INDUSTRY GROUP HAS MIXED FEELINGS ON SPECIAL 301

C O N F I D E N T I A L RIYADH 000030 SIPDIS STATE FOR NEA/ARP AND EEB STATE PASS TO USTR FOR JASON BUNTIN USDOC FOR TYLER HOFFMAN E.O. 12958: DECL: 09/17/2017 TAGS: ECON ETRD EINV KIPR PREL SA SUBJECT: INDUSTRY GROUP HAS MIXED FEELINGS ON SPECIAL 301 REF: A. RIYADH 1870 ¶B. RIYADH 1271 Classified By: Deputy Chief of Mission David Rundell for reasons 1.4 (b ) and (d). ¶1. (C) Summary: Although the International Intellectual Property Alliance (IIPA) is preparing to recommend that Saudi Arabia be placed on the Special 301 Priority Watchlist, representatives in Riyadh said they feel "handcuffed" into this recommendation, and would prefer to recommend a more favorable rating. Saudi Arabia is currently on the Watchlist, and SAG officials have communicated a strong desire to be removed. In 2008, IIPA recommended to USTR that Saudi Arabia be downgraded to the Priority Watchlist. Econoff met with IIPA representatives who revealed the group's intention to make the same recommendation in 2009 claiming little tangible progress made since last year. However, as the SAG has gained momentum and motivation to combat IPR violations in recent months, IIPA fears that a negative recommendation, while "required" under their methodology, will do more harm than good. End Summary. ¶2. (C) On December 28, Econoff met with Scott Butler, CEO of the Arab Anti-Piracy Alliance (AAA),and Ayman Takrori, Partners Group Director for Microsoft Arabia. Butler is the de facto regional representative for the International Intellectual Property Alliance (IIPA) which is a private sector coalition formed to represent U.S. copyrights-based industries in USG efforts to improve international protection of copyrighted materials. Saudi Arabia has been on the Special 301 Watchlist for several years. In 2008, the IIPA recommended that the Kingdom be downgraded to the Priority Watch List. ¶3. (C) In recent months, Post, AAA and IIPA have successfully engaged a senior SAG official, Abdul Rahman Al-Hazzaa, Deputy Minister for Internal Information at the Ministry or Culture and Information. Al-Hazzaa has demonstrated a strong commitment to improving IPR protection and enforcement in the Kingdom, and has already mobilized his employees to work on legislation and raids on street vendors (ref A). Butler said his concern was that given no observable improvements, IIPA would be "handcuffed into making the Priority Watchlist recommendation." He said IIPA wants to support al-Hazzaa's positive efforts and does not want him to fail nor does it want to be perceived as punishing Saudi Arabia when the Kingdom is beginning to make forward strides towards combating piracy. ¶4. (C) Butler said IIPA is looking for ways to positively reinforce SAG efforts while still maintaining its institutionalized standards. To that end, he described to Econoff an action plan that, in IIPA's view, might result in a better ranking for Saudi Arabia. According to Butler, if the SAG took action against street vendors and fully populated the website of ongoing cases maintained by the Ministry of Culture and Information (MOCI) (ref B),the IIPA would be prepared to offer a recommendation that Saudi Arabia remain on the Watchlist. He claimed that if Saudi Arabia took specific additional steps (prosecute IPR violations, enforce severe deterrent penalties for piracy, conduct a public awareness campaign, and decrease SAG use of unlicensed software),IIPA would recommend that USTR remove Saudi Arabia from the Watchlist entirely. ¶5. (C) Comment: In the past several months IIPA officials and the SAG have begun to see eye-to-eye regarding IPR enforcement. IIPA acknowledges that the Saudi bureaucracy inherently impedes progress; however, in spite of this and other limitations, progress is being made, and we judge that the more collaborative approach that IIPA is considering may work if the Saudis are informed of the IIPA's new long-term vision. Nevertheless, the SAG certainly knows that IIPA's recommendation is only one of many that the USG considers. End comment. FRAKER