The other side of rent seeking

Originally posted 2006-11-06 15:00:34. Republished by Blog Post Promoter

I have written often about the way trademark law plays out predictably along lines of classical rent-seeking. That is not a bad thing per se, but we usually see successful rent seeking performed by actors with greater resources, including ready access to attorneys and officials.  The result is frequently an ever-expanding zone of IP rights grabs by IP rights holders, beyond what strict tests such as LIKELIHOOD OF CONFUSION mandate.

Here it’s more complicated: Ethiopia wants trademark protection for the names of certain coffee beans native to its borders, similar to the protection granted to words such as Champagne and Gorgonzola. Sounds like a good strategy, but who’s going to pay that rent? Our regular customer at this blog, Starbucks Coffee, says the answer to that question hits a little too close to home.

Reuters reports:

If Ethiopia, one of the world’s poorest countries, had been been successful in trademarking its coffee beans with the U.S. Patent and Trademark office, it would have allowed the country to control the use of the beans in the market, giving its farmers more of the retail price.”

Securing the trademark for its Sidamo, Harar and Yirgacheffe coffee beans could have allowed the country to increase its negotiation leverage through control of the names and ultimately (derive) a greater share of the retail price in the global market,” Ethiopia’s oreign Ministry said in a statement.

It would also raise the cost of coffee. But that Starbucks java is such a bargain already, we wouldn’t mind, right?

UPDATE:  Starbucks says it isn’t so.

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Author:Ron Coleman

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4 Responses to “The other side of rent seeking”

  1. February 18, 2007 at 8:15 pm #

    This blink is only that they will buy more I see nothing that validates an increse in priceing the laud themselves for giving the growers aid but they can not eat aid the aid in question is only for the issue they care about which is coffee not the well being of the growers and their familiys

  2. February 18, 2007 at 11:15 pm #

    Well, Arondo, the thinking is that if the growers themselves are able to obtain exclusive rights to using this name — i.e., as a trademark — they (or their representatives, or purported representatives, such as the government) will be in a position to regulate what can and cannot be described by these names. If coffee producers decide that they “must” have beans by this name, they will have to buy them from an exclusive source. This will tend to increase prices — but all depends on that “must.”

    I agree with you that they do not care about the well being of the growers and their families, just as the growers are not interested in the well being of Starbucks and the families of its stockholders, employees and customers.

Trackbacks/Pingbacks

  1. LIKELIHOOD OF CONFUSION » Blog Archive » Starbucks blinks - February 18, 2007

    […] Big Green gives in on the Ethiopia coffee-bean-name controversy. I guess if you talk the PC talk, you’ve got to walk it, too. The result will be higher prices for the coffee beans in question — Sidamo and Harar — at the farmer level. Will Starbucks “pass on” the extra cost to consumers? If it can, it will, of course. If it can’t, it won’t. And everything in between. […]

  2. LIKELIHOOD OF CONFUSION » Blog Archive » Big Green’s Ethiopian trademark problem - March 10, 2007

    […] The Australian reports that earlier news about a resolution of Starbucks’ trademark problems with the Ethiopian coffee thing were perhaps over-caffeinated. […]

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