Reference ID: 10KUWAIT165

Created: 2010-02-24 11:01

Released: 2011-08-30 01:44


Origin: Embassy Kuwait



DE RUEHKU #0165/01 0551101


R 241101Z FEB 10









E.O. 12958: DECL: NA



REFTEL: STATE 3361, KUWAIT 09 1060, KUWAIT 09 897

1. (SBU) SUMMARY: In a meeting on February 10th, Econcouns informed

Ahmed Al-Haroun, the Minister of Commerce and Industry (MOCI), and

Sheikha Rasha Naief Al-Sabah, the Director for IPR in the MOCI,

about the 2010 301 Special Report review process. Due to the delays

in passing a TRIPS-compliant Copyright Law, Post recommends that

Kuwait remain on the Special 301 Watchlist. Protecting IPR remains

a priority in Kuwait: inspection teams from the Ministries of

Information (MoI), Commerce and Industry (MOCI) and Kuwaiti Customs

continue to conduct regular raids and seizures. Kuwait maintains a

strong spirit of enforcement, but the Kuwaiti Copyright Law and its

TRIPS non-compliance hampers the government's enforcement capacity.


2. (SBU) Kuwait's 1999 Copyright Law was revised by the Minister of

Commerce and Industry and is currently under review with the

Ministry of Justice. Critics of the pending Copyright Law

amendments say that the law is already obsolete because it does not

address internet piracy protection. Post is encouraged by Kuwait's

commitment to IPR enforcement and by an increased willingness to

prosecute violators, but remains frustrated at the slow pace of

movement on key legislation. MOCI, MOI and Customs have made IPR

enforcement a high priority, but the delay in finalizing IPR

legislation and forwarding it to the Parliament indicates that IPR

protection is not a high priority for the GOK as a whole. In a

recent meeting with Econoff, Tarek Al-Ajmi, the Assistant

Undersecretary for the Ministry of Information, stated that the

inter-ministerial National Committee for IPR, which was formed in

2005, has not met or done anything of substance since 2007.

3. (SBU) In September 2007, the GOK announced that copyright

protection responsibility officially merged with the Ministry of

Commerce and Industry (MOCI) and all IPR enforcement functions

(other than Customs) had been consolidated into the MOCI, which

previously held responsibility only for trademarks. 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, including

the office of the Director for IPR, Sheikha Rasha Naief Al-Sabah.

Optical Media Piracy


4. (SBU) In a recent phone conversation, Khaled Al-Abduljaleel

Al-Jassem, the Assistant Manager for Kuwait's Arabian Anti-piracy

Alliance (AAA) described to Econoff the pay TV decoder box

phenomenon, which has emerged in Kuwait since 2007. For a fee of

40KD (about 160 USD), Kuwaitis can purchase a "DreamBox" receiver

which provides access to multi-satellite channels, free of charge,

for about six months. While Al-Jassem describes the "DreamBox"

phenomenon as rampant in Kuwait, the International Intellectual

Property Alliance (IIPA), claims that enforcement has resumed after

a brief stoppage in 2009. Al-Jassem also asserted that Kuwait's

optical media piracy rate is still around 90 percent, although the

Ministry of Information disputes this figure. The Ministry of

Information, however, does not compile its own statistics on optical

media piracy. 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, or use advanced computer

technology by acquiring pirated material from wireless LAN.

Nonetheless, pirated material continues to be readily available in


Domestic and International IPR Agreements

5. (SBU) The United States and Kuwait entered into a Trade and

Investment Framework Agreement (TIFA) in 2004, which established a

formal dialogue to promote increased bilateral trade and

investments. TIFA also emphasizes the importance of providing

effective protection and enforcement of intellectual property rights

and of membership adherence to intellectual property rights

conventions. Kuwait has yet to join the WIPO Copyright Treaty or

the WIPO Performances and Phonograms Treaty (WPPT), as other GCC

countries have done.

6. (SBU) On December 10, 2006, the GCC Supreme Council enacted the

GCC Unified Trademark Law with the intent of homogenizing brand

protection practices in the GCC states. The law seeks to replace

local provisions with a single set of general directives governing

assignment and cancellation, trademark registration, renewal and

enforcement systems. Each country will retain and manage an

independent register, and applications must be made separately in

each country. Kuwait must draft and enact implementing regulations

before the Trademark Law will become operative. These regulations

are in the process of finalization.

TRIPS Compliance


7. (SBU) The Ministry of Information has drafted extensive

amendments to the 1999 non-compliant Copyright 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 provided feedback for the Kuwaitis' consideration.

Since February 2009, the draft Copyright Law has been under the

jurisdiction of the IPR Department at the Ministry of Commerce and

Industry. Sheikha Rasha Naief Al-Sabah, the Director of IPR and

Ahmed Al-Haroun, the Minister of Commerce and Industry, informed

Econcouns in a February 2010 meeting that the revised Copyright Law

had passed the Ministry of Justice review and is currently with the

Executive Cabinet's Legislative Committee and pending submission to


8. (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. The new law sets minimum penalties that include

mandatory jail sentences. According to our interlocutors, all raids

in 2009 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 a

fine (up to $1,735) and rarely include jail time, are a major

contributing factor to the GoK's failure to deter vendors of pirated

and counterfeit goods.

Training Opportunities

9. (SBU) In 2009, Post presented Kuwaiti officials with two

invitations for IPR training opportunities with USPTO. Both of

these invitations were declined due to language barriers, budget

constraints and other bureaucratic issues. In October 2009, Kuwaiti

Customs, in collaboration with the Ministry of Commerce and the

Brand Owners Protection Group, conducted its first-ever training

sessions for 150 customs inspectors on how to identify imitation

products, effectively communicate intelligence updates, and how to

profile counterfeit product shipments. American-based companies

such as Philip Morris, NIKE and Ford sent materials and

representatives to talk about brand integrity and

anti-counterfeiting techniques. In February 2010, Sheikha Rasha

Naief Al-Sabah participated in an IPR training session at the Kuwait

Lawyers' Union, along with customs inspectors, lawyers and customs


Use and Procurement of Government Software


10. (SBU) In a December 2009 meeting, Jawad Al-Redha, Microsoft's

regional office director told Econoff that software piracy in Kuwait

is around 61 percent. The Ministry of Information does not have

statistics on software piracy, however Post believes that private

sector assessment in this case is accurate. Post's GOK

interlocutors assure us that pirated software is not allowed in any

government ministry or office. Ministry of Information, the

Secretariat General of Supreme Council for Planning and Development

(formerly the Ministry of Planning) and Ministry of Interior

officials affirm that they use only licensed and authenticated

software on government computers. However, Microsoft claims that

the number of end-users exceeds the quantity of purchased and

licensed software. 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. (Comment: MOI assertions

in this regard are not highly credible. Emboffs have personally

witnessed MoD laptop power-point presentations for high-level VIPs

fail because the presentation was running pirated software. End




11. (SBU) In general, enforcement remains hampered by an

unwillingness to prosecute Kuwaiti citizens who run piracy rings,

with prosecution reserved for foreign nationals who work for

Kuwaitis. In most cases, piracy fines are around 100 KD to 500 KD

(350 USD to 1750 USD). 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.

12. (SBU) Trademark infringement is a growing concern, particularly

with the office at the Ministry of Commerce of Industry 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 Kuwaiti

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.

Kuwaiti Customs


13. (SBU) The U.S. Customs advisory team, which has worked closely

with Kuwaiti Customs since its creation in 2003-2004 and is

physically located within Kuwaiti Customs offices, has developed a

close and productive relationship with the IPR team at Customs, and

much of Kuwaiti Customs' progress over the last few years can be

directly attributed to this partnership. Kuwaiti 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 and penalties imposed on the

spot, including the 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 IPR holders have agreed

to absorb the costs of destruction in order to avoid the goods being


14. (SBU) Kuwaiti Customs continues to be the most aggressive and

competent agency in impeding the movement of pirated and counterfeit

products. In 2009 Osama Al-Shami, the Assistant Director for the

IPR Office in Kuwaiti Customs reported 394 seizures, valuing KD

615,738, with a 22% increase in comparison to 2008's 308 seizures.

Such a decrease is attributed to the newly applied procedure, where

importers approach Customs with sample products they intend to

import, and ask for an assessment of the products' legitimacy before

placing orders. Al-Shami stated that importers submitted 120

examples in 2009, with roughly 60% of the samples rejected. In

2009, Kuwait's Northern Ports were the primary point of entry for

counterfeit products, valuing more than 400,000 KD; the primary

products were electrical appliances, textiles and computer


Ministry of Commerce and Industry


15. (SBU) The Ministry of Commerce and Industry 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 National Committee for IPR which oversees and

coordinates all enforcement efforts. However, as stated earlier,

this Committee has been inactive since 2007. As a result of the

TIFA process, the Ministry has made IPR enforcement a higher

priority in the Ministry. MOCI blames parliamentary politics for

lack of movement or slow movement on the Copyright Law amendments.

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 a broad range of IPR

issues, the new MOCI IPR units should be more effective and


Ministry of Information


16. (SBU) According to MOI officials, the Ministry had plans to

increase its enforcement staff to 250 in the next few years. The

Ministry of Information now has 19 team leaders with the legal

authorization to conduct search and seizures, bringing the

Ministry's number of inspectors to 120. According to statistics

provided by Abdulaziz Bu-Dastour, the recently named Supervisor in

MOI's newly formed Inspection Department the Ministry seized 675,283

items in 2009. MOI shut down 46 stores and 427 cases were referred

to prosecution.

17. (SBU) 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 2010.

Kuwaiti Municipality - Destruction of Seized Pirated Materials

18. (SBU) In October 2009, the Ministry of Information and the

Kuwaiti Municipality undertook a massive destruction operation,

transferring to the destruction site an estimated 16 million

counterfeit items accumulated by the MOI in the last ten years. It

took the Municipality more than two weeks to destroy the materials

confiscated by customs inspectors.