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July 20, 2011

Starbucks Learns the Hard Way About The Importance of Trademarking Acronyms in Naming and Branding

Here is a lesson for all of us: when you trademark a brand name, trademark its acronym too.

SDNThumnail.pngJust ask Starbucks, which is finding itself suing a company over the use of the initials "SDN." Starbucks uses this to refer to Starbucks Digital Network, which provides free Internet access for all Starbucks stores through its Web site. The letters also come up on Starbucks' smartphone app.

A small South Dakota broadband service provider, South Dakota Network LLC, claims they own the acronym trademark.

They sent letters to Starbucks to stop using the "SDN" acronym to avoid confusion between the milions upon millions of Starbucks customers and their probably not so numerous customer base.

But the Starbucks' law suit says "Defendant's accusation of willful infringement casts a cloud over Starbucks' ongoing use and development of the Starbucks Digital Network, threatens to cause irreparable harm to Starbucks, and threatens Starbucks' substantial investment in the Starbucks Digital Network."

MobileSDN.pngThis may be so, but a SDN Communications rep has said "We intend to defend our trademark that we secured... We've tried to come to an agreement with them, to no avail. It shocked us that suddenly, they were suing us. We're this home-grown, rural South Dakota company that did its trademark homework."

Starbucks is trying to get the Federal law on its side but this looks like SDN has a case. In fact, Starbucks has drawn first blood, filing suit in Nebraska after getting cease and desist letters from SDN lawyers. Why has Starbucks gone to Nebraska with this? Nobody is sure exactly but the South Dakota company has an office in Nebraska.

The coffee giant assures us that "Starbucks' use of the acronym SDN is only used as a shorthand reference to its Starbucks Digital Network website and is not used to promote Wi-Fi services or any services other than the Starbucks Digital Network website that is available exclusively to Starbucks' in-store customers."

Well, that may be so, but a trademark is still a trademark.

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Posted by William Lozito at July 20, 2011 10:24 AM
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