Update: Starbucks and Ethiopian Farmers Reach Trademark Agreement

Last year, coffee giant Starbucks was involved in a trademark dispute with Ethiopia over the names of three different coffees sold by Starbucks. The coffee names – Yirgacheffe, Harar and Sidamo – refer to regions within Ethiopia, and the coffee drinks themselves are made with beans from these respective regions. Concerned that its farmers were not adequately protected, Ethiopia applied for international trademark protection in 2006, and Starbucks subsequently opposed the registration attempts.

In a deal announced June 20, 2007, Starbucks will no longer oppose Ethiopia's attempts to trademark its specialty coffee beans. Although no royalty payments exist in the deal, Starbucks released a statement stating that greater distribution control will lead to a stronger demand and better pricing for the specialty beans. Prior to the agreement, Ethiopian farmers received $0.75-$1.60/pound for coffee that Starbucks in turn sold for $26.00/pound. In other parts of the world, specialty coffee growers receive up to 45 percent of the retail price, well above the previous 5-10 percent that Ethiopian farmers received. The large price differential resulted in impoverished Ethiopian farmers struggling to make a living growing the beans for which U.S. consumers paid top-dollar.

Ethiopia has acquired trademark protection for all three of its specialty coffees in some countries, and for Yirgacheffe in the United States. In total, Starbucks and 14 other international coffee companies have signed trademark agreements with Ethiopia.

Patent Application for Synthetic Bacterium Raises Concern

On May 31, 2007, the USPTO published Venter Institute's U.S. Patent application number 2007/0122826 for "Minimal Bacterial Genome". The significance of the application is that the invention described is the world's first-ever human-made species, a "free-living organism that can grow and replicate". Appropriately named "Synthia", the species is made entirely with synthetic DNA from the laboratory. The application also has some groups up in arms about the potential ramifications should the PTO grant the patent.

The ETC group petitioned the PTO and WIPO to reject the patent on the grounds that granting patent rights to Venter is contrary to public morality and safety. ETC worries about the accidental or intentional release of the microbe into the environment and cautions about the possibility to harness the microbe and create a virulent pathogen. Other biologists oppose the privatization of synthetic life forms and suggest that a commercial race to claim property rights to the same would result from granting the patent. Further, ETC advocates "open source" biology – where the components of what is known in the field should be freely accessible to other biologists to conduct research.

On the other hand, Venter claims that the bacterium is the key to cheap energy production, as the claimed bacterium has the potential to make hydrogen and ethanol. Part of the research was funded by the U.S. Department of Energy, and the U.S. government will hold certain rights to the patent, if granted. Venter further contends that, in a business sense, patent rights should be granted for a bacterium that produces fuel, eventually leading to the world’s first multi-billion dollar organism.

Section 101 of Title 35 U.S.C. details subject matter that is patentable, including any new and useful process, machine, manufacture or composition of matter. While not specifically addressing synthetic DNA, the Supreme Court in Diamond v. Chakrabarty, in a 5-4 decision, held that a living, man-made micro-organism is patentable subject matter as a "manufacture" or "composition of matter" within the meaning of the Patent Act of 1952. The patentability of a man-made bacterium composed of synthetic DNA lacks precedent, and the PTO likely faces a tough decision as to whether the subject matter is patentable.

Chocolate Company Hershey Sues Marijuana Dealer for Trademark Infringement

Chocolate giant Hershey Co. filed a lawsuit on May 10, 2007 against Kenneth Affolter, a California-based marijuana dealer. The lawsuit accuses Affolter of trademark infringement, trademark dilution and unfair competition, and Hershey is seeking $100,000 worth of damages.

The suit ensued after Affolter sold marijuana-laced snacks with names like Keef Kat, Puff-A-Mint Patty, Rasta Reese's and Stoney Rancher to California state-authorized medicinal marijuana shops. Stickers placed on the snacks closely resemble the packaging of Hershey Co.'s Kit Kat, York Peppermint Pattie, Reese's Peanut Butter Cups and Jolly Rancher.

Trademark dilution occurs when a famous mark is used in a way that would lessen the mark's uniqueness. Tarnishment, a form of dilution, occurs when a mark is weakened through unflattering or unsavory associations. Under current U.S. trademark dilution law, the party bringing suit must only prove likely dilution, and not actual dilution.

Even though California state law permits the sale of medicinal marijuana, federal law prohibits the possession of marijuana. Although consumers might not think that Hershey manufactures the marijuana-laced snacks, the company has a valid interest to not be associated with illegal drugs. Using famous marks on bad quality or illegal goods can certainly create an unflattering or unsavory association in the mind of the consumer.