Abu-Ghazaleh Intellectual Property (AGIP)

The Arab World, easily defined as the 22 member states of the Arab League, is increasingly becoming part and parcel of the global business community. This is evident in the increasing number of member countries joining the World Trade Organization (WTO). As a result many of those countries are subjecting their legal and regulatory systems to an overhaul to accommodate the demands of the WTO treaties, particularly those connected with the World Intellectual Property Organization (WIPO). Signing the treaty is the easy part. Implementing is the hard part since it entails that all Laws concerned with Intellectual Property Rights (IPR) that deal with Trademarks, Patents, Industrial Design, and Copyrights in the signatory countries have to be amended, and in some cases rewritten, to meet the WIPO standards.

An overview of the overall implementation shows that the Arab World is in the early stages of IP rights protection. Before reviewing IPR progress in the Arab World, it is important to review the problems that impede the IPR implementation.

1- The demographic issue:

The issue of population has been a primary obstacle on the road of economic development. The basic formula is that the thicker the demographic density the slower the pace of economic development and assimilation of new concepts and technologies. This is true in Europe as it is in the Arab World. Smaller countries such as Ireland and the Scandinavian states have had a far better record in development, such as the growth of IT industries, than the larger European states, such as Germany and France.

This naturally applies to IPR as well; the thicker the demographic density, the slower the implementation of international IP standards. This is why it is far easier for Arab countries with small populations, like Bahrain and Jordan, to join WIPO and implement its requirements on the national level, than it is for countries with large populations like Egypt. The latter’s large population imposes certain local socio-economic considerations that stand in the way of drafting of effective IP protection laws, and particularly in relation to IT and entertainment copyrights. It has to be clear that the problem is on the enforcement level.

2- False political and social pre-conceptions:

Without going into details, there are certain false pre-conceptions related to any laws emanating from the West generally, and in terms of the WTO in particular. This is not a mere Arab phenomena. In fact, the most potent anti-WTO forces emanate from the West itself.

Nevertheless, there are many who are inclined to play what is called, as TAGO Chairman Talal Abu-Ghazaleh stated in an ICC meeting last year, “the game of victimization”, which infects some intellectual circles in the Arab World. Rather than seeing free trade and IPR as imperialist tools to subjugate our trade and industries, we should realize that IPR protection is in our own best interest. As all things, globalization has some negative aspects, but to dismiss it out of hand is ridiculous. Certainly the Arab World’s economies need total rehabilitation, but no country or region is an island, and we need the world as much as the world needs us. We should adopt IPR laws and the implementing regulations now and then on the long run we should promote enforcement among the general public. Whether in the media or in the academic circles, advancing the IPR cause requires popular understanding and recognition of the importance and value of IPR protections.

3- The dark side of the moon countries:

As was the case with the early stages of European economic integration, the Arab world is made up of two types of countries; the rapidly developing states and the slow developing countries. This is what is called the two tier economic system. For different reasons, mostly political and demographic, certain Arab states seem to move faster towards economic development and integration into the world economy than others. In lieu with that, the adoption of IPR protection laws and treaties, such as TRIPS, has also been on a two-tier level; 13 countries* have signed and ratified most of the WIPO agreements. Eight out of these thirteen countries have signed the TRIPS agreement.** Rather than dwell on those who have not yet moved forward with the assimilation process, we should consider those who have as the vanguard nations who constitute national success stories and potential IP protection regional clusters.

4- High software piracy rates jeopardize confidence

With one of the high software piracy rates in the world and displaying poor records on IPR protection, Arab states increasingly suffer bad press and a lack of credibility, with looming restrictions in technology transfers. If negligible in absolute terms, losses incurred in Arab states are dismally high in percentage levels, with Kuwait, Qatar, Bahrain and especially Lebanon, ranking at or above the 80 percent threshold. The United Arab Emirates, Egypt and Jordan have made considerable attempts at tackling the issue, enforcing stricter controls and enacting antipiracy laws.

5- Regulatory framework ignores the Arab citizen

As they seek WTO membership, Arab states are taking action to harmonize their legal systems with TRIPS. By 2005, Arab states, classified as developing counties, are obliged to extend product patent protection on products not previously patented in these countries. Main provisions include standardized definitions of intellectual property, implementation of the “ national treatment “ and “most favored nation” principles, the establishment of antipiracy and protection enforcement procedures, and clauses for swift dispute treatment. While regulatory frameworks are being updated to ensure investor protection, personal liberty and consumer protection rights issues have not yet been fully addressed. Analysts question why Arab states maintain lax policies pertaining to encryption, while restricting and censoring the actual content available online. Saudi Arabia, for example, has publicly stated that it will seek to protect its citizens from immoral Internet content. Other states, for political reasons, monitor Internet connectivity at government agencies. Independent agencies such as the Human Rights Watch regularly question personal freedom on the Internet. However, while the Arab consumer is highly constrained, consumer protection is largely absent from the regulatory environment in the Arab states. Very few consumer protection laws have been enacted at this stage. We expect those requirements to be increasingly addressed, in line with WTO requirements.

The absence of serious ICT R & D funding commitments translates into a virtual absence of national Arab ICT and software industries, intensifying reliance on foreign expertise and furthering the “brain drain”. With a share of R&D in Arab gross domestic product at a record low of 0.5 percent and high reliance on foreign technology, Arab states are structurally net importers of technology and ICT.

The consequences of this poor performance in technology are to further the “brain drain”” and to accentuate the loss of sovereignty in implementing national ICT strategies. Few Arab states ( e,g. Algeria and Tunisia) retain some degree of technology independence. Reliance on foreign technology could be symptomatic of a certain lack of government and business leadership and understanding of the benefits of indigenous ICT research and autonomy.

6- Poor interconnectivity of Arab IP systems

The various Arab IP systems do not interconnect, impeding interregional IP communications and inter-Arab trade and e-commerce. With no Pan-Arab connectivity initiative, some Arab states rely on regional cooperation, linking their gateways to the global backbone. Fiber Optic Gulf, the leading GCC initiative, linking Kuwait, Qatar, Bahrain, and the UAE, is a prime example of successful cooperation. Links between Levant states are underway. The consequences of infrastructure fragmentation are reflected in the Internet usage patterns of the area: slow service, minimal inter-Arab e-commerce, reliance on international private or semiprivate IP networks, and lack of competitiveness in connectivity alternatives.

7- Scarce Arab Payment and transaction platforms

Few local banks offer operational transaction platforms, and credit card penetration is low amidst concerns of poor security and fraud. The lack of national financial development policies has a direct impact on private investment and business development in general, and on IT infrastructure in particular. In 2000, only 18 percent of banks offered online transactional facilities. Although there were some local players (in Lebanon and the Gulf), these were mostly of foreign banks with regional presence. Arab e-banking and e- transactions also suffer from the absence of clearing house alternatives to central banks, as most clearinghouses have yet to move their operations online.

TRIPs influence on the industry of the Arab world

Arab states display significant interest in technology initiatives. Materialized via techno poles and/or technology incubators, the benefits of these initiatives include providing an environment for research and development in collaboration with private initiatives, developing technology diffusion, benefiting the social and economic fabric by creating new employment possibilities, building the ecosystem for business development, and enhancing technological transfers between the public and private sectors. In all cases, private-public partnerships and universities play central roles. The political and regulatory environment in the Arab world is being adapted in accordance with best practices from the United States and Europe.

Arab states have been prolific on both the techno pole and incubator fronts: most countries have at least launched a national planning process for these technology-building initiatives, with varying degrees of success in implementation. Technology-dedicated research facilities are operational components of Arab states’ national strategies. In the Gulf, Kuwait, Saudi Arabia and the UAE stand out in terms of research facilities. Initially sector-oriented (mineral and petrochemical sectors), these facilities now encompass ICT and high technology. Levant and Maghreb states drafted plans for such facilities as early as the 1960s (for example, Lebanon drafted its National Council for Scientific Research in 1969 and a general framework to develop the country’s scientific potential). Leading French research institutes inspired Moroccan research and ICT involvement. Six countries operate technopoles dedicated to research and development in technology. Saudi Arabia’s King Abdul Aziz City for Science and Technology (KACST), for instance, has evolved from its petroleum focus to include atomic energy, astronomy and geophysics, computer and electronics and aerospace. Other countries, such as Jordan, with its newly established ICT plan, have adopted a narrower focus.

As Arab states join the World Trade Organization, (WTO) they have been adapting their legal and regulatory systems to accommodate trademark, patent, and intellectual property rights (IPR) protection. Some states have been part of the early stages of IPR protection; others have retroactively signed the agreements and sought membership of the World Intellectual Property Organization (WIPO). Nine of the countries in the scope of this study are members of the WTO, and eleven joined the Paris Convention for the protection of Industrial Property, on whose principles the WIPO was founded. Arab states’ participation in interim treaties is uneven: only four have signed the Patent Cooperation Treaty (PCT) and three the Patent Law Treaty (PLT). There has been improvement in the mid-to-late 1990s, when eight of them joined the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). A joint WTO-WIPO framework, TRIPS revisits the entire IPR protection system, standardizing intellectual property definitions, affirming and enforcing national treatment and most favored nation principles through a series of procedures, and providing for standard dispute treatment processes. At this stage, only Lebanon, Syria, Algeria, Saudi Arabia, and Qatar are yet to enact the agreement.