MICROSOFT LEADING COLLABORATION WITH SAG TO COMBAT

C O N F I D E N T I A L RIYADH 001271

SIPDIS

STATE FOR EEB/TPP/IPE AND NEA/ARP
STATE PASS TO USTR FOR JASON BUNTIN
USDOC FOR TYLER HOFFMAN

E.O. 12958: DECL: 09/17/2017
TAGS: ECON ETRD EINV PGOV KIPR KTFN SA
SUBJECT: MICROSOFT LEADING COLLABORATION WITH SAG TO COMBAT
IPR VIOLATIONS

REF: 07 RIYADH 2437

Classified By: Political/Economic Counselor Horacio Ureta
for reasons 1.4 (b) and (d).


1. (C) Summary: Intellectual property rights (IPR)
violations in Saudi Arabia are receiving increased attention
from the Saudi government (SAG). The SAG has made
significant efforts to address IPR violations, which in the
Kingdom occur most notably in the pharmaceutical and software
sectors. With regard to software infringement, the SAG is
now collaborating directly with a Microsoft-led private
sector group, calling itself the "Rights-Holders", on a
six-point plan to combat IPR issues. This plan seeks to
ensure transparency in IPR cases, establish and enforce
deterrent penalties, and improve coordination between SAG
entities with IPR related equities. Rights-Holders is
claiming the existence of a link between IPR piracy and
terrorism finance. Intellectual property rights issues are
also being covered increasingly in the Saudi news media. End
summary.


2. (C) In a meeting August 13 EconOff met with Scott Butler
of the Raven Anti-Piracy Alliance (RAPA),a Dubai based group
that is linked to the Business Software Alliance (BSA),a
group of 13 software companies in the Kingdom which includes
Microsoft, Autodisc, Symantec, and Adobe. RAPA also has
powers of attorney with regional entertainment companies such
as Rotana and Viva and liaises between these licensees and
entertainment studios. Butler told EconOff that earlier in
the day he and Ayman Takrori, Partners Group Director for
Microsoft and de facto representative of a private group of
"Rights-Holders" (of which BSA is a part) met with Ministry
of Culture and Information Under Secretary Abdul Rahman
Al-Hazaa, who holds a mandate from Culture and Information
Minister Dr. Eyad Madani to "fix the IPR issue."


3. (C) Butler related that RAPA had presented al-Hazaa with a
six point plan to address IPR issues: 1) ensure complete
transparency in all IPR cases; 2) establish and enforce
deterrent penalties to create real fear in the market; 3)
eradicate street vendor piracy; 4) establish a mechanism to
address internet piracy; 5) ensure the SAG uses software that
was legally acquired; and 6) ensure effective coordination
between the Ministries of Culture and Information, Interior,
and Customs Enforcement. According to Butler and Takrori,
Under Secretary al-Hazaa pledged complete support from the
SAG for all points.


4. (C) The Rights-Holders's six-point plan includes fully
populating the Violations Review Committee's online
case-tracking database in both Arabic and English,
imprisoning violators in lieu of simply imposing fines (Note:
According to Butler, there is precedent legislation in the
UAE for imprisoning IPR violators. End Note.),and providing
training for inspectors and police on IPR and on how to
conduct raids. Butler also related a story of a raid
conducted in 2006 that yielded 20 million pirated music and
software CDs in a warehouse. In the same warehouse weapons
were found which led to the arrest and prosecution of several
members of an organized crime ring. Butler asserted that a
clear link exists between piracy and organized crime, to
include terrorism finance.


5. (SBU) On August 17, Al-Watan, a moderate Arabic-language
daily, published a full page story on IPR violations. In the
article both SAG officials and economists were quoted as
saying that software piracy is both more lucrative and less
risky than drug trafficking.


6. (C) Comment: The SAG has made significant progress in IPR
enforcement but continues to cite lack of capacity to justify
a dearth of major developments (Reftel). Engagement at the
ministerial level is an encouraging step and demonstrates an
increase in political will to address the problem. Ministry
of Interior (MOI) interest is crucial to further progress in
enforcement and prosecution, and would be critical to
implement any of the directives outlined in the
Rights-Holders six-point plan. Previously, MOI involvement
has been sub-optimal, but might be stimulated if a strong
link were to be substantiated between the supposedly
"victimless" crime of IPR violations and and organized crime
or even terrorism financing. End comment.
GFOELLER