[Commons-Law] relay

Via: Monica Narula

Thought this might be of interest.

best
M

Monica Narula
Raqs
Sarai-CSDS
29 Rajpur Road
Delhi 110 054
www.raqsmediacollective.net
www.sarai.net


Begin forwarded message:

> From: Soenke Zehle
> Date: 29 August 2007 2:00:47 PM GMT+05:30
> To: incom
> Subject: Ethiopia's loss in the Starbucks affair
>
> I became interested in the Starbucks issue a while ago when it was
> still
> looking like a possible example of how the IPR-logic could be turned
> around by one of the weaker players; the assessment below is quite
> sobering, Soenke
>
> -------- Original Message --------
> TITLE: Ethiopia's loss in the Starbucks affair
> AUTHOR: Wondwossen Mezlekia
> PUBLICATION: Addis Fortune
> DATE: 19 August 2007
> URL:
> http://www.addisfortune.com/Vol%208%20No%20381%20Archive/
> ecconomic_commentary.htm
> NOTE FROM GRAIN: The conflict between the Ethiopian government and
> Starbucks over trademark rights to Ethiopian coffee names has
> generated
> a tremendous amount of controversy, campaigning and reporting since it
> broke out last year. Yet the recent signing of a joint agreement
> between
> the two parties has not put the fires out. The below is one take on
> the outcome.
> ________________________________________________________
>
> Addis Fortune | 19 August 2007
>
> Why did Ethiopia sign an agreement critics say is favoring Starbucks?
> Wondwossen Mezlekia, an Ethiopian working and living in Seattle,
> Washington -- where Starbucks is also headquartered -- has been
> following the trademark dispute through his well-read blog,
> http://www.poorfarmer.blogspot.com. In his contribution to a series of
> articles that appeared on this newspaper, Wondowssen sheds some
> light on
> the issue.
>
> ETHIOPIA'S LOSS IN THE STARBUCKS AFFAIR
>
> Ethiopia, one of the ancient civilisations in the world, collided
> with a
> symbol of globalisation and, to some extent, challenged the status-quo
> without success. The outcome should serve third-world countries as a
> reminder of the harsh reality that they have a long way to go to get
> control of their intellectual property rights.
>
> Although Ethiopian coffees command a premium price in foreign markets,
> particularly the United States (US), farmers who grow the beans often
> live in extreme poverty. The Ethiopian coffee sector's strategy to
> trademark the famous coffee brands in all major international markets
> was an eye-opener for many of the coffee growing nations in Africa.
> But
> that effort hit a dead end in the US, home of Starbucks Corporation
> and
> this led to several months of conflict between the two.
>
> On June 20, 2007, Starbucks and Ethiopia declared that they have both
> emerged as winners. But analyses of documented facts suggest that
> there
> is more to the affair than what either side claims. The bizarre and
> mysterious ending of the dispute warrants further scrutiny of the
> accord.
>
> Whether and how the terms of the truce will benefit the Ethiopian
> coffee
> sector and the trademark project remains to be seen. What is
> unquestionable is that, because of Starbucks and the National Coffee
> Association (NCA), Ethiopia has lost the trademark for Sidamo in
> the US.
> Sadly, Ethiopia has also surrendered the moral high ground that had
> won
> it support all over the globe; it has very little to show for it.
> Besides, all the windfall economic opportunities that might have
> changed
> the lives of the poor farmers, who, for centuries, have been taken
> advantage of, have vanished into thin air.
>
> The conflict began in March 2005, when Ethiopia filed with the US
> Patent
> and Trademark Office (USPTO) to trademark the country's most valued
> brands Harar, Sidamo, and Yirgacheffe. Starbucks had filed an
> application to trademark "Shirkina Sun-Dried Sidamo" in 2004,
> making it
> impossible for Ethiopia to go forward with its own application
> until the
> two applicants reached an agreement to drop one. The Ethiopian
> government asked Starbucks to drop its claim.
>
> Kassahun Ayele, the former Ethiopian Ambassador to the US, now serving
> in the same position in Berlin, made the initial effort to engage
> Starbucks in discussions to resolve the matter. But his letter to
> Howard
> Schultz, chairman of Starbucks, went unanswered for over a month. When
> it did get answered, Starbucks' response was condescending.
>
> He received on April 21, 2005, a short and dismissive reply from a
> company lawyer, and a short time later, a note from a Corporate Vice
> President inviting him to attend the award event for Mr. Schultz,
> and to
> contribute 600 dollars for the 'privilege.', according to the Embassy.
>
> In October 2006, Oxfam launched an international campaign to force
> Starbucks to come to the table and discuss with Ethiopia for
> resolution.
> The campaign was framed to depict Starbucks as a company exploiting
> its
> coffee producers. The theme, "For every cup of Ethiopian coffee
> Starbucks sells, Ethiopian farmers earn 3¢", proved to be Starbucks'
> irritant.
>
> Arrogance combined with a desire to counteract Oxfam's unexpected
> campaign actions might have blinded Starbucks' management into making
> several ridiculous assertions.
>
> First, the company claimed that Ethiopia's coffee brands cannot be
> trademarked because they are generic terms for coffee, rather than
> distinctive marks. They then asserted that the trademarks are against
> the interests of Ethiopian farmers. At the peak of its charges, the
> company went on to say that Ethiopia's attempt to trademark the coffee
> brands was illegal. They exhausted all their fabricated allegations
> before running out of charges to publicly discredit Ethiopia's
> trademark
> project.
>
> Ultimately, forced by mounting public pressure, Starbucks senior
> management resorted to a different strategy without losing sight of
> their goals. They hired the Washington-based lobbying firm, The
> Whitaker
> Group, and travelled to Ethiopia to convince government authorities by
> employing alternative negotiating tricks.
>
> On the lead-up to the company executives' second trip to Ethiopia in
> February 2007 -- first trip was in November 2006 -- Starbucks
> announced
> its donation of half a million dollars to CARE International, a US-
> based
> charity organisation, for its social work in the coffee growing
> regions
> of Ethiopia. In addition, the company issued a press release with
> promises to build a farmer support centre and to double the volume of
> coffee the company buys from East Africa.
>
> During their meetings held in Addis Abeba, Starbucks succeeded in
> convincing Ethiopian authorities to divert their attention to what
> they
> called a "value-added" process. Empty promises, such as the
> possibility
> of cooperation with the country's tea and textile sector, and implied
> support through the African Growth and Opportunity Act (AGOA), were
> used
> to entice state ministers from ministries of Agriculture and Rural
> Development, Trade and Industry, Finance and Economic Development, and
> others, including Getachew Mengistie, director general of the
> Ethiopian
> Intellectual Property Office (EIPO).
>
> Noneof those sectors are as vital as the most exploited coffee
> sector,
> which continues to be the backbone of the Ethiopian economy. In
> spite of
> that, the authorities were swayed and subsequently signed on
> Starbucks'
> press release announcing their agreement to "work together". Four
> months
> after that agreement and deafening secret negotiations, the government
> representatives and Starbucks declared their signing of a "marketing,
> licensing, and distribution" agreement on June 20, 2007.
>
> The devil, however, is in the details.
>
> As a global company that fights to secure its grip over the sources of
> its coffee, it is evident that Starbucks' opposition to Ethiopia's
> trademark initiative stems from three basic elements: Royalty fees,
> monopoly over the brands and traceability.
>
> As long as Starbucks will not be expected to pay royalty fees, and so
> long as Ethiopia does not legally own the Sidamo brand, which is the
> most important brand to Starbucks -- Starbucks does not hold Harar and
> Yirgacheffe coffees in many of its stores -- signing some sort of weak
> licensing agreement, with secret details that do not mention financial
> resources to help promote Ethiopian coffee, offers a safe exit.
> Therefore, a negotiated settlement outside of administrative rights to
> own the trademarks is a viable option for Starbucks.
>
> Starbucks' concern about Ethiopia monopolising the brands is already
> non-existent, at least in the US, as Sidamo is not a registered mark.
> Also, because Starbucks buys most of its coffees through third
> parties,
> the concern about tracing the beans to the origin is automatically
> taken
> care of.
>
> Starbucks' obligations in the agreement, if any, are confidential. The
> signatories imply that Ethiopia's obligations are uncomplicated and
> the
> benefits flowery.
>
> Getachew Mengistie said Ethiopia's obligation is not to impose a
> royalty
> fee of any nature during the contract period whereas its benefits
> include a contractual provision, which recognises Ethiopia's common
> law
> rights where applicable.
>
> According to available information, however, Ethiopia's benefits
> are not
> as impressive as the words. Although common law is a valid form of
> trademark rights in the US as rights stem from use rather than
> registration in this country, not all countries have the same
> system as
> the US. In some countries, Ethiopia does not have any rights at all
> unless the mark is registered.
>
> In addition, enforcement of trademarks is expensive and probably not
> practical in every instance of infringement. That is why the
> conventional rights of registration are important -- they help prevent
> infringement and consequently avoid expensive enforcement before it
> occurs.
>
> Strikingly, the negotiation process did not fully address the promises
> made by Starbucks during the February 2007 meeting, which Getachew
> proudly refers to as the turning point that led to the resolution.
> Only
> the promotion of the output of other sectors is mentioned in the
> contract. Even that is not listed as enforceable.
>
> The government representatives failed to follow through on the rest of
> the promises, such as building a farmers support centre and
> doubling the
> amount of coffee Starbucks would buy from Ethiopia, which is
> believed to
> be only two per cent. The centre was not even a negotiating point,
> if we
> go by what Samuel Assefa (PhD), Ethiopia's ambassador to the US, said.
>
> "Starbucks is a private company; we cannot ask them to open a farmer
> support centre in Ethiopia," he told the media.
>
> But another African country leader did just that: reached out to
> private
> companies such as Starbucks, Google and Costco to attract business
> investment. His name is Paul Kagame, the president of Rwanda.
>
> Starbucks invited Mr. Kagame to deliver a corporate endorsement at the
> company's annual shareholder meeting on March 21, 2007, -- a key
> moment
> when Starbucks executives needed an African leader to paint a picture
> different from what the shareholders have come to read in the media
> as a
> result of the trademark dispute.
>
> Recent reports indicate that Starbucks eyes Rwanda for setting up the
> Farmer Support Centre.
>
> Another widely publicised promise was that Starbucks would increase
> its
> Ethiopian coffee purchases. As of this day, there is no indication
> that
> Starbucks bought more Ethiopian coffee; nor is there any way to
> substantiate this claim in the future as Starbucks buys most of its
> coffee through third parties, mainly from Germany.
>
> How else Ethiopia benefits from the agreement is either not
> defined, or
> undisclosed.
>
> "Having the commitment and support of Starbucks will help enhance the
> quality of Ethiopian fine coffees and improve the income of farmers
> and
> traders," Getachew, told the media.
>
> But Starbucks' executives do not acknowledge any such commitment.
>
> In an interview with the Seattle PI, Sandra Taylor, Starbucks senior
> vice president of Corporate Social Responsibility, said that the deal
> was not intended to set prices.
>
> "Starbucks pays based on the quality and marketplace," she said. "If
> this works right, it will lead to better pricing for high
> quality . . .
> For Starbucks, we have long paid premium prices."
>
> Starbucks would work with Ethiopian farmers to improve quality and
> crop
> yield, but not dedicating any new financial resources, according to
> the
> paper's report. The status-quo is conserved.
>
> What did Ethiopia lose? Everything it tried to gain, and then some.
>
> Starbucks succeeded in preventing Ethiopia from gaining permanent
> control of the mark Sidamo in the US market, effectively eliminating
> Ethiopia's opportunity to move beyond its cycle of poverty.
>
> In addition, the long fought battle to this ruinous end was
> exasperated
> by Ethiopia's loss of dignity in the process. Oxfam's approach of
> using
> images of poor farmers, the victims of Starbucks' insensitivity, was
> meant to coerce the company into changing the way they do business;
> but
> instead, Ethiopia once again garnered a reputation reminiscent of
> 1984.
> The country was dishonoured in front of the world while its Ambassador
> was disrespected. The trademark initiative was discredited and the
> project was delayed by over two years. As if that was not enough,
> Ethiopia was deceived by empty promises.
>
> Starbucks has still not admitted any of its wrong doings: its
> misleading
> statements, which unlawfully undermined the people's rights, and its
> disrespect to a sovereign country's Ambassador, much less apologise
> for
> trying to publicly discredit the country's efforts. To this day, the
> company has not expressed regret for its opposition that cost Ethiopia
> the opportunity to trademark Sidamo.
>
> The trademark dispute which carried the hopes of over 15 million
> people
> was concluded with a reprehensible remark by Ambassador Samuel:
> "Ethiopia salutes Starbucks for its exemplary display of global
> corporate citizenship. This alliance highlights the significance of
> visionary entrepreneurs in creating space for win-win engagements
> between corporations that operate globally and developing countries
> such
> as ours."
>
> And Oxfam celebrated "resolution" of the dispute between Starbucks and
> Ethiopia.
>
> Starbucksrecently increased its coffee prices in the US by nine
> cents a
> cup, which further widens the income gap between Starbucks and coffee
> farmers. But, the equation still remains the same: "For every cup of
> Ethiopian coffee Starbucks sells, Ethiopian farmers earn three cents."
>
> ________________________________________________________
>
> GOING FURTHER (compiled by GRAIN)
>
> Oxfam, "Oxfam celebrates win-win outcome for Ethiopian coffee farmers
> and Starbucks", press release, Washington DC, 21 June 2006.
> http://www.oxfam.org/en/news/2007/pr070621_win-win-outcome-for-
> ethiopian-coffee-farmers-and-starbucks.html
>
> Government of Ethiopia and Starbucks Coffee, "Joint statement:
> Starbucks
> and Ethiopian Intellectual Property Office (EIPO) partner to promote
> Ethiopia's coffee and benefit the country's coffee farmers", Addis
> Ababa
> and Seattle, 20 June 2007.
> http://www.starbucks.com/aboutus/pressdesc.asp?id=779
>
> Amy Goodman (host), "Following public campaign for trademark efforts,
> coffee giant Starbucks signs licensing deal that could bring
> millions to
> Ethiopian farmers", Democracy Now!, New York, 9 May 2007.
> http://www.democracynow.org/article.pl?sid=07/05/09/1515200
>
> Anton Foek, "Trademarking coffee: Starbucks cuts Ethiopia deal",
> CorpWatch, Oakland, 8 May 2007.
> http://www.corpwatch.org/article.php?id=14474
>
> David Bollier, "Starbucks, trademarks and coffee colonialism", On the
> commons, 6 March 2007.
> http://onthecommons.org/node/1108
>
> Joshua Gallu, "Starbucks, Ethiopia, and the coffee branding wars", Der
> Spiegel, 16 November 2006.
> http://www.spiegel.de/international/0,1518,448191,00.html
>
> Light Years IP
> http://www.lightyearsip.net/
>
> Ethiopian Trademarking and Licensing Initiative
> http://www.ethiopiancoffeenetwork.com/
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