MICROSOFT AND SAUDI LEADERS CITE PROGRESS ON IPR

UNCLASSIFIED,FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 RIYADH 001202 SIPDIS SENSITIVE STATE FOR NEA/ARP (HARRIS, BERNDT) AND EEB/TPP/IPE DEPT PLEASE PASS TO USTR (BUNTIN) E.O. 12958: N/A TAGS: ECON, ETRD, KIPR, SA SUBJECT: Microsoft and Saudi leaders cite progress on IPR Ref: Jeddah 297 1. (SBU) Summary: The Saudi Ministry of Culture continues to make progress working through a backlog of cases of suspected copyright violators. The Ministry reports it has closed several stores for brief periods until they resolve copyright violations. It plans for the first time to refer a repeat offender to the Board of Grievances. The Ministry supports greater public relations efforts to increase awareness of IPR issues, and it is willing to work with industry on training and awareness campaigns. Meanwhile, local Microsoft representatives tell us they have seen the Saudi government show improvement in both attitude and enforcement, and they confirmed to us that one computer store has been closed for IPR violations. The company remains willing to work with Saudi ministries to provide training and increase awareness, although they still say enforcement could be stronger, including within the SAG. End summary. Microsoft exec: Saudi record on IPR has improved... --------------------------------------------- ------- 2. (SBU) On September 8, Fernando De Sousa, Microsoft's chief operating officer in Saudi Arabia, paid a farewell call on Charge Ambassador Erdman, thanking him for the Embassy's strong support on IPR issues. The Ambassador briefed De Sousa on his recent conversations with Minister of Commerce and Industry Abdullah Zainal Alireza (reftel), in which the Minister reiterated Saudi Arabia's commitment to fulfill all of its WTO commitments to protect intellectual property. The Minister had said he welcomed the interest of companies like Microsoft in supporting SAG enforcement efforts, including through training. Econ Counselor also briefed the Microsoft team on recent conversations with Assistant Deputy Culture Minister for Internal Information Abdulrahman Al-Hazzaa, who also welcomed cooperation with Microsoft and other companies on training and public awareness campaigns. 3. (SBU) Hazzaa reported that the Ministry of Culture and Information is processing the backlog of IPR enforcement cases that had been awaiting review by the violations review committee, finishing an average of 7 a week, and on track to finish reviewing all old cases by the end of September (the committee was meeting in the adjoining room while Econoffs called on Hazzaa). Hazzaa said that this will allow the committee to focus on bringing new cases from inspectors, which will help improve awareness of enforcement efforts. Hazzaa reported that, as a result of the committee's reviews, several shops have been closed with the posting of large public notices explaining why until the owners come and settle their fines with the Ministry. The point, according to Hazzaa, is to impress upon store owners that they cannot sell pirated goods with impunity. (Microsoft reps separately confirmed they are aware of one computer store having been closed down and said that closures may help stores selling legitimate software compete if enforcement is seen as more pervasive.) Hazzaa also reported that increased Ministry inspections and enforcement efforts have disrupted the ability of black market vendors to sell a range of pirated products. Econoffs have observed a reduction in the public sale of pirated software and other items, like movies, over the last year. Microsoft representatives agree that there has been some reduction in street-level sales, although they believe stores in malls continue to sell pirated software. 4. (SBU) Hazzaa also reported that the committee had found one commercial entity had engaged in so many violations that the committee has recommended, for the first time, that the case be sent to the Board of Grievances with a recommended fine of SR 100,000. He explained that the Minister of Culture and Information will have to approve this referral, and he promised to push hard for this approval, noting that this will send an important message to the Saudi public and business owners that the Ministry is serious about enforcing copyright laws. ... and the issue now is sustainment ------------------------------------ 5. (SBU) De Sousa told the Ambassador that there has been improvement in IPR copyright protection in the last several years, although he said the issue now is to make this improvement sustainable. He also stressed Microsoft's willingness to support efforts by the Ministries of Culture and Commerce to publicize enforcement efforts and assist public campaigns to raise awareness of IPR issues. 6. (SBU) Despite the improvement in the overall climate, De Souza noted that problems remain. He noted that Microsoft has discovered a software activation key licensed to the Ministry of Interior has been used in Pakistan and other south Asian countries to attempt to register product upgrades. The Ambassador suggested that Microsoft work with the Business Software Alliance and other companies to come up with a white paper listing specific problems on which it would be RIYADH 00001202 002 OF 002 useful to have greater cooperation with the SAG, including the Ministry of Interior. 7. (SBU) Comment: The Embassy will continue to work with the Ministries of Culture and Commerce and with industry representatives to foster agreement on a public relations campaign to increase awareness about IPR issues. We will also continue to support industry offers to provide training to SAG inspectors, and efforts to achieve SAG support to allow an audit of its own software to ensure it does not exceed its existing license requirements. End comment. MUENCH