SCENE SETTER FOR A/USTR CHRIS WILSON VISIT

UNCLAS SECTION 01 OF 02 RIYADH 001375 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: ETRD KIPR ECON EINV PREL SA SUBJECT: SCENE SETTER FOR A/USTR CHRIS WILSON VISIT REF: RIYADH 524 RIYADH 575 RIYADH 789 RIYADH 793 RIYADH 982 JEDDAH 297 RIYADH 1202 RIYADH 1366 ¶1. (SBU) Summary: Saudi Arabia has made significant progress on improving the climate to protect intellectual property rights in the last several years. It has done so through the commitment of the reformist King, sustained hard work by dedicated staff, and the conjunction of committed senior leaders in key ministries like the Ministries of Commerce and Industry, and Culture and Information. There is still piracy in Saudi Arabia, and the government can - and should - do more. However, your trip offers a good opportunity for Saudi Arabia to demonstrate the significant progress it has made on long-standing problems. Your visit is also an opportunity to cement a broader IPR partnership that will help Saudi Arabia realize its ambition to become a leader in the Middle East in a new high tech economy. End summary. ¶2. (SBU) As local industry representatives report, Saudi Arabia has made significant progress on several fronts in improving the protection of intellectual property rights. On copyrights, the Ministry of Culture and Information has sustained a strong partnership with industry to disrupt street markets for illegal movies, cds and computer software. The Ministry has conducted thousands of raids and seizures, and reports it has closed a large number of stores. More importantly, it has set up a web site to publicize these activities, for the first time naming and shaming stores that engage in this activity. MOCI acknowledges it needs to do more. One of the key goals it has for your trip is to agree with industry on specific steps that will help the Ministry increase the number of MOCI officials and beat cops dedicated to IPR enforcement and cataloguing seizures, as well as provide training to identify and shut down internet pirate sites. MOCI also wants help to improve its web site to raise public awareness. ¶3. (SBU) Saudi Arabia has also made significant strides in improving its patent protection. In just two years, the Saudi Food and Drug Authority (SFDA) stood up, taking over management of the medical devices and pharmaceutical sectors from the Ministry of Health. The change is truly remarkable, as demonstrated by its modern, well-lit office space which is open and welcoming to customers and companies. They have modernized the application process from paper to electronic, which allows them both to be more transparent and to process applications for product registration in days and weeks rather than months. They have worked closely with King Abdulaziz City for Science and Technology (KACST) partners to put into place protections for data exclusivity that they believe will help patch the holes until a complete Saudi patent system is available. Saudi Arabia just filled one of these important holes with the King's approval of a decree granting exclusive marketing rights to products registered before 2004, an action that will safeguard millions in revenues for U.S. firms. ¶4. (SBU) Industry is very complimentary of the attitude of Saudi ministries, ranging from MOCI to Commerce to the Saudi FDA. Key personnel - most of whom have American education and understand why improved IPR is important both for us and for Saudi Arabia's future - are now in senior government roles. These officials have dedicated considerable efforts to overcome suspicions and lack of understanding within the government, pass regulations and laws that would comply with WTO obligations and the standards we want to see, as well as begin to change the situation in malls and on the street. These officials have worked for a long time to improve the situation on the ground, and view your visit as a key opportunity to benchmark their performance. ¶5. (SBU) Saudi Arabia, as decreed by the King, is staking a significant bet on developing a high tech economy to meet its long-term development needs, diversifying beyond oil over the next 30 years. The country faces significant challenges - beginning with the need to double the number of existing jobs over the next decade to keep the unemployment rate at its current 10 percent. The King understands his country's future rests on the ability to develop an economy beyond petrochemicals. Saudi Arabia would very much like to develop its IPR economy, ranging from the outer edges of science to medicine. This is not a passing fancy, but a serious commitment, as demonstrated by the King's decision to dedicate more than $10 billion of his own money to create The King Abdullah University for Science and Technology (KAUST). Your partners in the concerned Saudi ministries understand the vision, but have to try to achieve it with limited budgets for staff, language barriers, and a large number of competing priorities. RIYADH 00001375 002 OF 002 ¶6. (SBU) Your commitment not just to visit Riyadh, but spend several days is a very important gesture that your Saudi hosts will deeply appreciate. We recommend that you use your trip to work with Saudi officials to begin to chart the roadmap for a post-301 future. Your partners in the SAG are eager to move beyond the framework of the 301 process to a more positive discussion of how we can best collaborate to create the climate the King believes is necessary to meet the country's development challenges. ZIADEH