US embassy cable - 05KUWAIT4402

UNCLAS SECTION 01 OF 02 KUWAIT 004402 
 
SIPDIS 
 
SENSITIVE 
 
STATE PLEASE PASS USTR FOR PBURKHEAD 
STATE PLEASE PASS USPTO FOR PFOWLER 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, KIPR, PREL, KU, IPR 
SUBJECT: UPDATE ON KUWAIT IPR EFFORTS 
 
REF: KUWAIT 3222 
 
 1.  (SBU) Summary:  While Kuwait's elevation to the Special 
301 Priority Watch List in 2004 galvanized some GOK agencies 
into action, overall the GOK has not made significant 
progress in enforcement actions, rewriting copyright laws, or 
prosecuting violators.  Officials say steps will be taken 
after Ramadan to improve coordination between Interior and 
Commerce ministries responsible for IPR enforcement.  Post 
has nominated 5 GOK officials for USPTO training in December. 
 END SUMMARY 
 
Kuwait IPR:  Where we Stand Now 
------------------------------- 
 
2.  (SBU) When the U.S. and Kuwait signed a Trade and 
Investment Framework Agreement (TIFA) in April 2004, USTR 
emphasized that Kuwait's poor record on IPR needed 
improvement in order for the process to move forward.  USTR 
again stressed the need for IPR reform during the first TIFA 
Council meeting in April 2004.  Since that time, however, the 
GOK has not made significant progress in enforcement actions, 
rewriting its copyright laws, or in the prosecution of 
violators. 
 
3.  (SBU) Piracy rates in Kuwait are among the highest in the 
world. According to the 2004 Special 301 Report, motion 
picture piracy is 95 percent of sales; the police have not 
systematically enforced intellectual property rights.  In 
addition to optical media, vendors openly sell a wide range 
of pirated and counterfeit items, including pharmaceuticals 
and auto parts, without significant fear of police 
intervention.  When Kuwaiti police do raid businesses selling 
pirated goods - pirated optical media are typically targeted 
- they usually seize large quantities of material.  However, 
prosecutions are rare and most violators simply pay a small 
fine and affirm in writing that will not sell such items 
again. 
 
4.  (SBU) Kuwait's elevation to the Special 301 Priority 
Watch List in 2004 appears to have galvanized some GOK 
agencies to take IPR seriously, especially Kuwaiti Customs 
and the Ministry of Commerce (MOC).  However, significant 
legal inadequacies and bureaucratic disinterest remain. 
Kuwait's copyright law is still TRIPS-incompliant, and while 
the increasing frequency of raids of shops selling pirated 
goods shows promise, the Ministry of the Interior (charged 
with enforcing copyright protections) prosecutes very few 
offenders.  In May 2005, the GOK announced the creation of an 
inter-ministerial IPR coordination committee that would form 
interagency inspection teams to carry out joint raids. 
However, the continued failure to prosecute offenders is a 
serious concern.  Penalties for IPR violations are weak, and 
while draft legislation would provide for tougher sentences, 
the National Assembly has yet to take up the bill for 
discussion. 
 
Follow-up Meeting with MOC Inspection Director 
--------------------------------------------- - 
 
5.  (SBU) Econoff met the Ministry of Commerce Inspection 
Department Director Mansour Al-Nazhan on October 10 to follow 
up on issues discussed during Econoff's previous meeting with 
Al-Nazhan on July 18 (REFTEL).  Al-Nazhan explained that the 
long-awaited interagency committee formed by the Council of 
Ministers would convene shortly after the end of Ramadan, and 
would "work out the mechanism" for correcting the 
long-standing lack of coordination between the MOC and the 
MOI.  Al-Nazhan said the MOI is focused solely on optical 
media piracy; while the MOC is mandated to inspect all types 
of products; and that the MOI does not always share with MOC 
its information about non-optical media piracy.  Al-Nazhan 
expects that MOC Assistant U/S Abd Al-Aziz Mishaan Al-Khaldi 
will ultimately head this committee. 
 
6.  (SBU) Al-Nazhan stated that the MOC now has around 400 
inspectors throughout Kuwait City, generally in teams of 
12-18 based in each district.  He stated that his inspectors 
seize goods only when found in small quantities.  When 
inspectors discover large caches of goods they close the 
shop, warehouse or flat, and seal the door with wax.  The MOI 
has the authority to seize and destroy the goods, but only 
after a court order is issued, usually 1-2 months after the 
raid.  One point Al-Nazhan emphasized was that his inspectors 
meet periodically to map out their raids, and make every 
effort to inspect shops systematically, targeting high-piracy 
areas and returning regularly to known violators.  He stated 
he was confident that the raids were making a difference. 
Nevertheless, he acknowledged that the volume of pirated 
products (mainly from China) is steadily increasing. 
 
7.  (SBU) Al-Nazhan provided Econoff and LES a copy of a 
binder containing 72 reports of raids conducted during the 
first six months of 2005.  The reports were thorough, and a 
copy of each report is sent to the MOI for use in 
prosecution.  Al-Nazhan said MOI claims to fine offenders 
approximately $220 to $7200 per violation depending on the 
volume of contraband involved.  He said he could not confirm 
these MOI claims due to the lack of prosecution information. 
Econoff also saw forms provided by the Arabian Anti-Piracy 
Alliance (AAA) which Al-Nazhan's inspectors use to log raids. 
 Al-Nazhan complained that the forms are long and overly 
complex and take too much time to complete.  When asked if he 
would be willing to keep a log of his inspectors' activity if 
the record keeping procedure were simplified, he eagerly 
agreed.  Post will work with industry representatives in 
designing a more user-friendly reporting form. 
 
Looking Forward 
--------------- 
 
8.  (SBU) Post has nominated five individuals to participate 
in USPTO training in December (two from the MOC, two from 
MOI, and one from Customs).  Post expects that these 
individuals, along with others who have completed USPTO 
training in the past, will constitute a core group of 
effective IPR enforcers.  Post will also work with newcomers 
to the IPR game in the GOK - a new Assistant U/S and new 
legal advisor at MOI - to press for copyright law change and 
IPR enforcement consistent with international standards. 
LEBARON