Starbucks, which extols fair trade with its suppliers in the developing world, has been thrown on the defensive by allegations from British charity Oxfam that it was instrumental in depriving Ethiopian farmers of extra income.
In mid-August, an official at the US Patent and Trademark Office ruled in favour of a protest by the National Coffee Association (NCA), which represents US coffee roasters including Starbucks, against the trademark application.
The NCA said the bid was bad economics and bad for Ethiopian farmers, and
Starbucks said that Ethiopia would be better served by cooperating to give its coffee beans geographical designations.
"Starbucks has never filed an opposition to the Ethiopian government's trademark application, nor claimed ownership to any regional names used to describe the origin of our coffees," the chain said in a statement.
’Too generic’
Ethiopia had applied to trademark its most famous coffee names, Sidamo,
Harar and Yirgacheffe, enabling it to control their use and allow farmers to receive a greater share of the retail price.
But the patent office's examiner said the names had become too generic as descriptions of coffee to be trademarked. Ethiopia can appeal the decision.
Accusing Starbucks of being behind the NCA protest, Oxfam said the US chain was denying Ethiopian producers an estimated £47 million pounds (A$116 million) a year.
NCA chief executive Robert Nelson said any implication that his group had been leant on by Starbucks was "categorically false", insisting he had brought the matter to the attention of Starbucks and other US coffee companies.
He added that the Ethiopian bid was always doomed as under US law, it is impossible to trademark a geographical region in this way.
"The Ethiopian trademark would cause economic harm to Ethiopian coffee farmers," Mr Nelson said, arguing that US coffee makers could no longer market premium brands such as Sidamo themselves.
Starbucks said it had written to the Ethiopian government to seek cooperation on giving "robust" geographical designations to the beans, placing them on a par with Bordeaux wine and Florida oranges.
"These systems are far more effective than registering trademarks for geographically descriptive terms, which is actually contrary to general trademark law and custom," it said.
Starbucks added that it was "committed to paying premium prices for all our coffee". In the fiscal year ended last month, it said, it paid an average of US$1.28 per pound of coffee, 23 percent above the average New York price.
"Our approach to coffee purchasing, investment in social development projects and microfinance initiatives in coffee-growing regions has been recognised for its leadership within the industry."