Can You Trademark Coffee Beans?

from the starbucks-would-like-to-know dept

HurB writes in to point out a dispute over whether or not Ethiopian farmers can trademark certain types of coffee beans. This might not seem like a technology issue -- but it is an issue of abuse of intellectual property, which is important to the tech industry. It appears that the National Coffee Association has tried to block the trademark application in the US. A group representing Ethiopian farmers blames Starbucks, claiming that the NCA is acting as a front for Starbucks' effort to keep the beans trademark free. In the submission, this is positioned as big bad Starbucks exploiting Ethiopan farmers, but that doesn't seem to be the case at all. If anything it looks like the opposite. The purpose of trademark law is to prevent confusion over brand names, but the details suggest that's not what's happening here. Instead, Ethiopia is just trying to get more money out of Starbucks for offering coffee based on their beans. As is suggested in the article, the actual impact, though, would be to make the beans too costly and price the Ethiopian coffee bean farmers out of the market -- which helps no one. If they're selling their beans to Starbucks, then they should set a price and be done with it. It seems, however, that they want to be able to set their price for the beans, and then charge an additional "trademark licensing" fee on top of the beans. It's a plan that's destined to backfire. Luckily, the US has rejected some of the trademark applications already, but to position this as Starbucks trying to take advantage of the coffee bean farmers is to misunderstand economics and the very purpose of trademark law.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Anonymous Coward, Oct 31st, 2006 @ 3:00pm

    This coffee beans issue reminds me that while tequila can be made anywhere, it's not really tequila unless its made in Mexico.

     

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  2.  
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    misanthropic humanist, Oct 31st, 2006 @ 3:32pm

    The usual double standards

    That's the natural outcome of a contemptible and nonsensical idea like intellectual property. The problem for American corporations though is anyone daring to suggest that rules they impose on others should also apply to them.

     

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  3.  
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    speculatrix, Oct 31st, 2006 @ 3:59pm

    happened before in the European Union

    the French complained for a long time that their wines makers were being undermined by foreign imports which stole their trademark (Californian or Australian Chardonnay etc) so petitioned the Union to make it that a food or drink associated with a specific place could only use that name... so no other drink other than fizzy wine from Champagne could be so called.

    snag was the French realised this would kill their cheese business, because they produced and sold more cheeses with English names than the English makers!

    be warned, these sort of trademark disputes have unforeseen consequences!

     

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  4.  
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    William, Oct 31st, 2006 @ 5:07pm

    I'm not so sure

    If their farmers developed a new kind of coffee through selective breeding or something. I could understand giving them a patent on it. But Ethiopia sure didn't discover / invent coffee.

    And I agree that they don't deserve a patent just because they want one. I didn't even know that Ethiopia made coffee, much less have any famous brands that need trademark protection.

     

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  5.  
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    anonymous, Oct 31st, 2006 @ 5:15pm

    this bean brought to you by...

    Although I am always a little wary of stories distilled to blog form, if everything above is correct, this is the most ridiculous trademark claim I have ever heard of. You can only trademark a product if it is somehow indicative of its source. Since I think you'd be hard-pressed to show that an Ethiopian coffee bean is inherently distinctive, you'd have to show that their beans have acquired distinctiveness or secondary meaning. Beans are fungible. More than that they are generic. No one looks at the beans and says, "Hey, that's an Ethiopian bean!" The beans can't be copyrighted. But if you stamped a trademark on the beans...
    Even if the beans were able to be trademarked, as long as there was no consumer confusion about where the beans came from and companies like Starbucks were not trying to pass off the beans as their own, I don't see where the problem is. I had no idea the coffee business was so cutthroat.

     

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    The Dukeman (profile), Oct 31st, 2006 @ 5:17pm

    I agree

    It seems they are barking up the wrong tree!

     

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  7.  
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    John Gardeniers, Oct 31st, 2006 @ 5:47pm

    It's not so wierd

    This concept sounds pertty absurd, at least up to the point where you realise this is exactly what "technology" companies have been doing to us for a very long time.

     

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  8.  
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    Anonymous Coward, Oct 31st, 2006 @ 6:17pm

    Actually, Ethiopia is considered the birthplace of the coffee bean. It still grows wild there. You can indeed tell where coffee comes from by looking at it too - coffees grown at higher elevations tend to be smaller and denser than those grown at lower altitudes. The processing of the coffee bean also can dramatically affect the flavor profile.

    Bourbon can only be made in Kentucky, IIRC. And Scotch can only be made in Scotland.

    At any rate it's foolishness. If Ethiopia wants to make more money from their coffee, they should simply do what Kenya has done. The entire crop coming out of Kenya is sold at auction. They get the best price the market demands for their quality product.

     

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  9.  
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    starbucks_blow_chunks, Oct 31st, 2006 @ 7:00pm

    Starbucks et al are purveyors of excrement

    WGAF ! Anyone serious about drinking a *good* cup of coffee wouldnt walk down the same side of the street as a Starbucks, or any of those other wannabe coffee emporiums. Their coffee is crap, made by people who are trained monkeys.

     

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  10.  
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    Anonymous Coward, Oct 31st, 2006 @ 7:42pm

    Re: Starbucks et al are purveyors of excrement

    and yet, they still are in business making money, while you are at home bitching about it and being jealous of them.

     

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  11.  
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    Mousky, Oct 31st, 2006 @ 7:56pm

    IP Gone Crazy

    Speaking of intellectual property, I saw an Allstate ad about Deductible Rewards on TV this evening. In the fine print I saw the words "Patent Pending". WTF?

     

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    starbucks_blow_chunks, Oct 31st, 2006 @ 10:21pm

    Re: Re: Starbucks et al are purveyors of excrement

    Yeah, bitching about it and jealous - you and your genius mind got it in one ... dick ...

     

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    Sanguine Dream, Nov 1st, 2006 @ 5:58am

    I highly doubt...

    this is the first trademark/patent/copyright issue to hit the agricultural industry.

     

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  14.  
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    HurB, Nov 1st, 2006 @ 6:02am

    You can trademark coffee beans!!!

    Sidamo, Harar, and Yirgacheffe are specific regions in Ethiopia where the coffees by the respective names are grown. Maybe in the U.S. and Europe these are only known by coffee lovers or connoisseurs having an acquired taste for exotic or gourmet coffee. Much like any other product, the name brand distinguishes it from all other types of coffee within and outside Ethiopia. Coffee from those regions is worth much more, simply because it is of better quality due to a number of factors mainly related to their origin. This is what the WTO refers to as Geographical Indications or GIs which are defined as "indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographic origin."

    From this link, the excerpts below further explain when and how a group of producers may seek protection under US Trademark laws:

    The United States has many valuable geographical indications that have been in use in the United States for decades. Names like IDAHO POTATOES, or FLORIDA ORANGES, or VIDALIA ONIONS, or NAPA VALLEY WINES, or WASHINGTON STATE APPLES have been used in the United States and are protected under U.S. trademark laws against unfair competition and trademark infringement, whether or not they are registered with the USPTO. Moreover, many foreign GIs are protected in the United States via the geographical indication certification mark system, one example of which is JAMAICA BLUE MOUNTAIN COFFEE (U.S. Reg. No. 1,414,598) - Jamaica.

    However, a geographical indication, as defined in WTO's Trade-Related Aspects of Intellectual Property Rights (TRIPS), identifies a good, not merely a geographic area. If a geographic term is used in such a way as to identify the source of the goods/services and, over time, consumers start to recognize it as identifying a particular company or manufacturer or group of producers, the geographic term no longer describes only where the goods/services come from, it also describes the "source" of the goods/services. We say that the term has "secondary meaning" or "acquired distinctiveness." The primary meaning to consumers is the geographic place, whereas the secondary meaning to consumers is the producing or manufacturing source. If a descriptive term has "secondary meaning" to consumers, the term has a source-identifying capacity and is protectable as a trademark. Because of this feature of U.S. trademark law, geographical terms or signs can also be protected as trademarks or collective marks.

     

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  15.  
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    HurB, Nov 1st, 2006 @ 6:21am

    Re: You can trademark coffee beans!!!

     

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  16.  
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    HurB, Nov 1st, 2006 @ 6:21am

    Re: You can trademark coffee beans!!!

    The link does not appear but it's from the USPTO website.

     

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  17.  
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    BBarron, Nov 1st, 2006 @ 6:42am

    What's the issue?

    If they think their coffee beans are distinctive and want to try to build a brand with customers I don't see the problem here. If their idea is to somehow try to get more money out of Starbucks, then yeah, its destined to fail. But I could see this being a legitimate trademark issue.

    My guess is that they're trying to move the extra markup in fair trade coffee from the retailer to themselves, which probably won't work.

     

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  18.  
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    BigLouie, Nov 1st, 2006 @ 8:57am

    GI's are BS

    Good example is Vidalia Onions. The city of Vidalia, Georgia, US is near me. They got an injunction against growers from Texas selling "Vidalia Onions". At first they tried to claim it was a different onion, then that the taste was SO distinctive because of the soil, etc, but the Texas Growers proved it was geneticlaly the same breed, and even proved in taste tests that consumers could tell little difference, and even in some cases, preferred the Texas onions. But a well-paid someone here or there made sure that unless it was grown in the immediate area of Vidalia, GA, that it could not be called a Vidalia Onion. Someone was scared the consumer would be "confused" if the distinction wasn't made. Hooey. I think that once the variety of onion was labeled as such, if the growing conditio9ns outside the region produced a similar texture, taste, etc, that it should be the same name. If a Granny Smith Apple is grown anywhere, it is still a Granny Smith Apple. What drove the Vidalia issue was greed, pure, unadulterated greed.
    When the Olympics came to Atlanta, GA in 1996, they forced a Greek guy who had a small pizza place called "Olympic Pizza" to change his name, even though his place had been there for more than twenty years. The Olympic attorneys cried in court that they didn't want visitors "assuming" that this pizza place was the "official" pizza place, and that people were assured thiier money was going to the right place. No one could even use a set of rings in thier logo, no matter how configured. One guy's four connected rings (in a straigt line) was considered to be "confusingly similar" to the Olympic rings, and he was forced to change his company logo, which he had for many years. Greed, greed, greed. It is noted that both these businesses were approached first with the offer to keep thier name or logo, if they paid a licensing fee. WTF? "Allow" him to keep a business name owned for nearly 30 years by paying you a fee? Unfortunately, an either incompetent or well-bribed judge ruled against the pizza shop.
    Greed, greed, greed, greed, greed.

     

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  19.  
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    Danielle, Nov 1st, 2006 @ 7:14pm

    a lot of inaccuracies

    Yikes! This blog post contains more inaccuracies than almost any I have seen on this topic.

    Firstly, Ethiopia is certainly trying to, over the long term, get more money back to the farmers who produce coffee. But, Ethiopia is a long way from trying to screw Starbucks out of money here. Firstly, Starbucks had an application with the USPTO for Sidamo for 16 months before it finally withdrew it. The withdrawal just ‘happened’ to become effective literally within hours of the NCA’s opposition filing to both Sidamo and Harar becoming effective. Go figure.
    The purpose of trademark law is not only to protect existing brand names, but also to recognize ownership of names in the first place. In this case the names of these coffees have been in use for years, but Ethiopia has not had the ability to protect them. Only in the past few years has Ethiopia finally started the trademarking initiative, and it is worth noting that these trademarks have already been recognized and filed in over 30 countries. This doesn’t sound to me like a misunderstanding of trademark law. They are also being advised on this project by Arnold and Porter (very well respected law firm) who I assume understand trademark law a little bit.
    Starbucks is not offering coffee “based on Ethiopia’s beans”, it is literally selling Ethiopia’s beans. In bags with the names on them that Ethiopia is trying to protect. Ethiopia has offered this licensing agreement to Starbucks free of charge. There is absolutely no licensing fee associated with this agreement.
    The USPTO has not “rejected” any of the applications. There are various levels of paperwork and such at work here, but the Sidamo and Harar TM’s are still under consideration. The trademark for Yirgacheffe has already been granted in the US.
    Finally, to the economic argument. The idea that Ethiopia will price themselves out of the market for coffee beans might be legitimate if the beans being referred to were commodity beans (the ones used in a $6 tin of Folgers™) where the relevant price is the NY “C” price. However, the whole point of the exercise is that these types of coffee are not commodity. They are specialty coffees. They are unique in both type and flavor. The actions that Starbucks has taken to ensure that they can continue to buy gourmet coffee at commodity prices and sell it at specialty coffee prices are the reason that Starbucks is being targeted. If Ethiopia has the ability to build the reputation of their coffees, and are the only producer of these types of coffee (as they currently are), then there is no reason to believe that they will be priced out of the market.
    Starbucks continually refused meetings with the Ethiopians to discuss the issue for over a year. Then when they were publicly lambasted for their actions, they offer to help with a certification program that would not achieve any of the goals of Ethiopia.
    I don’t think Starbucks is a big bad company, but I do think that they should stop trying to legally block (via their own actions or the NCA’s) Ethiopia from gaining much needed control over their method of international trade. It’s up to Ethiopia to decide how they want to sell their coffee, not Starbucks.

     

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  20.  
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    Mike (profile), Nov 2nd, 2006 @ 1:28am

    Re: a lot of inaccuracies

    The purpose of trademark law is not only to protect existing brand names, but also to recognize ownership of names in the first place.

    Sounds good, but not true.

    who I assume understand trademark law a little bit.

    Lawyers know how to misuse trademark law very well.

    Starbucks is not offering coffee “based on Ethiopia’s beans”, it is literally selling Ethiopia’s beans. In bags with the names on them that Ethiopia is trying to protect. Ethiopia has offered this licensing agreement to Starbucks free of charge. There is absolutely no licensing fee associated with this agreement.

    Ok, here's where your argument goes TOTALLY off the rails. So it's selling Ethiopan beans that it bought legitimately and then selling them *PROPERLY* described as Ethiopan beans? Where's the problem?!?

    There isn't one. If I sell you a chair I built, and then you go and resell the chair describing it as "designed by Mike" that's FACTUAL information. It's not something you need to license.

    Starbucks is selling these beans and accurately describing their origin.

    If Ethiopia doesn't like it, don't sell 'em the beans or raise the price.

    There's no legitimate reason for trademarking them other than as a money grab that will backfire.

     

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  21.  
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    Danielle, Nov 3rd, 2006 @ 2:06pm

    Re-Re a lot of inaccuracies

    The purpose of trademark law is not only to protect existing brand names, but also to recognize ownership of names in the first place.

    Sounds good, but not true.

    If that’s not true, then how would you create a new brand? If the trademark office did not register new names, then new branding, companies, and names, would cease to progress. The USPTO gets an innumerable amount of applications each year. Including Starbuck’s attempted registration of Sidamo.

    who I assume understand trademark law a little bit.

    Lawyers know how to misuse trademark law very well.

    This may be true. And many people may disagree with how trademark law currently works, but Ethiopia is working within the guidelines of US and international trademark law. Just because you don’t like how the law works doesn’t make it invalid.

    Ok, here's where your argument goes TOTALLY off the rails. So it's selling Ethiopan beans that it bought legitimately and then selling them *PROPERLY* described as Ethiopan beans? Where's the problem?!?

    There isn't one. If I sell you a chair I built, and then you go and resell the chair describing it as "designed by Mike" that's FACTUAL information. It's not something you need to license.

    If I bought several “Authentic MLB Jerseys”, and then I set up a store and sold them without a license as “Danielle’s Authentic MLB Jerseys”, you can bet MLB would have me on a pike for unlicensed distribution of their product. In this case Starbucks is taking Ethiopia’s beans, at least one of which now is trademarked in the US, slapping its own name on them, and selling them. And Ethiopia even offered them a free license to continue doing this (ie no money grab) if they would just recognize that Ethiopia owns the names. And they refused.

    To continue the analogy, what would happen if “Danielle’s Authentic MLB Jersey Store” called the MLB to tell them that they thought they would lose money due to trying to license their product, and as such not only refused to become a licensed distributor myself, but also actively sabotaged efforts to license other distributors?


    If Ethiopia doesn't like it, don't sell 'em the beans or raise the price.

    They can’t raise the price currently. That’s the whole point. It’s a buyers market, there is not enough control over distribution, and the beans are being sold at commodity prices. Once they have registered the names they have the ability to negotiate on more equitable terms with buyers. In the end they can build the reputation of their coffees so as to get a higher border price and a higher end retail price, while increasing the quality of the coffee production at the same time. It’s win/win/win.

     

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  22.  
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    Mike (profile), Nov 3rd, 2006 @ 6:38pm

    Re: Re-Re a lot of inaccuracies

    If that’s not true, then how would you create a new brand? If the trademark office did not register new names, then new branding, companies, and names, would cease to progress. The USPTO gets an innumerable amount of applications each year. Including Starbuck’s attempted registration of Sidamo.

    The purpose of trademark is to avoid confusion over brand names, not factual descriptions. This is a factual description, not a brand name.

    This may be true. And many people may disagree with how trademark law currently works, but Ethiopia is working within the guidelines of US and international trademark law. Just because you don’t like how the law works doesn’t make it invalid.

    Again, you're trying to say it's okay to trademark a factual description. That's not allowed.

    If I bought several “Authentic MLB Jerseys”, and then I set up a store and sold them without a license as “Danielle’s Authentic MLB Jerseys”, you can bet MLB would have me on a pike for unlicensed distribution of their product. In this case Starbucks is taking Ethiopia’s beans, at least one of which now is trademarked in the US, slapping its own name on them, and selling them. And Ethiopia even offered them a free license to continue doing this (ie no money grab) if they would just recognize that Ethiopia owns the names. And they refused.

    Yes, MLB might do that, but they'd be wrong, and you'd win the case -- because once you've bought them, you're allowed to resell them, and you're allowed to say that they're authentic, because that's factually true. There's nothing wrong about what Starbucks is doing. They don't need a "license" to sell beans they legally bought under the accurate description of that bean.

    What you're trying to do is say that there's no right of first sale, which is ridiculous. The world economy works on the right of first sale.

    They can’t raise the price currently. That’s the whole point. It’s a buyers market, there is not enough control over distribution, and the beans are being sold at commodity prices.

    In other words, the market is properly pricing the beans. What's the problem?

    Once they have registered the names they have the ability to negotiate on more equitable terms with buyers. In the end they can build the reputation of their coffees so as to get a higher border price and a higher end retail price, while increasing the quality of the coffee production at the same time. It’s win/win/win.

    Time to hit the econ textbook again. What you're saying is that adding friction (licensing) to an already efficient market will help the situation? Um, no way. No how. You do realize what happens when you try to add friction to an efficient market? It's lose/lose/lose. In the situation you're describing, NO ONE wins. Ethiopan farmers lose because Starbucks goes elsewhere for the beans. Starbucks loses because it's not economically sensible to buy such beans. Customers lose because they no longer get to consume the coffee.

    That's not the solution anyone wants.

     

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  23.  
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    HurB, Nov 3rd, 2006 @ 11:04pm

    Re: Re: Re-Re a lot of inaccuracies

    The same beans growing anywhere else can no longer be considered Sidamo Coffee, as their origin or source defines the species and thus the name brand. It has been a perfectly legal and ongoing practice to trademark a name brand based on origin; this is not something to debate. The fact that Starbucks resells the beans is not wrong either, but trying to trademark it so as to prevent the actual producers from being able to control the name and how it is marketed, that is not allowed. It is a buyer's market, but does the market properly price the beans; for the poor farmers, you can bet that it's not. To imagine that it's ok for Starbucks to buy it at the price that it does only to resell it for 20-30 times that is just ludicrous. Their move to block the trademark is based purely on greed, nothing more. In time, events will show just how wrong this is and things will turn in favor of the poor farmers.

     

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  24.  
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    Danielle, Nov 17th, 2006 @ 11:51am

    This article explains things better than most I've seen.

    http://www.spiegel.de/international/0,1518,448191,00.html

     

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  25.  
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    Anonymous Coward, Dec 7th, 2006 @ 12:38am

    Re: I'm not so sure

    why don't you google 'history of coffee" and come to know why the name coffee has its name the way it is now?

     

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  26.  
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    Anonymous Coward, Dec 7th, 2006 @ 1:05am

    Re: Re: a lot of inaccuracies

    "There's no legitimate reason for trademarking them other than as a money grab that will backfire."
    If 'money grab that will back fire' is the case why does not starbucks' sit back and relax simply because the case will finally backfire against Ethiopia? Actually it is starbucks that is acting as a money grab.

     

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  27.  
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    peter rosenthal, Jan 19th, 2007 @ 7:47pm

    Re: I'm not so sure

    Ethiopia is not trying to trademark "coffee". Ethiopia is trying to trademark its own coffee NAMES which could bring coffee farmers an estimated £47 million per year (80 million $). again; NOT coffee, but the names of their Worldwide known Harar, Sidamo, Yirgacheffe coffee names. These names in the World of Coffee is like Camembert or Brie in the World of Cheese.
    misanthropic humanist said something quiet thoughtful;"The problem for American corporations though is anyone daring to suggest that rules they impose on others should also apply to them."
    For God sake! Americans wrote the textbook on Trademark and Copyright. Is it right for them to copyright the name of a toilet paper even though they didn't invent it, but an entire country can't put their name on a product that millions know and love all over the world, that makes millions of dollars for others and in the same time it could pull their country out of poverty? Aren't we F@#$% up a bit my fellow Americans?

     

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  28.  
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    peter, Jan 19th, 2007 @ 7:52pm

    Re:

    Anonymous Coward, thank you for writing it down so beautifully. People are not educated enough. Again; thank you

     

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  29.  
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    Danielle, Feb 12th, 2007 @ 5:07pm

    Trademark dispute between Ethiopia and Starbucks

    My understanding of the purpose of trademarking is to ensure that customers are getting what they are trying to pay for. If customers want beans from a certain area, there should be a way to ensure that they are getting what they're paying for (as with markers of geographic origins for wine). I'm not aware of all the nuances of this particular trademark dispute, so I'm confused what you mean when you say that Ethiopia's IPO wants to get more money out of Starbucks (thereby pricing the farmers out of the market, as you put it). Coffee prices continue to remain so low that in many (ok, most) coffee growing areas of the world, farmers can't cover the cost of coffee production (which leaves them vulnerable to predatory lending practices in their local communities). One of the main reasons why coffee prices remain ridiculously low is that coffee is treated as a bulk commodity. As supply increases, prices will go down (since demand for coffee stays pretty consistent). So what does this do to local communities? You can imagine. And when coffee is treated like a bulk commodity, quality is often questionable. Customers do not always know what they're getting. For customers who want bulk-based blends (such as Maxwell House, Folgers, etc), this is an ideal situation (there will be plenty of cheap, bulk-based blended coffees around for them to consume). For customers who want to sample different coffee varietals, and want more consistent guarantees of coffee quality, the bulk system is bad.

    Suppose Ethiopian coffees are trademarked. If so, customers who want Ethiopian coffee will have an easier time finding what they want (and they won't have to worry about fraudulent claims about coffee origins--- a problem that is not too uncommon). And if customers who sample Ethiopian trademarked coffeess find themselves really liking what they taste, they'll go looking for it when they do their shopping, which could mean more sustainable coffee production in Ethiopian, one of the poorest countries in the world (win-win situation, it seems). Starbucks, I'm sure, would still make a profit. I don't see Starbucks as big, bad and evil. They're just doing business.

     

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    raving anarchist, May 9th, 2007 @ 12:45pm

    ethiopia 1, starbucks 0

    starbucks has now agreed to the trademark deal: http://seattlepi.nwsource.com/business/314229_starbucksethiopia04.html

    my understanding is, there will be no new 'licensing fee' or anything like that, just a higher price for the farmers.

    i too despise the concept of 'intellectual property rights', but in this f#$%#d-up world, the poor have to do what they have to do to survive.

     

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  31.  
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    DW, Jun 20th, 2007 @ 1:48pm

    no, NOW they've agreed to the TM deal

     

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  32.  
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    lovingseem (profile), Jun 4th, 2009 @ 9:46pm

    I am drinking a cup of coffee brewed with Peet's coffee beans. Moreover, when you submit a specimen to the Patent and Trademark Office, the specimen should So what can the Trademark Consigliere bring to the table? loving seem adult

     

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