On What Legal Grounds?

Categories: News
Because it's only logical that someone would confuse a credit-rating provider with a coffee house. Really.
A Friend of Unfair Park's with a coffee buzz sends the following item about the bad blood brewing between South Side of Lamar coffee house-performance space Standard & Pours, winner of a Dallas Observer best-of last year, and the self-proclaimed "world's preeminent providers of credit ratings" Standard & Poor's. Apparently, the battle over the names has been going on for two years but has picked up steam in recent weeks, with S&P threatening to sue the local coffee shop owned by Pascale Hall, formerly of Legal Grounds, if she doesn't change the name. I do wonder what this does to my plans to open my new daytime restaurant Merrill Lunch next door to my X-rated video store American Sexpress. Really, got a million of 'em. The story follows after the jump. --Robert Wilonsky


One of Dallas' premier acoustic music venues is being threatened with an injunction by arguably the most important financial company on the planet. In March of 2003, Pascale Hall combined her love of caffeine and stocks and opened Standard & Pours Coffee & Stocks, a coffee shop located in the basement of the old Sears Catalog Building, better known now as South Side on Lamar. It's also a terrific-sounding music venue, though it wasn't designed to house one since it's in a basement with brick walls and a concrete floor. Of course, the name was a play on Standard & Poor's, which is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and business valuations. One thing S&P, as it's better known, does not do is sell coffee, just as Standard & Pours Coffee & Stocks does not dispense financial advice.

The place has thrived, but it seems that whenever a small coffee shop actually makes money, it's only a matter of time until the universe tries to correct itself by sending the full weight of a financial giant down upon it. For Standard & Pours Coffee, this assault began 21 months after opening its doors and came in the form of a certified cease and desist letter from the independent legal counsel for Standard & Poor's. Among other things, the lawyers for S&P claimed that Hall's use of the name Standard & Pours leads to a "likelihood of confusion" amongst the general public, and that this "likelihood of confusion" is damaging S&P.


"The whole thing seems a bit ridiculous to me," Hall says. "I can understand their point if I was brokering stocks or giving out financial advice using the name 'Standard & Pours,' but all I do is sell coffee. In three years of operations, I have never once had a single customer who seemed the least bit confused about that. If anything, I have helped S&P's name recognition, at least in Dallas, because I have people ask me all the time what the heck 'Standard & Pours' means. When I explain that it's a play on the name Standard & Poor's, I still get blank stares, but when I say, 'You know, like the S&P 500,' you can almost see the light bulb go off over their heads. Everyone knows 'S&P.'"


After receiving the cease and desist letter in December of 2004, Hall voluntarily placed a legal disclaimer on the coffee shop's Web site: "Not associated with the index company Standard & Poor's (a McGraw-Hill Company)." She also informed S&P's lawyers about the disclaimer. This seemed to satisfy them, because she did not hear another word from them for more than a year.


During this time, the coffee shop's business tripled, it acquired investors, and it actually began the process of expanding to other locations. Fast forward to April 2006, and the certified letters started coming again. "I understand that S&P has an interest in protecting its name, but at this point, so do I," Hall says. "It's not just about changing our sign and our business cards and our menus; it's about having to start over from scratch with a new name. Our name has become so well-known throughout the Southwest for both great coffee and music that forcing me to change it now would be crippling. I want to be in the business of selling coffee, not in the business of defending lawsuits, but at some point, I have to defend what I've worked for and what my employees have worked for."


Ironically, Hall obtained much of the experience needed to run a coffee shop at the Lakewood coffee shop Legal Grounds. This raises an interesting point: Coffee shops are notoriously and universally addicted to puns, even fake ones. (After all, the coffee shop on Friends was called Central Perk, and never did the city of New York send NBC a certified letter about that.) One of Hall's attorneys, Chris Harris, of the firm Amsler & Amsler in McGregor, insists, "It's not a complicated legal issue. What we have here is a financial giant who is using the threat of litigation to scare my client into changing its name. S&P probably spends more on pencils in a single day than my client's average annual revenue, but S&P's money doesn't give it any additional legal rights.

"There is a ton of legal precedent on this issue," Harris says. "For example, in the late 1990s Federal Express sued a coffee shop in New York called Federal Espresso. FedEx lost at both the federal District Court and the Circuit Court of Appeals, as they should have, because it's absurd to think that anybody would confuse the package delivery giant with a mom and pop coffee shop. The matter was eventually settled pursuant to a confidential settlement agreement whereby the coffee shop agreed to change its name. Confidential or not, common sense dictates that FedEx paid the coffee shop a substantial sum of money to make that happen. The difference in this case is that my client doesn't want anything from S&P other than the ability to peacefully co-exist since neither business is taking any customers from the other. From a legal standpoint, I think we're on solid footing...The real problem here is that S&P knew about my client's business name for years, but did little or nothing about it, probably assuming the coffee shop would eventually go out of business like most do. My client was led to believe that it had the green light to continue using the name, and it reasonably did so. Now that the business is taking off, S&P wants to crush it."


So what's in a name? For Standard & Pours Coffee, the possible answer to that question is "a lawsuit."

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