VZCZCXRO5465
OO RUEHDE RUEHDH RUEHDIR
DE RUEHRH #1550/01 3270636
ZNR UUUUU ZZH
O 230636Z NOV 09
FM AMEMBASSY RIYADH
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1966
INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RUEHRC/DEPT OF AGRICULTURE WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHFJUSC/US CUSTOMS SERVICE WASHDC PRIORITY

UNCLAS SECTION 01 OF 02 RIYADH 001550 
 
SENSITIVE 
SIPDIS 
 
STATE PASS TO USTR FOR CHRIS WILSON, JASON BUNTIN 
STATE PASS TO DOC FOR STEVEN GARRETT 
DEPT FOR NEA/ARP, EB/TPP/BTA, E FOR U/S ROBERT HORMATS 
 
E.O. 12958: N/A 
TAGS: ETRD KIPR ECON EINV PREL SA
SUBJECT: POST RECOMMENDS SAUDI ARABIA BE REMOVED FROM 301 
WATCH LIST 
 
REF: A. RIYADH 524 
     ¶B. RIYADH 575 
     ¶C. RIYADH 789 
     ¶D. RIYADH 793 
     ¶E. RIYADH 982 
     ¶F. JEDDAH 297 
     ¶G. RIYADH 1202 
     ¶H. RIYADH 1366 
     ¶I. RIYADH 1375 
     ¶J. RIYADH 1423 
     ¶K. RIYADH 1425 
     ¶L. RIYADH 1426 
     ¶M. RIYADH 1441 
     ¶N. RIYADH 1459 
     ¶O. RIYADH 1493 
     ¶P. RIYADH 1543 
     ¶Q. RIYADH 1544 
 
Summary 
------- 
 
¶1. (SBU) Embassy Riyadh recommends Saudi Arabia be removed 
from the Special 301 Watch List for IPR protection during the 
2009 Out-of-Cycle Review.  As industry's submissions for the 
OCR have recognized, the Kingdom's motivated leadership on 
intellectual property protection and demonstrated significant 
progress on copyright, patent, and data protection merits 
recognition.  Removal from the list will benefit U.S. trade 
and investment interests and will reward champions in the 
Saudi government who are sincerely committed to building an 
effective IPR regime in the Kingdom.  End summary. 
 
Motivated Saudi IP team 
----------------------- 
 
¶2. (SBU) Saudi Arabia has made significant progress in 
improving its intellectual property rights (IPR) regime in 
the past year, in the areas of copyright, patent, data, and 
trademark protection, The SAG has made this progress largely 
as a result of the hard work of three officials:  Deputy 
Minister of Culture and Information Abdulrahman Al-Hazzaa; 
Deputy Minister of Commerce and Industry Abdullah Al-Hamoudi; 
and Chairman of the IPR Committee Mohammad Al-Aiyash.  SAG 
officials are focused on more than just the 301 process; they 
are motivated by the King's mandate of transforming the 
Kingdom into a knowledge-based economy which they recognize 
requires a strong IP regime.  Al-Hazzaa lamented recently 
that if Saudi Arabia is removed from the Watch List, he will 
feel "even more pressure to work hard" than if they remain on 
the Watch List. 
 
Progress on copyright protection 
-------------------------------- 
 
¶3. (SBU) In the area of copyrights, the Ministry of Culture 
and Information has conducted raids at a high and steady 
rate.  The Violations Review Committee (VRC) has tried and 
published cases, making 128 decisions in the past three 
months alone.  The Copyright Department holds weekly training 
sessions with industry, and is eager for more training.  The 
Ministry of Culture and Information now licenses imported 
satellite dishes, which should curb satellite television 
piracy.  Al-Hazzaa has promised to refer at least two 
copyright cases to the Board of Grievances with a 
recommendation for deterrent sentencing imminently (ref P). 
The Ministry is working closely with industry to increase its 
enforcement capacity and to launch a more robust awareness 
campaign in the first quarter of 2010. 
 
¶4. (SBU) On government use of legal software, the Ministry of 
Commerce and Industry and the Ministry of Culture and 
Information are drafting a proposal for the King's signature 
which will recommend that all SAG ministries conduct software 
audits to ensure they are using legal software.  The Ministry 
of Commerce and Industry is expected to complete its own 
internal software audit by the first quarter of 2010, and we 
understand the Culture Ministry has already put in place a 
system to ensure it is compliant. 
 
Increased patent and data protection 
------------------------------------ 
 
¶5. (SBU) The SAG's long-awaited implementation of the 
 
RIYADH 00001550  002 OF 002 
 
 
Exclusive Marketing Rights (EMR) agreement following its 
approval by the King has encouraged the pharmaceutical 
industry by granting transitional protection for products 
caught between the SAG's pre-2004 patent system and its new 
one (ref Q).  Although an EMR application is yet to be 
processed by King Abdulaziz City for Science and Technology 
(KACST) and the Saudi Food and Drug Authority (SFDA), the 
Chairman of the Saudi IPR Committee told Econoffs to alert 
him if any applicant experiences difficulty with the new 
process. 
 
¶6. (SBU) The SFDA, which formally opened in August, has 
repeatedly confirmed its commitment to protecting 
pharmaceutical research and development data.  PhRMA and the 
Ministry of Commerce and Industry co-hosted a workshop on 
data exclusivity in June, and are working together to plan a 
second workshop focused on implementation in the first 
quarter of 2010.  SFDA recently told the Commercial Counselor 
that they are working on a proposal to introduce jail terms 
and increase the fine to 5 million SAR for counterfeit 
medicines.  SFDA is also appointing officials at ports of 
entry to provide expertise to the Saudi Customs Authority on 
counterfeit medicine. 
 
Strongly recommend removal from 301 Watch List 
--------------------------------------------- - 
 
¶7. (SBU) The summary of all these details is that Saudi 
authorities have worked tremendously hard to meet as many of 
the specific goals we set for them last March to exit the 301 
list.  They have substantially addressed all but one, and are 
moving as quickly as the system allows to refer copyright 
violations to the Board of Grievances for deterrent 
sentencing.  Doing so has required creative precedents and 
rewiring the system.  Industry has praised Saudi progress and 
knows it is critical to build on the partnerships created at 
the cost of so much effort. 
 
¶8. (SBU) As AUSTR Chris Wilson's visit made clear, there is 
strong political will at the highest levels in the Kingdom to 
implement a robust and effective IPR regime.  Several key 
officials have worked diligently for several years to make 
continued progress and remain determined to provide promised 
protections to rights-holders.  The leadership, including the 
King, key Ministers, and the Board of Grievances, understand 
that Saudi Arabia must have an attractive climate for 
entrepreneurship and investment if it is to reach its 
ambitious goal of growing its knowledge-economy.  Although 
more work needs to be done, the leadership at the Commerce 
and Culture Ministries remain sincerely committed to 
protecting IPR and consistently seeks U.S. public and private 
sector assistance to further their efforts.  Young 
organizations like the SFDA are proudly modeled on U.S. 
institutions and are eager to be transparent, efficient 
organizations.  Post strongly recommends the Special 301 
Review Committee remove Saudi Arabia from the Watch List. 
Doing so will remove a speed bump in the Kingdom's ability to 
attract U.S. foreign direct investment -- which is in the 
interest of both countries.  Removal will also reward the 
hard work of key partners and motivate them to not only live 
up to, but surpass the 301 standard. 
 
Ambassador's Comment 
-------------------- 
 
¶9. (SBU) This cable correctly assesses Saudi Arabia's 
commitment to the protection of IP, and I fully support their 
removal from the 301 Watch List.  I would argue, however, 
that it is equally in our interest to have them removed. 
Saudi Arabia is committing massive research and development 
budgets to the development of their own technology and IP, a 
by-product of the creation of a culture that respects IP.  By 
keeping them on the 301 list, we will continue to limit 
participation by U.S. companies due to the impact of 301 on 
insurance, prohibition of technology transfers, and these 
opportunities will continue to move in the direction of our 
competitors.  The time has come to remove them from the 301 
list. 
SMITH