Everything from the sign to the towels bears the official emblem of the world’s largest coffee chain. But in Baghdad, appearances are deceiving: the “Starbucks” of the Iraqi capital is unlicensed.
Authentic Starbucks products are imported from neighboring countries to get the city’s 3 coffees, but they all operate illegally. Starbucks filed a lawsuit to prevent trademark infringement, but the case was halted after the owner allegedly threatened lawyers hired through the café.
Be careful, he told them, and boasted of his ties to militias and hardline political figures, according to U. S. officials and Iraqi judicial sources.
“I’m a businessman,” Amin Makhsusi, the branch owner, said in a rare interview in September. He denied making threats. ” I had this ambition to open Starbucks in Iraq. “
After his requests for a license from Starbucks’ official agent in the Middle East were denied, “I have to do it anyway and face the consequences. “In October, he said he sold the business; The cafes continued to operate.
Starbucks is “evaluating next steps,” a spokesman wrote Wednesday, responding to a request for comment from The Associated Press. “We have a legal responsibility to our anti-counterfeit intellectual assets to retain our exclusive rights. “
The Starbucks saga is just one example of what U. S. officials and corporations see as a developing problem. Iraq has become a hub for counterfeiting and trademark piracy in all sectors, including retail, broadcasting and pharmaceuticals. They say regulation is weak, while intellectual property — infringers can continue to do business largely because they take advantage of the hard-group canopy.
Counterfeiting compromises well-known brands, costs corporations billions in lost revenue and even puts lives at risk, according to corporations affected by the breaches and U. S. officials tracking their businesses.
Qatari broadcaster beIN estimated it had lost $1. 2 billion due to piracy in the region, and said more than a third of all web piracy of beIN channels came from corporations founded in northern Iraq. Report 301, which publicly lists countries that do not offer sufficiently good asset rights.
Iraq is seeking foreign investment outside of its oil-based economy, and high-end assets will likely occupy an intermediate tier in negotiations with companies. However, the race to enforce legislation and crack down on the vast internet of rape has been derailed by more pressing advances in the crisis-hit country or thwarted by well-connected entrepreneurs.
“As Iraq strives to diversify its economy beyond the energy sector and attract foreign investment in knowledge-based sectors, it is critical that companies know that their patents and intellectual assets will be reputable and through government,” said Steve Lutes, vice president of Middle East Affairs at the U. S. Chamber of Commerce.
Makhsusi insists he tried legal direction but was denied a license through Starbucks’ Kuwait-based regional agent. He also said he tried to succeed at Starbucks through contacts in the United States, but also failed.
He describes opening a branch anyway as a triumph over adversity.
Starbucks cups, blenders and other products are received in Turkey and Europe, his contacts, he said. “The coffee, everything is original to Starbucks,” Makhsusi added.
Makhsusi said he “had a session” with a lawyer in Baghdad to reach a settlement with the coffee company, “but so far we haven’t found a solution. “
The law firm counts the edition of events.
The confidentiality agreements prevent the company from disclosing the main points of the case to third parties, but the AP spoke with three Iraqi legal resources familiar with the case. They spoke on condition of anonymity to provide the main points. They also asked that the corporate call not be discussed for security reasons.
They said that in early 2020, the company was hired through Starbucks and sent a stop and desist notice to Makhsusi. They said the businessman then told one of the lawyers handling the case that he had to be careful, warning that he had that of a main armed organization subsidized through Iran and the backing of Iraqi political parties.
“It was too risky and they stopped the case,” the Iraqi judicial source said. Makhsusi denied threatening Starbucks’ lawyers.
Makhsusi said doing business in Iraq required relationships with armed groups, most of which are part of the official state security apparatus.
“I have friendly relations with everyone in Iraq, adding the armed factions,” he said. “I’m a hard worker, I want those relationships to be problematic, especially since the scenario in Iraq is not sound for business. “
He did not call any specific armed team he was in contact with. The AP contacted two teams known to have business relationships in the spaces where the cafes are located, and neither said they had worked with Makhsusi.
Counterfeiters and hackers have stepped up their activities in Iraq over the past five years, especially as Gulf countries have responded to U. S. pressure. A U. S. State Department official said. The U. S. spoke on condition of anonymity because it wasn’t legal to talk about trends. .
broadcaster beIN sent suspension and withdrawal letters to Earthlink, Iraq’s largest service provider. Earthlink offers subscribers a flexible streaming service, Shabakaty, which beIN says is almost entirely made up of pirated content. Failure to respond to a request for comment.
“This is unheard of and absolutely outrageous,” said Cameron Andrews, director of beIN’s anti-piracy department. “It’s a mass market, so it’s a big business loss. “
But the biggest challenge for beIN is piracy that originates in Iraq and spreads to the rest of the region and the world, he said. After being copied through those companies, beIN channels are broadcast on pirated IPTV facilities and are available in the region, according to beIN. The company’s investigation found that some Iraqi operators were even distributing pirated content in the United States.
At least two pharmaceutical corporations in EE. UU. se have approached the U. S. Chamber of Commerce with the U. S. Department of Commerce. The U. S. Department of Health and Prevention informs you that its logo is being used to sell counterfeit, life-saving medicines through Iraqi corporations.
“I am involved that if regulatory loopholes or intellectual asset violations are allowed, American corporations will be deterred from doing business in Iraq and the quality of care may be dangerously compromised for Iraqi patients,” Lutes said.
The corporations agreed to be named in this report or to detail the types of drugs.
Successive Iraqi governments have pledged to fight corruption since the 2003 U. S. -led invasion restored Iraq’s political order, but none have taken serious steps to dismantle the vast domestic mechanism that sanctions corruption.
Intellectual assets have also traditionally been a low priority for Iraq. Limited bilateral talks with the United States on the issue have been intermittent for the past five years.
The challenge is to locate a “clear leader within the Iraqi government who is interested in intellectual asset issues as a way to attract foreign investment,” a U. S. State Department official said. “U. S. ” As long as that user doesn’t exist, it’s hard for us to get involved. “
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