US embassy cable - 05KUWAIT790

C O N F I D E N T I A L SECTION 01 OF 03 KUWAIT 000790 
 
SIPDIS 
 
STATE PLEASE PASS USTR JFENNERTY 
 
E.O. 12958: DECL: 02/22/2015 
TAGS: ETRD, PREL, KIPR, KU, IPR 
SUBJECT: MESSAGE RECEIVED? INFORMATION GETS SERIOUS ABOUT 
IPR 
 
REF: KUWAIT 36 
 
Classified By: CDA Matthew H. Tueller, Reason 1.4(b) 
 
1.  (C) Summary and Comment.  Econoff and intellectual 
property rights (IPR) industry representatives met with the 
Ministry of Information's new IPR Committee Chief, Khaled 
Al-Hendi, on February 14 to discuss the challenges Al-Hendi 
faces and his strategies for improving the Ministry's poor 
IPR protection record.  Al-Hendi bluntly admitted that the 
largest impediment to proper IPR protection by the Ministry 
of Information is Ghannas Al-Adwani, the head of the 
Ministry's Artistic Works Department. He said that Al-Adwani 
often acts outside the law by inviting IPR violators to swear 
in writing that they will stop selling pirated products, and 
then administratively closing the case.  With the minister's 
approval, Al-Adwani will now report to the new assistant 
undersecretary, and will be required to make 200 inspections 
each month.  Al-Hendi, who is a sitting judge and will return 
to the bench full-time in April, would like to set up an IPR 
protection system for the ministry.  One serious problem is 
building the Ministry of Information's credibility with 
judges.  To do this, Microsoft will create a software program 
to track IPR complaints properly from their inception to the 
point at which they are transferred to the Ministry of 
Justice.  Al-Hendi suggested that the cases' dispositions be 
made publicly available on the internet.  Al-Hendi agreed 
that Kuwait's penalties for convicted IPR violators are too 
low and agreed to consider mandatory minimums. He also noted 
that the Ministry of Interior had agreed to police 
involvement in IPR enforcement efforts. 
 
2.  (C) Comment.  It was clear from this meeting that 
Al-Hendi understands how critical proper IPR enforcement is 
to the ongoing TIFA process, and that he is well aware of his 
ministry's shortcomings.  We are encouraged by his efforts to 
set up a more rigorous system to track IPR cases, as well as 
his willingness to accept help from industry.  We are also 
pleased to hear that the Ministry of Interior has at long 
last agreed to provide police resources for enforcement, 
something that we have been advocating.  Still, the fact that 
Al-Hendi will be leaving the ministry in April is 
discouraging; only time will tell if the ministry's new 
enthusiasm for improving IPR protection will continue, or if 
Al-Adwani's lackadaisical attitude will prevail after 
Al-Hendi departs.  End Comment. 
 
New Ministry of Information IPR Committee Set Up 
--------------------------------------------- --- 
 
3.  (C) In a frank meeting with econoff and intellectual 
property rights (IPR) industry representatives on February 
14, the Ministry of Information's new IPR Committee Chief, 
Khaled Al-Hendi, spoke about the challenges he faces and his 
strategies for improving the Ministry's poor IPR protection 
record.  Al-Hendi, the minister's legal advisor and a member 
of Kuwait's Trade and Investment Framework Agreement (TIFA) 
team, said that he advised the minister of the need for a 
committee devoted to copyright enforcement after the first 
TIFA Council meeting in May 2004.  Initially, the minister 
refused to create the committee, saying that there were 
insufficient staffing resources.  However, with Al-Hendi 
keeping up the pressure and with no improvement in the 
ministry's performance on IPR issues, the minister relented 
in December 2004. (Note.  As reported in Ref A, the minister 
resigned in early January to avoid a parliamentary 
"grilling;" a permanent replacement has not yet been named. 
End Note.) 
 
Actions to Bring Artistic Works Dept. Head to Heel 
--------------------------------------------- ----- 
 
4.  (C) Al-Hendi bluntly admitted that the largest impediment 
to proper IPR protection by the Ministry of Information is 
Ghannas Al-Adwani, the head of the Ministry's Artistic Works 
Department. (Note. The International Intellectual Property 
Alliance's (IIPA) Special 301 submission for 2004 names 
Al-Adwani specifically as an official who is "unable or 
unwilling" to uphold IPR.  End Note.)  According to Al-Hendi, 
Al-Adwani has actively thwarted every initiative to step up 
IPR enforcement, ignoring inspection schedules drawn up by 
Al-Hendi and refusing to carry out raids.  He also revealed 
that Al-Adwani often acts outside the law when he does carry 
out inspections:  when he finds shops selling pirated goods, 
Al-Adwani routinely invites the owner to swear in writing 
that he will stop selling pirated products, and then 
administratively closes the case against the pirate.  "Under 
the law," Al-Hendi commented," he does not have this right -- 
only the Amir and the Public Prosecutor's office have this 
right."  Still, "it happens every day." 
 
5.  (C) Recognizing that "working with Ghannas was a waste of 
time," Al-Hendi appealed to the minister, who referred 
Al-Hendi to new Assistant Undersecretary Brahim Al-Nouh. 
Al-Nouh, who unlike Al-Hendi works in the same building as 
Al-Adwani, agreed to have Al-Adwani report directly to him 
(Al-Adwani previously worked independently), and the minister 
agreed to back Al-Nouh in his dealing with Al-Adwani. 
Al-Nouh instructed Al-Adwani and his team to carry out a 
minimum of 400 inspections per month, to which Al-Adwani 
objected; they ultimately agreed that he would inspect at 
least 200 shops monthly.  Al-Hendi suggested that when 
industry files a criminals complaint with Al-Adwani, they 
should copy Al-Nouh as well.  This will allow Al-Nouh to 
track Al-Adwani's responsiveness (or lack thereof). 
 
6.  (U) Al-Hendi added that to improve efficiency, Al-Nouh 
will focus on enforcement while Al-Hendi will be responsible 
for revising Kuwait's copyright legislation.  Al-Hendi will 
also push for Kuwait to join the WIPO Copyright and 
Performances/Phonograms Treaties, as well as the Berne 
convention. 
 
 
Need to Establish IPR Protection System 
---------------------------------------- 
 
7.  (C) Al-Hendi, who is also a sitting judge, said that 
because of the ongoing security concerns in Kuwait, the GOK 
has ordered all judges to give up their advisory roles in 
other ministries and return full-time to the Ministry of 
Justice.  Consequently, Al-Hendi will leave the Ministry of 
Information in April.  Before that time, however, he would 
like to set up an IPR protection system for the ministry. 
One serious problem that Al-Hendi identified is that judges 
do not trust the data that the Ministry of Information 
provides when it pursues IPR cases.  Consequently, judges are 
reluctant to hand down harsh sentences -- and almost never 
impose jail time -- to violators identified by Information. 
To build the ministry's credibility, the group discussed 
devising a standardized template that Ministry of Information 
inspectors could use to file their cases, which (when 
properly filled) would include all of the data required to 
prove piracy. 
 
8.  (SBU) Sami Al-Anzy and Jean Haddad from Microsoft Kuwait 
told Al-Hendi that Microsoft was prepared to invest in 
writing a computer software program to aid the ministry in 
tracking IPR complaints from their inception to the point at 
which they are transferred to the Ministry of Justice.  But, 
they cautioned, the system would only work if the ministry 
were to collect good data that would be logged by accountable 
data enterers.  Al-Hendi immediately accepted the offer, 
agreed to work with Al-Anzy on the design, and pledged to 
coordinate with the Public Prosecutor's Office (PPO) to 
determine what data are necessary.  He also noted that the 
PPO,s case disposition data can be publicly accessed from 
the internet, and suggested that the same should be true for 
Information's IPR complaints. 
 
9.  (C) Arabian Anti-Piracy Alliance's (AAA) Middle East 
Representative Scott Butler commented on the inadequacy of 
Kuwait's maximum penalties for convicted IPR violators:  a 
500 KD fine (about $1700).   According to Microsoft's Haddad, 
the fine is so low that pirates with whom he has spoken say 
that they will not even bother hiring a lawyer to contest 
cases against them.  The pirates know they will not go to 
jail for their offenses and, if they are convicted, they will 
pay a fee that they can recover with a few days' sales.  The 
deterrent effect is therefore non-existent.  Butler noted 
that IIPA is recommending that countries with IPR problems 
consider imposing mandatory minimum sentences to deter 
piracy.  Al-Hendi, who indicated that he is not opposed to 
increasing penalties, said that the GOK would consider 
mandatory minimums.  But he stressed again that the Ministry 
of Information needs to build its credibility with the judges 
before any real changes in sentencing would occur. 
 
10. (SBU) Butler asked Al-Hendi to use industry watchdog 
groups' expertise, saying that they could help identify key 
pirates.  He also stressed that the timing of the Ministry's 
raids should be dictated by the pirate,s schedule, not by 
the Ministry's work hours.  Butler noted that Al-Adwani had 
not been receptive to raiding after working hours, which has 
allowed the pirates to tailor their sales around his 
schedule. 
 
MOI Agrees to Include Police in Enforcing IPR 
--------------------------------------------- 
 
11. (SBU) Al-Hendi said that the Ministry of Interior finally 
responded to Information's July 2004 request for police 
involvement in IPR enforcement efforts.  An interministerial 
team will meet shortly to determine the terms of a memorandum 
of understanding.  Al-Hendi asked for industry input into how 
to use the police most effectively.  AAA's Butler said that 
he would like to see the police spearheading investigations 
ex officio, rather than acting simply at the behest of the 
Ministries of Information or Commerce.  Industry would like 
copyright offenses treated like any other crime, he said, 
obliging the police to make arrests in clear cases of piracy 
(street vendors, for instance).  The police could also help 
with investigations, Butler added. 
 
Industry Recommends Kuwait Stay on Priority Watchlist 
--------------------------------------------- -------- 
 
12. (SBU) Butler informed Al-Hendi that IIPA had recommended 
that Kuwait remain on the Special 301 Priority Watchlist for 
2004.  He noted that the system that the Ministry of 
Information sets up to track IPR complaints will be critical, 
not only to hold officials like Al-Adwani accountable but 
also to get Kuwait off the priority watchlist.  Al-Hendi 
raised a familiar complaint among the GOK that the piracy 
rate used by IIPA is exaggerated.  At the same time, he 
acknowledged that Kuwait does not conduct its own statistical 
studies on piracy, and therefore cannot put forth an 
alternate estimate of the piracy rate. 
 
TUELLER