After row, Ethiopia confident on U.S. coffee rights

WASHINGTON (Reuters) - Despite a recent row with an American coffee giant, Ethiopia, the birthplace of coffee, is confident it can win trademarks in the United States, a move the poor country believes will boost incomes for farmers, the country's leader said on Tuesday.

President Girma Woldegiorgis was in the United States, meeting with business and development groups, just months after a high-profile dispute broke out with U.S. coffee giant Starbucks Corp. (SBUX.O) over the African country's bid to obtain U.S. trademarks for its Sidamo and Harar coffees.

"Even if Starbucks wanted to resist, they would have no way because it's illegal for them to do so. I don't think there will be any problems," Woldegiorgis said in an interview.

Aid agency Oxfam triggered a maelstrom last fall when it charged Starbucks was stonewalling a bid from the Ethiopian government to register the two remaining coffees.

Starbucks hit back, denying Oxfam's claim and saying that they already pay premium prices for coffee. It suggested, though, that a trademark agreement would do little to help farmers in dirt-poor countries like Ethiopia.

The row appears to now be cooling after Starbucks acknowledged Ethiopia's right to pursue trademarks and pledged to double coffee purchases from the region and spend more on development programs.

The company continues to advocate a program to certify products' origin instead.

Oxfam is still calling for the company, and other roasters, to bow to Ethiopia's request to sign a voluntary licensing deal. "It's still a live issue," said Chris Jochnick, director of private sector engagement at Oxfam America.

TRADEMARK GRANTED TO YIRGACHEFFE

Woldegiorgis seemed pleased that Starbucks had, in his words, "come around." He was also confident Ethiopia would get trademark approval for Sidamo and Harar brands. Those requests, rejected initially by U.S. patent officials, are pending.

The U.S. Patent and Trademark Office did award Ethiopia's Yirgacheffe coffee a trademark in 2006.

The president also downplayed talk that Ethiopia might consider shutting out the company if things grew ugly.

"I don't think we've reached that stage," he said.

Starbucks has exploded in U.S. and foreign markets to about 13,000 stores worldwide. Two percent of the coffee Starbucks buys, which in turn represents 2 percent of world coffee, is from Ethiopia, the company said.

In the 2006 fiscal year, the company bought 294 million lbs. of coffee, paying an average of $1.42 per lb., up from an average of $1.28 the previous year.

Jochnick believes the firm has capitalized on coffee names and should take a more active role in supporting the trademark campaign. "We hope Starbucks will come around and realize they're on the wrong side of the curve on this one," he said.

In theory, trademark agreements would bolster incomes for Ethiopia's farmers by allowing the country to negotiate purchasing conditions for coffee roasters or retailers that want to use the trademarked name.

Poverty is dire in Ethiopia, where a quarter of its 80 million people rely on coffee. The average Ethiopian's yearly income, in purchasing power parity terms, is around $1,000.

Woldegiorgis said any price gains due to trademarking would go straight to farmers and wouldn't be captured by the government or by middlemen.

"As long as Ethiopian coffee is sold as Ethiopian coffee, the value will be assessed," he said.