VZCZCXYZ0002
OO RUEHWEB

DE RUEHKU #0185/01 0621142
ZNR UUUUU ZZH
O 031142Z MAR 09
FM AMEMBASSY KUWAIT
TO SECSTATE WASHDC IMMEDIATE 2908

UNCLAS KUWAIT 000185 
 
SIPDIS 
 
EEB/IPE FOR TMCGOWAN; STATE PASS TO USTR JENNIFER GROVES 
 
E.O. 12958: N/A 
TAGS: KIPR ECON ETRD KU
SUBJECT: KUWAIT: COMMENTS FOR 2009 SPECIAL 301 REVIEW 
 
REF: A. STATE 08410 
     ¶B. 08 KUWAIT 211 
 
¶1. (U) Kuwaiti government agencies significantly improved the 
level of IPR enforcement activity in 2008 compared to 
activities in 2007. Sharp executive legislative tensions, in 
several areas, will complicate GOK efforts to amend Kuwait's 
copyright law and bring it into full TRIPS compliance.  While 
Kuwait Customs in particular continued to be the most 
aggressive agency in impeding the movement of pirated and 
counterfeit products, the Ministry of Information boosted its 
efforts in combating optical disk piracy and resulting in a 
positive net impact on piracy for most industries. 
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.  (U) The division of responsibility for IPR protection 
among the Ministries of Information and Commerce and Kuwait 
Customs became clearer in 2008, resolving some of the 
problems with 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.  An increased cooperation between MOCI, MOI and 
Customs, has proven the consolidation was a step in the right 
direction. 
 
¶3.  (U) Although Kuwait's copyright law remains 
TRIPS-non-compliant and weak penalties for violators 
undermine enforcement efforts, Kuwait's enforcement efforts 
were significantly improved in 2008.  Due to the delays in 
drafting and passing TRIPS-compliant copyright law, post 
recommends, somewhat relluctantly, that Kuwait remain on the 
Special 301 Watchlist.  There is a clear commitment on the 
part of the GOK to improve IPR protection.  However, given 
highly contentious executive legislative relations, and a 
generally obstructionist parliament, it is not clear whether 
the GOK will be able to amend this law in the near future. 
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 enforcement a high priority.  As was expected, the 
consolidation within the Ministry of Commerce lead to further 
improvements in enforcement.  While the GOK is clearly 
committed to IPR, its inability to bring its National 
Assembly along means that ipso facto Kuwait's TRIPS 
compliance remains inadequate by international standards.  In 
the 2009 Special 301 Report, Post encourages USTR to commend 
Kuwait's enforcement personnel and to focus heavily on the 
need to pass the relevant legislation.  The GOK should also 
be commended for its efforts in stepping up public efforts to 
curb the use of illegal software, hardware and pirated 
CDs/DVDs and to raise public awareness. 
 
-------------------- 
Optical Media Piracy 
-------------------- 
 
¶4.  (U) The copyright industry claims that Kuwait's optical 
media piracy rate is around 90 percent, although the Ministry 
of Information disputes this figure.  Pirated optical media 
are 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 back rooms and offer pirated material only upon request. 
There was also an increased use of advanced computer 
technology to acquire pirated material from wireless LAN 
systems.  This is a significant change from previous years. 
 
-------------------------------------- 
Use/Procurement of Government Software 
-------------------------------------- 
 
¶5.  (U) According to the Business Software Alliance and the 
ME Computer Software Producers Society, software piracy in 
Kuwait is around 62 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, 
Secretariat General of Supreme Council for Planning and 
Development (former Ministry of Planning) and Ministry of 
Interior officials affirm that they use only licensed and 
authenticated software on government computers.  MOI claims 
that its networks are monitored by an IT supervisor 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 including Microsoft 
Corporation, claiming software infringement by GOK 
ministries.  Ministry of Commerce and Industry officials are 
surveying government offices in an effort to determine the 
extent of the problem and have expressed the commitment to 
address it. 
 
---------------- 
TRIPS Compliance 
---------------- 
 
¶6. (U) 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  Most 
recently in December 2008, USG comments were sent to the GOK 
based on amendments sent to Washington in August 2007.  The 
draft law sets minimum penalties that include mandatory jail 
sentences.  According to our interlocutors, as in 2007, all 
raids in 2008 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 $1700) and rarely include jail time, are a major 
contributing factor to the government's failure to deter 
vendors of pirated and counterfeit goods.  The draft law has 
recently moved to the Department of Commerce and Industry. 
Post will continue working with the Ministry of Commerce and 
Industry to ensure that progress not be lost. 
 
----------- 
Enforcement 
----------- 
 
¶7. (U) Inter-ministerial cooperation which has long been the 
most limiting factor for enforcing IPR in Kuwait, improved 
greatly in 2008 due to the consolidation of IPR 
responsibility within MOCI.  The inter-ministerial IPR 
committee, established in 2006 and chaired by the Ministry of 
Commerce, has made information sharing more efficient, 
although some problems still remain.  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 penalties usually amount 
to 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. 
 
¶8. (U) 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, 
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.  On February 
19, 2009, Post forwarded a copy of the patent draft law it 
received from the Director of the Patent and Trademarks 
Department to USTR. 
 
-------------- 
Kuwait Customs 
-------------- 
 
¶9. (U) In 2008, Kuwait Customs continued to provide 
aggressive and effective enforcement of IPR.  The U.S. 
Customs Advisory team, which is now the US Customs and Border 
Protection Advisory team has been working closely with Kuwait 
Customs and located with them since 1994.  The Kuwait Customs 
IPR Team was created in April 2004, as a result of efforts by 
the CBP Advisory team.  The CBP Advisory team has developed a 
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 prosecutor's 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. 
 
¶10. (U) Customs officials continue to express their 
commitment to protecting IPR.  According to the 2008 
Customs-IPR report provided to Post by Customs officials, 
seizures by Customs IPR units in 2008 totaled 310 cases with 
a total value of approximately 30 million USD.  This is a 
significant decrease from 2007 when Kuwait Customs recorded 
538 seizures at ports of entry.  The decrease in the number 
of seizures can be attributed to the new approach taken by 
importers, in which the importers approach Customs with a 
sample of the products they intend to import and ask for an 
assessment of the products' legitimacy before placing their 
orders.  According to Customs, the importers submitted 70 
examples of products to Customs officials in 2008 and most of 
them were rejected.  Customs officials attribute the increase 
in the number of raids of local shops/vendors that took place 
in 2008 to the combined efforts of Customs Intellectual 
Property Rights Office (IPRO) and the IPR committee that 
includes members from MOI, MOCI, Ministry of Justice, 
Ministry of Interior and Customs.  The increased raids and 
inspections on local shops and commercial areas resulted in a 
dramatic decline in the number of peddlers selling 
counterfeit or pirated goods on the streets. 
 
--------------------------------- 
Ministry of Commerce and Industry 
--------------------------------- 
 
¶11. (U) 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, 
¶2008. IPR enforcement and legislation was discussed in great 
detail during this session.  The Ministry has made IPR 
enforcement a high priority.  In October, MOCI coordinated 
the destruction of 64,000 confiscated DVDs and CDs that were 
collected in raids conducted by inspection teams from the IPR 
committee.  Amending the copyright law has also been made a 
high priority.  With the move of the copyright enforcement 
unit to MOCI, copyright and trademark inspections and raids 
saw significant improvements in 2008.  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 
----------------------- 
 
¶12. (U) The Ministry of Information's performance in 2008 
continued to improve in comparison to previous years.  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.  MOI increased 
its 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 2009. 
¶13. (U) 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.  In 2008, MOI teamed up with the Business 
Software Alliance (BSA) in an effort to strengthen 
anti-piracy enforcement and to raise public awareness. 
Highlights from 2008 include the seizure of more than 167,991 
pirated optical media discs, which include CDs, DVDs, 
software and video games. 
 
--------------------------------------------- --------------- 
WIPO Copyright Treaty and Performances and Phonograms Treaty 
--------------------------------------------- --------------- 
 
¶14. (U) Although Kuwaiti officials have expressed their 
interest in the treaties, Kuwait is a party to neither. 
 
 
 
 
 
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For more reporting from Embassy Kuwait, visit: 
visit Kuwait's Classified Website at: 
 
http://www.intelink.sgov.gov/wiki/Portal:Kuwa it 
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JONES