Amazon, Walmart, Costco Sued Over Fake ‘Kona’ Coffee (subscription to Law360 required)

  • Section 43(a) of the Lanham Act (15 U.S.C. 1125) permits a civil action for, among other reasons, “false designation of origin.”  To prevail, a plaintiff must prove the designation of origin is false, that it is used in a commercial advertisement (e.g., a label) in interstate commerce, that it deceives or is likely to deceive in a material way, and it has caused or is likely to cause competitive or commercial injury to the plaintiff.
  • A group comprising all of the coffee farmers in the Kona District of the Big Island of Hawaii filed a class action on February 27, 2019 in the U.S. District Court for the Western District of Washington against the producers and sellers of 19 brands of coffee that are identified as “Kona” but allegedly contain no Kona coffee or only trace amounts.  Defendants include sellers such as Walmart, Costco, Amazon, Safeway, Kroger, Cost Plus/World Market, and Bed Bath & Beyond as well as several producers based in Hawaii and in the mainland.  The plaintiffs point out that only 2.7 million pounds of coffee are grown in the Kona region each year, but more than 20 million pounds of coffee are labeled with the name and they offer a report on analytical testing of trace metals in the allegedly counterfeit coffee to prove that it was not produced in the Kona region (which is said to yield coffee with a distinct flavor profile that commands premium prices).
  • A Hawaiian newspaper reports that the attorneys representing the Kona coffee growers in the Lanham Act lawsuit also plan to file another class-action lawsuit based on the same claims on behalf of consumers who bought allegedly fraudulent Kona coffee.
  • The designation of origin for Kona coffee can be distinguished from the use of common cheese names which, as reported here, have been the subject of longstanding trade disputes between the United States and the European Union.  Whereas “Kona” is clearly used to indicate coffee grown in the Kona region of Hawaii, parmesan and other some other names are used generically to indicate a specific style of cheese and are not necessarily geographical indicators that imply the cheese is produced in a certain place, such as Parma, Italy.