Starbucks is trying to shut down 3 unlicensed Starbucks stores in Iraq that import the company's coffee and merchandise from surrounding countries

• Starbucks filed a lawsuit in an attempt to shut down three unlicensed Starbucks stores in Iraq.
• The owner of the cafes said he tried to obtain a license, but "decided to do it anyway" when denied.
• Authentic Starbucks merchandise in the store is imported from Turkey and parts of Europe.

Three Starbucks cafes in Baghdad, Iraq are facing legal action including trademark violation for selling real Starbucks coffee and authentic merchandise while operating without a license.

Starbucks filed a lawsuit to shut down the unlicensed stores, but the case isn't moving forward because the owner of the unlicensed stores allegedly threatened Starbucks' lawyers, the Associated Press reported.

Amin Makhsusi, the owner of the unlicensed Starbucks stores, allegedly told lawyers he has "ties to militias and powerful political figures," US officials and Iraqi legal sources told the AP. He said that while he sold the business in October, the cafes remain open.

Makhsusi denied the threats, and told the AP he requested licenses from Starbucks' Middle East agent in Kuwait, but was denied. He said he also attempted to speak to company officials through contacts in the US, but was unable to reach them.

"I decided to do it anyway, and bear the consequences," Makhsusi said, adding he "had a session" with a lawyer in Baghdad to talk to Starbucks, but he and the coffee chain "have not reached a solution."

Cups, stirrers, napkins, and other merchandise bearing the Starbucks mermaid logo are imported from Makhsusi's contacts in Turkey and Europe, according to the outlet.

In a statement to Insider, a Starbucks spokesperson said, "The stores in Baghdad are not operated by Starbucks or a licensed business partner and we are evaluating next steps. Starbucks has made significant investments to develop our brand and intellectual property and we have an obligation to protect our intellectual property from infringement to retain our exclusive rights to it."

The AP talked to three legal sources close to Makhsusi's case, all speaking on the condition of anonymity since the firm has confidentiality agreements to protect details of the case from third parties.

The sources told the outlet Starbucks hired the firm in early 2020, and sent Makhsusi a cease-and-desist notice, but Makhsusi warned one of the lawyers to be careful since Makhsusi has militia and political backing.

"They decided it was too risky, and they stopped the case," an Iraqi legal source said, per the AP.

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

The coffee chain is not the only company fighting trademark violations in Iraq. The AP reported there's been a rise in such cases as the country aims to expand its economy beyond the energy sector amid weak regulation.

"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," Steve Lutes, vice president of Middle East Affairs at the US Chamber of Commerce, told the AP.