Starbucks and Ethiopia Coffee Trademark Issues
The decision taken by Ethiopia to protect the agricultural products with a definite type of trademark was an unusual one. This is simply because of the fact that, corporations and geographic areas use this type of protection. However, it is to be noted that, the dispute arose from the attempts that were made by the Ethiopian government in order to file an application for trade marking three of the significant brands of coffee, which are namely Yirgacheffe, Sidamo and Harar. Thus, it has also been found that, the Ethiopian farmers have received only a fraction of the value that the coffee retailers, mainly Starbucks obtain on the market.
Starbucks Coffee: background
Located in Washington, Starbucks Corporation is one of the leading American coffee companies and is a leading coffeehouse chain. The company is considered the primary representative of “second wave coffee”, which initially distinguishes itself from other coffee serving locations. Starbucks is famous for their high quality beverages, out of which the coffee that are being provided by them is famous across the globe (www.starbucks.com, 2018).
Coffee production in Ethiopia
It is to be noted that, Ethiopia is the seventh largest producer of coffee in the world and is the top coffee producer in Africa. It has also been found that, half of the coffee is consumed by Ethiopia, as it leads the continent in the context of domestic consumption. The predominant markets of Ethiopian coffee are namely East Asia and North America. On the other hand, it is to be noted that, total area that is used for coffee cultivation is 4,000 km.
The Starbucks dispute
As per the tenets of the case of the coffee trademark issues of Starbucks and Ethiopian coffee, it can be stated that, it is one of the prominent examples of the consequences that are associated with the proper usage of trademark by any company (Hutt, 2016). Furthermore, a specific coalition of Ethiopian coffee producers along with the Ethiopian Intellectual Property Office (EIPO) intended to set up a programme, which acquired trademarks in the significant export markets. They had a view to increase the profits on the brands for the producers. It was in the year 2005 in March that, the government of Ethiopia filed their first and foremost US trademark application for the three coffee names that were contested to be present in the list. It was after a timeframe of 15 months that the USPTO agreed to the fact that the name of Sidamo was generic. Thus, it was propagated that, the name cannot be subjected to trade marking. However, this led to a definite outcome, which made an outcry by some of the critics that included the NGOs along with IPR professionals.
On the other hand, it has also been found from the case that, the comments that were made by the NGOs and IPR professionals managed to make an echo of their opinions, using the medium of press and media. However, Starbucks constantly opposed the petition of the trademark. Instead of helping the Ethiopian farmers for attaining a higher value of price of coffee, they proposed a geographical certification model, which is similar to GIs (Hughes, 2016). Nevertheless, the Ethiopian coalition kept on arguing about the fact that, the trademark that has been proposed will tend to add value that is more significant for the producer (van den Hurk, 2014).
Consolidation of the Coffee Supply Chain
After an extensive assessment, it has been found that, coffee production and distribution has witnessed and has managed to dominate the small number of transnational corporations. Thus, it represents the fact that, just a number of commodities and retail chains have witnessed an increase in the geographical improvement of the definite sourcing systems. It has also managed to increase the expansion of the power that is being exerted in their supply chains. It includes their employees, suppliers as well as the distributors and their definite distribution channels. On the other hand, it can also be said that, the transnational corporations have the definite power for the determination of the production of goods and the ways by which marketing is to be done based on the marketing channels that are being projected by them (Godar et al. 2016).
Starbucks battle Ethiopia over trademark certification
It is to be noted that, Ethiopia ranks in the bottom ten of the human development index of income of United Nations. It has also been found that coffee tends to represent almost half of the export income of the country. However, despite the commitment projected by Starbucks in offering Fair Trade prices along with other farmer empowerment initiatives. There is an approximate earning of $25 per pound of that Starbucks sells the coffee for. In the year 2005, the government of Ethiopia, after attaining the information that there is a huge disparity of labor charge of the Ethiopian farmers, they decided to end the discrepancy. The government estimated the fact that, Ethiopia can increase their coffee earnings by $80 million per year by the specialisation of coffee names. However, Starbucks refused this request and argued regarding the fact that, they found this to be legally onerous. They refused to assist Ethiopian farmers in securing more money. Thus, the government implemented the second phase of the plan when the EIPO filed to trademark the names of the three coffee producing regions, which are namely Yirgacheffe, Harrar and Sidamo (Sheldon, 2014).
Therefore, it can be concluded by stating the fact that, the issue of the Starbucks-Ethiopian coffee has managed to show that, different countries have proposed different approaches to GIs and there is no definite consensus on their use. It can also be said that, trademarking plays an important role in the promulgation of the processes and procedures that are associated with the use of implementation of the effective methods that are relative of the trademarking of licensing.