This entire trademark wrangling finds its roots to those early days in 2004 when Ethiopia was preparing to file an application with the United States Patent and Trademark Office (USPTO) to register the names Harar, Sidamo and Yirgacheffe. Though Starbucks won't discuss the issue in public, I found out that at least three reasons are driving the company’s decisions which might bear risks to its own brand.
In 2004, just before filing their applications to register the coffee brands, Ethiopian government officials discovered that Starbucks had already submitted an application to trademark “Shirkina Sun-Dried Sidamo.” The government attempted to engage Starbucks in discussions because it had become evident that the company’s application might jeopardize Ethiopia’s plans to trademark the name, Sidamo.
The company later dropped its application to register “Shirkina Sun-Dried Sidamo” but only after, the National Coffee Association (NCA), whom Starbucks is the influential member
, had filed a protest so Ethiopia’s applications to register the names Harar and Sidamo be denied. (Ethiopia’s application to register the Yirgacheffe brand had already been granted by the USPTO, apparently due to lack of sufficient preparation by the contestants.) Obviously, this was a trick but, Starbucks swears that the company has never filed a protest to block Ethiopia’s application.
The second argument by Starbucks reveals the other economic reason. The company argues, if Ethiopia takes control of the trademark rights in the coffee brands, it may create onerous legal barriers to trade while attempting to protect its ambitious interests. I believe, this is the rationale used by Starbucks’ buddies when they concluded that Ethiopia “may price its coffee beans uncompetitively high, thereby hurting its exports.”
Of course, trademark licensing programs are complex by nature. But there should always be a way to design graduating programs that will be fine tuned over a longer period of time. In fact, the proposal put forth by the Ethiopians’ in a form of Licensing Agreement provides that the licenses to be granted to coffee roasters in a royalty-free, nonexclusive basis, and even more, for free. All documents indicate that Ethiopia’s licensing program is going to be prepared with roasters in mind. The people representing Ethiopia’s government stated that they will discuss any issues that Starbucks may have provided that the company accepted Ethiopia’s rights of ownership to its brand names. I think this should suffice for Starbucks to feel at ease.
The other concern that Starbucks has is over the fact that, by taking the ownership of the names, Ethiopia will increase its negotiating leverage with importers. Currently, the company and other importers control the terms of coffee trade in the world. As a result, the price for coffee is determined by importers in the New York Stock Exchange and other commodities’ markets. In reality, these commodity markets are non-discriminatory in that they set similar prices for both fine gourmet coffees and commodity coffees regardless of their quality differences.
Well, these are all good points from Starbucks’ perspective. But shouldn’t Ethiopia’s plans be responsible for its own economic reasons only?
In 2004, just before filing their applications to register the coffee brands, Ethiopian government officials discovered that Starbucks had already submitted an application to trademark “Shirkina Sun-Dried Sidamo.” The government attempted to engage Starbucks in discussions because it had become evident that the company’s application might jeopardize Ethiopia’s plans to trademark the name, Sidamo.
The company later dropped its application to register “Shirkina Sun-Dried Sidamo” but only after, the National Coffee Association (NCA), whom Starbucks is the influential member
, had filed a protest so Ethiopia’s applications to register the names Harar and Sidamo be denied. (Ethiopia’s application to register the Yirgacheffe brand had already been granted by the USPTO, apparently due to lack of sufficient preparation by the contestants.) Obviously, this was a trick but, Starbucks swears that the company has never filed a protest to block Ethiopia’s application.The second argument by Starbucks reveals the other economic reason. The company argues, if Ethiopia takes control of the trademark rights in the coffee brands, it may create onerous legal barriers to trade while attempting to protect its ambitious interests. I believe, this is the rationale used by Starbucks’ buddies when they concluded that Ethiopia “may price its coffee beans uncompetitively high, thereby hurting its exports.”
Of course, trademark licensing programs are complex by nature. But there should always be a way to design graduating programs that will be fine tuned over a longer period of time. In fact, the proposal put forth by the Ethiopians’ in a form of Licensing Agreement provides that the licenses to be granted to coffee roasters in a royalty-free, nonexclusive basis, and even more, for free. All documents indicate that Ethiopia’s licensing program is going to be prepared with roasters in mind. The people representing Ethiopia’s government stated that they will discuss any issues that Starbucks may have provided that the company accepted Ethiopia’s rights of ownership to its brand names. I think this should suffice for Starbucks to feel at ease.
The other concern that Starbucks has is over the fact that, by taking the ownership of the names, Ethiopia will increase its negotiating leverage with importers. Currently, the company and other importers control the terms of coffee trade in the world. As a result, the price for coffee is determined by importers in the New York Stock Exchange and other commodities’ markets. In reality, these commodity markets are non-discriminatory in that they set similar prices for both fine gourmet coffees and commodity coffees regardless of their quality differences.
Well, these are all good points from Starbucks’ perspective. But shouldn’t Ethiopia’s plans be responsible for its own economic reasons only?
Keep posting stuff like this i really like it
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