have two critical features: a headphone jack and TouchID. Everyone knew that the headphone jack was on borrowed time, especially with apples Bluetooth earbuds being such a hot hit. But, it will be interesting to see how consumers adapt to the new facial recognition feature. It will be doubly interesting to see the legal ramifications that come from this new feature.

Cites:

Matt Burns, I don’t want the iPhone X and I can’t be alone TechCrunch, https://techcrunch.com/2017/09/13/i-dont-want-the-new-iphone-x-and-i-cant-be-alone/.

The iPhone X’s Controversial New Feature

By: Melissa Goldstein

In honor of the iPhone’s tenth anniversary, Apple will be releasing the iPhone X. One of its new features, known as FaceID or facial recognition, allows users to unlock their phones just by staring into the camera. The iPhone creates a 3D map of a person’s face by using sensors, the front camera, and a dot projector. Every time people use their face to open their phone, 30,000 infrared dots are projected onto their face. The map of the user’s face becomes more and more detailed with every use.

Three-dimensional facial recognition sounds very high tech and exciting, but it is sparking some controversy in the legal world. Law enforcement is concerned that FaceID will make it harder for them to collect important data in crime investigations. On the other side, some consumers are concerned that law enforcement will use this feature to take advantage of a citizen’s Fifth Amendment rights.

An article in Washington’s Top News discusses that investigators in Maryland’s digital forensic labs are already bogged down and backed up with all of the evidence they have to sort through on iPhones. Law enforcement is concerned that the facial recognition technology could impose a delay on unlocking an iPhone in the first place. The iPhone’s older models, the iPhone 6 and iPhone 7, are already nearly impossible to crack. Essentially, there is a big concern that the longer it takes to unlock an iPhone, the longer it could take to catch dangerous criminals.

On the flip side, consumers have their own worries that facial recognition could lead to law enforcement taking advantage of them. A law professor at the University of Oregon, Carrie Leonetti, says that FaceID and the current TouchID have less of a constitutional protection than older methods. When the only method of security was a four-digit passcode a person could rely on his or her Fifth Amendment privilege and simply not say the passcode. However, Jim Dempsey, ?executive director at UC Berkeley’s Center for Law & Technology, believes that police officers will still need a search warrant to make an iPhone owner unlock the phone using the FaceID feature. In 2014 the Supreme Court ruled that it was unconstitutional to search cellphones without a warrant. Dempsey believes that this ruling from Riley v. California will also apply to the FaceID feature.

Apple’s FaceID technology does however include ways to prevent the phone owners face from unlocking the phone. When pressing the power button five times in a row, the phone will go into “SOS mode” and FaceID will be disabled. Also, the facial recognition will only unlock the phone if the user’s eyes are open and staring into the camera. It will be interesting to see how this new feature affects the legal world once the new iPhone is released in November.

Rubik’s Cube: The Battle for America’s Classic Toy

By: Elle Nanstein

In 1974, Erno Rubik, a Professor of Architecture in Budapest, Hungary, created a six-sided, colorfully decorated cube puzzle in an effort to provide new and exciting ways to present information to his students. Though it took over a month for Erno to work out the solution to his puzzle, he was able to use the Cube’s first model to explain the science behind spatial relationships. As its creator, Erno envisioned the Cube as “an object of art, a mobile sculpture symbolizing stark contrasts of the human condition: bewildering problems and triumphant intelligence; simplicity and complexity; stability and dynamism; order and chaos.”

After presenting his prototype to his students and friends, Erno began to realize the potential of his Cube and sought to begin the manufacturing and distribution process under the name “Magic Cube.” Due to Hungary’s involvement in the Communist regime, Erno knew that the only way for the Cube to obtain worldwide recognition was to get his invention out of the country. This was accomplished partly by a Hungarian entrepreneur who took the cube to the Nuremberg Toy Fair in 1979, where Tom Kremer, a toy specialist for Ideal Toy Company, agreed to sell it to the rest of the world. However, Ideal Toy’s executives thought that the designation “Magic Cube” had overtones of witchcraft and decided to rebrand the product, eventually settling on the iconic name, “Rubik’s Cube.”

Since its launch in 1980, an estimated 350 million Rubik’s Cubes have been sold and it is approximated that one in seven people alive have played with a Rubik’s Cube. According to its official website, “the beauty of the Rubik’s Cube is that when you look at a scrambled one, you know exactly what you need to do without instruction. Yet without instruction it is almost impossible to solve, making it one of the most infuriating and engaging inventions ever conceived.”

Unfortunately, the international success of the Rubik’s Cube has put the product at risk for trademark infringement. On August 28, 2017, Rubik’s Brand Limited filed a complaint in the U.S. District Court in Manhattan against Duncan Toys Co., its parent company Flaumbeau, Inc., and the retailer Toys “R” Us in an effort to halt sales of Duncan’s “Quick  Cube,” an alleged knockoff (pictured left). According to the complaint, Duncan’s cube “mimics the features and overall appearance” of the Rubik’s Cube, mainly differing in its colors and “slight rounding” of the corners. The company is also seeking to hold Toys “R” Us liable for selling Duncan’s cubes.

Rubik’s Brand Limited asserts that “as a result of Defendants’ use of a spurious version of Plaintiff’s federally registered Rubik’s Design Mark, consumers who expect to receive Plaintiff’s Rubik’s Cube puzzle, for which Plaintiff has developed a national and international reputation, will be disappointed when using Defendants’ imitation twist puzzle cube. This will cause irreparable harm to Plaintiff’s reputation and the goodwill which is symbolized by the Rubik’s Design Mark.” Rubik’s Brand Limited hopes to recover alleged illegal profits and triple damages, and seeks an order permitting the destruction of the unauthorized cubes. Whether the company will be able to maintain exclusive rights to the cubed puzzle remains uncertain at this time.

Cites:

The History of the Rubik’s Cube, Rubiks.com, https://www.rubiks.com/about/the-history-of-the-rubiks-cube (last visited Sept. 4, 2017).

Complaint, Rubik’s Brand Ltd. v. Flambeau, Inc., Duncan Toys Co., Toys “R” Us, Inc., WL 3724670 (S.D.N.Y. 2017) (No. 1:17-cv-06559).

New Rubik’s 3×3 Cube, Rubiks.com, https://www.rubiks.com/store/cubes/new-rubiks-3×3-cube (last visited Sept. 4, 2017).

Quick Cube 3×3, Yo-Yo.com, https://www.yo-yo.com/Quick-Cubes/Quick-Cube-3-x-3-3901QC (last visited Sept. 4, 2017).