Over the years, I've had a vested interest in Copyright, Trademark, and Patent Law. As a software developer, having that knowledge at your disposal can be an invaluable tool to avoiding legal issues. We are in the business of writing complex software products, any of which may infringe at any time. Before I begin though, I am not a lawyer and what follows, while good common sense, is not legal advice. If you need legal advice, find a good attorney. I recommend reading the actual laws surrounding Copyrights, Trademarks, and Patents by visiting the various official .gov websites for yourself, which link directly to and have copies of the relevant laws available. If you are a software developer in a country other than the United States, you should make yourself aware of your own country's intellectual property laws. I'm hoping that what I have to say here is just reiterating what you already know as a software developer. What follows is opinion mixed with generally good advice as I follow an ill-conceived idea that popped up on my radar.
Recently I learned about "Dumb Starbucks" from a friend and, immediately, the thought "probable Trademark Law violation" popped into my head and I raised my eyebrows in the "Oh really" fashion. This person proceeded to tell me that the person behind "Dumb Starbucks" was a comedian and that the comedian said "everything was legal". Because comedians are also apparently lawyers, judges, and juries. Oh wait, they aren't. Lawyers can provide legal advice, but only a court of law (with a jury of peers - depending on the case) can decide whether or not something is truly legal. However, it is best to steer really far away from the courtroom as possible. This comedian, who I personally don't think is all that funny (to each their own), apparently wants to visit a courtroom really badly.
I went and watched a few videos on YouTube related to "Dumb Starbucks", including the one where the comedian addresses the legal situation from their perspective. I also went and re-read everything I know on the relevant legal topics. Based on my understand of the laws and precedents set, there's a strong possibility that this infringes on multiple fronts. I wouldn't blame Starbucks Corp if they sued the comedian into oblivion. Here's why:
Let's pretend you are Starbucks for a moment. You have a set of intellectual property (IP) that you have spent time, money, effort, and energy to create. I then proceed to come along and make a business, no matter how well-intentioned, and call my clone of your intellectual property "dumb". The dictionary has the following to say about the word "dumb":
1. lacking intelligence or good judgment; stupid; dull-witted.
2. lacking the power of speech (offensive when applied to humans): a dumb animal.
3. temporarily unable to speak: dumb with astonishment.
4. refraining from any or much speech; silent.
5. made, done, etc., without speech.
Some or all of these things have now been attributed to your brand, your intellectual property, your stores, your employees, and possibly your customers. There is actually significant precedent in several court cases where the "parody" claim did not fly. A quick Google search turns up (hey, correct use of a Trademark, BTW! Trademarks are correctly used as an adjective before a common noun):
Overview of Trademark Law
Harvard Law school - one would hope that they can understand law, digest it, and then communicate it so that the average person doing cursory research can understand the basics. All four referenced "parody" cases mean that the holder of the mark found sufficient evidence to go to court over the claimed parody. Remember the rule of thumb: You don't want to be anywhere near a courtroom. This means that there was a failure on those with the parody defense to do advanced due diligence. While the above is a summary, I see somewhat of an additional pattern in the cases that Harvard Law school surprisingly seems to have missed. The two cases that were deemed infringing seem to be much more denigrating to the brand than the two that were not deemed infringing. Respectively, the two cases associating the brand with poop and illicit drugs were deemed infringing while the cases regarding semi-nudity and the briefly mentioned name of a character in a movie that's a comedy were not infringing. Hopefully you can see the difference. All of them ended up in court though - a place you don't want to be or unnecessarily risk being in.
The last case struck me as odd because it is widely known that the Muppets franchise is frequently equated to cheeky parody that has its humorous moments, so I went and looked up more information about the case. It looks like Hormel Foods Corp. was concerned about the potential reduced sales of their merchandise due to merchandise that The Jim Henson Company was planning to sell and not the name of the character in the movie itself. Articles on the topic seem to be rather misleading in this regard. The actual reason of potentially lost sales makes more sense than the reason of a character's name in a comedy. However, instead of filing suit and making themselves a public nuisance and embarrassing themselves later as an example on Harvard Law school's website, they should have either formed a business relationship so that they got a (significant) cut of the profits of the merchandise (hey, practically free money from a big brand name!) or sent a cease-and-desist and then recorded losses in the sales of their own merchandise so that they would have demonstrably hard numbers for filing suit later after a reasonable amount of time had passed. The way they filed suit just strikes me as being draconian in their approach to running a business. Don't get me wrong, they are totally entitled to running their business that way, but it will cause them to end up as an example on Harvard Law school's website - as long as they are cool with that, sure go ahead. But businesses should try to attempt to have good public relations.
At any rate, let's get back to "Dumb Starbucks". First off, associating the word "dumb" with the mark is highly denigrating to the brand. Name-calling is never funny - if you called me "dumb" to my face, the conversation might degrade to something less than ideal. Putting that label on the brand in my mind moves it into the same territory as the aforementioned "poop and illicit drugs" cases. In addition, the parody attempt fails to actually say something culturally specific about the brand which the average person can pick out and say, "Oh yeah, that makes sense. Ha ha, that's funny." That seems to be the rough definition of the word "parody" in the context utilized and this attempt fails to meet that definition. Parody is best done as a loosely associated mention with lots of variations on the theme, not outright cloning of a mark and then slapping some minor modifications to it (in this instance, the word "dumb" all over the place). In addition, their claim of parody ironically has this against them:
Photo of a relevant document
The photo is loaded with poorly worded gems and is really all Starbucks Corp needs to take the "comedian" to court and sue him into oblivion over misuse and abuse of their intellectual property. The combination of "marketing purposes" with "not affiliated in any way with Starbucks Corporation" says this is a commercial venture of some sort meant to be in direct competition with the Starbucks brand. That alone puts them in hot water (har har). Second, I'm not aware of any such thing as "Parody Law". However, there are three sets of relevant laws to be concerned with in the United States with regards to intellectual property: Copyright, Trademark, and Patent Law. Within Copyright and Trademark Law, there exist clauses that roughly exclude "parody" via "fair use" but generally leave it up to the courts to decide what those words/phrases actually mean. It is up to a business or individual to bring suit to test the extent of those phrases. Fortunately, they are fairly well tested and defined by easily discoverable precedent. It would seem to me that the lawyers didn't do a good job of due diligence here. Again, you don't ever want to be anywhere near a courtroom.
Third, while they address on that piece of paper that their use of the word "dumb" is not out of "enmity", there is no indication of such anywhere else. This is especially true on the large sign with the modified logo(s) that the average person can see from the street as they drive by. Someone just driving by could confuse it with vandalism or an official marketing ploy by Starbucks Corp. and go inside thinking it was a real Starbucks franchise. I would anyway. If it were truly a parody, the sign would somehow attempt to indicate as such in the same or a larger font size to clearly distinguish that business from the original and official brand.
Finally, the document indicates eventual profits. This will provably cut into the Starbucks Corp. bottom line. In fact, it already has done precisely that by giving away coffee and thus drawing Starbucks customers away to this new, unaffiliated business.
If Starbucks Corp. also holds patents on specific processes for specific coffee preparation techniques, they also have reason for simultaneously filing for patent infringement. Due to the fact that most companies hold patents like nukes in a Cold War (i.e. they don't generally fire them), claiming patent infringement would just be a minor part of a larger suit that Starbucks Corp. might bring to bear against the comedian. It is generally accepted that patents are a legal minefield. Again, avoiding going to court is the best policy but also don't waste tons of time and money figuring out if something will infringe because there are a bunch of junk patents out there too that should never have been issued. My personal policy is to do due diligence but not worry too much - partly because of the whole "treble damages for conducting patent searches" aspect of Patent Law that needs to be removed from Patent Law because it effectively prevents proper searching of the USPTO database (i.e. damned if you don't, triple damned if you do).
There also may be grounds for Copyright infringement, but such would be less likely to succeed than Trademark infringement. It is difficult to explain why I lean in this direction. Copyright protects against outright copying and some derivation of protected works but doesn't necessarily cover trademarks. The only thing that might be Copyright infringing here is the (ab)use of the official Starbucks logo - specifically, the image of the logo can be considered artwork, which is protected by Copyright Law. Copyright generally demands that derivative works be sufficiently different from original works to be considered not infringing. Where that line is varies, but I personally estimate 25% to 75% of the copyrighted content has to be different, which this doesn't really meet the minimum qualification. Exceptions in copyright are made for parody under the "fair use" clauses but, as I stated earlier, I don't see any actual parody taking place and "fair use" in terms of the rest of Copyright has traditionally been isolated to education-ish things. Parody comments on society and its norms - this merely slapped the word "dumb" on an existing logo and started a real business based on it. A more correct use of "fair use" is Wikipedia, which uses a lot of company logos protected under Copyright but claims their use falls under fair use as they are distinctly dedicated to disseminating impartial information about the company whose logo they are using in an encyclopaedic format. Wikipedia's use feels a little awkward but is more in line with both Copyright and Trademark Law and the general understanding of what fair use means and then I combine that with editors who care about correct usage and it leans more toward being legal than infringement, but it does walk the line. This is because I'm sure that if a company demanded removal of their logo from the Wikipedia article about their company, Wikipedia would probably comply and not fight it, but demanding as much would be rather silly since the logo only helps to reinforce the brand in conjunction with impartial facts about the company - for most companies, this just helps their image and market position. While this is my view, it is entirely likely a court of law will see an entirely different take and decide that the artwork modifications are sufficient enough to warrant a denial of a copyright infringement claim. This could go either way and only a court of law can decide. However, risking copyright infringement here is not a smart decision because it has a pretty good chance to land the business in court - again, a place that you nor I want to be and should generally avoid.
Also, according to what I've read, the business was shut down, not by a lawsuit, but by the California Health Department for not being properly licensed. Ouch. While semi-irrelevant, it could be used as part of the arguments of a lack of care for Starbucks customers and the brand itself. Perhaps it is a "parody" by saying that Starbucks franchises don't meet health codes and because of that, Starbucks Corp is therefore "dumb". Starbucks Corp could then counter with something to the effect of, "Furthermore, we hold all of our franchises to the highest standards of quality and require them to meet or exceed all local, state, and Federal regulations, whether they are health regulations or otherwise. Dumb Starbucks did not bother to apply for the appropriate business licenses to operate a coffee shop in the State of California, which further tarnishes the reputation of our organization through the implication that our franchises do not attempt to meet health codes or other laws. We have had to issue statements to counter the damage in public perception of our brand regarding our strict compliance with health regulations." (I'm pretty good at that, aren't I? A lot of programmers I've run into have randomly become lawyers when they grow tired of programming. Apparently, it's a natural progression of sorts. I can't ever see that happening - too much exciting and innovative software is just waiting to be written.)
The comedian should fire their attorneys for not making a recommendation against treading into this very dangerous legal territory. Good legal counsel will give good, sound legal advice, addressing the risks and weighing them against the benefits. The risks here are multiple lawsuits, no financial gain, and significant financial loss. The benefits are either no financial gain (most likely) or barely breaking even since setting up a new business is an expensive proposition. This was a financial lose-lose situation from the get-go, should have been identified as such, and promptly and summarily declared a bad idea and rejected.
Now to bring it home: Once again, as a software developer, you never want to be near a courtroom. It is a waste of your time - time better spent making new and innovative things instead of copying someone else and getting taken to court over it. When we develop software, we have to be careful but still willing to take risks after doing due diligence. If it looks like a logo might infringe, change it - no big deal. Verify the licenses of the third-party libraries being used. Run regular Google searches on terminology. When in doubt, don't. These are all pretty common sense things that are easy to deal with up front, avoid legal hassles later, and you can still work on a whole lot of great software development projects that are innovative and also interesting, fun, and/or exciting.
Also, if you have the attitude of "I'm just going to keep innovating" instead of "I'm going to copy these things that other people have made and make a profit", you'll be way ahead of most programmers and businesses. Lazy programmers and businesses copy, great programmers and businesses innovate. If you are constantly innovating, if you get sued over one product, it won't be the end of the world or your business since you'll have a dozen other products that don't infringe to fall back on. You'll simply just take the infringing software offline, apologize and explain the situation in a positive light to former customers, and move on to the next project. The tendency of potential infringement is fear, but with an attitude of innovation you'll never be affected by it. It is important to just be aware of the various aspects of intellectual property and having a healthy respect for existing brands, doing due diligence to avoid landing in court before developing the product, being hospitable if someone has a legitimate claim, but all the while hoping there aren't issues down the road because, beyond due diligence, hope is literally the best you can do in a world with over 6 billion people all with their own ideas.