For consumers coffee is a beverage or even part of a lifestyle. For about 25% of Ethiopia's population it is a livelihood.  Coffee forms a very high percentage of Ethiopia's export revenues. This exposes Ethiopia's people and economy to coffee price fluctuations.

This is a story about Ethiopia's attempt to increase coffee revenues using brands, IP strategy and licensing contracts - all founded on trade marks Ethiopia seeks to register across the world.

The story begins in 2001 when coffee-producing nations experienced a severe downward price trend. The trend continued to 2005. So the first paragraph of the September 2005 submission by the International Coffee Organization to the UN General Assembly stated: 

Perhaps there is a connection between the coffee price crisis and the collapse of the International Coffee Agreement of 1975-1989. This was the last of the post World War II UN-supported international commodity agreements. It had held the minimum coffee price at US$1.20 per pound. But such agreements are now history.

For consumers coffee prices have not been dropping. As the accompanying graphic from the US BusinessWeek illustrates, there are good margins for the US registered trade mark brands of Eight O'Clock Coffee, Dunkin' Donuts and Starbucks.

Ethiopia supplies 2% of the coffee beans used by Starbucks. Ethiopia has moved to find a solution to remedy its crisis.   

As a coffee bean producer it has a number of options to move above commodity-level coffee prices. Its options include strategies and calls for:

• more efficiency, diversification or a move to other crops by farmers,
• policies to better balance international shifts in supply and demand,
• moves to focus on specialty "fine coffees" or organic coffee,
• support for the Fair Trade movement, and
• use of intellectual property law, including trade mark registration.

  

Ethiopia's three trade mark applications

In 2005 Ethiopia adopted registration of trade marks in its policy mix. In 2005 the Government of Ethiopia filed standard trade mark applications for registration in 40 countries of three trade marks - YIRGACHEFFE, SIDAMO and HARRAR. The accompanying photo is of two packets of Sidamo coffee.

In working out its IP strategy Ethiopia had the assistance of Light Years IP, a "non-profit organisation dedicated to alleviating poverty by assisting developing country."

Light Years IP says "We assist producers, exporters, and governments in the developing world to analyse their export potential with respect to identifying the value of intangibles and then using IP tools (i.e. patents, trademarks, licenses) to secure more sustained and higher export income."

Australia is one of the countries in which Ethiopia filed coffee trade marks. There are three Ethiopian trade marks applications filed in Australia and their status on the Australian Trade Marks Register is currently as follows:

• YIRGACHEFFE: Pending given adverse examiner's report, deadline for reply extended
• SIDAMO: Pending given adverse examiner's report, deadline for reply extended
• HARRAR: Pending given adverse examiner's report, deadline for reply extended

Ethiopia's applications for these marks have already been registered in some other countries, eg in Canada and Japan. Trade mark law while broadly similar in many respects nonetheless differs from country to country.

In the US, over the last year Ethiopia's trade mark applications become a fight in the court of public opinion. To argue about values (largely of an ethical nature), in that court different interest groups used video press releases and photographic presentations on the YouTube, Yahoo! and Flickr Websites. For examples see here for the view of Ethiopia's US law firm. The lawyer there is responding to Starbucks' video press release, which Starbucks removed from YouTube in the last 24 hours after it had been on for months and had attracted considerable commentary.

Starbucks (which had revenues of US$7.8 billion last year, up 22% over 2005) initially opposed Ethiopia's applications.

Arcane trade mark law issues are obstacles for Ethiopia's applications 

In the legal arena in the US and elsewhere, the dispute over Ethiopia's trade mark applications involves arcane topics in trade mark law. Following is an overview.

Latest developments 

As regards prices, coffee prices increased somewhat in 2005, it seems due to increased demand from China and Russia. But still in the midst of a crisis, producing nations need new approaches to build coffee's perceived and real value. 

As regards trade marks, on 19 February 2007 Starbucks announced it would not oppose Ethiopia's trade mark efforts. However, there's a long way to go yet to fully execute Ethiopia's IP strategy for coffee.

The takeaway is that Ethiopia's use of trade mark law is an illustration of how intellectual property law, combined with licensing contracts and other commercial law, can be blended and then recruited to bolster commercial strategies to increase revenues.

[UPDATE: Starbucks settles coffee trade mark law dispute , 22 June 2007] 

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• Special Collection: Trade Marks
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• Dilanchian brochure - Services - Trade Mark Registration Brochure [PDF]
• Coffee production statistics are available from the International Coffee Organization.
• Black Gold documentary movie trailer.