Kuwaiti companies call for concerted counterfeit crackdown

Although they acknowledged the initial steps that have been taken by the government to reduce piracy, they highlighted the need for further action to make a significant impact in the market, and agreed to collaborate in a bid to ask authorities to step up their enforcement activity. The piracy of motion pictures, books and business software alone are estimated to have cost the Kuwaiti economy millions in lost revenues last year.

KIPCO, one of the Middle East's largest investment holding companies, has frequently had its business constrained by piracy and has had to put more than one investment plan on hold because of it. The company, which owns the Showtime satellite TV network as well as Gulf Net and other information technology companies has identified piracy as a major deterrent for investment in the region, and limiting factor for the economic development of Kuwait.

"The Kuwaiti government has taken many steps to address this problem," commented Ahmad Al Ajeel, Vice President, Marketing at KIPCO, "Through the ratifying of international agreements and setting up task forces between the different authorities, the government has laid down the framework for real action against piracy. Yet, we are far from reaching international levels of copyright protection, and a lot more enforcement is needed to fight piracy efficiently. This means that the business community will remain hesitant about investing in many domains. We call on the government to prioritize this issue. Kuwait benefits from a young and educated population that has continued to prove its creativity, but it does need support from its government to grow and thrive".

Illegal operators in Kuwait redistribute pay TV signals without authorization from the rights holder, which is a blatant copyright infringement and a misappropriation of on-air content. Using a "Direct To Home" smart card, they collect monthly fees by rerouting illegal cables to neighboring buildings, thus taking away income from the legal channels and supplying low quality, unreliable TV viewing to consumers.

On the other hand, the software industry remains one of the market sectors most sensitive to intellectual property infringements. Although piracy dropped in recent years, it currently still stands at 76% in Kuwait. The most common forms of piracy are hard disk loading, where reseller load unlicensed software applications onto newly purchased PCs, and counterfeiting where illegal CDs are sold directly to the consumer. Software development companies also recently identified internet piracy as a new threat, with millions of sites selling illegal software on the world wide web.

"The development and survival of a viable software industry is difficult in Kuwait at this point," commented Tarek Al Marzouk, General Manager, Al Marzouk Software. "For example, our company has developed many products over the years, which were all pirated. Had our intellectual property been protected, our company would have grown much faster, we would have been able to invest more in research and we might have created hundreds of jobs for young Kuwaitis. As it stands today, software development is not a viable business option, simply because of piracy. There is demand for software products, but how can we sustain our business if our software is sold by the hundreds on counterfeit CDs in the street? We do thank the government for its action against this phenomenon, but a lot more needs to be done"

Other industries have also suffered: the International Video Center which has bought video retail rights to all Kuwaiti plays has also seen its business threatened by illegal video copying.

"We strongly believe in the creativity and the potential of the Kuwaiti theater," said Hussam Shehadeh, Managing Director, International Video Center "We invested heavily to buy video rights for Kuwaiti theater plays, yet this investment has not yielded real results because of piracy. Not only does this affect our business, but it also discourages theater producers and writers to carry on with their creative mission."

Pirate movie CDs are predominately produced in Asian countries and smuggled into Kuwait. They are stored in a centralized location and distributed to young children who, in turn, sell them on street corners to passers by.

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