VZCZCXRO3899
PP RUEHDE RUEHDIR
DE RUEHKU #0211/01 0521613
ZNR UUUUU ZZH
P 211613Z FEB 08
FM AMEMBASSY KUWAIT
TO RUEHC/SECSTATE WASHDC PRIORITY 0856
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS SECTION 01 OF 04 KUWAIT 000211 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
EEB/IPE FOR JBOGER; USTR FOR JGROVES; COMMERCE FOR CPETERS 
 
E.O. 12958: N/A 
TAGS: KIPR ECON ETRD KU
SUBJECT: KUWAIT: COMMENTS FOR 2008 SPECIAL 301 REVIEW 
 
REF: A. STATE 9475 
     ¶B. 07 KUWAIT 1768 
 
¶1. (SBU) Kuwaiti government agencies significantly improved 
the level of IPR enforcement activity in 2007 compared to 
activities in 2006.  Kuwait Customs in particular continued 
to be the most aggressive and most competent agency in 
impeding the movement of pirated and counterfeit products. 
Protecting IPR remains a priority at the ministerial level 
and inspection teams from the Ministries of Commerce and 
Information, and Kuwait Customs have continued to conduct 
regular raids and seizures. 
 
¶2.  (SBU) As in past years, the division of responsibility 
for IPR protection among the Ministries of Information and 
Commerce and Kuwait Customs continued to cause problems with 
unclear jurisdictional boundaries and inadequate information 
sharing.  In September 2007, the GOK announced that copyright 
protection responsibility had officially moved out of the 
Ministry of Information (MOI) and all IPR enforcement 
functions (other than Customs) had been consolidated into the 
Ministry of Commerce and Industry (MOCI), which previously 
held responsibility only for trademarks.  This move has been 
a step in the right direction but it is too early to see how 
well it is going to work in practice. The move has not been 
smooth or easy and several elements of enforcement have yet 
to make their final move into the Ministry of Commerce. 
Despite the move and uncertainty associated with it, the 
Ministry of Information continued to conduct raids and 
inspections throughout the year. 
 
¶3. (SBU) Although Kuwait's copyright law remains 
TRIPS-non-compliant and weak penalties for violators make 
enforcement efforts toothless in many cases, Kuwait's 
enforcement efforts, especially in Customs, were 
significantly improved in 2007.  Due to the delays in passing 
TRIPS-compliant copyright law, post recommends that Kuwait 
remain on the Special 301 Watchlist.  We are encouraged by 
the commitment, at the ministerial level, to IPR enforcement 
and by an increased willingness to prosecute violators, but 
remain frustrated at the slow pace of movement on key 
legislation.  MOCI, MOI and Customs have made IPR enforcement 
a high priority, but the delay by the Cabinet Council in 
forwarding IPR legislation to the Parliament indicates that 
IPR protection is not a high priority for the GOK as a whole. 
 We expect that the consolidation within the Ministry of 
Commerce will lead to further improvements in  enforcement, 
but the true test of the GOK's commitment to IPR will be to 
pass the long-delayed TRIPS-compliant copyright law. In the 
2008 Special 301 Report, Post encourages USTR to commend 
Kuwait's enforcement personnel, particularly Kuwait Customs, 
and to focus heavily on the need to pass the relevant 
legislation, a point noted in the just-concluded third round 
of TIFA negotiations held in Kuwait on February 14 (see para 
12). 
 
-------------------- 
Optical Media Piracy 
-------------------- 
 
¶4. (SBU) The copyright industry claims that Kuwait's optical 
media piracy rate is around 90 percent, although the Ministry 
of Information disputes this figure.  The Ministry of 
Information, however, does not compile its own statistics. 
Pirated optical media is imported into Kuwait in large 
quantities, but is also produced locally, as evidenced by 
several busts in which high-speed CD/DVD duplicating 
equipment was recovered.  Post has noticed a significant 
reduction in the number of vendors selling pirated DVDs, 
software and video games on the streets or in shops.  Due to 
the increase in the number of raids conducted by MOI and 
Customs, vendors have been forced to sell from residential 
locations like apartments and houses.  Some shops continue to 
keep pirated DVDs, CDs and video games in backrooms and offer 
pirated material only upon request.  This is a significant 
change from previous years. 
 
-------------------------------------- 
Use/Procurement of Government Software 
-------------------------------------- 
 
¶5. (SBU) According to the Business Software Alliance and the 
ME Computer Software Producers Society, software piracy in 
Kuwait is around 64 percent.  MOI does not have statistics on 
software piracy and post believes that private sector 
assessment in this case is accurate.  GOK interlocutors 
assure us that pirated software is not allowed in any 
government ministry or office.  Ministry of Information and 
Ministry of Planning officials affirm that they use only 
 
KUWAIT 00000211  002 OF 004 
 
 
licensed and authenticated software on government computers. 
MOI claims that its networks are monitored by an IT 
supervision center which does not permit any unlicensed 
software to be installed on its network systems.  However, 
post has received complaints from several U.S. companies 
claiming software infringement by GOK ministries, especially 
the Ministry of Planning. 
 
---------------- 
TRIPS Compliance 
---------------- 
 
¶6. (SBU) Kuwait's 1999 copyright law is not TRIPS-compliant. 
The Ministry of Information has drafted extensive amendments 
to the law, which it believes will bring the law into 
conformity with international standards. As part of the TIFA 
process, USG experts have reviewed the 1999 law and have 
provided feedback for the Kuwaitis' consideration.  In 
September 2006, the Kuwaiti delegation to the TIFA meeting in 
Washington, DC provided a copy of the draft amendments to 
USTR. In January 2008, USG comments were sent to the GOK 
based on amendments sent to Washington in August 2007.  In a 
TIFA council meeting on February 14, an MOI legal expert 
responsible for drafting the amendments affirmed that all USG 
comments have been reviewed and incorporated into the 
amendments.  He explained that the completed amendments have 
been sent to the Cabinet Council for review and will be moved 
to the Parliament for a vote in the next two months. 
 
¶7. (SBU) In 2004, the Ministry of Information submitted draft 
legislation to increase penalties for IPR violators.  This 
law is still pending at the Cabinet Council and awaiting 
submission to the Parliament.  According to MOI, this law is 
also expected to be considered by the Parliament in the next 
couple of months.  The new law sets minimum penalties that 
include mandatory jail sentences.  According to our 
interlocutors, as in 2006, all raids in 2007 resulted in 
cases being referred to prosecution. Penalties are still 
weak, however, and the judiciary has yet to show a consistent 
willingness to sentence violators to time in jail.  Post 
continues to believe that weak penalties, which usually 
consist of just a fine (up to $1,700) and rarely include jail 
time, are a major contributing factor to the government's 
failure to deter vendors of pirated and counterfeit goods. 
 
----------- 
Enforcement 
----------- 
 
¶8. (SBU) Lack of inter-ministerial cooperation, which has 
long been the most limiting factor for enforcing IPR in 
Kuwait, improved slightly in 2007 due to the consolidation of 
IPR responsibility within MOCI. The inter-ministerial 
IPR committee, chaired by the Ministry of Commerce, has made 
information sharing somewhat more efficient, although 
problems remain. MOI interlocutors complain, however, that 
coordination is still difficult and cumbersome.  In general, 
enforcement remains hampered by an unwillingness to prosecute 
Kuwaiti citizens who run piracy rings, with prosecution 
usually reserved for foreign nationals who work for Kuwaitis. 
 In most cases dealing with piracy, the sentences are usually 
around 100 KD to 500 KD (350 USD to 1750 USD).  Most 
violators consider such minor penalties to be part of the 
cost of doing business.  Businesses that are closed down for 
IPR violations often quickly reopen and return to selling the 
same products. 
 
¶9. (SBU) Trademark infringement is a growing concern, 
particularly with the office at the Commerce 
Ministry responsible for researching and registering 
trademark applications. Valid Kuwaiti registrations can be 
obtained for applications that clearly violate an existing 
trademark or trade dress, as long as no complaints are 
received over a 30-day period in which the mark is displayed 
in a local newspaper. Once a trademark is registered 
locally, it is difficult to rescind even after a complaint is 
made as the aggrieved party must go to court to resolve the 
issue. A secondary effect of this weak registration process 
is that Kuwait Customs is periodically forced to release 
products that clearly violate an existing trademark because 
the importer holds a valid Kuwaiti registration for the 
infringing mark. 
 
-------------- 
Kuwait Customs 
-------------- 
 
¶10. (SBU) In 2007, Kuwait Customs continued to be the most 
aggressive and effective agency enforcing IPR.  The U.S. 
 
KUWAIT 00000211  003 OF 004 
 
 
Customs advisory team, which has worked closely with Kuwait 
Customs since its creation in 2003-2004 and is physically 
located within Kuwait Customs offices, has developed a close 
and productive relationship with the IPR team at Customs, and 
much of Kuwait Customs' progress over the last few years can 
be directly attributed to this partnership. Kuwait Customs 
employs a complex tracking system to catalogue seizures and 
the disposition of each case; depending on the circumstance, 
dispositions can be a referral to the prosecutors office, 
penalties imposed on the spot, and confiscation and 
destruction of goods. Customs seizures include a wide variety 
of pirated and counterfeit goods, including clothing, toys, 
watches, optical media, and automobile parts. For a 
first-time seizure, Customs allows the re-export of seized 
counterfeit goods, which violates international customs 
commitments, although all seized optical media are destroyed. 
 If the same or similar goods are seized a second time, 
Customs destroys the confiscated products after 90 days so 
long as the importer does not appeal the seizure to the 
courts.  Some IP rights holders have agreed to absorb the 
costs of destruction in order to avoid the goods being 
re-exported. 
 
¶11. (SBU) In a recent meeting with Econoff, Director General 
of Customs Ibrahim Al-Ghanim reiterated Customs' commitment 
to protecting IPR.  He provided us with a detailed 2007 
Customs-IPR report, which outlined the work Customs IPR units 
have done in the last year.  The report stated that seizures 
by Customs IPR units in 2007 totaled 538 cases with a total 
value of 1.7 million USD.  This is a significant increase 
from 2006 when Kuwait Customs recorded 313 seizures at ports 
of entry.  Not only have the number of seizures increased, 
the quality and quantity of seizures have also increased 
significantly in the last year.   Al-Ghanim also informed us 
that the combined IPR committee that includes members from 
MOI, MOCI, Ministry of Justice, Ministry of Interior and 
Customs has also stepped up raids and inspections in local 
shops and commercial areas.  This has resulted in a dramatic 
decline in number of peddlers selling counterfeit or pirated 
goods on the streets.  According to Customs officials, IPR 
violators have resorted to using children to sell counterfeit 
products to avoid attracting attention from the IPR units. 
Further evidence of Customs' improvement is that many 
importers now approach Customs with examples of products they 
intend to import, and asking for an assessment of the 
products' legitimacy before placing orders in an effort to 
avoid IPR problems on arrival. 
 
--------------------------------- 
Ministry of Commerce and Industry 
--------------------------------- 
 
¶12. (SBU)  The Ministry of Commerce became more active in IPR 
protection after the signing of the Trade and Investment 
Framework Agreement in 2004. The Minister is the head of 
Kuwait's TIFA delegation and the Ministry is charged with 
heading the inter-ministerial IPR committee to oversee and 
coordinate all enforcement efforts. The Under Secretary of 
Commerce and Industry, Rasheed al-Tabtabaei led the latest 
round of TIFA council meetings in Kuwait on February 14.  IPR 
enforcement and legislation was discussed in great detail 
during this session.  As a result of the TIFA process, the 
Ministry has made IPR enforcement a high priority in the 
Ministry.  Amending the Copyright Law has also been made a 
high priority.  MOCI blames parliamentary politics for lack 
of movement or slow movement on legislation.  With the move 
of the copyright enforcement unit to MOCI, copyright and 
trademark inspections and raids should see significant 
improvement.  Although the copyright office has moved to 
MOCI, bureaucratic details like budget, office space and 
personnel still remain to be worked out before the office can 
be fully functional with MOCI.  Prior to the move, MOCI 
lacked the statutory authority to seize products that were 
openly sold as counterfeit. With added enforcement authority 
and jurisdiction over broad range of IPR issues, the new MOCI 
IPR units should be more effective and efficient. 
 
Ministry of Information 
----------------------- 
 
¶13. (SBU)  The Ministry of Information's performance in 2007 
was significantly improved compared to 2006.  In September 
2007, copyright enforcement authority was officially moved 
from MOI to MOCI.  Post sees this as a positive step since 
MOI enforcement was the weakest link in the GOK enforcement 
regime.  This move not only eliminates problems related to 
coordination and information sharing between MOCI and MOI, it 
also allows MOCI to consolidate its trademark and copyright 
enforcement efforts.  In 2007, MOI increased expanded its 
 
KUWAIT 00000211  004 OF 004 
 
 
enforcement team from 15 members in 2006 to more than 50 in 
¶2007.  According to MOI officials, the Ministry had plans to 
increase its enforcement staff to 250 in the next few years. 
The copyright office and its inspectors have moved to the 
Ministry of Commerce and will work in conjunction with 
Commerce's trademark protection teams under a combined 
reporting hierarchy. Post was encouraged to learn that the 
copyright office has transferred largely intact, as the USG 
has invested considerable resources in training and 
developing its personnel over the years and plans to continue 
to do so in 2008. 
 
¶14. (SBU) In 2006, at Post's urging the inter-ministerial IPR 
committee began keeping records of enforcement activities for 
all offices holding IPR responsibility. This move has added a 
measure of accountability to inspection teams' activities and 
has resulted in more completed seizure reports from 
inspectors. Highlights from 2007 include the seizure of more 
852,000 pirated optical media discs, which include CDs, DVDs, 
software and video games; and a total of 546 cases were 
referred for prosecution, up from 412 in 2006. 
 
--------------------------------------------- --------------- 
WIPO Copyright Treaty and Performances and Phonograms Treaty 
--------------------------------------------- --------------- 
 
¶15. (U) Kuwait is not party to either treaty.  However, in a 
TIFA council meeting on February 12, MOI legal consultant 
Fayez Al-Kandhari noted that Kuwait is interested in signing 
these treaties.  He expects these treaties to be signed by 
the GOK in 2008. 
 
********************************************* * 
For more reporting from Embassy Kuwait, visit: 
http://www.state.sgov.gov/p/nea/kuwait/?cable s 
 
Visit Kuwait's Classified Website: 
http://www.state.sgov.gov/p/nea/kuwait/ 
********************************************* * 
LENDERKING