Starbucks Unicorn Frappuccino slammed by lawsuit

Last Updated May 5, 2017 3:00 PM EDT

What's the value of a unicorn-themed drink? It may go well beyond the $5 or so Starbucks (SBUX) was charging for its limited-time "Unicorn Frappuccino," according to a lawsuit filed by a New York city cafe called The End. The cafe is suing Starbucks over the drink, claiming the sugary Frappuccino overshadowed its "Unicorn Latte." 

The End, which is owned by Montauk Juice Factory, started selling its Unicorn Latte in December and applied for a trademark on the drink in January. While Starbucks' colorful unicorn Frappuccino was made with ingredients including sugar and natural and artificial flavors, The End's Unicorn Latte, which the cafe says took six months to develop, is whipped together with artisanal ingredients like dates, ginger root and algae that might appeal to hipster enclaves. Neither drink contains coffee. 

"Our client Montauk Juice Factory created the Unicorn Latte, a successful product that our clients transformed into a social media sensation, developed a famous and valuable trademark, and took the appropriate steps to protect it," attorney Josh Schiller of law firm Boies Schiller Flexner, which is representing the cafe, said in a statement. "Starbucks, with its thousands of coffee shops, launched a competing product with a similar look and name, and marketed it in the same channels where our client's product became famous, severely damaging our client's mark."


The cafe is seeking unspecified compensation and a public apology. 

"The size of and scope of Starbucks' product launch was designed so that the Unicorn Frappuccino would eclipse the Unicorn Latte in the market, thereby harming Plaintiffs and confusing their customers," the lawsuit alleges. 

The complaint notes that customers started to ask The End to create Unicorn Frappuccinos for them, while online publications referred to Starbucks' product as a Unicorn Latte. 

"The Unicorn Latte has been the most popular product we've created to date, so we were shocked and disappointed when Starbucks came out with the Unicorn Frappuccino, which is similar to our product in name and appearance, but has none of its healthy ingredients," The End co-owner Bret Caretsky said in a statement.

A spokesperson for Starbucks said the lawsuit is without merit.

The unicorn Frappuccino, sold between April 19-23, was the company's first new Frappuccino flavor this year. While The End is seeking a trademark for its Unicorn Latte, many unicorn-themed foods are  popular on social media, including a recent rage for "unicorn toast," which is toast spread with rainbow-colored cream cheese. 

The End claims Starbucks' version of a unicorn-themed drink created a misperception that the small cafe was copying the giant coffee chain, the lawsuit claims. "This widespread confusion was made worse by the derision and ridicule that Starbucks' Unicorn Frappuccino encountered upon launch," the lawsuit alleges, according to the Daily News. 

Starbucks' unicorn Frappuccino appeared to be a hit, at least based on social media buzz. The new drink comes at a sensitive time for Starbucks, with a new chief executive at the helm and a sales slowdown in 2016 that came amidst an unpopular change in its loyal program. The coffee giant is also dealing with competition from smaller stores that appeal to younger consumers.

A whiff of unicorn magic may be giving a boost to Starbucks' stock price. The shares have increased more than 9 percent this year, compared with a 6.8 percent gain for the S&P 500.