Plaintiffs-appellants, Starbucks Corporation and Starbucks U.S. Brands, LLC (together, “Starbucks”), appeal from a judgment entered on June 5, 2008, in the United States District Court for the Southern District of New York (Swain, J.), following a bench trial, in favor of defendant-appellee, Wolfe’s Borough Coffee, Inc., d/b/a Black Bear Micro Roastery (“Black Bear”). The District Court found that Starbucks failed to demonstrate entitlement to relief on its (1) federal trademark infringement, dilution, and unfair competition claims brought pursuant to the Lanham Act, 15 U.S.C. §§ 1114(1), 1125, 1127; (2) state trademark dilution claims brought pursuant to New York Gen. Bus. Law § 360-i; and (3) unfair competition claim under New York common law. We vacate, in part, the District Court’s decision and remand for further proceedings on the issue of whether Starbucks demonstrated a likelihood of dilution by “blurring” under federal trademark law. In all other respects, the judgment of the learned District Court is affirmed.
I. BACKGROUND
A. Preliminary Facts
Starbucks, a company primarily engaged in the sale of coffee products, was founded in Seattle, Washington in 1971. Since its founding, Starbucks has grown to over 8,700 retail locations in the United States, Canada, and 34 foreign countries and territories. In addition to operating its retail stores, Starbucks supplies its coffees to hundreds of restaurants, supermarkets, airlines, sport and entertainment venues, motion picture theaters, hotels, and cruise ship lines. Starbucks also maintains an internet site that generates over 350,000 “hits” per week from visitors.
In conducting all of its commercial activities, Starbucks prominently displays its registered “Starbucks” marks (the “Starbucks Marks”) on its products and areas of business. The Starbucks Marks include, inter alia, the tradename “Starbucks” and its logo, which is circular and generally contains a graphic of a mermaid-like siren encompassed by the phrase “Starbucks Coffee.” Starbucks “has been the subject of U.S. trademark registrations continuously since 1985” and has approximately 60 U.S. trademark registrations. Starbucks also has foreign trademark registrations in 130 countries.
From fiscal years 2000 to 2003, Starbucks spent over $136 million on advertising, promotion, and marketing activities. These promotional activities included television and radio commercials, print advertising, and in-store displays, and “prominently featurefd] (or, in the case of radio, mention[ed]) the Starbucks Marks, which *103 Starbucks considers to be critical to the maintenance of its positive public image and identity.” Starbucks also enhanced its commercial presence by permitting the use of its products and retad stores in Hollywood films and popular television programs. These films and programs contained scenes in which the Starbucks Marks were also “prominently displayed.”
As may be expected from its spending “substantial time, effort and money advertising and promoting the Starbucks Marks throughout the United States and elsewhere,” Starbucks devotes “substantial effort to policing its registered Starbucks Marks.” Starbucks “has a regular practice of using watch services and other methods to identify potential infringers of the Starbucks Marks,” and it “routinely sends cease and desist letters and, if necessary, commences litigation in support of these efforts.”
Black Bear, also a company engaged in the sale of coffee products, has its principal place of business in Tuftonboro, New Hampshire. In contrast to Starbucks, Black Bear is a relatively small company owned by Jim Clark and his wife. It is a family-run business that “manufactures and sells ... roasted coffee beans and related goods via mail order, internet order, and at a limited number of New England supermarkets.” Black Bear also sold coffee products from a retail outlet called “The Den,” in Portsmouth, New Hampshire. To help operate its business, Black Bear hires some part-time employees, such as “one girl who comes in two days a week and helps with packaging,” but Black Bear is otherwise operated by Mr. and Mrs. Jim Clark, with the occasional help of their two daughters.
In April 1997, Black Bear began selling a “dark roasted blend” of coffee called “Charbucks Blend” and later “Mister Charbucks” (together, the “Charbucks Marks”). Charbucks Blend was sold in a packaging that showed a picture of a black bear above the large font “BLACK BEAR MICRO ROASTERY.” The package informed consumers that the coffee was roasted and “Air Quenched” in New Hampshire and, in fairly large font, that ‘You wanted it dark ... You’ve got it dark!” Mister Charbucks was sold in a packaging that showed a picture of a man walking above the large font “Mister Char-bucks.” The package also informed consumers that the coffee was roasted in New Hampshire by “The Black Bear Micro Roastery” and that the coffee was “Roasted to the Extreme ... For those who like THE EXTREME.”
Not long after making its first sale of Charbucks Blend, in August 1997, Starbucks demanded that Black Bear cease use of the Charbucks Marks. Having felt wrongly threatened by Starbucks, and believing that “[w]e hadn’t done anything wrong,” Black Bear ultimately decided to continue selling its “Charbucks Blend” and “Mister Charbucks.” Mr. Clark later testified, “[m]y main objection was that basically this was a large corporation coming at me and saying, telling us what to do, and, oh, by the way you’re going to pay for it, too.... [S]ome of the requests that they were making were really off the wall.”
B. Complaint and Trial
After failed negotiations with Black Bear, on July 2, 2001, Starbucks filed a complaint in the District Court, alleging trademark dilution in violation of 15 U.S.C. §§ 1125(c), 1127; trademark infringement in violation of 15 U.S.C. § 1114(1); unfair competition in violation of 15 U.S.C. § 1125(a); trademark dilution in violation of New York Gen. Bus. Law § 360 — i; deceptive acts and business practices and false advertising in violation of New York *104 Gen. Bus. Law §§ 349, 350; and unfair competition in violation of New York common law. 1
A two-day bench trial was held on March 15, 2005, and March 17, 2005. Among the evidence proffered during trial, Starbucks introduced the testimony of Warren J. Mitofsky (“Dr. Mitofsky”), a scientist in the field of consumer research and polling. His testimony explained the results of his survey, which concluded in part that “[t]he number one association of the name ‘Charbucks’ in the minds of consumers is with the brand ‘Starbucks’ ... [and that] [t]he name ‘Charbucks’ creates many negative associations in the mind of the consumer when it comes to describing coffee.” Dr. Mitofsky testified that the surveyed sample of persons were “designed to be representative of the United States” and that he believed a telephone survey of 600 adults in the United States would “do a good job of random sampling.” Dr. Mitofsky summarized the scope of his survey: “Well, if you want to know the reaction to the name Charbucks, then the telephone is perfectly adequate. If you want to measure the reaction or the familiarity with other visual cues, then it’s not the right method.”
On December 22, 2005, the District Court issued an opinion and order ruling in favor of Black Bear and dismissing Starbucks’ complaint. Among its findings, the court determined that there was neither actual dilution to establish a violation of the federal trademark laws nor any likelihood of dilution to establish a violation of New York’s trademark laws. The court also found that Starbucks failed to prove its trademark infringement and unfair competition claims because there was no likelihood that consumers would confuse the Charbucks Marks for the Starbucks Marks.
C. Subsequent Proceedings
Starbucks appealed the District Court’s judgment, and, while the appeal was pending, Congress amended the trademark laws by passing the Trademark Dilution Revision Act of 2005 (the “TDRA”).
See Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 477
F.3d 765, 766 (2d Cir.2007) (per curiam). The TDRA was in response to the Supreme Court’s decision in
Moseley v. V Secret Catalogue, Inc.,
On remand, the District Court accepted additional briefing from both parties. Both parties agreed that no further evidentiary proceedings were required. On June 5, 2008, the District Court again en *105 tered judgment in favor of Black Bear, finding — for substantially the same reasons detailed in the court’s December 2005 decision but with additional analysis with respect to the federal dilution claim — that Starbucks failed to demonstrate an entitlement to relief on its federal and state claims. Starbucks timely appealed the District Court’s June 5, 2008 judgment.
On appeal, Starbucks primarily argues (1) that the District Court erred in finding that the Charbucks Marks are not likely to dilute the Starbucks Marks under federal and state law; and (2) that the District Court erred in its factual findings and balancing of the relevant factors for determination of “likelihood of confusion” with respect to Starbucks’ infringement and unfair competition claims.
II. DISCUSSION
A. Standard of Review
We ordinarily review a district court’s factual findings for clear error and its “conclusions of law and its resolution of mixed questions of law and fact”
de novo. See Design Strategy, Inc. v. Davis,
B. Federal Trademark Dilution
Under federal law, an owner of a “famous, distinctive mark” is entitled to an “injunction against the user of a mark that is ‘likely to cause dilution’ of the famous mark.”
Starbucks Corp. v. Wolfe’s Borough Coffee, Inc.,
1. Dilution by Blurring
Dilution by blurring is an “association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark,” 15 U.S.C. § 1125(c)(2)(B), and may be found “regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury,” 15 U.S.C. § 1125(c)(1);
see also Deere & Co. v. MTD Products, Inc.,
Federal law specifies six non-exhaustive factors for the courts to consider in determining whether there is dilution by blurring:
*106 (i) The degree of similarity between the mark or trade name and the famous mark.
(ii) The degree of inherent or acquired distinctiveness of the famous mark.
(iii) The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark.
(iv) The degree of recognition of the famous mark.
(v) Whether the user of the mark or trade name intended to create an association with the famous mark.
(vi) Any actual association between the mark or trade name and the famous mark.
15 U.S.C. § 1125(e)(2)(B)(i)-(vi);
cf. ITC Ltd. v. Punchgini, Inc.,
With respect to the first factor— the degree of similarity between the marks — the District Court did not clearly err in finding that the Charbucks Marks were minimally similar to the Starbucks Marks. Although “Ch”arbucks is similar to “SF’arbucks in sound and spelling, it is evident from the record that the Char-bucks Marks — as they are presented to consumers — are minimally similar to the Starbucks Marks. The Charbucks line of products are presented as either “Mister Charbucks” or “Charbucks Blend” in packaging that displays the “Black Bear” name in no subtle manner, and the packaging also makes clear that Black Bear is a “Micro Roastery” located in New Hampshire.
See Playtex Prods., Inc.,
Furthermore, we note that it is unlikely that “Charbucks” will appear to consumers outside the context of its normal use, since “Charbucks” is not directly identifiable with the actual product,
i.e.,
coffee beans.
Cf. Nabisco v. PF Brands, Inc.,
Inasmuch as Starbucks argues that the District Court clearly erred in concluding that Charbucks is not a stand-alone identifier of Black Bear’s products, we find Starbucks’ argument to be unpersuasive. Starbucks asserts that the District Court should have ignored the term “Mister” or “Blend” before or after “Charbucks” in assessing the “degree of similarity” factor because those terms are generic and “too weak to serve a brand-identifying function.” This argument to ignore relevant evidence is unfounded in the law.
See
15 U.S.C. § 1125(c)(2)(B);
accord
H.R. Report No. 109-23, at 7 (2005),
reprinted in
2006 U.S.C.C.A.N. 1091, 1096 (emphasizing that “a court is permitted to consider all relevant factors in determining the presence of dilution by blurring”). And in any event, even if the core term “Charbucks” were used to identify a product as a standalone term, such finding would not be dis-positive of the District Court’s overall assessment of the degree of similarity.
See Playtex Prods., Inc.,
Upon its finding that the marks were not substantially similar, however, the District Court concluded that “[t]his dissimilarity alone is sufficient to defeat [Starbucks’] blurring claim, and in any event, this factor at a minimum weighs strongly against [Starbucks] in the dilution analysis.” We conclude that the District Court erred to the extent it required “substantial” similarity between the marks, and, in this connection, we note that the court may also have placed undue significance on the similarity factor in determining the likelihood of dilution in its alternative analysis.
Prior to the TDRA, this Court has held that “[a] plaintiff cannot prevail on a state or federal dilution claim unless the marks at issue are ‘very’ or ‘substantially similar.’ ”
Playtex Prods., Inc.,
*108 The owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person’s commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark....
15 U.S.C. § 1125(c) (2000). Our adoption of a “substantially similar” requirement for federal dilution claims,
see Playtex Prods., Inc.,
The post-TDRA federal dilution statute, however, provides us with a compelling reason to discard the “substantially similar” requirement for federal trademark dilution actions. The current federal statute defines dilution by blurring as an “association arising from the similarity between a mark ... and a famous mark that impairs the distinctiveness of the famous mark,” and the statute lists six non-exhaustive factors for determining the existence of an actionable claim for blurring. 15 U.S.C. § 1125(c)(2)(B). Although “similarity” is an integral element in the definition of “blurring,” we find it significant that the federal dilution statute does not use the words “very” or “substantial” in connection with the similarity factor to be considered in examining a federal dilution claim.
See
15 U.S.C. § 1125(c);
Bonime v. Avaya, Inc.,
Indeed, one of the six statutory factors informing the inquiry as to whether the allegedly diluting mark “impairs the distinctiveness of the famous mark” is “[t]he
degree
of similarity between the mark or trade name and the famous mark.” 15 U.S.C. § 1125(c)(2)(B)(i) (emphasis added). Consideration of a “degree” of similarity as a factor in determining the likelihood of dilution does not lend itself to a requirement that the similarity between the subject marks must be “substantial” for a dilution claim to succeed.
See Bonime,
Turning to the remaining two disputed factors — (1) whether the user of the mark intended to create an association with the famous mark, and (2) whether there is evidence of any actual association between the mark and the famous mark — we conclude that the District Court also erred in considering these factors.
The District Court determined that Black Bear possessed the requisite intent to associate Charbucks with Starbucks but that this factor did not weigh in favor of Starbucks because Black Bear did not act in “bad faith.” The determination of an “intent to associate,” however, does not require the additional consideration of whether bad faith corresponded with that intent. The plain language of section 1125(c) requires only the consideration of “[wjhether the user of the mark or trade name intended to create an association with the famous mark.”
See
15 U.S.C. § 1125(c)(2)(B)(v);
see also Kozeny,
The District Court also determined that there was not an “actual association” favoring Starbucks in the dilution analysis. Starbucks, however, submitted the results of a telephone survey where 3.1% of 600 consumers responded that Starbucks was the possible source of Charbucks. The survey also showed that 30.5% of consumers responded “Starbucks” to the question: “[w]hat is the first thing that comes to mind when you hear the name ‘Char-bucks.’ ” In rejecting Starbucks’ claim of actual association, the District Court referred to evidence supporting the absence of “actual
confusion
” to conclude that “the evidence is insufficient to make the ... factor weigh in [Starbucks’] favor to any significant degree.” (internal quotation marks and original alteration omitted). This was error, as the absence of actual or even of a likelihood of confusion does not undermine evidence of trademark dilution. See 15 U.S.C. § 1125(c)(2)(B);
accord Nabisco,
Accordingly, in light of the foregoing, we remand to the District Court for consider *110 ation of Starbucks’ claim of trademark dilution by blurring under 15 U.S.C. § 1125(c)(2)(B).
2. Dilution by Tarnishment
Dilution by tarnishment is an “association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark.” 15 U.S.C. § 1125(c)(2)(C). “A trademark may be tarnished when it is linked to products of shoddy quality, or is portrayed in an unwholesome or unsavory context, with the result that the public will associate the lack of quality or lack of prestige in the defendant’s goods with the plaintiffs unrelated goods.”
Hormel Foods Corp. v. Jim Henson Productions, Inc.,
Starbucks argues that the District Court “erred by failing to find that ‘Char-bucks’ damages the positive reputation of Starbucks by evoking both ‘Starbucks’ and negative impressions in consumers, including the image of bitter, over-roasted coffee.” Starbucks reasons that it has shown dilution by tarnishment because, pursuant to its survey, (1) 30.5% of persons surveyed “immediately associated ‘Charbucks’ with ‘Starbucks’ ”; and (2) 62% of those surveyed who associated “Charbucks” with “Starbucks” “indicated that they would have a negative impression” of a “coffee named ‘Charbucks.’ ” We are unpersuaded by Starbucks’ reasoning.
To the extent Starbucks relies on the survey, a mere association between “Char-bucks” and “Starbucks,” coupled with a negative impression of the name “Char-bucks,” is insufficient to establish a likelihood of dilution by tarnishment. That a consumer may associate a negative-sounding junior mark with a famous mark says little of whether the consumer views the junior mark as harming the reputation of the famous mark. The more relevant question, for purposes of tarnishment, would have been how a hypothetical coffee named either “Mister Charbucks”- or “Charbucks Blend” would affect the positive impressions about the coffee sold by Starbucks. We will not assume that a purportedly negative-sounding junior mark will likely harm the reputation of the famous mark by mere association when the survey conducted by the party claiming dilution could have easily enlightened us on the matter. Indeed, it may even have been that “Charbucks” would strengthen *111 the positive impressions of Starbucks because it brings to the attention of consumers that the “Char” is absent in “Star”bucks, and, therefore, of the two “bucks,” Starbucks is the “un-charred” and more appealing product. Juxtaposition may bring to light more appealing aspects of a name that otherwise would not have been brought to the attention of ordinary observers.
Starbucks also argues that “Char-bucks” is a pejorative term for Starbucks’ coffee, and, therefore, the Charbucks
“name
has negative associations that consumers are likely to associate with Starbucks’ coffee.” Although the term “Char-bucks” was once used pejoratively during the so-called “coffee-wars”
5
in Boston, Massachusetts, Black Bear is not propagating that negative meaning but, rather, is redefining “Charbucks” to promote a positive image for its brand of coffee. Black Bear sells “Charbucks” as its own product, and, consistent with its intent on profiting from selling Charbucks, the Charbucks line of coffee is of “[v]ery high quality. It’s our life. We put everything into it.” In short, Black Bear is
promoting
“Charbucks” and not referring to it in a way as to harm the reputation of Starbucks’ coffees.
Cf. Deere & Co.,
Moreover, that the Charbucks line of coffee is marketed as a product of “[v]ery high quality” — as Starbucks also purports its coffee to be — is inconsistent with the concept of “tarnishment.”
See Hormel Foods Corp.,
3. The Parody Exception
Even if its use of “Charbucks” constituted dilution by either blurring or tarnishment, Black Bear appears to argue in the alternative that Charbucks is a parody and thus falls under an exception to 15 U.S.C. § 1125(c). Section 1125(c)(3), which was added in 2006 pursuant to the TDRA, specifies that the following uses of a mark “shall not be actionable as dilution by blurring or dilution by tarnishment”:
(A) Any fair use, including a nominative or descriptive fair use, or facilitation of such fair use, of a famous mark by another person other than as a designation of source for the person’s own goods or services, including use in connection with—
(i) advertising or promotion that permits consumers to compare goods or services; or
*112 (ii) identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner.
(B) All forms of news reporting and news commentary.
(C) Any noncommercial use of a mark.
15 U.S.C. § 1125(c)(3) (emphasis added).
As evident from the statutory language, Black Bear’s use of the Charbucks Marks cannot qualify under the parody exception because the Charbucks Marks are used “as a designation of source for [Black Bear’s] own goods[,
i.e.,
the Charbucks line of coffee].”
See
15 U.S.C. § 1125(c)(3)(A). Although Black Bear cites to several cases in support of its argument that the parody exception may still apply even if the parody were used to “identify the source of the defendants’ goods,” those cases were decided before the TDRA and are thus inapposite to the extent they are inconsistent with the amended section 1125(c)(3).
See Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC,
Inasmuch as Black Bear’s argument may be construed as advocating for consideration of parody in determining the likelihood of dilution by blurring- — -such as is recognized by the Fourth Circuit, see id. at 267 — we need not adopt or reject Louis Vuitton’s parody holding. We conclude that Black Bear’s use of the Charbucks Marks is not a parody of the kind which would favor Black Bear in the dilution analysis even if we were to adopt the Fourth Circuit’s rule.
In the Fourth Circuit’s Louis Vuitton case, Louis Vuitton Malletier S.A. — the famous maker of luxury luggage, handbags, and accessories — asserted, inter alia, a trademark dilution claim against Haute Diggity Dog, LLC, a manufacturer of pet toys that named its products to “parody elegant high-end brands of products such as perfume, cars, shoes, sparkling wine, and handbags.” Id. at 256, 258. Among its parodies, Haute Diggity Dog, LLC’s “Chewy Vuiton” product was alleged by Louis Vuitton Malletier S.A. as infringing and dilutive of the “Louis Vuitton” mark. Id. at 256.
Addressing the dilution claim, the Fourth Circuit initially noted that the fair use exception for parodies as specified in 15 U.S.C. § 1125(c)(3)(A) “does not extend ... to parodies used as a trademark.... [P]arodying a famous mark is protected by the fair use defense only if the parody is not ‘a designation of source for the person’s own goods or services.’ ”
Louis Vuitton,
[F]actor (v) (whether the defendant intended to create an association with the famous mark) and factor (vi) (whether there exists an actual association between the defendant’s mark and the famous mark) directly invite inquiries into the defendant’s intent in using the parody, the defendant’s actual use of the parody, and the effect that its use has on the famous mark. While a parody intentionally creates an association with the famous mark in order to be a parody, it also intentionally communicates, if *113 it is successful, that it is not the famous mark, but rather a satire of the famous mark. That the defendant is using its mark as a parody is therefore relevant in the consideration of these statutory factors.
Similarly, factors (i), (ii), and (iv) — the degree of similarity between the two marks, the degree of distinctiveness of the famous mark, and its recognizability — are directly implicated by consideration of the fact that the defendant’s mark is a successful parody. Indeed, by making the famous mark an object of the parody, a successful parody might actually enhance the famous mark’s distinctiveness by making it an icon. The brunt of the joke becomes yet more famous.
Id. (internal citations omitted). The Fourth Circuit then concluded that “Chewy Vuiton” did not dilute “Louis Vuitton” primarily because Chewy Vuiton “convey[ed] the ... message that it was not in fact a source of [Louis Vuitton] products.... [A]s a parody, it separated itself from the [Louis Vuitton] marks in order to make fun of them.” Id. at 267-68 (“[Bjecause [Louis Vuitton’s] mark is particularly strong and distinctive, it becomes more likely that a [successful] parody will not impair the distinctiveness of the mark.”).
Here, unlike in
Louis Vuitton,
Black Bear’s use of the Charbucks Marks is, at most, a subtle satire of the Starbucks Marks. Although we recognize some humor in “Char”bucks as a reference to the dark roast of the Starbucks coffees, Black Bear’s claim of humor fails to demonstrate such a clear parody as to qualify under the Fourth Circuit’s rule. As the owner of Black Bear affirmed during his testimony, “[t]he inspiration for the term Charbucks comes directly from Starbucks’ tendency to roast its products more darkly than that of other major roasters.” The owner of Black Bear further testified that the Char-bucks line of products “is the darkest roasted coffee that we do” and is of “[v]ery high quality.” Thus, the Charbucks parody is promoted not as a satire or irreverent commentary of Starbucks but, rather, as a beacon to identify Charbucks as a coffee that competes at the same level and quality as Starbucks in producing dark-roasted coffees.
See Harley Davidson, Inc. v. Grottanelli,
Therefore, because the Charbucks Marks do not effect an “increase [in] public identification [of the Starbucks Marks with Starbucks],” the purported Char-bucks parody plays no part in undermining a finding of dilution under the Fourth Circuit’s rule.
See generally Hormel Foods Corp.,
C. State Trademark Dilution
New York law provides that a “[l]ikelihood of injury to business reputa
*114
tion or of dilution of the distinctive quality of a mark or trade name shall be a ground for injunctive relief ... notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services.” N.Y. Gen. Bus. Law § 360 — l. Similar to federal trademark dilution law under 15 U.S.C. § 1125(c), section 360 — l has been interpreted to provide for protection against both dilution by blurring and tarnishment.
See Hormel Foods Corp.,
Because we conclude that the District Court did not clearly err in finding that the Charbucks Marks are not substantially similar to the Starbucks Marks, the court did not err in denying Starbucks relief under New York dilution law. Moreover, for the reasons stated supra, Part 11(B)(2) (Dilution by Tarnishment), we agree with the District Court that Starbucks failed to establish dilution by tarnishment under New York law. Accordingly, we hold that the District Court did not err in finding that there was no likelihood of dilution under New York law in this case.
D. Trademark Infringement and Unfair Competition Claims
To prevail on a trademark infringement and unfair competition claim under 15 U.S.C. §§ 1114(1), 1125(a), in addition to demonstrating that the plaintiffs mark is protected, the plaintiff must prove that the defendant’s use of the allegedly infringing mark would likely cause confusion as to the origin or sponsorship of the defendant’s goods with plaintiffs goods.
Savin Corp.,
*115
In determining whether there is a likelihood of confusion, we apply the eight-factor balancing test introduced in
Polaroid Corp. v. Polarad Elecs. Corp.,
Here, that the Starbucks Marks are strong ones (first factor), that the parties use their respective marks in connection with the sale of coffee products (third factor), and that there is no competitive gap to be bridged between the relevant commercial activities of the parties (fourth factor) are not disputed. Whether these factors should favor Starbucks, however, is contested to some extent by Black Bear. Specifically, although Black Bear accepts that the third factor favors Starbucks in determining the likelihood of confusion, Black Bear argues that the first and fourth factors do not favor Starbucks in the determination of a likelihood of confusion. 7
We agree with Black Bear’s first argument that the “bridging the gap” factor is irrelevant and thus should not favor Starbucks where, as here, the two products are in direct competition with each other.
Star Indus.,
We reject Black Bear’s second argument, however, that the particularly strong Starbucks Marks should “weigh ... against the likelihood of confusion.” In so arguing, Black Bear ignores the rule that a strong mark “would be a factor favoring the trademark
plaintiff.” Hormel Foods Corp.,
With respect to the remaining five Polaroid factors, namely, (1) similarity of the marks; (2) evidence of actual consumer confusion; (3) evidence that the imitative mark was adopted in bad faith; (4) respective quality of the products; and (5) sophistication of consumers in the relevant market; we find no error in the District Court’s determinations as to each individual factor — with the exception of (5) — and agree that, ultimately, there is no likelihood that consumers will confuse the Charbucks Marks with the Starbucks Marks.
Starbucks’ argument that the District Court clearly erred in finding that the Charbucks Marks and the Starbucks Marks were minimally similar is rejected for the same reasons discussed supra Part II(B)(1) (Dilution by Blurring). Starbucks further argues in its challenge to the District Court’s Polaroid analysis that the court clearly erred because it “presuppose[d] that no consumer who searches for ‘Charbucks’ on the Internet, either purposefully or as the result of a typing error, is without perfect information about the true source, affiliation or sponsorship of the product.” The District Court, however, considered the similarity between the Charbucks Marks with the Starbucks Marks in the context in which each were presented to the public and did not presuppose perfect knowledge by the consumer:
It is possible, by using a search engine, to reach a page within [Black Bear’s] Internet web site that lists “Mr. Char-bucks Blend” for sale along with other types of Black Bear coffee and that does not show the Black Bear logo or company name as such. The internet address for this page does, however, include the “blackbearcoffee.com” domain name utilized by [Black Bear]. This page of the web site is not indicative of stand-alone or other potentially confusing use by [Black Bear] of the word “Charbucks” in promoting its products.
*117
See Star Indus.,
Starbucks next argues that the District Court clearly erred in finding that evidence of actual confusion — -or the court’s finding of a lack thereof — favored Black Bear in the
Polaroid
analysis. The only evidence as to actual confusion submitted by Starbucks was a telephone survey where 3.1% of 600 respondents named Starbucks as a possible source of a “Char-bucks” product; 30.5% of 600 respondents “immediately thought of ‘Starbucks’ ” upon hearing “Charbueks”; and 9% of consumers “immediately thought of coffee ... after hearing ‘Charbueks.’ ” Particularly in light of the fact that the survey was administered by telephone and did not present the term “Charbueks” in the context in which Black Bear used it, the District Court did not clearly err in finding that the survey was “insufficient to make the actual confusion factor weigh in [Starbucks’] favor to any significant degree.” Moreover, Starbucks’ own witness, a Director of Brand Management, testified that Starbucks had no knowledge that any consumer had ever actually become confused that Charbueks was a Starbucks product. Although actual confusion is not necessary to establish a likelihood of confusion,
Hasbro, Inc. v. Lanard Toys, Ltd.,
Starbucks also argues that the District Court erred in considering whether Charbueks was adopted by Black Bear in bad faith to mislead the public. Starbucks argues that the District Court applied the wrong legal standard because “Black Bear’s intent to capitalize on Starbucks’ reputation is undisputed and its alleged lack of intent to mislead is irrelevant to the ‘intent’ factor.” We reject Starbucks’ argument, however, because the “only relevant intent is intent to confuse. There is a considerable difference between an intent to copy and an intent to deceive.” 4 McCarthy on Trademarks § 23.113;
see also Star Indus.,
Here, Black Bear wrote in 1997 that the “Char” part of “Charbucks” would prevent anyone from purchasing the dark roasted coffee by mistake and that “[s]ince the name was going on our packaging, and since our graphics bore no similarity whatsoever to Starbuck’s [sic] graphics, it seemed perfectly obvious that no one could possibly be confused into thinking we were in any way connected to Starbucks.” Indeed, presumably because of its small operation and its local customers’ disdain for large corporations, Black Bear’s owner testified that Black Bear’s association with a “large corporation ... would be very bad for us.” Thus, the District Court reasonably concluded that Black Bear did not intend to mislead the public that the Char-bucks coffees were Starbucks products, and, accordingly, the court did not clearly err in its consideration of the “bad faith” factor.
Starbucks also challenges the District Court’s consideration of the “comparability of goods” factor. Instead of challenging the District Court’s factual determination that both Starbucks and the Charbucks line of products were high quality coffees, Starbucks argues that the court’s conclusion that the goods were of comparable quality should favor Starbucks in the analysis of “likelihood of confusion.” In support of this argument, Starbucks cites to
Morningside Group Ltd. v. Morningside Cap. Group, LLC,
Finally, Starbucks argues that the District Court clearly erred in finding that the “ordinary purchaser is very unlikely to mistake [Black Bear’s] ‘Mr. Charbucks Blend’ or ‘Charbucks Blend’ product for one offered by Starbucks, whether or not that person is ‘highly discriminating,’ ” and consequently concluding that the consumer sophistication factor favored Black Bear. Starbucks argues that its base of coffee customers are not sophisticated enough to discriminate between the Charbucks Marks and the Starbucks Marks “because consumers generally make quick, casual purchasing decisions about low-cost goods and therefore are more likely to form mistaken impressions about the products’ affiliation or sponsorship.”
The District Court’s determination that purchasers were unlikely to be mistaken
*119
whether or not
they were sophisticated does not logically support its conclusion that consumer sophistication, as an individual factor, favored Black Bear. The District Court appears to have been anticipating its final balancing of the
Polaroid
factors within its consumer sophistication analysis. Moreover, Starbucks is correct that our case law has associated the purchase of low-cost goods in a supermarket environment with low customer sophistication.
See, e.g., Lever Bros. Co. v. Am. Bakeries Co.,
In sum, considering all of the Polaroid factors, we conclude that there is no “likelihood of confusion” in this case. Notably, the District Court — in coming to the same conclusion we reach here — considered the fourth Polaroid factor (“bridge the gap” factor) in favor of Starbucks. Having concluded that the “bridge the gap” factor should not have weighed in favor of Starbucks in the Polaroid analysis, we a fortiori agree with the District Court’s ultimate conclusion that there is no likelihood of confusion “as to source, sponsorship, or association of [Charbucks] with the Starbucks mark,” notwithstanding our determination that the consumer sophistication factor should not have been given much weight in the analysis.
III. CONCLUSION
For the foregoing reasons, the judgment of the District Court is AFFIRMED in part and VACATED in part. The case is REMANDED to the District Court for further proceedings consistent with this opinion.
Notes
. In an order dated September 28, 2004, the District Court granted, in part, Black Bear’s cross-motion for summary judgment and dismissed Starbucks’ claim under N.Y. Gen. Bus. Law §§ 349, 350 for deceptive acts and business practices and false advertising. On appeal, Starbucks does not contest this dismissal.
. The parties do not challenge the District Court’s determination as to the difference in color between the two marks.
. We acknowledge that there is some obvious similarity between the core terms "Char-bucks” and "Starbucks.” As explained below, the existence of some — but not substantial — similarity between the subject marks may be sufficient in some cases to demonstrate a likelihood of dilution by blurring. Thus, upon reconsideration of the application of the blurring factors, the absence of "substantial similarity” will not preclude the District Court from concluding that there is a likelihood of an "association arising from the similarity between [the Charbucks Marks and Starbucks Marks] that impairs the distinctiveness of the [Starbucks Marks].” See 15 U.S.C. § 1125(c)(2)(B), (c)(2)(B)(i).
. Despite the Ninth Circuit's relaxing of the similarity standard where the famous mark is highly distinctive, the court nonetheless required that the subject marks be "essentially the same" for a dilution claim to succeed under California law.
See Perfumebay.com Inc.,
. The name "Charbucks” was used publicly by the owner of a former chain of coffee bars, “Coffee Connection,” to describe what the owner believed was the “over-roasted” type of coffee Starbucks was serving.
. To the extent Starbucks argues that the District Court applied an excessively narrow view of "likelihood of confusion” by requiring that consumers "are likely to believe the infringer’s goods originate from the trademark owner,” we reject this argument as unsup *115 ported by the record. The District Court explicitly concluded that Starbucks was "unable to prove the requisite likelihood of consumer confusion as to source, sponsorship, or association of [Charbucks] with the Starbucks mark.” (emphasis added).
. The District Court’s opinion initially noted that the strength of the plaintiff’s mark, direct competitiveness, and bridge-the-gap factors "weigh in favor of Starbucks” but then later concluded that "[o]ther than the strength of the mark, the Polaroid factors in the instant case are largely favorable to [Black Bear] or neutral.” We understand the District Court's reference to "largely ... neutral” as an alternative method of expressing that the factors that weigh in favor of Starbucks do so only slightly.
. To the extent Starbucks claims that the relatively minimal sales of Black Bear’s coffee since 1997 gave "little opportunity for consumers to become confused,” this argument is unavailing. Since 1997, Charbueks has sold $7,000 annually of the Charbueks line of coffee, which range in price from $4.30 to $35.80 per bag. Moreover, Black Bear sold its Charbueks coffee openly in certain supermarkets in New England and through the internet, thus giving consumers more than a “little opportunity” for them to observe both the Charbueks Marks and the Starbucks Marks in the stream of commerce.
Cf. Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co.,
. In
Morningside,
this Court stated that under the quality factor, "a court first examines whether defendant's products or services are inferior to plaintiff’s, thereby tarnishing plaintiff's reputation if consumers confuse the two.”
Morningside,