VZCZCXYZ0008
RR RUEHWEB

DE RUEHNR #0924/01 0581051
ZNR UUUUU ZZH
R 271051Z FEB 07

FM AMEMBASSY NAIROBI
TO RUEHC/SECSTATE WASHDC 7779
INFO RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHRC/USDA FAS WASHDC 1457
RUEHDS/AMEMBASSY ADDIS ABABA 9136
RUEHAE/AMEMBASSY ASMARA 4916
RUEHBJ/AMEMBASSY BEIJING 0309
RUEHJB/AMEMBASSY BUJUMBURA 0034
RUEHEG/AMEMBASSY CAIRO 3926
RUEHDK/AMEMBASSY DAKAR 1255
RUEHDR/AMEMBASSY DAR ES SALAAM 5115
RUEHDJ/AMEMBASSY DJIBOUTI 4590
RUEHKM/AMEMBASSY KAMPALA 1857
RUEHKH/AMEMBASSY KHARTOUM 0965
RUEHLGB/AMEMBASSY KIGALI 4703
RUEHNE/AMEMBASSY NEW DELHI 0213
RUEHLO/AMEMBASSY LONDON 2162
RUEHFR/AMEMBASSY PARIS 2118
RUEHKO/AMEMBASSY TOKYO 0614

UNCLAS NAIROBI 000924 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
USDOC FOR USPTO OFFICE OF ENFORCEMENT 
 
STATE PLEASE PASS USTR WILLIAM JACKSON AND JENNIFER CHOE GROVES 
 
STATE ALSO FOR AF/E, AF/RSA, AF/EPS, EB/TPP/IPE, AND EB/TPP/MTA 
 
TREASURY FOR VIRGINIA BRANDON 
 
HOMELAND SECURITY FOR CBP/DHS AND ICE/DHS 
 
E.O. 12958: N/A 
TAGS: KIPR ETRD EINV EFIN ECON PGOV KE
SUBJECT: KENYA MAKES STEADY PROGRESS COMBATING COUNTERFEITING AND 
ENFORCING IPR IN 2006 
 
REFS: (A) STATE 0794 (B) NAIROBI 0583 (C) NAIROBI 0439 
 
      (D) 06 NAIROBI 5374 (E) 06 NAIROBI 4940 
      (F) 06 NAIROBI 3729 (G) 06 NAIROBI 1953 
 
¶1.  Sensitive but Unclassified.  Please protect accordingly. 
 
------- 
Summary 
------- 
 
¶2.  (SBU) Although the Kenyan Minister of Trade himself admits that 
his country is the "dumping ground in East Africa for substandard 
goods" from China and India, Kenya in fact made steady progress in 
2006 towards more effective enforcement of intellectual property 
rights.  In November, the government established an enforcement 
division within the Kenya Copyright Board (KCB) in the Office of the 
Attorney General (AG).  It has since made several high profile 
confiscations and begun developing working relationships with the 
American Chamber of Commerce of Kenya (ACCK), the Kenya Association 
of Manufacturers (KAM), and other business associations.  The AG 
will likely table an Anti-Counterfeit Goods bill before Parliament 
this spring.  Following a February 20, 2007 meeting with an 
executive from GlaxoSmithKline, Trade Minister Mukhisa Kituyi 
announced that the government would seek passage of an 
anti-counterfeit medicines bill this spring as well.  End Summary. 
 
-------------------------------- 
Pressure Yields Some IPR Results 
-------------------------------- 
 
¶3.  (SBU) In response to repeated complaints from the American 
Chamber of Commerce of Kenya (ACCK), the Kenya Association of 
Manufacturers (KAM), and other business associations that Kenya must 
do more to safeguard intellectual property rights, the Government of 
Kenya (GOK) established in November 2006 an IPR enforcement 
division, staffed by five prosecuting attorneys and two police 
investigators, within the Office of the Attorney General's Kenya 
Copyright Board (KCB).  At the time, Minister of Trade and Industry 
Mukhisa Kituyi vowed that Kenya would no longer be the "dumping 
ground in East Africa for substandard goods," from China and India. 
He said Kenya would strengthen surveillance of its sea and land 
borders, prohibit Kenya from being used as a transit country for 
trafficked goods destined for other nations, and pursue agreements 
with its neighbors on joint customs operations.  In keeping with 
these commitments, the Kenya Revenue Authority's (KRA) Deputy 
Commissioner in Charge of Policy and Legislation Creck Boyange 
announced on February 19, 2007 that Kenya had purchased four patrol 
boats from a Dutch firm to "facilitate customs anti-smuggling 
patrols in the Indian Ocean and Lake Victoria."  In an attempt to 
stem the flow of pirated goods from their source to Kenya, the GOK 
signed an agreement with China last fall wherein Chinese officials 
promised to make a good faith effort to prevent the shipment of 
bogus products to Kenya. 
 
¶4.  (U) Minister Kituyi participated in a number of high profile 
confiscations and destructions of pirated goods, ranging from Bic 
pens, to cans of phony Kiwi shoe polish from China stamped "Made in 
Kenya," to illegal copies of Microsoft software.  In February 2007 
police officers attached to the KCB's Copyright Enforcement Division 
confiscated 40 personal computers from two Nairobi retail outlets 
 
after discovering they were loaded with pirated Microsoft software. 
Kituyi was particularly incensed when KRA officials discovered that 
counterfeiters had forged the government's "Diamond Mark of Quality" 
in their attempt to smuggle the bogus Bic pens (ref D). 
 
----------------------- 
Pending IPR Legislation 
----------------------- 
 
¶5.  (U) Assistant Trade Minister Abdirahman Hassan was among several 
senior Kenyan officials who attended an inaugural ACCK November 1-3, 
2006 East Africa IPR Conference (ref E).  Other government 
participants were from KRA, the KCB, the Bureau of Standards (KBS), 
and the Kenya Industrial Property Institute (KIPI).  Attendees 
called upon Parliament to pass the GOK's proposed Anti-Counterfeit 
Goods bill.  In her address before a January 26, 2007 International 
Customs Day audience, Commissioner of Customs Wambui Namu said the 
government would seek passage of the bill when Parliament reconvenes 
on March 20.  KRA Commissioner General Michael Waweru added that 
Kenya would encourage its East African Community (EAC) partners to 
consider adopting a regional anti-counterfeit bill consistent with 
the East African Community Customs Management Act (ref B). 
 
¶6.  (SBU) The government also intends to seek passage of a bill 
prohibiting the sale of counterfeit medicines.  Following a February 
20 meeting with the GlaxoSmithKline President of Pharmaceutical 
Operations David Stout, Minister Kituyi said the GOK would press 
Parliament to adopt an anti-counterfeit drugs bill.  Kituyi assured 
Stout that in the meantime the GOK would destroy all counterfeit 
products.  According to Sylvance Anderson Sange, the KIPI Chief 
Trademark Examiner, Kenya will amend its industrial property rights 
laws to "domesticate WTO decisions on TRIPS."  This, he explained, 
is in keeping with Kenya's efforts to ensure that its IPR laws 
conform to international statutes. 
 
--------------------------- 
Motivations in Favor of IPR 
--------------------------- 
 
¶7.  (SBU) Aside from wanting to better adhere to its TRIPS 
obligations, Kenya has become more IPR-conscious for several 
reasons: 
 
-- Local manufacturers and legitimate traders are clamoring that 
their businesses are being undermined by counterfeit goods. 
 
-- Multinational corporations such as Sara Lee have threatened to 
vacate Kenya if the government does not combat pirating. 
 
-- Kenyans were taken aback in 2006 when Japan patented the "Kiondo" 
brand of hand-woven baskets and handbags made by Kikuyu women of 
central Kenya and the Akamba women of eastern Kenya.  Similarly 
Kenyans are astounded that a British company, "Kikoi Ltd.," has 
attempted since last August to patent the word "kikoi" as an 
exclusive UK trademark.  In the Kenyan context, kikoi is a 100 
percent East African hand-knitted cotton sarong.  Kenyans now 
realize that they, too, can lose out if they do not legally claim 
and protect homegrown intellectual property. 
 
-- Kenyan pastoralists have suffered large losses of livestock when 
 
using adulterated tick sprays that left their cattle vulnerable to 
pest-borne diseases. 
 
-- Without their consent or payment of royalties, Kenyan musicians, 
writers, and artists have had their works copied.  In August 2006, 
President Mwai Kibaki acknowledged that counterfeiting is denying 
Kenyan musicians, artists, recording companies, and publishers a 
return on their creations and investment.  He called upon the police 
and the judiciary to collaborate in combating piracy.  (Note: In 
Kenya, common counterfeit goods include substandard batteries, fake 
drugs, pirated music and films, illegal computer software, and 
textbooks.  An estimated 80% of all popular trademarks have been 
counterfeited and 97% of all music cassettes sold in the local 
market is believed to be pirated.  According to KRA, counterfeiting 
costs legitimate producers an estimated USD 430 million per annum in 
Kenya.  The government suffers about USD 90 million in lost revenue 
annually.  End Note.) 
 
--------------------------------- 
IPR Enforcement Agencies in Kenya 
--------------------------------- 
 
¶8.  (U) The enforcement of intellectual property rights in Kenya has 
been a joint effort between rights holders and various government 
agencies.  For example, the Anti- Counterfeit and Substandard 
Products Secretariat, a unit that was housed in the KRA, drew 
members from other government departments such as Weights and 
Measures, KBS, KIPI, KCB, and the Department of Trade in the 
Ministry of Trade and Industry.  It also had members from the 
private sector, including KAM and the Music Society of Kenya (MSK). 
Formed to deal with various counterfeit and piracy matters, it 
successfully carried out raids on various premises, seized goods, 
and had the cases brought to court.  However, its legality was 
challenged in court, leading to its disbandment in 2005 and the 
rebirth of an anti-counterfeit enforcement division within KRA. 
 
¶9.  (SBU) Partly as a result of Kenyan participation in USPTO GIPA 
training programs, the KCB is putting together a copyrights database 
and, in concert with the KRA, is designing an authentication device, 
which will be affixed to all audiovisual and software products 
approved by the board. This anti-piracy security device will be used 
to identify legitimate products.  In other new developments, the 
government has begun de-linking the KCB from the Office of the 
Attorney General to give it the independence to ensure the effective 
administration and enforcement of copyright legislation in the 
country. 
 
----------------------------------- 
Anti-Counterfeit Bills Good of 2006 
----------------------------------- 
 
¶10.  (U) The Anti-Counterfeit Goods bill of 2006 aims to recreate 
(by statute) the Anti-Counterfeit and Substandard Products 
Secretariat.  The new agency would be an independent corporate body 
 
SIPDIS 
consisting of representatives of both the private and public 
sectors.  It would coordinate with national, regional, or 
international organizations involved in combating counterfeiting. 
The proposed law provides for penalties that are pegged to the 
retail value of the legitimate goods.  A first-time offender would 
be liable to a penalty three times the market value of the goods 
 
and/or three years in prison.  A repeat offender would be subject to 
a fine five times the value of the goods and/or five years in 
prison.  The proposed act makes it an offence for one to obstruct an 
inspector in the course of his duties or to disclose information 
that is deemed to be a trade secret. This offence is punishable by a 
maximum fine of Ksh 2 million (about USD 28,600) and/or three years 
in prison. 
 
¶11.  (U) Passage of the Anti-Counterfeit Goods bill is a government 
priority.  The AG has been quoted as saying "my office is committed 
to ensure that the Bill is published and debated in the National 
Assembly and enacted by parliament during the course of this year." 
 
¶12.  (SBU) Comment: As counterfeiting has become a larger issue in 
the economy, the GOK has responded well and come a long way in 
improving protection of IPR in Kenya.  But much work still needs to 
be done.  In an election year full of other distractions, the test 
will be whether the GOK can maintain the momentum established in 2006 
by following through on the promises and commitments it has made. 
End Comment. 
 
Ranneberger