US embassy cable - 04ABUDHABI490

C O N F I D E N T I A L SECTION 01 OF 04 ABU DHABI 000490 
 
SIPDIS 
 
STATE FOR NEA/ARP, NEA/PPR AND EB/IPC FOR WILSON 
STATE PASS USTR - PECK AND BUNTIN 
STATE PASS LOC - STEPP 
USDOC FOR USPTO - URBAN, LASHLEY-JOHNSON 
USDOC FOR KSCHLEGELMILCH 
 
E.O. 12958: DECL: 02/23/09 
TAGS: PREL, KIPR, ETRD, TC 
SUBJECT:  EMBASSY ABU DHABI COMMENTS ON DRAFT 2004 SPECIAL 
301 REVIEW 
 
REFS: A) STATE 29549 
      B) ABU DHABI 403 
      C) ABU DHABI 91 
      D) 03 ABU DHABI 4594 
      E) 03 ABU DHABI 2981 
      F) 03 ABU DHABI 1028 
      G) 03 ABU DHABI 144 
 
1.  (U) Classified by Ambassador Marcelle M. Wahba for 
reasons 1.5 (b) and (d). 
 
2.  (SBU) Summary and comment: The UAE Government continues 
to take the leading role in protecting intellectual 
property rights (IPR) in the region.  Anecdotal and 
statistical evidence confirms that the UAEG is enforcing 
copyright, trademark and patent laws passed in 2002 to 
protect U.S. intellectual property, and continues to 
demonstrate its commitment to the 2002 agreement providing 
TRIPs-plus levels of protection to U.S. pharmaceuticals. 
 
3.  (SBU) Summary and comment continued: According to 
figures collected by the Business Software Alliance, the 
UAEG has dramatically trimmed the incidence of software 
piracy from 86 percent in 1994 to 36 percent in 2002  he 
lowest incidence of software piracy in the region.  The 
Arabian Anti-Piracy Alliance likewise has noted that, "The 
UAE authorities have taken concrete and tough measures to 
enforce intellectual property rights by introducing laws 
that prescribe stiff penalties for violators." 
 
4.  (SBU) Summary and comment continued: Additionally, the 
UAE has undertaken a massive public relations and 
enforcement effort against counterfeiting and routinely 
destroys copy-cat goods in large public events.  UAE 
authorities cooperate closely with U.S. businesses to 
prevent the trade of counterfeited goods.  Based on its 
solid record on IPR protection and enforcement of IPR 
legislation in 2003, we strongly recommend that the UAE 
remain off the Special 301 Watchlist again this year.  End 
summary and comment. 
 
-------------------------------------- 
UAEG "Beefing Up" 2002 IPR Legislation 
-------------------------------------- 
 
5.  (U) In 2003, the UAEG sought to expand the scope of, 
and issue amendments to, the landmark copyright, trademark 
and patent laws issued in 2002 in harmony with 
international standards and exceeding the UAE's TRIPs 
obligations.  Most notably, the UAE Ministry of Information 
said it would issue regulations under the 2002 Copyright 
Law allowing for specialized collecting societies.  These 
societies are a practical way for sound recording companies 
to collect royalties on the broadcast and performance of 
copyrighted material. The Ministry of Information is 
actively implementing regulations with the Ministry of 
Justice.  We expect the UAEG to release the new regulations 
by mid-2004, at the latest (ref B). 
 
6.  (U) In Dubai, the Ruler's Office currently is reviewing 
an amendment to the 2002 Electronic Transactions and 
Commerce Law (ETCL) that addresses data protection and 
privacy and other IP-related issues.  The ETCL was issued 
in 2002, and is modeled on the UNCITRAL Model Law on 
Electronic Commerce adopted by the United Nations.  A 
similar federal law is under consideration by the UAE 
Ministry of Justice that would address copyright violations 
on the Internet and covers all aspects of e-transactions 
and online activities, including privacy and data 
protection. 
 
--------------------------------------------- ------- 
Sustained Patent Protection For U.S. Pharmaceuticals 
--------------------------------------------- ------- 
 
7.  (SBU) The UAE Ministry of Health (MoH) issued a 
circular in October 2003 strengthening the UAE's 2002 
Patent Law, which failed to provide a mechanism for 
granting exclusive marketing rights absent MoH-Ministry of 
Finance (MoF) cooperation or afford any protection of data 
secrecy.  The circular stated the mechanism of granting 
exclusive marketing rights in the UAE for all innovative 
pharmaceutical products registered in other countries.  The 
circular also implied that the MoH would coordinate with 
the MoF to approve exclusive marketing rights, and offer 
protection for data secrecy.  The circular was a welcome 
development for U.S. pharmaceutical manufactures that have 
sought to codify the prevailing practice under the terms of 
the patent protection agreement reached with U.S. 
pharmaceutical industry group, PhRMA in March 2002 (ref D). 
 
8.  (C) Embodied in the March 2002 agreement, the written 
assurances of the MoH and MoF to ensure that no/no 
unauthorized copies of U.S. patent-protected medicines 
would be registered in the UAE is still holding firm and, 
in fact, the UAE has even refused to register copies during 
the last year of the 18 innovative pharmaceutical products 
that PhRMA agreed to allow local firm Julphar to produce in 
order to secure that agreement.  According to the MoH 
Central Drugs Control Department, Emirati authorities 
destroyed more than 4 million pharmaceutical items in 2002 
that violated IPR laws and were deemed "banned items." 
 
9.  (SBU) In 2003, the UAEG acted swiftly when U.S. 
pharmaceutical manufacturers evidenced patent infringement 
in the local market.  Such incidents were infrequent, and 
often resulted from a fundamental misunderstanding of the 
March 2002 agreement at the UAEG working level.  Most 
recently, Pfizer claimed that a local pharmaceutical 
manufacturer was illegally marketing Pfizer's registered 
version of Viagra in the UAE.  When confronted with the 
evidence, the MoH agreed to delay the local manufacturer's 
marketing rights until 2005, and undertook to cancel 
Julphar's manufacturing privileges in the UAE if Pfizer 
could demonstrate that Viagra was still under patent 
protection in the United States (ref C). 
 
----------------------------------------- 
Continuing Crackdown On Counterfeit Goods 
----------------------------------------- 
 
10.  (U) The UAE authorities are well aware of the danger 
to legitimate commerce posed by counterfeiting, 
particularly of safety-related items such as locks, 
automobile spare parts and food items.  The government has 
conducted a public awareness campaign warning consumers of 
the dangers of buying fake products, and industry also has 
been active in this respect.  A few examples include: 
 
-- The Gulf News reported that Dubai Police confiscated and 
destroyed more than 1,000 boxes of counterfeit Yale and 
Union locks in June 2003, and arrested three resellers of 
the counterfeit goods. 
 
-- The Dubai Chamber of Commerce established a Fake Parts 
Committee, in partnership with local auto-industry 
representatives including General Motors (GM), AC Delco, 
and Daimler Chrysler.  A local GM official recently told 
Embassy officers that the company was pleased with the 
cooperation it has received from the UAEG, which recently 
seized more than USD $1.4 million in counterfeit GM parts. 
He added that he would not/not support other private sector 
efforts to add the UAE to the Special 301 Watchlist. 
 
-- In June 2003, manufacturers of the Austrian energy 
drink, Red Bull, won a trademark infringement lawsuit 
against a prominent local importer for selling a competitor 
product, called "Bullfighter."  UAE courts decided that the 
importer attempted to capitalize on Red Bull's reputation 
and fined the importer AED 15,000 (USD $4,087).  Red Bull 
is a registered trademark in the UAE. 
 
11.  (U) Regular articles in the local dailies of raids and 
arrests of counterfeiters indicate that the authorities 
take seriously their responsibility to reduce the trade of 
other counterfeit consumer products, as well.  Penalties 
for IPR violations include destruction of the counterfeit 
goods, destruction of the counterfeiting equipment, fines, 
imprisonment, and publication of judgment.  Under the new 
Copyright Law of 2002, counterfeiters may face two to nine 
months imprisonment and a fine ranging from USD $2,700 to 
$55,000.  The penalty is doubled for repeat offenders 
according to the number of copyrights violated.  The 
following are a few recent examples: 
 
-- In early 2003, the Dubai Public Prosecution charged a 
local company with software piracy for using one copy of 
Microsoft Windows, and downloading the program onto more 
than one computer without the written permission of 
Microsoft.  The company's license specified the use of the 
program on only one computer.  The Dubai Court of Appeal 
eventually confiscated the seized hardware and software and 
ordered the accused to pay AED 25,000 (USD $6,811). 
 
-- Local press reported in April 2003 that Dubai Police 
seized 87,000 counterfeit cameras brought to Dubai from an 
Asian country.  Police received a tip-off that the cameras 
were stored in a warehouse, and arrested the owner. 
 
-- The Ministry of Information and Dubai Economic 
Development Department recently began a crackdown against 
street vendors of pirated CDs and DVDs.  According to the 
Economic Development Department, inspectors are permanently 
stationed at some of the market areas where such vendors 
congregate. 
 
-- Following a complaint filed on behalf of the trademark 
right holder, the Dubai Public Prosecutor brought charges 
against an individual in August 2003 for the possession and 
intention to sell 17 boxes of a perfume bearing a 
counterfeit famous trademark.  The Court ordered the 
accused to serve a 2-months jail term followed by 
deportation and ordered the seized goods to be confiscated. 
 
-- In November 2003, Dubai authorities destroyed more than 
400,000 fake watches in public, and forced the 
counterfeiters to witness the demolition.  The event 
received coverage in the international 'Financial Times' 
newspaper, with a picture of the bulldozer at work. 
 
--------------------------------------------- --- 
Anti-Counterfeiting Efforts Not Limited To Dubai 
--------------------------------------------- --- 
 
12.  (SBU) Although most anecdotal evidence of counterfeit 
trade centers in Dubai (indeed, most of the UAE's licit 
trade is via the emirate of Dubai), conversations with UAEG 
officials and news reports suggest that the other emirates 
are replicating Dubai's efforts to enforce federal IPR 
legislation. 
 
-- In a February 29 meeting with the U.S. Consul General, 
Ruler of Sharjah Shaykh Sultan Al-Qassimi acknowledged the 
counterfeiting problem in the emirate and undertook to 
better enforce federal IPR legislation.  He understands 
that Sharjah law enforcement must not only confiscate 
counterfeit goods, but also must vigorously arrest and 
prosecute IPR violators.  The Ruler designated an official 
from the Sharjah Economic Department to formulate an anti- 
counterfeiting campaign, in consultation with the U.S. 
Mission and industry representatives. 
 
-- According to the Khaleej Times, Sharjah Police raided a 
retail computer store in February 2003, and seized a number 
of PCs loaded with pirated software.  The police also 
seized 81 CDs containing copies of pirated software. 
 
-- Abu Dhabi authorities recently raided a number of 
companies for using pirated software, and police arrested 
five people and seized nine PCs.  The computers were loaded 
with illicit copies of Microsoft Windows Office, Norton 
AntiVirus and 28 other pirated software programs.  The UAEG 
has undertaken a massive public relations campaign with the 
Business Software Alliance targeting computer end-users and 
raising awareness about the negative effects of using 
pirated software. 
 
-- UAEG officials recently told Embassy officers that they 
are stepping up efforts to combat the trade of counterfeit 
goods across the porous Oman-UAE border near the city of 
Al-Ain.  The Director of the UAE's Copyright Office said 
that he has asked his Omani counterparts to better enforce 
IPR legislation on their side of the border, but the Omani 
authorities have been slow to act (ref B). 
 
-- UAE authorities have asked employers to educate their 
workers about the legal risks of counterfeiting in an 
effort to stem video piracy in certain blue-collar 
neighborhoods outside of Abu Dhabi.  Employers have posted 
signs warning workers that the company will take legal 
action against workers involved in counterfeiting. 
According to Abu Dhabi police, this campaign has resulted 
in the imprisonment and deportation of dozens of 
counterfeiters in these neighborhoods. 
 
-- Local merchants in Abu Dhabi have formed a committee to 
strategize with Abu Dhabi law enforcement on ways to combat 
video piracy.  The UAEG is cracking down on counterfeiters 
in response to complaints by movie distributors, video 
store owners, and local cinemas (ref F). 
 
----------------------------------------- 
Ensuring IPR Protection For The Long-Term 
----------------------------------------- 
 
13.  (U) The UAE Government is examining ways to further 
reduce the flow of counterfeit products and trademark 
infringement in the country.  To this end, the National 
Anti-Fraud Committee was established in 2001 under the 
aegis of the Ministry of Economy and Commerce.  The 
Committee's scope of responsibility was broadened in 2002 
to allow for the study of commercial fraud and counterfeit 
and imitation trademarks, and requires that the Committee 
propose combating measures on an annual basis. 
 
14.  (U) In March 2003, Dubai hosted a conference on 
"Middle East Law in the Internet Age" that brought together 
intellectual property and technology lawyers, government 
officials, and the private sector to discuss recent legal 
developments in the area of electronic transactions, 
intellectual property and the Internet.  The Dubai Chamber 
of Commerce, in cooperation with the International 
Trademark Association, also sponsored a roundtable 
discussion on IPR protection in December 2003.  Officials 
from the Ministry of Economy, Ministry of Information, the 
Dubai Economic Development Department and the Criminal 
Investigation Department of Dubai Police attended, as well 
as local law firms and representatives of brand owners from 
major multinational corporations. 
 
15.  (U) The UAEG has welcomed the opportunity to 
participate in USG-sponsored training on IPR enforcement. 
Most recently, the UAEG sent two representatives to an IPR 
enforcement seminar in Oman, co-sponsored by the GCC patent 
Office, the International Anti-Counterfeiting Coalition, 
and the U.S. Patent and Trademark Office.  The UAEG has 
also offered to host a MEPI-funded IPR training workshop 
for the GCC in Abu Dhabi in April 2004. 
 
-------------------------------------- 
UAEG, Steadfast Ally Against Terrorism 
-------------------------------------- 
 
16.  (SBU) The U.S. Mission objects to the International 
AntiCounterfeiting Coalition's (IACC) attempts to link 
counterfeit trade and terrorist activity in the UAE, and 
categorically rebuts any suggestion by the IACC that the 
UAEG knowingly facilitates Al-Qaeda activity.  The UAEG has 
sought to crackdown on potential vulnerabilities in the 
financial markets and prevent trade-based money laundering, 
and has provided outstanding cooperation in the 
international effort to combat terrorism.  In close concert 
with the United States, the UAEG has frozen the funds of 
groups with terrorist links -- to date, more than USD $3.13 
million in 18 bank accounts in the UAE since 9/11. 
Additionally, the UAEG has provided international 
organizations and foreign governments data on 172 cases 
related to terrorist financing. 
 
17.  (U) This cable has been coordinated with Dubai. 
 
Wahba