After Row, Ethiopia Confident on U.S. Coffee Rights

Is This The PR Campaign Sequel?

Starbucks has been opposing to Ethiopia’s plan to trademark its famous coffee names but always denied its doing so. They worked through the lobbying group, the National Coffee Association (NCA) who filled its opposition to Ethiopia’s trademark applications at USPTO in 2006. After the dispute was made public late last year, Starbucks' strategy has been to attempt to take the public attention away from the fundamental issue. The company issued numerous press releases with misleading information. Dub Hay, Starbucks senior VP, even said in the infamous YouTube video that Ethiopia’s attempt to trademark the coffee names was illegal.

Starbucks is feeling the heat because consumers, angered by its actions against the poor farmers, are demanding that the company change its course and do the right thing to support the country dig itself out of poverty. The company continues to change tactics and not its positions.

In February 2007, through an orchestrated public relations effort led by Rosa Whitaker, founder of the Starbucks hired lobbying firm, the company succeeded in having the Ethiopian government officials sign on another misleading statement. The joint statement, where Starbucks said it no longer opposes to Ethiopia’s trademarks, was nothing more than a public relations instrument designed to give the wrong impression as though the company gave in. The opposition filed at the USPTO is still in effect. Starbucks has not taken any actions beyond distributing the joint statement.

As you will see below, President Girma Woldegiorgis’ quoted remarks are off the point. In my view, the comments miss core elements of the strategy and undermine the uphill battle against a sophisticated public relations art.

Ethiopia’s trademark strategy does not end at registering the marks at the USPTO. Like any trademark, the coffee trademarks will need to be promoted. The necessary branding efforts should promote the marks until consumers recognize each brand as distinctly as the roaster do. For this effort to be successful, Ethiopia wants to create a network of licensed roasters and retailers. This can be achieved through a voluntary licensing agreement. Starbucks, the leading retailer who benefited from Ethiopia’s coffee brands for years, maintains its position of refusing to sign this agreement.

Starbucks leaders continue to lobby the Ethiopian Diaspora and other government bodies to instill the company’s preferred IP strategy i.e., register the coffee marks as geographic indications – not trademarks.

Where is the cooling off point?
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After row, Ethiopia confident on U.S. coffee rights
Reuters
Tue Mar 13, 2007 9:12PM EDT
By Missy Ryan

WASHINGTON (Reuters) - Despite a recent row with an American coffee giant, Ethiopia, the birthplace of coffee, is confident it can win trademarks in the United States, a move the poor country believes will boost incomes for farmers, the country's leader said on Tuesday.

President Girma Woldegiorgis was in the United States, meeting with business and development groups, just months after a high-profile dispute broke out with U.S. coffee giant Starbucks Corp. (SBUX.O: Quote, Profile, Research) over the African country's bid to obtain U.S. trademarks for its Sidamo and Harar coffees.

"Even if Starbucks wanted to resist, they would have no way because it's illegal for them to do so. I don't think there will be any problems," Woldegiorgis said in an interview.

Aid agency Oxfam triggered a maelstrom last fall when it charged Starbucks was stonewalling a bid from the Ethiopian government to register the two remaining coffees.

Starbucks hit back, denying Oxfam's claim and saying that they already pay premium prices for coffee. It suggested, though, that a trademark agreement would do little to help farmers in dirt-poor countries like Ethiopia.

The row appears to now be cooling after Starbucks acknowledged Ethiopia's right to pursue trademarks and pledged to double coffee purchases from the region and spend more on development programs.

The company continues to advocate a program to certify products' origin instead.

Oxfam is still calling for the company, and other roasters, to bow to Ethiopia's request to sign a voluntary licensing deal. "It's still a live issue," said Chris Jochnick, director of private sector engagement at Oxfam America.

TRADEMARK GRANTED TO YIRGACHEFFE

Woldegiorgis seemed pleased that Starbucks had, in his words, "come around." He was also confident Ethiopia would get trademark approval for Sidamo and Harar brands. Those requests, rejected initially by U.S. patent officials, are pending.

The U.S. Patent and Trademark Office did award Ethiopia's Yirgacheffe coffee a trademark in 2006.

The president also downplayed talk that Ethiopia might consider shutting out the company if things grew ugly.

"I don't think we've reached that stage," he said.

Starbucks has exploded in U.S. and foreign markets to about 13,000 stores worldwide. Two percent of the coffee Starbucks buys, which in turn represents 2 percent of world coffee, is from Ethiopia, the company said.

In the 2006 fiscal year, the company bought 294 million lbs. of coffee, paying an average of $1.42 per lb., up from an average of $1.28 the previous year.

Oxfam is still calling for the company, and other roasters, to bow to Ethiopia's request to sign a voluntary licensing deal. "It's still a live issue," said Chris Jochnick, director of private sector engagement at Oxfam America.

Jochnick believes the firm has capitalized on coffee names and should take a more active role in supporting the trademark campaign. "We hope Starbucks will come around and realize they're on the wrong side of the curve on this one," he said.

In theory, trademark agreements would bolster incomes for Ethiopia's farmers by allowing the country to negotiate purchasing conditions for coffee roasters or retailers that want to use the trademarked name.

Poverty is dire in Ethiopia, where a quarter of its 80 million people rely on coffee. The average Ethiopian's yearly income, in purchasing power parity terms, is around $1,000.

Woldegiorgis said any price gains due to trademarking would go straight to farmers and wouldn't be captured by the government or by middlemen.

"As long as Ethiopian coffee is sold as Ethiopian coffee, the value will be assessed," he said.