I've always said the Starbucks isn't evil; their coffee is just over-roasted, and not at all to my taste. Almost charred, you might say. A Center Tuftonboro, New Hampshire coffee roaster, in marketing coffees called "Charbucks Blend" and "Mister Charbucks" did intenionally mimick their brand name, but with no intent to mislead consumers and with no ill effects on the coporate giant, a U.S. District Court judge in New York has ruled. More from the Manchester Union Leader.

U.S. District Court Judge Laura Taylor Swain wrote that in adopting the name, Black Bear intended to take advantage of the similarity to the Starbucks name and the perception the West Coast-based company sells a dark roast of Joe. But the evidence did not support an inference it was done to mislead consumers about a connection between the two, Swain ruled. Starbucks also failed to demonstrate that a Charbucks brand is likely to hurt the perception of Starbucks’ goods in the eyes of the public, she said.

That's for sure. The key perception of Starbucks is not that their coffee is any good, but that their stores are conveniently located, a factor which greatly outweighs quality, as Tim Harford notes in his new book "The Undercover Economist: Exposing Why the Rich are Rich, the Poor are Poor — and Why You Can Never Buy a Decent Used Car." Smartmoney.com has the scoop.

Harford, a Financial Times magazine columnist and a former World Bank official, tackles big macroeconomic concepts like competition, scarcity, free trade and taxes. He uses commonplace examples like traffic congestion and expensive lattes to makes the big ideas more palatable to lay readers. For instance, Harford shows how Starbucks uses its leases on convenient, high-traffic storefronts to charge tasty premiums on its lattes. It's not, of course, because their java is especially good. Nineteenth-century economist David Ricardo could tell you that it's not about the coffee. Rush-hour commuters are so desperate for caffeine, they're practically price-blind. And when every precious minute of the commute is at a premium, why waste any worrying about paying $4.50 for a grande cinnamon spice latte?

Exactly. Judge Taylor clearly understood that without comparable real estate holdings, the small New Hampshire coffee roastery owner's intentional tweaking of Starbucks would have little effect on the company's fortunes. You would think that perhaps Starbucks might have realized that too, but then, they don't really have to worry about public relations. It's all about real estate.

Support your cramped and vibey neighborhood coffeehouse.

TECHNORATI TAGS: STARBUCKS, CHARBUCKS, COURT RULING, TIM HARFORD, UNDERCOVER ECONOMIST

Posted by Matt Rosenberg at December 29, 2005 02:20 PM