Honduran Donut Dunking Dispute Deepens

TEGUCIGALPA – Frequent visitorsto Honduras might be surprised to hear thatDunkin’ Donuts just opened its first storehere last year.Surprised because dozens of donutshops with the name “Dunkin’ Donuts”and a storefront sporting the familiar pink andorange steaming coffee cup logo havebeen luring sweet-toothed breakfast-goersin Honduras for several decades now.But things are not always as theyappear in the honey-dipped Hondurandonut industry.UNTIL recently, all “Dunkin’ Donuts”stores in Honduras were imitation knockoffsof the Massachusetts-based Dunkin’Brands Company, which modestly boasts“The World’s Best Coffee.”The local donut imposters are a registeredbrand of Honduran company Internacionalde Alimentos, S.A.Both serve sugar donuts and coffee, butthe name issue has created a cruller controversythat soon will be settled in court.“FOR a long time, they illegally usedthe name Dunkin’ Donuts,” charged NubiaTorres, head of operations for the “real”Dunkin’ Donuts’ franchises in Honduras.“Since Honduras began to implement intellectualproperty laws, they changed theirname to ‘DK’D Donuts,’ but they continueto use similar colors and designs.”The Nica Times attempted to get commentfrom DK’D management, but theyrefused to discuss the case. They insteadreferred all inquiries to the company Website, for which they refused to give anaddress.DESPITE the widespread prevalenceof pirated music, videos, and computersoftware, Honduras has made efforts tocrack down on intellectual property rightsviolations during the last five years.In 1999, the National Congress passedtwo laws protecting trademarks, copyrights,and other intellectual property. Ayear later, the government met most of therequirements for the World TradeOrganization’s Trade-Related Aspects ofIntellectual Property Rights (TRIPS)Agreement.Honduras has also ratified the CentralAmerican Free-Trade Agreement with theUnited States (CAFTA), which furtherstrengthens intellectual property rights.All these efforts, the government says,make Honduras relatively advanced in thearea of intellectual property rights – anissue of concern to the United States duringthe negotiation of the pact.“Success in protecting intellectual propertyrights rests primarily on (Honduras’)ability to effectively implement its currentlaws, rather than a need for further legislation,”a 2005 economic report by the U.S.Department of State concludes.HONDURAS’ Intellectual PropertyOffice uses a modern computer databasedesigned by the World IntellectualProperty Organization (WIPO). The countrynow claims to have the most efficienttrademark-registering system in CentralAmerica.According to the property rights office,trademarks are territorial; they must beregistered in Honduras to be valid here.The Dunkin’ Donuts trademark hasbeen registered in Honduras, with somelapses, since 1976.Furthermore, “well-known” brands,such as Pepsi or Levis, are granted theright to their trademark, even if they havenot registered in Honduras.Dunkin’ Donuts believes it fits into thiscategory as well.A distinction is made, however,between a company’s name and its logo.DK’D’s use of similar colors and visualscould be allowed, in part, by Dunkin’Donuts’ initial failure to register their company’svisual elements, which were eventuallyregistered last year. ButInternacional de Alimentos, S.A. neverattempted to register the steaming coffeecup logo either.If CAFTA goes into effect, Dunkin’Donuts will be further protected by Article15 of the agreement, which gives theowner of a registered trademark the exclusiveright to prevent third parties fromusing identical or similar signs in cases“where such use would result in a likelihoodof confusion.”DK’D has certainly caused confusion.Even the local English-language newspaper,in an article describing the amenities ofa new shopping mall in La Ceiba, oncereported that the food court included aDK’D, “the name of Dunkin’ Donuts here.”SO far, the coffee and corn-muffincompetition doesn’t seem to be hurtingeither donut chain.Industrias Turísticas, the companythat operates Dunkin’ Donuts inHonduras, plans to add eight more storesto its current five locations inTegucigalpa by the end of the year.DK’D employees say business hasremained steady despite their new U.S.competitor. And the knockoff company hasshown it’s willing to take the competitionto the next level, by now claiming to be:“the original.”That claim will be up to the courts todecide.