UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

ANSWER AND COUNTERCLAIM

               Now comes the Defendant, Wolfe’s Borough Coffee, Inc., d/b/a Black Bear Micro Roastery (“Black Bear”), and answers the allegations of the Plaintiffs’ Complaint as follows:

1. The Defendant admits that the named Plaintiffs have brought the instant action. Black Bear denies that it has willfully misappropriated and/or damaged the Plaintiffs' registered trademark.
2. Black Bear is without sufficient information to admit or deny the allegation that Starbucks is the largest and best-known purveyor of specialty coffees in North America, and calls upon Plaintiffs to prove same.  Black Bear denies the remaining allegations of paragraph two and calls upon Plaintiffs to prove same.
3. Black Bear denies the allegation that the amount in controversy in this action exceeds $75,000.  The remaining allegations of paragraph three are admitted.

4. Black Bear denies the allegations of paragraph four and calls upon the Plaintiffs to prove same.
5. The allegations of paragraph five are admitted.
6. The allegations of paragraph six are admitted.
7. The allegations of paragraph seven are admitted.
8. Black Bear is without sufficient information to admit or deny the allegations of paragraph eight and calls upon Plaintiffs to prove same.
9. Black Bear is without sufficient information to admit or deny the allegations of paragraph nine and calls upon Plaintiffs to prove same.
10. Black Bear is without sufficient information to admit or deny the allegations of paragraph ten and calls upon Plaintiffs to prove same.
11. Black Bear is without sufficient information to admit or deny the allegations of paragraph eleven and calls upon Plaintiffs to prove same.
12. Black Bear admits that it has used and continues to use the term "Charbucks" in connection with the marketing and sale of one of its roasted coffee blends.  The remaining allegations of paragraph twelve are denied and Black Bear calls upon Plaintiffs to prove same.
13. Black Bear admits the allegations of paragraph thirteen.
14. Black Bear denies the allegations of paragraph fourteen and calls upon Plaintiffs to prove same.
15. Black Bear denies the allegations of paragraph fifteen and calls upon Plaintiffs to prove same.

Count I

16. Black Bear's answers to the allegations set forth above are restated and incorporated herein.
17. The allegations of paragraph seventeen constitute a conclusion of law, requiring no response from Black Bear. To the extent that said allegations require a response, Black Bear denies same.

18. Black Bear denies the allegations of paragraph eighteen and calls upon Plaintiffs to prove same.

19. Black Bear denies the allegations of paragraph nineteen and calls upon Plaintiffs to prove same.

20. Black Bear denies the allegations of paragraph twenty and calls upon Plaintiffs to prove same.

Count II

21. Black Bear's answers to the allegations set forth above are restated and incorporated herein.

22. Black Bear is without sufficient information to admit or deny the allegations of paragraph twenty-two and calls upon Plaintiffs to prove same.
23. Black Bear denies the allegations of paragraph twenty-three and calls upon Plaintiffs to prove same.

24. Black Bear denies the allegations of paragraph twenty-four and calls upon Plaintiffs to prove same.

25. Black Bear denies the allegations of paragraph twenty-five and calls upon Plaintiffs to prove same.

26. Black Bear denies the allegations of paragraph twenty-six and calls upon Plaintiffs to prove same.

Count III

27. Black Bear's answers to the allegations set forth above are restated and incorporated herein.

28. Black Bear denies the allegations of paragraph twenty-eight and calls upon Plaintiffs to prove same.

29. Black Bear denies the allegations of paragraph twenty-nine and calls upon Plaintiffs to prove same.

30. Black Bear denies the allegations of paragraph thirty and calls upon Plaintiffs to prove same.

31. Black Bear denies the allegations of paragraph thirty-one and calls upon Plaintiffs to prove same.

Count IV

32. Black Bear's answers to the allegations of paragraphs one through thirty-one are restated and incorporated herein.

33. The allegations of paragraph thirty-three constitute a conclusion of law, requiring no response from Black Bear. To the extent that said allegations require a response, Black Bear denies same.

34. Black Bear denies the allegations of paragraph thirty-four and calls upon Plaintiffs to prove same.

35. Black Bear denies the allegations of paragraph thirty-five and calls upon Plaintiffs to prove same.

Count V

36. Black Bear's answers to the allegations set forth above are restated and incorporated herein.

37. The allegations of paragraph thirty-seven constitute a conclusion of law, requiring no response from Black Bear. To the extent that said allegations require a response, Black Bear denies same.

38. Black Bear denies the allegations of paragraph thirty-eight and calls upon Plaintiffs to prove same.

39. Black Bear denies the allegations of paragraph thirty-nine and calls upon Plaintiffs to prove same.

40. Black Bear denies the allegations of paragraph forty and calls upon Plaintiffs to prove same.

Count VI

41. Black Bear's answers to the allegations set forth above are restated and incorporated herein.

42. Black Bear admits the allegations of paragraph forty-two.

43. The allegations of paragraph forty-three constitute a conclusion of law, requiring no response from Black Bear. To the extent that said allegations require a response, Black Bear denies same and calls upon Plaintiffs to prove same.

44. Black Bear denies the allegations of paragraph forty-four and calls upon Plaintiffs to prove same.

First Affirmative Defense

            The Plaintiffs’ claims against Black Bear fail to state claims against Defendant upon which relief may be granted and therefore must be dismissed.

Second Affirmative Defense

            The Plaintiffs are estopped from recovery against Black Bear due to their own conduct and actions, including, but not limited to, conduct in violation of the covenant of good faith and fair dealing and conduct which constitutes unfair and deceptive business practices.

Third Affirmative Defense

            The claims arising out of the subject matter, transactions and occurrences alleged in the Plaintiffs’ Complaint are barred by the doctrine of laches.

Fourth Affirmative Defense

            The Plaintiffs’ claims against Black Bear are barred by the applicable Statute of Limitations.

Fifth Affirmative Defense

            By their own conduct and actions, the Plaintiffs have waived their right to any recovery against Black Bear.

Sixth Affirmative Defense

            The Plaintiffs’ claims against Black Bear are barred due to the Plaintiffs’ fraudulent conduct against Black Bear.

Seventh Affirmative Defense

            Plaintiffs’ claims are barred pursuant to the terms of any applicable license.

Eighth Affirmative Defense

            Black Bear hereby gives notice that it intends to rely upon such other and further defenses as may become available or apparent during the discovery proceedings in the action and hereby reserves the right to amend its Answer and Counterclaim and to assert any such further defense or claim by appropriate motion.

          WHEREFORE, the Defendant, Wolfe's Borough Coffee, Inc., d/b/a Black Bear Micro Roastery, prays that judgment enter as follows:

1. That all claims brought against it by the Plaintiffs be dismissed;
2. That the Plaintiffs take nothing in this action, that judgment enter on behalf of the Defendant, together with attorneys fees, costs and interest;

3. That it be granted such further relief as this Court deems just

COUNTERCLAIM

1. Plaintiff-in-counterclaim, Wolfe's Borough Coffee, Inc., d/b/a Black Bear Micro Roastery ("Black Bear"), is a corporation organized and existing under the laws of the State of New Hampshire with a sole place of business at 16 Burleigh Road, Center Tuftonboro, New Hampshire.

2. The Defendant-in-counterclaim, Starbucks Corporation ("Starbucks"), upon information and belief, is a corporation organized and existing under the laws of the State of Washington, with a principal place of business in Seattle, Washington.

3. The Defendant-in-counterclaim, Starbucks U.S. Brands, Inc., upon information and belief, is a corporation organized and existing under the laws of the State of California, with a principal place of business in Burlingame, California and is a wholly owned subsidiary of Starbucks.

4. Black Bear is a small, family owned and operated business that roasts select coffee beans in small batches, using a computer-controlled, hot air, refractory-lined roaster, which provides for a superior roasting environment and produces a very high quality product.

5. Black Bear's roast coffees are available for purchase through mail and internet order and at a limited number of New England supermarkets.

6. Black Bear does not own or operate any retail coffee shops.

7. Black Bear's annual revenues generally total less than two hundred thousand dollars ($200,000).

8. Upon information and belief, Starbucks is the largest seller of specialty coffees in North America.

9. Upon information and belief, Starbucks owns and operates over four thousand retail coffee shops throughout North America and many foreign countries, with annual revenues in excess of two billion dollars ($2,000,000,000).

10. None of Black Bear's logos, labels and/or other marketing materials bear any resemblance whatsoever to Starbucks' logos, labels and/or other marketing materials.

11. The term "Charbucks" is used by Black Bear in connection with the sale of one of its twenty-two roasted coffees. Charbucks is a widely known and commonly used term in the coffee trade and is meant to refer to the very dark roasted coffees made popular by west coast coffee purveyors. Such a dark roast is a departure from Black Bear's typical products.

12. Black Bear is aware of no evidence that any consumer has ever been confused as to the origin of its coffees due to the use of the term Charbucks.

13. In 1997, Starbucks initiated contact with Black Bear through legal counsel and advised Black Bear that it objected to Black Bear's use of the term Charbucks, and requested that Black Bear cease its use of the term and remove the coffee bearing that designation from its retail customers' shelves.

14. Black Bear responded to Starbucks' demands by contending (1) that to the best of its knowledge it was not infringing on any of Starbucks' trademarks, (2) that it was convinced that no customer had ever been confused by Black Bear's use of the Charbucks term, and (3) that effecting the changes demanded by Starbucks would be an expensive and time consuming undertaking for Black Bear.

15. Black Bear and representatives of Starbucks corresponded over a period of several months in an effort to reach an accommodation, but no final resolution was ever reached.

16. Black Bear has continued to use the term Charbucks in connection with its said dark roasted coffee blend.

17. The Plaintiffs/Defendants-in-Counterclaim brought the instant action in 2001, some four years after initially making its demands upon Black Bear.

Count I

Unfair and Deceptive Business Practices v. Starbucks Corporation

18. The Plaintiff-in-Counterclaim restates and incorporates herein each of the above allegations.

19. The above-described conduct of Starbucks Corporation is without legal justification and constitutes a knowing and wilful violation of applicable New York statutory law, including New York General Business Law § 349.

20. The said conduct of Starbucks Corporation has caused Black Bear undue damage and expense, including attorneys' fees and has had the effect of damaging Black Bear's viability as a business enterprise.

Count II
Unfair and Deceptive Business Practices v. Starbucks U.S. Brands, Inc.

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21. The Plaintiff-in-Counterclaim restates and incorporates herein each of the above allegations.

22. The above-described conduct of Starbucks U.S. Brands, Inc. is without legal justification and constitutes a knowing and wilful violation of applicable New York statutory law, including New York General Business Law § 349.

23. The said conduct of Starbucks U.S. Brands, Inc. has caused Black Bear undue damages and expense, including attorneys' fees and has had the effect of damaging Black Bear's viability as a business enterprise.

Count III

Abuse of Process v. Starbucks Corporation

24. The Plaintiff-in-Counterclaim restates and incorporates herein each of the above allegations.

25. The prosecution of this action by Starbucks Corporation constitutes a willful use of the legal process for a malicious purpose, not justified by law.

26. The said conduct of Starbucks Corporation has caused Black Bear undue expense, including attorneys' fees and has had the effect of damaging Black Bear's viability as a business enterprise.

Count IV

Abuse of Process v. Starbucks U.S. Brands, Inc.

27. The Plaintiff-in-Counterclaim restates and incorporates herein each of the above allegations.

28. The prosecution of this action by Starbucks Corporation constitutes a wilfull use of the legal process for a malicious purpose, not justified by law.

29. The said conduct of Starbucks U.S. Brands, Inc. has caused Black Bear undue expense, including attorneys' fees and has had the effect of diminsihing competition and damaging Black Bear's viability as a business enterprise.

1. That judgment enter in its favor and that it be awarded damages on each of the above counts;

2. That it be awarded attorneys' fees and multiple damages as allowed by law;

3. That it be awarded its costs and expenses, including reasonable attorneys' fees; and

4. That it be granted such further relief as this Court deems just.