Starbucks Met Ethiopian Ambassador, No Agreement Again

UPDATE ~ Starbucks’ infamous video was brought down yesterday. The message on YouTube says: “This video has been removed by the user."

Starbucks Senior VP Dub Hay said on the video that Ethiopia's coffee trademark attempts are illegal.

Bob Winter of Arnold and Porter LLP responded, also on YouTube, saying that Hay's claim was totally absurd.

The company never admitted its mistakes publicly except the comment on YouTube which read, “When we posted that video we felt the information was correct & since we've learned a lot & realized the information about the legality of the trademark was not accurate.”

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Starbucks Met Ethiopian Ambassador, No Agreement Again

The Ethiopian Ambassador to Washington, Samuel Assefa was in Seattle yesterday to meet senior Starbucks' executives, it was learned. Credible sources confirmed that the meeting between Starbucks and the Ambassador took place here in Seattle yesterday, April 3, but no specific agreement on Starbucks' acceptance of Ethiopia's trademark program was reached.

This is the first time Starbucks agreed to invite an Ethiopian Ambassador to its headquarters since the initial letter, by the former Ambassador to the United States, Kassahun Ayele, to Howard Schultz, Starbucks Chairman, was sent on March 18, 2005. According to the embassy website, Mr. Schultz never responded to the letter.

Kassahun Ayele, now the Ambassador to Germany, says, "My letter to Howard Schultz went unanswered for over a month" adding, "When I learned that Mr. Schultz was to be in Washington to receive an award, I invited him to meet with me at our Embassy, or at any convenient place of his choosing. I received no reply from him."

Starbucks' eventual response was condescending.

"On April 21 he received a short, dismissive reply from a company lawyer, and a short time later a note from a Corporate Vice President inviting him to attend the award event for Mr. Schultz, and to contribute $600 for the 'privilege,' the website states.

A lot has changed since then. Starbucks has suffered a dent on the brand when the public which otherwise perceived the company as socially responsible and pro-poor woke up to a less attractive reality. Over 90,000 petitioners, most of whom are Starbucks customers, expressed their discontent and anger at the company's actions by opposing the efforts of poor coffee farmers in Ethiopia to fairly compete in the market.

Ethiopia wants to take ownership of its most known coffees marks, Harar, Sidamo, and Yirgacheffe but Starbucks has refused to acknowledge Ethiopia's ownership of the marks.

As the public pressure mounted, the company twice sent its most senior management officers including Jim Donald, CEO all the way to Addis Ababa to attempt to convince the government to accept Starbucks' prescription: drop the trademark application and register the marks as geographic certification.

Starbucks executives have used every opportunity to divert public attention and attempt to do so by providing inaccurate information. Since the public dispute over the coffee trademarks made public by Oxfam, Starbucks issued numerous press releases saying that they had reached agreement with the government.

Yesterday's meeting appears to be a continuation of Starbucks' familiar strategy of talking but refusing to change its position.

Mr. Schultz, addressing the Annual Shareholders Meeting held on March 21, 2007, won applause when he said, "can we be assured that any premium or licensing fee of any kind will go to the farmer?" Schultz was answering the question with a question that he found to be compelling to the audience, but that was another misleading statement. There is no fee associated with the licensing agreement Ethiopia offered for the companies to sign. The trademark agreement is royalty free. Higher prices for coffee reach Ethiopia's farmers without government interference.

Mr. Schultz also brushed aside the government's role by saying, "It is very difficult to hear the voices of the farmers in this dialogue who are benefiting from practices we had in that country for two decades. It is very difficult when they are being drowned out by government voices and an NGO." But now, he is discussing with representatives of the same government he did not seem to recognize as representing the country.

To continue the current discussion, it is also learned that Getachew Mengiste, Director of Ethiopian Intellectual Property Office (EIPO) will be coming from Ethiopia to meet with Starbucks in late April, 2007.

Is there room for a compromise? What would each side have to give up? In the meantime, the disagreement between them continues. There is only hope that Starbucks will - one day - acknowledge Ethiopia's ownership of the trademarks by signing the licensing agreement.