Spurious Starbucks becomes a challenge for the international brand in Iraq
December 23 - 2022
Coffee Geography Magazine
The unlicensed Starbucks in Iraq have everything from the signboard outside down to the napkins bears the official emblem of the top international coffee chain. The three illegally operating cafes in Baghdad imports real Starbucks merchandises from neighboring countries to stock.
A lawsuit was filed against the perpetrator who violated the rights of an international brand, name and logo for their own illegal personal gains. However, the case was lagging due to threats to hurt the lawyers hired by the company.
“I am a businessman,” Amin Makhsusi, the owner of the fake branches, said in the interview. He denied making the threats. “I had this ambition to open Starbucks in Iraq.”
After his requests to obtain a license from Starbucks’ official agent in the Middle East were denied, “I decided to do it anyway, and bear the consequences.”
Starbucks is evaluating next steps as stated by its spokesperson “We have an obligation to protect our intellectual property from infringement to retain our exclusive rights to it.” Iraq has emerged as a hub for trademark violation and piracy that cuts across sectors, from retail to broadcasting and pharmaceuticals. Regulation is weak while perpetrators of intellectual property violations can continue doing business largely because they enjoy cover by powerful groups.
Counterfeiting is compromising well-known brands, costing companies billions in lost revenue and even putting lives at risk, according to businesses affected by the violations and U.S. officials following their cases.
“As Iraq endeavors to diversify its economy beyond the energy sector and attract foreign investment in knowledge-based sectors, it is critical that companies know their patents and intellectual property will be respected and protected by the government,” said Steve Lutes, vice president of Middle East Affairs at the U.S. Chamber of Commerce.
Makhsusi insists he tried the legal route but was denied a license from Starbucks’ regional agent based in Kuwait. He also said he attempted to reach Starbucks through contacts in the United States, but that these were also unsuccessful.
Cups, stir sticks and other Starbucks merchandise are obtained in Turkey and Europe, using his contacts, he said. “The coffee, everything is authentic Starbucks,” Makhususi added.
A law firm was hired by Starbucks and sent a cease-and-desist notice to Makhsusi. They said that the businessman then told one of the lawyers on the case that he ought to be careful, warning that he had backing from a prominent Iranian-backed armed group and support from Iraqi political parties.
Makhsusi said doing business in Iraq requires good relations with armed groups, the bulk of whom are part of the official state security apparatus.
“I have friendly relations with everyone in Iraq, including the armed factions,” he said. “I am a working man, I need these relationships to avoid problems, especially given that the situation in Iraq is not stable for business.”