What's in a name? Ethiopia's battle against Starbucks

Ethiopia, fed up with getting short-changed when selling its popular coffee products to the West, has been in legal conflict with Starbucks since 2005. Ethiopia complains that while a pound of coffee sold in the United States nets Ethiopian farmers about $1, the same pound of coffee sells for $26 at Starbucks under the name "Shirkina Sun-Dried Sidamo." Ethiopia argues that the high price for its coffee is not just the result of roasting, packaging or marketing in the United States, but because there is something consumers intrinsically value in Ethiopian coffee. Ethiopia is frustrated that it hasn't been able to capitalize on the "intellectual property" of its coffee-producing regions, and wants that to change.

In March 2005, Ethiopia filed a case with the U.S. Patent and Trademark Office to  trademark the names of three of its renowned coffee-producing regions (Yirgacheffe, Harrar and Sidamo), hoping that eventually the government will be able to force buyers into licensing agreements and thereby gain a bigger share of the sales. Starbucks, which had already applied to trademark Shirkina Sun-dried Sidamo, has been able to stall Ethiopia's progress by not responding to Ethiopia's request to drop its petition. Starbucks argues that Ethiopia should opt for "geographic certification" (used for Idaho potatoes and Florida oranges) rather than an outright geographic trademark. Ethiopia counters that it just doesn't have the resources to bear the burden of certification, and that it still wouldn't necessarily help Ethiopia earn more from coffee sold in those regions. Starbucks could still sell its Sidamo coffee for the same price—as long as it actually comes from Sidamo.

Starbucks sources only 2 percent of its beans from Ethiopia at the moment, accounting for around 2 percent of the Ethiopia's crop. Nonetheless, if Ethiopia wins its petition, it is likely to earn an extra $88 million in revenues. So for Ethiopia, there's a lot in a name.