After resorting to playing out a high profile row over trade marks for coffee on the video-clip sharing website YouTube, US coffee shop chain Starbucks and the Ethiopian government have called an end to their public relations war.
The two sides say that have reached a deal on distribution, marketing and licensing of Ethiopian coffee.
In a joint statement they said the agreement "provides a framework for mutual cooperation to promote the recognition of the Harrar, Sidamo and Yirgacheffe designations and to strengthen the Ethiopian coffee sector, and includes the license of certain trade marks".
"The agreement allows Starbucks to use and promote these designations in markets both where trade marks exist for the coffee designations as well as where they may not, in accordance with agreed terms and conditions."
The row began when the Ethiopian government tried to obtain trade mark protection for the names of three of its indigenous coffee varieties. Rather than protecting the names through certification marks, the government filed applications to register the names Sidamo, Harar and Yirgacheffe as trade marks in more than 30 countries.
It has successfully registered one or more of the names in a number of countries, including in the US, the UK, Canada and Japan, as well as in the EU.
The Ethiopian government and non-profit organization Light Years IP then launched a programme to license the use of the coffee names royalty-free to individual coffee companies around the world.
Ron Layton, CEO and founder of Light Years IP, says that the licensing scheme provides a new platform for formal and commercial cooperation between the coffee growers and the coffee distributors.
Retail prices for specialty coffees can be anywhere from five to 15 times export prices, based on the New York commodity exchange. Light Years IP says that coffee brands are a prime example of how in the global economy, the value of a product that is generated by reputation, authenticity, local culture, image, special know-how and design increasingly accounts for a larger allocation of retail income.
"While many coffee companies are promoting their concern for farmers and offering marketing partnerships, few of these partnerships explicitly enhance the bargaining power of farmers. Ethiopia's initiative shines a new light on such arrangements between powerful buyers and their developing world suppliers and is trend setting. Developing countries can look to IP to increase export revenue and improve the security of that income," Layton said.
But while some companies agreed to take a licence, thereby acknowledging Ethiopia's rights to the coffee names, the country met with opposition from Starbucks.
UK-based charity Oxfam sided with Ethiopia, criticizing what it called Starbucks' "opposition to the Ethiopia's trade marking project".
During the negotiations, Starbucks had sought to win over public opinion in December by posting a video on YouTube outlining its position, but was later forced to correct some of the information in its film.
On February 27 the Ethiopian Coffee Network hit back, posting a video clip that parodied the style of Starbucks' own video. In it Bob Winter, a partner with Arnold & Porter who is advising the Ethiopian government, outlines some of the legal issues involved in the country's attempt to register the three trade marks.
Light Years IP says that 15 companies, including Starbucks, have now agreed to take a licence to use the coffee brands.
