Report on Starbucks and Ethiopia Dispute Coffee Trademark Issue

Table of Contents

Starbucks and Ethiopia Dispute Coffee Trademark Issue

Introduction of Starbucks and Ethiopia Dispute Coffee Trademark Issue

The economy of Ethiopia is heavily based on its primary products trade. Among limited tradable goods of the country, by the coffee of Ethiopia the total export earnings alone generated about 60 percent. Certainly, coffee is directly connected to a society as well as Ethiopia culture as well as an expected around 15 million people are indirectly or else directly concerned with a coffee production of Ethiopia. On 21 June, Starbucks and Ethiopia proclaimed that they had accomplished an agreement of licensing cover marketing and distribution of Sidamo, Yirgacheffe and Harar, coffee. The agreement admits ownership of Ethiopia in the three names of coffee, even though Starbucks will not be essential to royalty pay for using them. From beginning to end with Starbucks the agreement, Ethiopia is hopeful that its coffees specialty will turn out to be more broadly appreciated and recognized, which would increase their price and demand. In this report there would be discussion on the Starbucks and Ethiopia dispute coffee trademark issue and all of the factors that are involve in the dispute coffee trademark (Theguardian.com, 2007).

The Starbucks primarily question strategy of the Ethiopia to catalog trademarks, on the way out to sign a licensing agreement voluntary recognising rights of the Ethiopia to the names of Yirgacheffe, Harar, and Sidamo in countries where they were not likely to trademark. According to Starbucks, the trade marking would be officially difficult and might cause the coffee of Ethiopia price out of market. Supposedly, Starbucks recommended other opportunity for Ethiopian Yirgacheffe, Harrar/Harar, and Sidamo coffee names protection depending on a trademark certification (certifying quality/origin), that is directly connected with the region of compliance and production with recognized standards of quality. Under this scheme, the US recognizes names for example Hawaiian Kona coffee and Washington apples. Another alternative for Ethiopia could be to catalog the names of its coffee as Geographic Indications (GIs) in some of the importing countries (Theguardian.com, 2007).

Trademarks Issue

The EIPO started applications folder to record Yirgacheffe names, Sidamo, and Harrar/Harar as trademarks of key markets. In US, the Yirgacheffe was the earliest to get registration; at a later time Harrar/ Harar and Sidamo  were arranged to get registration. Trademarks of Ethiopian for coffees are register in the European Union and Canada . In the country of Japan, certificates for registration have been protected for two coffees. The EIPO has file the applications for registrations trademark of Yirgacheffe, Harrar/Harar, and Sidamo within a many of the other countries including Brazil, Saudi Arabia, South Africa, Australia, and China.

IP Dispute Resolution of Starbucks and Ethiopia Dispute Coffee Trademark Issue

In 2006, For Ethiopian coffee trademark strategy goes through a main difficulty. The Trademark Office (USPTO) and US Patent had accepted the request to Yirgacheffe register. But National Coffee Association, on behalf of United States coffee roasters, object to the applications of the EIPO to first Harrar, after that Sidamo trademark. The opposition grounds in both situations were that names had turn out to be too general a coffee description, and like this were not qualified for list under trademark law of United States. In 2005 USPTO turned down the Harrar application and in 2006 it turn down the Sidamo (Ictsd.org, 2007).

The Starbucks Coffee Corporation in the American coffee chain, that was extensively account to have a dynamic force in the media following NCA objection, in creation of a national certification system openly presented to help out the marks of EIPO to allow the farmers to market as well as protect their coffee as healthy indications on geographical. “for geographically descriptive terms than registering trademarks these frameworks are far more efficient, toward the general trademark customs and law which is actually contrary,” in a statement said through a company. But with the statement its advisors and EIPO were mostly conflicted. They disputed a designations, not submitted but to distinctive types of coffee to geographical locations. Furthermore, for the intellectual property suitable tools had to be selected toward gather precise situations as well as needs. The EIPO Mr. Mengistie explained that the situation in Ethiopia needed to be understood. Trademarking was said to be more suitable to the requirements. It was a direct offering route of more to have power over (Reuters.com, 2007).

The rebuttals were filed against EIPO for USPTO choices with sustaining confirmation to exhibit that the terms Sidamo and Harrar had to obtain individuality. In the meantime, both Ethiopian government and the Starbucks were intense to decide their dissimilarity rapidly as well as find an elastic method onward. In 2006, their combined hard work led to an assertion that they had arrive at an equal satisfactory agreement concerning the marketing, licensing as well as distribution of Ethiopia’s designations of coffee specialty, that offered a cooperation framework to encourage acknowledgment of Sidamo Yirgacheffe and Harrar (Ictsd.org, 2007).

The Starbucks decided to sign licensing agreements of voluntary trademark that right away acknowledge ownership of Ethiopia for the Yirgacheffe, Harrar, and Sidamo names, in spite of whether or not a registration of the trademark has decided. Legal analyst have hone on use of word “designation” in contract as a circumventing income to a obstruction because of the status of Sidamo and Harrar application. “Yes,” as it is acknowledges by Mr. Mengistie, “since a broader expression than trademark designation is used here, some of the trademarks to encompass which are still pending registration. Certification is not connected to it.” In 2006 August, an EIPO is the knowledgeable by USPTO in the successful case of Harar which their refutation. In February 2008 A Sidamo trademark was also granted (Ictsd.org, 2007).

The legal issue of Starbucks and Ethiopia Dispute Coffee

After obtaining trademarks, Ethiopia introduced a licensing scheme that was royalty-free. According to Mr. Mengistie, the licensing purpose was “from the coffee distribution industry to secure recognition that Ethiopia owns as well as trademarks use through the controls, thereby building the reputation and good will of its specialty coffees around the trademarks.” The government of Ethiopian required its coffee to be extra visible in the marketplace for Ethiopian coffee so they can export quality specialty like Yirgacheffe, Harrar/Harar, and Sidamo could be increased. The strategy adopted offered license agreements royalty-free and make the proprietor by using the listed (free of charge) trademarks to sell the coffees specialty on product that wholly consists on the Ethiopian coffees department as well as to indorse fine coffee of Ethiopia by customers education. The strategy of licensing is anticipated to increase recognition of consumer of Ethiopian trademarks coffee and enable the development of the Ethiopian demand for the satisfactory coffees. This strategy of licensing would guarantee that small businessmen as well as farmers in the Ethiopian market can secure a sensible profit from the coffees sales. The complete information on the enterprise and also the licensing is made widely accessible through a website. By the year 2009, nearly 100 agreements license have been determined with coffee roasting, distributing and importing North America, Japan South Africa and Europe companies. In the country, some 47 exporters of the private coffee and 3 producer of coffee in the Ethiopian cooperative union’s agreement signed.

The individual parties’ arguments, with particular emphasis on your selected party’s arguments

Regarding the arguments the Ethiopian government took a step and argue for the U.S. Patent and Trade mark Office (USPTO) in order to register the brand Sidama, Yirgacheffe and Harar, however, they refused to trademarks in March 2005. There were different parties that argue for the ongoing application. The Ethiopian government’s Initiative was to get the USPTO so that the country could block the application from Starbucks. However, the country released its entitlement or claim in July 2006 for the licencing agreement so that Starbucks couldget the proper geographical indications. Ethiopian government’s considered it as a better tool because intellectual property was of Ethiopian government; the government also have some pressure groups that helped to persuaded Starbucks to get the trademarks as a most suitable tool. Consequently, the aim was to provide the right to small-scale coffee farmers. Thus in 20 June 2007; there was Oxfam campaign and Starbucks finally signed the agreement based on the trademark protection (Daviron & Ponte, 2013).

The tribunal’s decision on Starbucks and Ethiopia Dispute Coffee

The tribunal’s decision focus that Starbucks need to take the decisions regarding the geographical designations or there should be protected by trademarks proper laws could be followed. However, there are tools for product differentiation and that need to be applied by the new shops so that customers could be provided by the information. Tribunal’s decision based on the consumption decision origin so that there should be injustice with them. However, US incorporates and then there was focus on the existing trademark regime based on the geo-graphic term. The Starbucks then registered as a trademark; and with the certification mark; licensing Initiative was taken on the behalf of Ethiopian government justifies (Simon, 2009)

The tribal want to get decision because it was their earning source. There were enterprises in the countries that were selling the coffees of Ethiopia and that supported the bargaining position and confidence of an exporter’s of coffee as well as in the country growers. However, in the international market there is an accumulative satisfactory Ethiopian coffee demand. The innovation of an Enterprise that it allowed the producers as well as growers to become portion of setters of worth as an alternative of being worth takers. General, total coffee exports of the Ethiopia are anticipated the US $1.2-1.6 to reach billion as opposite to an insufficient $400 million US (Tucker, 2017).

Significance of the case in international law Starbucks and Ethiopia Dispute Coffee Trademark Issue

This case helped allot the governments in order to focus on the laws regarding international law because there was a violation of the international law and then Ethiopia asked for the right. However, based on international law the country gets the protection and Starbuck become legal. However, after the tribunal decision there were final court decisions under the international law; as under article 22.1; there was Ethiopia strategic decision that is based on the trademark for the heritage coffee of Ethiopia. The country gets the demanded specific quality reputation. 

Conclusion on Starbucks and Ethiopia Dispute Coffee Trademark Issue

Summing up the discussion about the Starbucks and Ethiopia dispute coffee trademark issue, it can be said that the agreement admits ownership of Ethiopia in the three names of coffee Yirgacheffe, Harrar/Harar, and Sidamo, even though Starbucks will not be essential to royalty pay for using them. The Starbucks recommended other opportunity for Ethiopian coffee names protection depending on a trademark certification. For coffees Ethiopian trademarks are register in the European Union and Canada. The opposition grounds in both situations were that names had turn out to be too general a coffee description, and like this were not qualified for list under trademark law of United States. They argued the designations, not referred to geographical locations but to distinctive types of coffee. In the meantime, both Ethiopian government and the Starbucks were keen to decide their dissimilarity rapidly and find an elastic way onward. Legal analyst have hone on use of term “designation” in contract as a circumventing means to the obstruction because of the status of Sidamo and Harrar application. Starbucks primarily question strategy of the Ethiopia to catalog trademarks, on the way out to sign a licensing agreement voluntary recognising rights of the Ethiopia to the names of Yirgacheffe, Harar, and Sidamo.

References of Starbucks and Ethiopia Dispute Coffee Trademark Issue

Daviron, B., & Ponte, S. (2013). The Coffee Paradox: Global Markets, Commodity Trade and the Elusive Promise of Development. Zed Books Ltd.,.

Ictsd.org. (2007, July 6). ETHIOPIA AND STARBUCKS REACH COFFEE AGREEMENT. Retrieved from https://www.ictsd.org/bridges-news/biores/news/ethiopia-and-starbucks-reach-coffee-agreement

Reuters.com. (2007, June 21). Starbucks, Ethiopia settle licensing dispute. Retrieved from https://www.reuters.com/article/us-starbucks-agreement-ethiopia/starbucks-ethiopia-settle-licensing-dispute-idUSN2029455320070620

Simon, B. (2009). Everything but the Coffee: Learning about America from Starbucks. University of California Press,.

Theguardian.com. (2007, May 3). Starbucks strikes deal with Ethiopia. Retrieved from https://www.theguardian.com/business/2007/may/03/globalisation.money

Tucker, C. M. (2017). Coffee Culture: Local Experiences, Global Connections. Taylor & Francis.