US embassy cable - 05KUWAIT2251

UNCLAS SECTION 01 OF 03 KUWAIT 002251 
 
SIPDIS 
 
SENSITIVE 
 
STATE PLEASE PASS USTR JFENNERTY AND JBUNTIN 
LONDON FOR EGOLDRICH 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, EINV, PGOV, PREL, KIPR, KU 
SUBJECT: KUWAIT IPR: NEW INFORMATION MINISTRY ASSISTANT U/S 
ON PIRACY PROBLEM, SOLUTIONS 
 
REF: A. STATE 94876 
 
     B. KUWAIT 1965 
 
This cable is sensitive but unclassified; please protect 
accordingly.  Not for internet distribution. 
 
1.  (SBU) Summary.  On May 24, emboffs met with Ibrahim 
Al-Nouh, the Ministry of Information's new assistant 
undersecretary overseeing intellectual property rights (IPR) 
enforcement.  Econ/C congratulated Al-Nouh on his ministry,s 
recent raids (ref B), and asked for additional details on 
Al-Nouh's new program.  Al-Nouh said he has met with industry 
to identify the ministry's weaknesses, increased the number 
of inspectors, and instituted a monthly reporting requirement 
for the inspection teams. He also spoke about the recently 
created inter-ministerial IPR coordinating committee that 
will, he said, form interagency inspection teams to carry out 
joint raids.  Econ/C offered technical assistance, and urged 
the ministry to nominate participants for this summer's USPTO 
IPR Enforcement Academies. 
 
2.  (SBU) Al-Nouh was unsure about the status of amendments 
to Kuwait's 1999 copyright law.  He said the ministry had 
recommended that the Ministry of Justice increase fines for 
piracy, but not jail time.  Econ/C stressed that imposing 
prison sentences would be an essential element in deterring 
future offenders.  Al-Nouh commented that since most people 
who buy pirated products say that the genuine products are 
too expensive, perhaps manufacturers should lower the prices 
of their proprietary goods to encourage consumers to buy 
genuine products. Econ/C strongly refuted this contention, 
stressing that it was essential that the Kuwaiti leadership 
understood that the issue of piracy was more than a question 
of price.  Rather, piracy has a strong negative impact on the 
Kuwaiti economy by hindering job creation, investments, and 
protection for Kuwaiti innovators.  Al-Nouh said he would be 
visiting Dubai and Manama shortly, and would talk to his 
counterparts about their strategies for combatting piracy. 
End Summary. 
 
--------------------------------------- 
New Assistant U/S Confronts IPR Problem 
--------------------------------------- 
 
3.  (SBU) On May 24, emboffs met with Ibrahim Al-Nouh, the 
Ministry of Information's new assistant undersecretary 
overseeing intellectual property rights (IPR) enforcement. 
Econ/C congratulated Al-Nouh on his Ministry,s recent raids 
(ref A), and asked for additional details on Al-Nouh's new 
program.  Al-Nouh, who was promoted from a different 
department in the ministry about four months ago, said that 
he had not been involved with IPR issues previously and was 
surprised by the scale of Kuwait's problem, as described in 
the International Intellectual Property Alliance's (IIPA) 
2005 Special 301 submission for Kuwait. (Note.  The Director 
of the Artistic Works Department, whom Al-Nouh now 
supervises, was personally named on the report,s first page 
as a serious impediment to IPR protection.  End Note.)  To 
help improve Kuwait's IPR record, Al-Nouh began meeting with 
industry representatives to obtain their assessments of the 
Ministry's weaknesses.  Al-Nouh acknowledged that the 
ministry has serious problems that will require coordinated 
action at all levels. 
 
4.  (SBU) Al-Nouh said that when he arrived, the Ministry's 
inspection teams were too understaffed to canvas the 
5000-6000 stores in Kuwait, and so he increased the number of 
inspectors from 23 to 45.  Al-Nouh called the preliminary 
results of the inspectors' actions positive, noting that they 
had raided more than 90 stores in 20 days and seized, among 
other things, in excess of 37,000 pirated compact discs.  To 
track their progress, Al-Nouh has instituted a monthly 
reporting requirement for the inspection teams; he offered to 
provide this information to post. 
 
5.  (SBU) According to Al-Nouh, his inspectors face 
additional difficulties in trying to carry out raids.  For 
example, shop owners often keep their storefronts free of 
pirated goods, but will procure counterfeits from a second 
location (an apartment near the store or a warehouse) upon 
demand.  He also said that the pirates now recognizing the 
inspectors by face, and hiding their goods when the 
inspectors approach (the vendors are using look-outs to warn 
when inspectors are en route). 
 
---------------------------------------- 
A New Committee to Increase Coordination 
---------------------------------------- 
 
6.  (SBU) Al-Nouh said that he supported the recent creation 
of a "supreme council" on intellectual property rights.  This 
inter-ministerial coordinating committee includes the 
Ministries of Information, Commerce, Interior, the Customs 
Service, and the municipality, and according to Al-Nouh, will 
form interagency inspection teams to carry out raids 
together.  Al-Nouh was unsure who would chair the committee, 
but thought it would most likely be Ministry of Commerce 
Undersecretary Rasheed Al-Tabtabaei, since Commerce will be 
providing staff for the committee.  He added that he had 
recommended that all committee members be at the assistant 
undersecretary level or higher. 
 
7.  (SBU) When asked if the U.S. could help provide technical 
assistance, Al-Nouh said that he needed better technology to 
facilitate information exchanges (and requested that the 
Embassy provide the ministry with a larger computer server). 
He told Econ/C that Microsoft had initially offered to help, 
but that they had been slow in providing assistance.  (Note. 
In a February meeting with the Ministry of Information,s IPR 
committee chief, Microsoft offered to build a software 
tracking program for the Ministry, free of charge, to allow 
for better data collection on raids and seizures.  Ministry 
officials agreed, but then complained that they did not have 
anyone to do data entry, and suggested that Microsoft should 
pay the salary of a ministry employee who would do data 
entry.  Microsoft declined to fund the position, but has 
continued to build the software program.  It is possible that 
this is what Al-Nouh was describing when he said that 
Microsoft was backing off.  End Note.)  Econ/C also invited 
Al-Nouh to nominate candidates for this summer's USPTO IPR 
Enforcement Academies (ref A), and suggested that Al-Nouh 
himself might want to consider attending. 
 
------------------------------------ 
No Increase in Jail Time for Pirates 
------------------------------------ 
 
8.  (SBU) Econ/C asked about the status of the long-overdue 
amendments to Kuwait's 1999 copyright law, which is not 
compliant with TRIPs requirements.  Al-Nouh was unsure, 
saying that he was not very familiar with the legislative 
component of the IPR portfolio.  Econ/C noted that the 
Undersecretary had recently told the media that Kuwait should 
increase the penalties for piracy, and asked for additional 
details.  Al-Nouh said that the Intellectual Property 
Department had sent a memo to the Ministry of Justice's Legal 
Department, recommending an increase in the maximum fine 
(which now stands at 500 KD, or about $1700).  However, this 
recommendation did not include increasing prescribed jail 
time. 
 
9.  (SBU) Econ/C stressed that imposing prison sentences 
would be an essential element in deterring future offenders. 
He presented Al-Nouh with information comparing Kuwait's 
penalty regime to other countries in the region and in Asia, 
illustrating that Kuwait's punishments are among the weakest. 
 He also gave Al-Nouh an information paper on U.S. penalties 
for copyright infringement, and urged him to consider 
recommending stiffer prison sentences.  Al-Nouh said he would 
be meeting the following day with the Ministry,s legal 
advisor, and would it discuss this with him. 
 
---------------------------------------- 
It's Just Too Expensive to Buy Originals 
---------------------------------------- 
 
10. (SBU) Al-Nouh commented that the general public's IPR 
awareness is increasing.  He said that most people who buy 
pirated products like CDs and DVDs say that the genuine 
products are too expensive and that they cannot afford 
originals.  According to Al-Nouh, if manufacturers were to 
lower the prices of their proprietary goods, consumers would 
choose to buy genuine products rather than counterfeits. 
(Note.  Al-Nouh is the second GOK official charged with IP 
protection to make this claim within the last few weeks.  As 
reported ref B, a representative of the Ministry of 
Commerce's Patent and Trademark Office offered this same 
solution to Kuwait's IPR problem two weeks ago, at a Ministry 
of Information-sponsored conference on IPR.  End Note.) 
 
11. (SBU) Econ/C strongly refuted this contention, noting 
that prices of genuine goods are made more expensive by 
piracy, since companies have to compensate for the losses 
they suffer when their products are counterfeited.  The only 
way to lower prices, he said, would be to foster competition 
among legitimate producers.  Econ/C also pointed out that 
piracy is more than just a question of price, and enumerated 
the costs to Kuwait of piracy:  lost opportunities for 
Kuwaiti copyright holders who are denied proper protection; 
fewer jobs for university graduates; loss of investors who 
might otherwise be interested in doing business in Kuwait; 
and an increase in criminality, the proceeds of which could 
be used to fund other illegal enterprises like terrorism.  He 
stressed that it was essential that the Kuwaiti leadership 
understood these issues, and that they demonstrate their 
understanding by increasing the costs of violating IPR laws. 
One essential element of this, Econ/C added, was imposing 
jail sentences on pirates. 
 
12. (SBU) Econ/C gave Al-Nouh a handout prepared by Bahrain's 
Ministry of Information that explained Bahrain's IP laws and 
outlined the penalties for violating them (in Arabic and 
English), and suggested that Kuwait consider a similar 
project.  Al-Nouh said he would be visiting Dubai and Manama 
shortly, and would talk to his counterparts about their 
strategies for combatting piracy. 
LEBARON