VZCZCXRO8894
PP RUEHDE RUEHDH RUEHDIR
DE RUEHRH #1366/01 2861825
ZNR UUUUU ZZH
P 131825Z OCT 09
FM AMEMBASSY RIYADH
TO RUEHC/SECSTATE WASHDC PRIORITY 1703
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 RIYADH 001366 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO USTR FOR JASON BUNTIN, CHRIS WILSON 
USDOC FOR STEVEN GARRETT 
DEPT FOR NEA/ARP 
 
E.O. 12958: N/A 
TAGS: ECON EINV ETRD KIPR PREL SA
SUBJECT: SAUDI PROGRESS ON IPR AND TRADE ISSUES 
 
REF: A. 09 RIYADH 524 
     ¶B. 09 RIYADH 575 
     ¶C. 09 RIYADH 789 
     ¶D. 09 RIYADH 793 
     ¶E. 09 RIYADH 982 
     ¶F. 09 JEDDAH 297 
     ¶G. 09 RIYADH 1202 
 
Summary 
------- 
 
¶1. (SBU) Saudi government officials and industry 
representatives have recently reported that the Saudi 
Government has made significant progress on outstanding trade 
and intellectual property rights (IPR) enforcement issues 
since the U.S.-Saudi Arabia IPR Working Group held its first 
meeting March 4-6 in Washington, DC.  On patents, the Saudi 
Food and Drug Authority is now up and running, and has 
assumed the pharmaceutical market oversight functions from 
the Ministry of Health. The King recently approved a Royal 
Decree to implement the exclusive marketing rights proposal 
for pharmaceutical products (septel).  On copyright issues, 
Saudi authorities continue to conduct raids and levy fines. 
They are looking for industry assistance to increase seizures 
and expand transparency on legal actions.  On trade, the 
Saudis submitted a new notification of the  Gulf Cooperation 
Council (GCC) customs union to the World Trade Organization 
(WTO) in fulfillment of its WTO obligations.  Copyright and 
data exclusivity protection issues remain, although Saudi 
Government authorities remain committed to expanding 
protections and improving the investment climate. 
 
Industry lauds Saudi progress on copyright enforcement... 
--------------------------------------------- ------------ 
 
¶2. (SBU) Local industry representatives, including Microsoft 
and the Arab Anti-Piracy Alliance (AAA), lauded the 
developments in copyright protection over the past year. 
They singled out for praise the "outstanding" efforts of 
Deputy Minister of Culture and Information Al-Hazzaa, thanks 
to which, AAA investigators can "raid at will."  They 
highlighted several positive developments at the Ministry of 
Commerce and Industry (MOCI), including: setting up the MOCI 
website, which gives the public more information about 
seizures and investigations than before; establishing a 
committee within the Riyadh Police which has raided pirates; 
blocking web sites that distribute pirated material; MOCI 
sending warning letters to four selected compounds, directing 
them to cease broadcasting pirated cable programs; MOCI 
sending a letter to the Customs authority requesting that 
they block decoder boxes that circumvent / encryption 
technologies; and conducting a massive crackdown against 
street vendor piracy. 
 
...And suggested areas for improvement 
-------------------------------------- 
 
¶3. (SBU) Industry representatives outlined copyright holders' 
priority areas for improvement, which AAA also provided in a 
January 8 letter to Al-Hazzaa.  AAA emphasized that the 
largest single issue affecting all stakeholders is the 
absence of fear of prosecution in the market.  Industry 
thinks an important part of the problem is the lack of 
deterrent sentencing, namely imprisonment.  Saudi Arabia has 
yet to sentence a single pirate to prison, although industry 
has cited some examples of multiple offenders that could 
serve as good examples for punishment.  Al-Hazzaa told 
EconCouns on October 13 that the Violations Review Committee 
had imposed the maximum allowed fine (SR 100,000, or $26,700) 
on two repeat offenders.  The Business Software Alliance and 
Microsoft believe that greater transparency on the MOCI 
website would also help illustrate the dangers of getting 
caught.  Industry would also like to see more progress on the 
processing of internet piracy cases; the illegal use of 
encrypted satellite signals; and greater police support for 
raids in Jeddah and Dammam.  Microsoft would like Saudi 
ministers to be more active in conducting audits to ensure 
they are not using illegal software.  Al-Hazzaa is open to 
cooperation with industry, but in some cases needs material 
assistance to address specific concerns (e.g., improving the 
web site). 
 
Saudi IPR Committee Progress 
---------------------------- 
 
¶4. (SBU) Mohammad Al-Aiyash, the head of the Saudi IPR 
Committee at the Ministry of Commerce and Industry, told 
EconCouns October 12 that the Committee continued to meet 
 
RIYADH 00001366  002 OF 002 
 
 
regularly and make progress on IPR enforcement in the 
Kingdom.  Deputy Minister of Culture and Information 
Al-Hazzaa told EconCouns recently that he had set a goal to 
clear the backlog of cases in the Violations Review Committee 
(VRC) by the end of September, while continuing to raid 
suspected pirates (ref G).  Al-Hazzaa reported on October 13 
that the VRC has reviewed hundreds of cases, and posted 
information on the web site about their disposition.  Between 
February and August, MOCI conducted 3,433 raids, a number he 
promised to update during the upcoming visit of A/USTR 
Wilson.  The Ministry of Commerce also continues to hold 
weekly copyright seminars with the private sector. 
 
¶5. (SBU) Al-Aiyash said that the Ministry of Commerce and 
Industry had selected a firm, and begun an audit of the 
Ministry,s software to assess how much was properly licensed 
or purchased.  He said the Ministry would evaluate the report 
when it was complete.  In the likely event it was useful, the 
Ministry will encourage other Saudi Government agencies to 
follow its example. 
 
Exclusive Marketing Rights and Data Exclusivity 
--------------------------------------------- -- 
 
¶6. (SBU) IPR Committee chair Mohammad Al-Aiyash stated that 
King Abdullah approved the Royal Decree concerning the 
Exclusive Marketing Rights (EMR) Proposal first put forth by 
the USTR in 2007.  The EMR agreement is formally in effect 
now that the Royal Decree has been issued, which directs the 
Directorate of Industrial Property at the King Abdulaziz City 
for Science and Technology (KACST) to provide protection to 
those drugs registered before the implementation of the new 
Saudi patent systems. 
 
 
¶7. (SBU) In a meeting with EconCouns, the Vice President of 
Saudi Food and Drug Authority's (SFDA) Drug Affairs Professor 
Saleh Bawazir said it was SFDA's responsibility to uphold 
data exclusivity laws (Note:  The SAG successfully moved 
pharmaceutical licensing from the Ministry of Health to the 
Saudi Food and Drug Administration in August.  End note). 
Bawazir said that license applicants would be able to file 
for registration online, emphasizing that the SFDA wants to 
make it easier for companies to submit their data files. 
Drugs are now registered within 24 hours, he said, a dramatic 
improvement over once lengthy registration times.  To address 
outstanding data protection issues, PhRMA is organizing a 
second workshop on November 10 (tentative) during the visit 
of the U.S. IP working group.  This event builds on the June 
16-17 workshop on Data Exclusivity, which was organized by 
the Commerce Ministry and PhRMA to clarify for Saudi 
officials the meaning and enforcement requirements of data 
exclusivity rights.  The initial seminar was very useful in 
explaining the difference between patent rights and data 
exclusivity rights.  Saudi officials expect the follow on 
seminar will be equally useful in sharpening Saudi officials 
understanding, and ability to enforce the regulations. 
 
GCC Customs Union Notification 
------------------------------ 
 
¶8. (SBU) Saudi Arabia sent a new notification of the GCC 
Customs Union to the WTO on October 12 at the WTO Committee 
on Trade and Development meeting in Geneva.  Saudi Arabia, as 
a GCC member state, made explicit commitments in their WTO 
accession to comply with the notification requirements under 
GATT Article XXIV.  Saudi Arabia correctly notified the 
Customs Union in 2006, but subsequently changed the 
notification without explanation in March 2008.  Saudi Arabia 
is now upholding its WTO commitments with the new 
notification. 
ZIADEH