Using Intellectual Property Rights to Create Value in the Coffee Industry
Johnson, Daphne Zografos, Marquette Intellectual Property Law Review
I. INTRODUCTION 284 II. A SHORT HISTORY OF THE COFFEE BEAN 285 III. GEOGRAPHICAL EXPANSION OF COFFEE PRODUCTION 286 IV. THE COFFEE CRISIS 288 V. CHANGES IN CONSUMER CONSUMPTION PATTERNS--THE DECOMODIFICATION OF COFFEE 291 VI. DIFFERENTIATED COFFEES 292 A. Specialty and Gourmet Coffees 292 B. Single-Origin Coffees 294 1. Geographical Indications 294 2. Trademarks 301 3. Certification and Collective Marks 304 C. Sustainable Coffees 308 1. Ethical Consumerism 309 2. Organic Coffee 310 3. Shade, Bird, and Eco-Friendly Coffees 313 4. Fair Trade 315 a. Definition and Historical Development of Fair Trade 315 b. The Fair Trade Philosophy, Economics, and Principles 316 c. Fair Trade Principles 318 i. Direct Trade with Producers 318 ii. Long-term Trading Relationships 319 iii. The Minimum Price and the Social Premium 319 d. Fair Trade Labelling 320 e. Certification 322 f. Fair Trade Coffee Facts 322 5. Industry-Driven Certification Initiatives 325 VII. CONCLUDING COMMENTS 325
Coffee is the single most important tropical commodity traded worldwide. It is produced in over 50 developing countries, and it is estimated that some 20 million rural families, (2) or 125 million people, (3) depend on growing coffee throughout the world for their livelihoods. Over the past decade, coffee producers have been facing considerable difficulties because of low and unstable coffee prices. In 2002, coffee prices collapsed to 100-year lows in real terms, leading to a world coffee crisis. Meanwhile, the coffee economy in high income countries has been moving in the opposite direction, and the crisis is hardly visible from Starbucks-type western coffee chains. This paper examines how coffee producers in developing countries can use intellectual property, or intellectual property-related rights, as differentiation tools to move from pure commodity exports to higher-price exports in niche markets and create value. It takes into account the influence of new consumption patterns in the coffee industry and analyzes the various differentiation techniques that have been proposed, such as single-origin, specialty and gourmet, and sustainable coffees. Finally, it examines the situation of the coffee industry in Vietnam and Indonesia, who are also two of the most important coffee producers worldwide in terms of volume, and where the coffee sector has experienced an explosive growth since the 1980s.
II. A SHORT HISTORY OF THE COFFEE BEAN
The history of the coffee bean starts in Northeast Africa, in the province of Kaffa in Ethiopia, where the coffee tree probably originated. Used traditionally by Ethiopian nomadic mountain warriors as an early type of energy bar, (4) "coffee was first eaten as a food sometime between 575 and 850[,] long before it was made into a hot beverage in 1000-1300." (5) Western accounts of the discovery of coffee include various fanciful tales told by local traders to the first European merchants who came to Yemen to buy coffee in the early seventeenth century. …