What's in a Coffee Bean's Name?

Last month, Oxfam accused Starbucks of blocking a 2005 bid by the Ethiopian government to trademark its three most popular types of coffee bean - Sidamo, Harar and Yirgacheffe - in the US. This week, talks between Starbucks Chief Executive and the Ethiopian prime minister regarding Ethiopian ownership of its coffee names were reported to have failed.

Coverage of the details of the case, however, has been confusing, at best.

A recent BBC report claims that it was the US National Coffee Association who first approached Starbucks, and then led the opposition to Ethiopia's application due its concern for the US industry, which requires “an economically stable coffee industry in the producing world.” According to Robert Nelson, head of the NCA, “the Ethiopian government was being badly advised, and the move would price them out of the market.”

A special report last month from the British-based Guardian Online, however, reported that the US Patent and Trademark Office initially rejected Ethiopia’s bid because a 2004 Starbucks application already contained the word “Sidamo.”

When Starbucks' application lapsed this June, the US NCA, of which Starbucks is a leading member, objected to the Ethiopian application.

It goes on to say that NCA representatives admitted that Starbucks had prompted their opposition.

But a report from Reuters yesterday pointed out that:

"Trademarking generic geographic descriptors, such as Sidamo and Harar, is inconsistent with U.S. law, which is the reason the USPTO rejected these applications," Nelson, the association's chief executive and president, said.

Whether the Ethiopian trademark application was rejected because the NCA wanted to protect the US coffee industry from higher prices, because Starbucks wanted to trademark the coffee beans itself, or simply because regions cannot be trademarked under US law remains unclear.

What is clear, however, is that once again the intellectual property debate has brought country against company in the wrangle for the legal control of a commodity upon which both are economically dependent.

Ethiopia is one of the first countries in which the coffee bean was cultivated, and today coffee is its most important export, accounting for 40% of the country’s total exports in 2005. It is estimated that 15 million Ethiopians depend on coffee for their living.

For the Boston-based coffee chain – whose annual revenue is just over two-thirds of Ethiopia’s gross domestic product – “Ethiopia Sidamo” is one of the four Starbucks branded coffees on offer in its Africa Arabia range, as well as the “Ethiopia Gemadro Estate,” which is currently on offer as a Starbucks “Black Apron Exclusive.”

According to Oxfam, Ethiopia’s bid to trademark its coffee names in the US is part of an effort to capture more of the global coffee profits for its farmers, who currently receive only 5-10% of the retail price. Oxfam’s Seth Petchers describes the Ethiopian trademark initiative as “a significant and innovative approach to alleviating poverty.”

But while poverty alleviation is a significant factor in the debate, it is naïve of Oxfam to suggest that this will be the most convincing or determining factor.

Firstly, there is a stronger economic argument offered by the Ethiopian government - as reported by Reuters - which is that incomes from coffee farming need to increase to prevent farmers from switching to other crops that are currently more profitable such as the mild leafy narcotic, khat. Thus, obtaining ownership would be a means for Ethiopia to maintain its comparative advantage in coffee.

Secondly, the structure of economic development rhetoric today is such that where the word poverty appears, you can be sure that “corruption” won’t be far behind, as responsibility is increasingly laid on the country’s own government as much as on rich countries and the forces of globalisation. Indeed, the Reuters article ends on remarks from the USPTO, hinting at concerns about the motivations of the Ethiopian government:

Nelson noted that other countries, such as Colombia and Jamaica, had opted to protect their intellectual property by receiving certification marks from the United States.

Nelson said that, in order for certification marks to provide additional value to farmers, a transparent system that shows the money is going back to the farmers as well as an investment in marketing are necessary.

Nowhere in its press release does Oxfam really explain how the Ethiopian government intends to ensure that this increase in import income is directed towards poverty alleviation.

But then, should they really have to?

Oxfam’s argument becomes stronger when it emphasizes that this is a rights issue, and that Ethiopia should have the right to be recognised as owning its own coffee beans.

Ethan Zuckerman, of Harvard Law School sums it up quite nicely:

The absurdity of the situation, as I read it, is the need for a very poor nation to protect “intellectual property” they’ve owned for centuries in an expensive foreign market. The coffee situation makes me think of the notorious “turmeric patent“, where Indian scientists and attorneys had to present ancient Sanskrit manuscripts to overturn a US patent that introduced the “novel” use of turmeric for wound healing, a process used for thousands of years in India. The patent was overturned, but it’s a huge barrier for poor countries to have to litigate bogus patents in US court.

(You can read about the latter case in more detail at Zuckerman's blog.)

In the talks held Wednesday between Prime Minister Meles Zenawi and CEO Jim Donald, the debate was no longer about trademarking per se, rather, it was reported to have concerned the offer of a royalty-free licensing agreement by the Ethiopian government. Starbucks is said to have refused.