IPR LETTER TO KUWAITI CROWN PRINCE

UNCLAS SECTION 01 OF 02 KUWAIT 001989

SIPDIS

DEPT PASS USTR FOR C. NOVELLI
DEPT PASS USTR FOR J. BUNTIN

E.O. 12958: N/A
TAGS: KIPR ETRD KU USTR
SUBJECT: IPR LETTER TO KUWAITI CROWN PRINCE

REF: A. KUWAIT 01911


B. STATE 123166

This is an action request for the office of the US Trade
Representative (USTR). See para 1.


1. SUMMARY AND ACTION REQUEST. Post plans to use the release
of the Special 301 report to make a new push for intellectual
property rights (IPR) reform in Kuwait later this month (Ref
A). Per email exchanges to USTR, post requests a letter from
US Trade Representative Robert Zoellick to Kuwaiti Crown
Prince Shaykh Saad Al-Abdallah Al-Sabah, which incorporates
talking points aimed at improving Kuwait's IPR protection and
enforcement efforts in the coming year (Ref B). A draft text
of the letter is contained in para 2. Post hopes to receive
a response to this draft at USTR's earliest convenience. In
addition to delivering this letter to the Crown Prince, the
Ambassador plans to use the letter as a starting point for
discussions during upcoming meetings with other key GOK
officials. END SUMMARY AND ACTION REQUEST.


2. Text of the letter:

Your Highness:

I first wish to extend my government's deep appreciation for
the indispensable assistance Kuwait has provided throughout
the liberation of Iraq. Your government's cooperation and
commitment to this effort has been truly commendable.

I would now like to turn your attention to another matter of
mutual concern. On May 1, I made a worldwide announcement of
the results of the 2003 "Special 301" annual review. This
report examines in detail the adequacy and effectiveness of
the efforts made by our international trading partners to
protect intellectual property rights, such as trademarks,
copyrights and patents.

As you may know, Kuwait was again place on the Watch List, as
a country of particular concern for insufficient protection
of intellectual property. Copyright violations continue to
pose the most serious problem in Kuwait, where the rate of
piracy remains the highest in the Gulf region. According to
industry estimates, 95 percent of motion pictures and 64
percent of records and music sold in Kuwait are illegally
pirated copies.

These figures have grown so far out of any reasonable
proportion that they are tarnishing Kuwait's image to
international investors. Companies such as Microsoft, AOL
Time Warner and Disney have been placing the center of their
Middle East operations in the United Arab Emirates, rather
than Kuwait, resulting in large losses of revenue now and in
the future for your country. As a prime example, Showtime
recently signed a 10-year deal worth millions of dollars with
the Dubai Investment Authority.

This problem also threatens to create unnecessary strains in
our bilateral relations. Last year alone the motion picture
industry estimated that it lost approximately USD 10 million
in Kuwait, while the music industry lost an additional USD
3.4 million from sales of illegally sold products. As the
majority of those films and records are owned by American
production companies or created by American artists, Kuwaiti
vendors of pirated goods are in essence stealing U.S.
property.

The purpose of the Special 301 report is not to condemn but
rather to highlight and resolve problems. The U.S.
Government would like nothing better than to see Kuwait
removed from the Watch List. Toward this end, we stand ready
to assist you in meeting your international obligations and
are willing to explore opportunities for potential technical
assistance and expert training on improving IPR enforcement
and protection.

We must, however, see Kuwait begin to intensify the depth and
breadth of its efforts. Steps that need to be taken as soon
as possible include the following:

-- Making a public declaration at the highest level that
copyright piracy in Kuwait will not be tolerated.

-- Introducing and passing the long-promised amendments
necessary to make copyright law fully consistent with the
provisions of the World Trade Organization (WTO) TRIPs
Agreement.

-- Undertaking a far more stringent and effective
intellectual property enforcement campaign, including
launching serious investigations of large-scale producers and
distributors of illegal goods, increasing penalties for
offenders, and publicizing results of the court cases as a
deterrent to future crimes.
To be effective, the police force must be incorporated into
this process, making regular arrests of all violators. These
include the young street vendors, who sell pirated copies of
CDs and DVDs throughout Kuwait, to the high-level importers
and manufacturers of illegal goods. Experience has shown in
countries like the United Arab Emirates and Saudi Arabia,
where copyright piracy once posed rampant problems, that
great strides can be made once the police are directed to
take proper action.

In today's information and technology based global economy,
intellectual property rights industries have become the
growth industry of the 21st Century. Those countries that do
not actively pursue and protect these intellectual property
rights and associated companies are essentially closing the
door on a wealth of economic potential.

In the interest of both of our countries, we would like to
renew our cooperation with you on this important front and
see that Kuwait joins the list of countries well respected
for its protection of intellectual property rights.

Sincerely,

Robert B. Zoellick
U.S. Trade Representative
URBANCIC