Starbucks Corporation v. Wolfe's Borough Coffee, Inc.

   U.S.D.C. Case No, Ol-CV-5981 (LTS) (THK)

OPINION OF WARREN MITOFSKY, DIRECTOR OF EDISON MEDIA RESEARCH,

                 SUBMITTED ON BEHALF OF PLAINTIFFS

April 8,2002

SUMMARY OF OPINION

 I have been engaged by the law firm of Jones, Day, Reavis & Pogue, counsel for plaintiffs, and asked to conduct independent consumer research to ascertain the reactions of a national sample of adults to the name "Charbucks" and to determine whether the respondents associate the name with "Starbucks" and how this association would affect the "Starbucks" brand name. Having completed this task, my opinions can be summarized as follows;

• The number one association of the name "Charbucks" in the minds of consumers is with the brand "Starbucks." No other single response conies anywhere close to the number of respondents who associate "Charbucks" with "Starbucks" or coffee in general. This association is even higher among those who are already familiar with the "Starbucks" brand. More than one-half of all respondents mentioned "Starbucks" or "Coffee" as something that comes to mind when they hear the name "Charbucks".

• The name "Charbucks" creates many negative associations in the mind of the consumer when it comes to describing coffee. It is obviously not a name that any company would select to increase the appeal of its product.

• "Starbucks" is a very well known and popular brand name. The association of the name "Charbucks" would only serve to damage the appeal of the Starbucks brand.

• Current "Starbucks" consumers are significantly more likely to use the Internet to make purchases than those who aren't aware of Starbucks. Thus, they are more likely to be exposed to a coffee named "Charbucks" that is sold through the Internet, and this exposure can only increase confusion with the "Starbucks" brand and lessen the positive appeal of the brand name.

SUMMARY OF QUALIFICATIONS

I have worked in the field of consumer survey research and polling for almost 40 years, I  currently own and operate the consulting firm of Mitofsky International, which does election and opinion research worldwide, with clients in Russia, Mexico, Sri Lanka and the United States. I am also Director of Edison Media Research ("Edison"), an international consumer research company that conducts survey and similar consumer research for radio stations, television stations, newspapers, cable networks, record labels and other media and political organizations.   As Director, my duties include coordinating statistical analysis for Edison.  In my career, I have designed, supervised and analyzed the results of literally hundreds of surveys for organizations including CBS News, The New York Times, The Wall Street Journal, CNN and The Washington Post. I have also done significant consumer research projects for many businesses, including companies such as Avon, AT&T and General Mills. A Summary of  my work and educational experience is set forth in my resume,, a copy is attached hereto as  Exhibit "A."

I received a Bachelor of Science degree in Psychology from Guilford College in 1958.  I have subsequently done graduate work at the University of North Carolina and the University of  Minnesota, where I was a candidate for a Ph.D, in Mass Communications. In the Spring of 1955, I was visiting Fellow at the Shorenstein Center of Harvard University. In the Fall of 1995.1 was the Howard R. March Visiting Professor at the University of Michigan, Department of  Communication Studies.

I have published numerous articles and edited several texts on the subject of opinion research. A list of these publications is included in my resume.  Throughout my career, I have been active in professional organizations that serve the opinion research community. I am a member of the American Association for Public Opinion Research (serving as its President in 1988-89), the National Council on Public Polls (serving as President from 1981-83) and the Research Industry Coalition. I am also a Fellow of the American Statistical Association.

I am familiar with the accepted principles of survey research, as well as the tests for trustworthiness of properly conducted surveys or polls, I have also read and am familiar with the sections of the Manual for Complex Litigation (3d) (Fed. Judicial Center. 1995) that relate to the standards governing the admissibility of survey and polling evidence in civil matters in federal courts.

PUBLICATIONS

Editor: A Meeting Place: The History of the American Association for Public Opinion         Research, Carolina Press, 1993, (with Paul Sheatsley).

Editor: Campaign 78, Arno Press, 1979-

Editor: Campaign 76, Arno Press, 1977. (with Catherine Krein).

"A Short History of Exit Polls." in Lavrakas and Holley, eds. Polling and Presidential

Election Coverage, 1991.

"How Pollsters and Reporters Can Do a Better Job Informing the Public: A Challenge for

Campaign "96," and "A Review of the 1992 VRS Exit Polls," (with M. Edelman) in

Lavrakas, Traugott and Miller, eds. Presidential Polls and the News Media, 1995,

          "Was 1996 a worse Year for Polls than I948? " Public Opinion Quarterly, 1998

PRIOR EXPERT TESTIMONY

  Prior Trial Testimony

I participated in the following First Amendment trials as the lead plaintiff's witness against state exit poll laws. A number of states set unreasonable distances from a polling place for interviewers to stand in order to conduct exit poll interviews. Exit polls are conducted by news organizations on Election Day with voters as they leave their polling places. These polls arc used for election projections and analysis.

I do not know the legal citations for all the cases. Floyd Abrams, Susan Buckley and others from Cahill, Gordon & Reindel were the attorneys for cases 1, 2 and 3, below.  They were tried in federal courts on behalf of CBS News, which was my employer at the time, and the other networks. The New York Times and The Washington Post (owner of  the Everett Daily Herald)  participated in the first case.  Attorneys from Louisville, Kentucky, tried the fourth case. They represented the local media. I was asked by Abrams to participate as a witness. Apparently, the attorneys had been in contact.

1. Daily Herald Co. v. Munro, 838 F.2d 380 (1988).  Trial was m Washington State in 1986. I was the major witness for the plaintiffs. The verdict was in favor of the plaintiffs (news organizations). It was appealed by the state to the 9th circuit, and was upheld.

2. The networks asked for an injunction in federal court against Florida's exit poll law. The trial was in Miami shortly before the 1988 presidential primary elections. It commenced soon after the 9th Circuit upheld the verdict against Washington State I was the only network witness for the plaintiffs. Relief was granted.

3.  This, too, was a request for an injunction in federal court in Atlanta against Georgia's exit poll law. It was shortly after the Florida case. Again, I was the only network witness for the plaintiffs. We won.

4. The Kentucky case followed the Florida and Georgia cases. I do not remember the details of this appearance. I went to Louisville for a trial, met with the attorney's, but do not recall what happened in court. The exit poll statute was struck down. I do not recall if this was a state or federal court.

Floyd Abrams

Cahill, Gordon & Reitdel

80 Pine Street

New York, NY 10005

Prior Deposition Testimony

5.  Early in 1995 Michael Huffington challenged Dianne Feinstein's election to   the U.S. Senate from the State of California. The challenge was made in the Senate and was scheduled to be heard by a Senate Committee.

Huffington claimed that there were fraudulent ballots cast in the election that made Feinstein's victory doubtful. He based this on estimates made from inspecting the voting records in the sample of precincts in the state.

         I was hired by Lloyd N. Cutler, Feinstein's attorney, to write a memo that was part of a deposition contesting Huffington's challenge.  Reference to the deposition appeared m a number of newspapers soon after it was filed.  Huffington eventually dropped his challenge.

Lloyd N. Cutler

Wilmer, Cutler & Pickering

2445 M Street, N.W.

Washington, D.C. 20037-1420

6. In 19981 gave a deposition in a South Carolina video gambling case, Caldwell v Collins. I critiqued a survey submitted by the plaintiffs in support of their suit.  My clients were the video gambling industry.

Rush Smith, III

Nelson Mullins Riley & Scarborough, L.L.P

Keenan Building, Third Floor

1330 Lady Street

Columbia, SC 29201

Survey Design

7. In 19971 designed a survey for the lawyers representing Merrill Lynch & Co in the bankruptcy suit brought by Orange County, California. The survey was to be used in support of a change of venue motion.

Kelly Klaus

Munger Tolles & Olson

33 New Montgomery St., 19th Floor

San Francisco, CA 94110

8. I participated in the design of a survey for a trademark lawsuit brought on behalf of Bill Blanks.  I worked for the defendant, Anchor Bay Entertainment.  I also critiqued the survey report of the expert witness representing Blanks. This work was done with Edison Media Research.

John C. Rawls

Blanc Williams Johnston & Kronstadt

1900 Avenue of the Stars, 17th floor

Los Angeles, CA 900067-4403

9. I conducted a survey in support of a change of venue motion for the New York City policemen charged in the shooting of Amadou Diallo. The venue was changed from the Bronx to

Albany County.

Burton Roberts

909 Third Avenue

New York, NY 10022

Consulting

10. In 19971 evaluated a survey submitted by Arnold & Porter titled "Attitudes Toward Cigarette Smoking." Arnold & Porter represented the tobacco industry in the landmark suit brought by the State of South Carolina. I worked for a consultant to the law firm representing South Carolina.

 Patricia McEvoy

 Zagnol McEvoy Foley - Suite 2330

 55 West Monroe Avenue

 Chicago, Illinois 60603

11. Starting in about 1978 and continuing for about five years, I consulted on an arbitration case that involved 18 major oil companies. My client was Hunt Oil. The case involved the distribution of fluids based on a complex arrangement among the companies designed to keep their Libyan oil interests from being taken over by the Libyan government. I designed a model to maximize Hunt's profits, which were effected by various actions they might take against the other oil companies. The first of two law firms I worked for was Kramer Levin. The other firm was in Virginia.

Kramer Levin Nessen Kamin & Frankel

919 Third Avenue

York, NY 10022

12. In 19951 consulted with three law firms that had similar cases involving the Upjohn pharmaceutical company and the drugs Halcion, Xanax and Versed. I examined Upjohn documents about the drugs for each of the attorneys listed below.

Kerry E. Connolly

Coblence & Warner

415 Madison Avenue

New York, NY 10017

Michael D. Mosher

Hytken & Mosher

1305 Lamar Avenue

Suites C and D

Paris, TX 75460

Robert Feinstein

Warner Center Business Park

5850 Canoga Avenue

Suite 500

Woodland Hills, CA 91367

EXPERT COMPENSATION

Edison Media Research was paid $30,000 to conduct this research. I am being compensated for my time expended in study and testimony offered in this case at the rate of $400/hour. My compensation is not contingent upon the results of my study or the substance of my testimony.

SURVEY RESULTS

How the Survey was Conducted

This report summarizes the results of a national telephone survey conducted by Edison Media Research regarding consumer reaction to the name "Charbucks." We conducted a national survey consisting of 600 telephone interviews with adults 18 years and older conducted between March 22'td and March 30'h 2002. The average length of the interviews was seven minutes. The households were contacted using random digit dialing, and one individual in each household was randomly selected to be interviewed. The final results were weighted to take into account the size of the household and to reflect the national age and sex demographic breakdown as estimated by the United States Census Bureau. With a sample size of 600 respondents the sampling error at a 95% confidence interval is ± 4%.

The questionnaire that was used is included with this report, attached hereto as Exhibit "B." It contains several open-ended questions that were used to record the respondents' reactions to the word "Charbucks" in their own words. These responses were then coded into groups of similar responses for tabulation. That tabulation is attached hereto as Exhibit "C." A spreadsheet with the actual verbatim comments by each respondent to each question is also included with this report, attached hereto as Exhibit "D." m addition, a summary of the survey findings is attached hereto as Exhibit "E."

Survey Findings

        The main objective of this survey was to determine how consumers react to the name "Charbucks." The questionnaire was designed so that this key question would be the first substantive question asked, so that no other questions would influence the initial reaction of the respondent to the name "Charbucks."

Q. 6 "What is the FIRST THING that comes to your mind when you hear the name 'Charbucks'

 spelled C-H-A-R-B-U-C-K-S?"

Responses

(NOTE: Percentages add up to 104% because some respondents gave more than one coded response.)

The results are clear. By &r the number one answer was that the name "Charbucks" reminded the respondents of the name "Starbucks." Nearly one-third of all respondents (31%) gave this response. AJO additional 9% said that the name "Charbucks" made them think of "coffee." It is logical to assume that these respondent thought about coffee because of the association with "Starbucks."

The next most common responses were each mentioned by fewer than 10% of the respondents. Several of these responses dealt with "Barbeque" or "Meat" (presumably from the "char" part of the name) and a few dealt 'with "Money" (no doubt from the "bucks" part of the name).

The overwhelming nature of the association of the word "Charbucks" with the brand "Starbucks" becomes even clearer when the results of this question are taken from just the respondents who say that they are familiar with the brand of coffee called "Starbucks." Nearly four out of five respondents (79%) said that they are familiar with the "Starbucks" brand and among this group 39% associated the word ''Charbucks" with "Starbucks". An additional 10% associated the word "Charbucks" with coffee. Thus, about one half of all respondents who are familiar with "Starbucks" would associate the name "Charbucks" with either "Starbucks" or coffee.

Respondents were then asked if anything else came to their mind when they heard the name "Charbucks."

Q. 7 "What OTHER impressions do you get from the name 'Charbucks' spelled C-H-A-R-B-U-C-K-S?"

When the results of this question are combined with the results of the previous question, the responses are as follows

Responses