Legal Letters

The following letter was received by Joseph Arvay of Arvay & Finlay, counsel for HaidaBucks, from Herbert Regehr of Bull, Housser & Tupper, representing Starbucks, on July 4, 2003.

We are writing further to your letter of April 28, 2003.

We are pleased to note that since our initial correspondence, your client has made several important changes to its name and logo that address many of Starbucks initial infringement concerns. Specifically, we note from photos on your client's web site that it has removed the signage previously affixed to the front of its café which included elements of similarity with Starbucks registered logo design. We also note that your client does not display the former logo anywhere on its website and, in fact, seems to have adopted a new non-infringing logo.

We further note that your client is using the words "Haida Bucks Café" rather than Haidabucks Coffee to describe its restaurant. The words HaidaBucks Cage" appear in a font and colour distinct from that used by Starbucks in its trade-marks. These changes further distinguish the overall look of your client's name and logo from that of Starbucks. The separation between "Haida'" and "Bucks" now also appears to be more consistent with your client's intent that the phrase "Haida Bucks" express the idea of "Haida men". We further note that your client has indicated that it has no intention of using the words HaidaBucks for any restaurant outside of Haida Gwaii.

Your client's changes to the manner in which it uses the words Haida Bucks and the associated design elements, as well as its representation that it will not expand its use of the HaidaBucks geographically, have gone a long way in dealing with the concerns expressed in our March 4, 2003 letter. While our client reserves its right in the even it learns of actual confusion in the marketplace or if your client expands its use outside of Haida Gwaii, it believes that these changes are a satisfactory compromise which will permit our client to continue its use of the words Haida Bucks for its restaurant in a non-confusing manner in its geographical region of interest.

We appreciate these constructive steps in addressing our client's concerns and are pleased that, as we had hoped, this matter could be resolved without resort to legal action.

The following letter is HaidaBucks' reply to the letter above.

July 4, 2003

Dear Mr. Regehr,

Re: Starbucks Coffee Company

I have your letter of June 27, 2003.

Contrary to what you say in that letter, our client has not made any changes to its name and/or logo. Nor has it made any changes to the signage or name of its restaurant. It has not adopted a new logo. Our client continues to use the word HaidaBucks. Furthermore, our client has made no representations with respect to any constraints on expansion of its business outside of Haida Gwaii, nor will it agree to any such constraints on its business. Our position with respect to Starbucks' allegations of trademark violation remains as set forth in our letter of April 28, 2003 - i.e. that Starbucks' allegation was and is ill-conceived and has no chance of success.

It has come to our attention through emails from "Customer Relations", info@starbucks.com, forwarded to us from Starbucks customers, that your client is advising members of the public that "Starbucks Coffee Company and Haida Bucks Café have recently resolved their trademark dispute" and that "In response to a letter sent by Starbucks in March, 2003, Haida Bucks Café has made several important changes to its name and logo that address many of Starbucks initial infringement concerns." As noted above, this statement is completely untrue. Moreover, it is materially misleading to customers who are legitimately concerned with Starbucks' action against our client.

Contrary to your client's statement that they and HaidaBucks have resolved their trademark dispute" it would appear that your client would like to retract from it's ill-conceived allegations against our clients. Our clients are still willing to resolve this dispute short of litigation, on terms similar to those set out in our April 28th letter. Starbucks' allegations have resulted in HaidaBucks incurring costs, including legal costs. Accordingly, our clients are agreeable to resolving this matter on the following terms.

1. Starbucks retract its cease and desist letter of March 4, 2003.

2. Starbucks provide HaidaBucks with a written apology for its allegation of a trademark infringement and its subsequent actions;

3. Starbucks acknowledge that at no time has HaidaBucks name or logo constituted an infringement of Starbucks' trademark;

4. Starbucks agree not to renew its allegations or pursue legal action against HaidaBucks at any time in the future with respect to the name or logo of HaidaBucks in existence at this time;

5. Starbucks pay the sum of $5,000.00 to defray our client's expenses in dealing with this matter thus far; and

6. Starbucks cease and desist making misleading representations to the public with respect to this matter and issue a public statement correcting the erroneous information provided thus far.

This offer is open to the close of business on Friday, July 11, 2003. Should this offer not be accepted, I expect to receive instructions to pursue whatever legal remedies may be available to protect my client's business interests and to recover damages and costs.

Yours sincerely,

ARVAY FINALY

Per: <signed>

Joseph J. Arvay