Starbucks spars with Ethiopia over three coffee names

The Ethiopian government, Starbucks and a coffee-industry association are embroiled in a spat over whether the coffee names Yirgacheffe, Sidamo and Harar belong to the African nation or can be used by anyone without restrictions.

Ethiopia wants Starbucks to sign a voluntary licensing agreement saying the country owns the rights to the coffee names. Seattle-based Starbucks said Wednesday that it wants instead to work with the country to establish a geographic certification for the coffee-bean names, much like what is done with Washington apples or Kona coffee.

Ron Layton, president of Light Years IP, which is advising Ethiopia on the matter, said the government doesn't want to charge a flat fee as part of the licensing agreement.

But he said the long-term plan would be to establish the brand and then use that leverage to gradually boost the prices that companies like Starbucks pay for those coffees.

Although U.S. consumers pay dearly for exotic coffees from Africa and elsewhere, impoverished farmers can struggle to eke out a living growing those beans. Starbucks says it pays above-average prices for its beans.

Ethiopia also is working to secure the rights to the three coffee names via the U.S. Patent and Trademark Office. The country has succeeded in its attempt to trademark the name Yirgacheffe, but a final decision has not been made on the other two.

A coffee trade group of which Starbucks is a member, the National Coffee Association of U.S.A., has filed protests arguing that the names are generic.

Robert Nelson, president of the association, said coffee shops may be less likely to buy those types of beans because of fears that advertising the names would provoke legal action.

Sean O'Connor, an associate professor of law at the University of Washington, said he thinks it would be costly and difficult for Ethiopia to maintain the trademarks on the coffee types.

Also, O'Connor said, trademarks may not produce higher prices, so it might make more sense to seek the geographic certification for Ethiopian beans, much like wine growers in France have done with the word "champagne." That's the type of process Starbucks also is suggesting.