INTELLECTUAL PROPERTY RIGHTS (IPR) CONSULTATIVE

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 003417 SIPDIS SIPDIS STATE FOR NEA/ARP, EB, MEPI STATE PASS TO USPTO MADLIN, DPOGODA E.O. 12958: DECL: 08/26/2016 TAGS: KIPR ECON PREL AE SUBJECT: INTELLECTUAL PROPERTY RIGHTS (IPR) CONSULTATIVE TASK FORCE FORMED IN UAE TO COMBAT PIRACY PROBLEMS REF: DUBAI 03360 Classified By: CLASSIFIED BY CDA MARTIN QUINN FOR REASONS 1.4 (b)&(d) ¶1. (C) Summary: On August 19, Econoffs attended a meeting with The Arabian Anti-Piracy Alliance (AAA),the Ministry of Economy and various intellectual property industry stakeholders. The head of AAA, Scott Butler, briefed the Ministry on a variety of intellectual property rights (IPR) issues, including pirated compact discs, pay television, interactive games and business software. Abdullah Al-Saleh, U/S in the Ministry of Economy (MOE),along with Ali Al-Baloushi, Director of International Works in the MOE, represented the UAEG. Although the UAE overall has the lowest software piracy rate in the Middle East and North Africa, profit losses in the UAE due to piracy are 285 million USD each year. This negative impact on investment stunts growth and undermines local creative development and further investments, said Butler. He also noted that Dubai is more proactive in combating piracy and that Abu Dhabi needs to do more on IPR enforcement. As a result of Abu Dhabi's comparatively lax enforcement, piracy problems are actually worse in Abu Dhabi than in Dubai, and AAA urged the Ministry to crack down on the violators. Both AAA and the Ministry agreed to form a consultative task force to better educate and empower UAE officials to combat piracy throughout the UAE. End Summary. -------------- Pay Television -------------- ¶2. (C) Butler said that illegal distribution of cable television is widespread, especially in Abu Dhabi. He gave the example of a UAE company, Bond Communications, "stealing" cable from pay television providers such as Showtime and Orbit. Butler said Bond Communications contracts with pay television providers to provide cable to a certain number of subscribers, but in reality provides cable to more than the agreed number of subscribers and retains the excess profits. Previously, all of Showtime's Middle East technical operations were in the UAE. However, Showtime has recently moved some of its company positions to Egypt as a result of the growing problem of piracy in the UAE. AAA estimates a 38 million USD loss in the UAE pay television sector because of piracy concerns, the majority of which are in Abu Dhabi. -------------- Movies and Games -------------- ¶3. (U) Pirated DVD and game sales, as well as internet piracy, are also areas of major concern to AAA. The number of illegitimate outlets in Abu Dhabi selling pirated DVDs, games and consoles exceeds the number of illegal outlets in Dubai by more than fifty percent. Butler said because many pirated goods are smuggled into the country, the UAEG is losing 5 percent of the merchandise's value in import duties. SONY estimates that 80-85 percent of its PlayStation 2 software is pirated in the UAE, and further estimates that lost sales for both pirated software and consoles is 94 million USD. Although piracy rates in the UAE are the lowest in the region, game makers are losing money in the UAE due to piracy. Due to these lost profits, companies are not able to spend additional funds to modify games for the local market by translating them into Arabic. -------------- Business Software -------------- ¶4. (SBU) According to AAA, pirated business software is also a problem in the UAE, particularly in Abu Dhabi. The UAE currently has a thirty-four percent piracy rate in business software. Decreasing this rate would add 350 million USD to the economy, create 650 new jobs, and allow the internet technology sector to grow 75 percent from 2004-2009 instead of the projected 68 percent. -------------- Proposed Measures to Combat Piracy -------------- ¶5. (SBU) AAA proposed several measures that the UAEG could use to combat all types of piracy. --- Empower experts in copyright enforcement, such as Mr. Juma Alleem (a champion of IPR enforcement in Dubai),with the authority to take independent action on IPR issues. ABU DHABI 00003417 002 OF 002 --- Establish an IPR task force comprised of the Ministry of Economy, Police, Municipalities, Customs, AAA and industry stakeholders, which would meet on a regular basis. --- Train police departments, the Ministry of Interior and the Ministry of Economy on IPR crimes. --- Continue and increase investigations and prosecutions against IPR violators. --- Publicize the UAEG's actions against pirates. --- Adopt World Intellectual Property Treaties, particularly regarding internet and encryption technologies. --- Create IPR awareness and incentive programs. ¶6. (C) In addition to the above-mentioned actions, AAA wants the UAEG to conduct a government-endorsed audit of Bond Communications, which AAA will finance. The purpose of this audit is to identify the volume of illegally distributed pay television signals, with the ultimate goal of using that information to prosecute Bond. AAA has also pressed the UAEG to continue raiding piracy "hot-spots" and to begin fining business owners that allow pirates to sell fake goods in their stores. ¶7. (C) U/S Abdullah Al-Saleh agreed to set up a consultative task force that will bring together AAA, industry stakeholders, and representatives of the appropriate UAE authorities. He agreed that the group should meet "soon" so that AAA can educate the various UAE officials involved in IPR enforcement on the details of individual IPR concerns. He also said the Ministry of Economy has a difficult time combating piracy due to lack of budget for IPR programs. (Note. Previously, the Ministry of Information and Culture, dissolved in February 2006, not the Ministry of Economy, handled IPR issues. End note.) Al-Saleh said the Ministry is considering charging private stakeholders a fee in order to finance the Ministry's IPR efforts. In addition, Al-Saleh asked for IPR enforcement training. He described the programs offered by MEPI and the USPTO as highly beneficial, and hopes to have more UAE officials attend the upcoming training sessions. He also said the UAEG wants to encourage investment in the UAE and thus wants the UAE to be a "leader in the region" in combating piracy. Butler observed that the UAE is a regional leader with a very low piracy rate overall, but he noted that AAA hopes Abu Dhabi will fix its existing problems and become a better example for other countries to follow. -------------- Next Steps and Comment -------------- ¶8. (SBU) Having secured Al-Saleh's support for the idea of forming a consultative IPR task force, AAA plans to arrange individual meetings with representatives from each industry with the task force. By presenting only one issue at a time, individual stakeholders can present detailed information on piracy specific to their industry. Each stakeholder will also provide the task force with a list of objectives and a timeline for action. Butler told Econoff after the meeting that pay television will be the first stakeholder to present a specific plan of action to the IPR task force, hopefully within the next several months. Butler also said that although various stakeholders have different concerns, all stakeholders agree that anyone found guilty of IPR violations should be criminally prosecuted. ¶9. (C) Comment. Although U/S Al-Saleh supports the idea of greater IPR enforcement, the Ministry of Economy currently has neither the manpower nor the resources to effectively enforce intellectual property rights or to prosecute pirates. Other ministries -) including the Abu Dhabi Police -- have told AAA (and Emboff) that they do not consider combating piracy a priority. Thus, the greatest challenges for the U/S will be: (1) to convince other UAEG players of the importance of combating piracy and (2) to empower them with the authority to do so. QUINN