Fake Starbucks in Iraq highlight counterfeiting, trademark violations costing US companies billions

Bearing the official emblem of Starbucks on the sign outside, Baghdad's unlicensed Starbucks is illegally selling coffee and merchandise in Iraq from the international chain.

Starbucks sued to stop the three illegally operating cafes in Baghdad over trademark violations, but the owner of the unlicensed stores allegedly threatened Starbucks lawyers, halting the case, the Associated Press reported Thursday.

"I had this ambition to open Starbucks in Iraq," the owner of the three knockoff Starbucks, Amin Makhususi, said in September. 

He said Starbucks' regional agent based in Kuwait denied him a license for an official coffee shop, and his contacts in the United States could not help him reach the chain. 

"I decided to do it anyway, and bear the consequences," he said.

Counterfeiting is a widespread problem in Iraq, costing billions of dollars for companies. However, enforcing intellectual property laws has been a low priority for the nation.

Baghdad's "Starbucks" stores feature authentic napkins, cups, stir sticks and other merchandise purchased in Turkey and Europe, Makhsusi said. "The coffee, everything is authentic Starbucks."

Several Iraqi legal sources knowledgeable about the case said a firm hired by Starbucks sent a cease-and-desist notice to Makhsusi in 2020. He then allegedly told one of the attorneys to be careful because he has support from an Iranian-backed militia and Iraqi political parties.

Makhsusi denied threatening the attorneys, but said: "I have friendly relations with everyone in Iraq, including the armed factions. ... I am a working man, I need these relationships to avoid problems, especially given that the situation in Iraq is not stable for business."