Arab world responds to $50bn IP fraud 'epidemic'

Intellectual property (IP) theft, the illegal pirating of business software, DVDs, music CDs and computer games is posing an increasing threat for legitimate business in Arab countries.

But steps are now being taken by organisations such as the Arab League to start to combat what has become a serious problem.

In many countries across the region, well over half the software in use is believed to be counterfeit. According to the organisation representing the world's commercial software industry, the Business Software Alliance (BSA): software piracy rates in 2006 reached 84% in Algeria, 79% in Tunisia, 73% in Lebanon, 66% in Morocco, 63% in Egypt and 61% in Jordan.

In the Gulf Cooperation Council (GCC) countries, the rates stood at 64% for Kuwait, 62% for Oman, 60% for Bahrain, 58% for Qatar, and 52% for Saudi Arabia.

Only the United Arab Emirates (UAE), at 35%, came in at the average global piracy rate for business software, and is the only Arab country in a world list of top 20 countries with the lowest piracy rates for 2006.

But even in the UAE, the value of counterfeited products across-the-board - from cosmetics, pharmaceuticals and tobacco to automobile spare parts - in 2006 was, according to a recently released KPMG study, estimated to run almost to $700m, and to have cost the country around $1.7bn in lost non-oil GDP, $110m in lost tax revenue, and some 31,000 lost job opportunities.

In a world in which legitimate businesses are estimated to be losing up to $700bn annually to IP piracy and counterfeiting, IP rights and protection literally represent foreign concepts in the Arab world, and the problem of piracy and counterfeiting is a pressing one among Arab countries.

In an effort to inform and educate Arab businesses, consumers and right holders about IP rights and protection and the damage that piracy and counterfeiting can cause, the Arab League - the Egypt-based umbrella policy-making body serving the interests of Arab countries - is, in association with the Saudi Arabian-based consumer and brand protection organisation Hemaya Universal, sponsoring Arab World Protect 2008: The first Arab Consumer and Brand Protection Forum, in Jeddah in October.

The forum aims to make progress in the following areas of IP in the Arab world:

• Understanding the extent of the problem in the Arab world

• Raising awareness of the economic ramifications, social costs, and health and safety risks to consumers

• Developing suitable strategies to combat the problem

• Enhancing cooperation and coordination across the region and between the various agencies trying to combat the problem

• Promoting better legislation and enforcement across the Arab world and inside specific markets

• Identifying resources available to combat the problem in each country and empowering and building their respective capacities in cooperation with international, regional and national agencies

• Organising capacity building and institutional strengthening programs in cooperation with leading brand owners, international agencies, national governments and the private sector

A forum focusing on the economic importance and socioeconomic impact of IP protection was also held early this January in Abu Dhabi.

It was hosted by the UAE Ministry of Economy, the World Intellectual Property Organisation (WIPO) and Dubai-based legal consultants Khasawneh & Associates, and was sponsored by a number of regional and international professional, business and corporate entities, including Microsoft.

At the forum, Khasawneh & Associates Managing Partner Nasser Ali Khasawneh illustrated how local attitudes to the concept of IP contributed to the growing piracy problem when he said piracy 'is still viewed by some as a harmless crime'. He urged 'stronger cross-border collaboration among countries in the Arab world' to combat piracy and to use IP protection 'as an effective tool of economic development in the Arab world'.

IP forums such as the UAE-hosted event last month and the Saudi-hosted Arab World Protect 2008 in October have a long way to go in educating Arab businesses and consumers on IP and forging effective tools in enforcing IP rights.

In the International Intellectual Property Alliance's (IIPA) major annual report released earlier this week, Middle Eastern Arab countries did not fare well:

• Bahrain was on the United States Trade Representative's (USTR) 'Watch List' in the mid-1990s.

• Egypt is on the USTR's 'Priority Watch List', and, describing the country as 'a major copyright offender', the IIPA recommends Egypt remain on the priority list in 2008.

• Jordan was on the USTR's Watch List 1997-98.

• Kuwait has regularly been listed on the USTR's Priority Watch List and Watch List for more than a decade. The country is currently on the Watch List and is being urged to implement 'several key pieces of IPR legislation (including amendments in the areas of copyrights, trademarks, geographical indications, patents, data protection, and enforcement) [that] have been pending for many years'.

• Lebanon has been on the USTR's Priority Watch List since 2001. Of continuing major concern are 'pervasive cable piracy' and 'widespread end-user piracy of computer software among large companies, banks, trading companies, and most government ministries'.

• Oman is not the subject of an IIPA submission for 2008, but has appeared on the USTR's Watch List as recently as 2001.

• The Palestinian Authority was on the USTR's Watch List in 1999, and in 2000 the IIPA recommended elevating the PA to the Priority Watch List because of rising concerns over pirate production for export. A scheduled USTR review has not occurred due to unrest in the area.

• Qatar first appeared on the USTR's Watch List in 1995 but is not currently listed. The IIPA in 2003 referred to 'high levels' of software piracy 'due to Qatar's failure to enforce its copyright law', despite 'steps to bring its copyright law into compliance with international standards'.

• Saudi Arabia has featured on the USTR's Priority Watch List and Watch List since 1993. The Kingdom is currently on the Watch List and in its 2008 report the IIPA recommends the listing be raised to the Priority Watch List.

• The UAE does not appear on any list and the IIPA has not filed a report on the UAE since 1999. The UAE is currently negotiating a Free Trade Agreement with the United States, including an IP chapter.
Yemen, Iraq and Syria are not mentioned in the 2008 IIPA report.