09.08.11

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Cablegate: Microsoft Uses US Government and Gates Lobbying to Pressure Saudi Arabia to Embrace US-Style Law (Updated)

Posted in Asia, Law, Microsoft at 4:31 am by Dr. Roy Schestowitz

Cablegate

Summary: Just like in Brazil and other parts of the world, Microsoft targets Saudi Arabia laws and practices, striving to change these with help from politicians

Microsoft loves to daemonise Brazil for being quite free (liberal) culturally, unlike Hollywood. With the title “MICROSOFT SEES GOB ATTACKS AGAINST IPR” (yes, attacks, on artificial ‘intellectual’ monopolies) Microsoft and its cronies in government take on the massive nation and try to pressure it to adjust its laws to better suit Microsoft’s business model. In the older cable, once again we saw Michel Levy (whom we mentioned in relation to OOXML lobbying) overstepping his authority.

Here is s similar Cablegate cable from SA. Watch the country head of Microsoft and notice how Bill Gates lobbies King Abdullah :


VZCZCXYZ0000
OO RUEHWEB

DE RUEHRH #2340/01 3291436
ZNY CCCCC ZZH
O 251436Z NOV 07
FM AMEMBASSY RIYADH
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7063
INFO RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

C O N F I D E N T I A L RIYADH 002340

SIPDIS

SENSITIVE
SIPDIS

USTR FOR JASON BUNTIN
USDOC FOR TYLER HOFFMAN

E.O. 12958: DECL: 09/17/2017
TAGS: ECON, ETRD, KIPR, PGOV, SA
SUBJECT: SAUDI ARABIA: MICROSOFT GM’S TAKE ON IPR
ENFORCEMENT

REF: STATE 107629

Classified By: Economic Counselor Robert B. Murphy
for reasons 1.4 (b) and (d).

1. (SBU) SUMMARY. Khaled al-Dhaher, General Manager of
Microsoft in Saudi Arabia, shared his perception of
intellectual property rights (IPR) enforcement in the Kingdom
during a meeting on November 20, 2007. Al-Dhaher identified
three major areas of concern: (a) the failure of the SAG to
license most of the Microsoft software it uses, (b) the
failure of the SAG to impose deterrent penalties, such as
harsh fines and even imprisonment, on IPR violators, and (c)
the lack of transparency of the workings of the Violations
Review Committee (reftel). He also expressed his opinion
that IPR enforcement problems persist in Saudi Arabia because
the working-level officials charged with enforcing IPR do not
consider IPR violations to be crimes. END SUMMARY.

——————————————— —–
Legalization, Deterrent Penalties and Transparency
——————————————— —–

2. (C) Khaled al-Dhaher, General Manager of Microsoft in
Saudi Arabia, identified three major areas of concern with
the enforcement of intellectual property rights (IPR) in the
Kingdom during a meeting with Emboffs on November 20, 2007.
The first of these areas is the failure of the SAG to license
most of the Microsoft software it uses. Al-Dhaher reports
that Bill Gates raised this issue with King Abdullah when he
visited Saudi Arabia in November 2006. The King agreed to
resolve the problem, and al-Dhaher says that the King
personally contacted the Saudi Arabian General Investment
Authority (SAGIA) to emphasize that legalization should be
accomplished. While al-Dhaher believes that SAGIA has been
Microsoft’s “champion” on this issue, the push for
legalization has enjoyed only modest success. Al-Dhaher
estimates that the SAG uses about 500,000 PCs with Microsoft
software, but has licensed only 25,000 of those computers.
The Ministry of Interior recently licensed Microsoft software
for 7,000 of its estimated 50-70,000 PCs, while the Ministry
of Culture and Information (the ministry to which the
Violations Review Committee (VRC) is attached) licensed
software for 3,000 of its PCs several months ago. Al-Dhaher
believes that legalization problems persist for bureaucratic
and budgetary reasons, and suggests that the SAG designate
funds for all ministries to use to legalize rather than
addressing the issue ministry by ministry or pooling the
ministries’ technology budgets together.

3. (SBU) Al-Dhaher believes that the imposition of
deterrent penalties would enhance the enforcement of IPR in
the Kingdom. The VRC, which reviews all copyright cases, is
authorized to impose fines up to 100,000 SAR (USD 26,666).
The Board of Grievances, the court of appeal for cases heard
by the VRC, can impose fines up to 250,000 SAR (USD 66,666)
and sentence a defendant to prison. However, the highest
fine al-Dhaher is aware of having been levied against an IPR
violator is 12,000 SAR (USD 3,200), and he is not aware of
any case that has been appealed from the VRC to the Board of
Grievances. Al-Dhaher believes that imposing significant
penalties in just one IPR case would serve as an effective
deterrent example.

4. (SBU) Al-Dhaher echoes long-reported complaints
regarding the lack of transparency of the workings of the
VRC. However, he is encouraged by the initiative and
openness shown by the new head of the VRC, Rafik al-Akeeli.
Al-Dhaher says that the VRC has heard more cases in the two
months since al-Akeeli has been in charge than it heard in
the previous year. Al-Akeeli also recently met with
Microsoft representatives for two hours. Given the general
difficulty industry has consulting with the SAG, al-Akeeli’s
willingness to meet with Microsoft was viewed very favorably
by al-Dhaher.

——————————————–
Persistence of Problems with IPR Enforcement
——————————————–

5. (C) Emboffs asked al-Dhaher reasons he believes the SAG
is not better addressing these areas of concern. Al-Dhaher
does not think that corruption is significant, and only
partly blames bureaucratic roadblocks and lack of capacity
for insufficient progress. He believes the root cause is
that many officials charged with enforcing IPR do not really
believe that IPR violations are criminal acts. Al-Dhaher
suggests that this might because IPR violations seem like
victimless offenses, or that violations are not viewed as
significant because the stakeholder is a wealthy, non-Muslim
business. He fears that this perception persists despite
industry having secured an official Saudi fatwa (religious
ruling) that IPR violations are violations of Muslim law.
GFOELLER





Copyright is relative and SA would be better off just using Free software that it can control. It would also remove the stain of guilt, which Microsoft loves to use to impose fees.

Update: Here is a followup cable.



VZCZCXRO3571
PP RUEHDE RUEHDIR RUEHROV
DE RUEHRH #1271 2320455
ZNY CCCCC ZZH
P 190455Z AUG 08
FM AMEMBASSY RIYADH
TO RUEHC/SECSTATE WASHDC PRIORITY 9017
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
C O N F I D E N T I A L RIYADH 001271 
 
SIPDIS 
 
STATE FOR EEB/TPP/IPE AND NEA/ARP 
STATE PASS TO USTR FOR JASON BUNTIN 
USDOC FOR TYLER HOFFMAN 
 
E.O. 12958: DECL: 09/17/2017 
TAGS: ECON, ETRD, EINV, PGOV, KIPR, KTFN, SA 
SUBJECT: MICROSOFT LEADING COLLABORATION WITH SAG TO COMBAT 
IPR VIOLATIONS 
 
REF: 07 RIYADH 2437 
 
Classified By: Political/Economic Counselor Horacio Ureta 
for reasons 1.4 (b) and (d). 
 
1. (C) Summary:  Intellectual property rights (IPR) 
violations in Saudi Arabia are receiving increased attention 
from the Saudi government (SAG).  The SAG has made 
significant efforts to address IPR violations, which in the 
Kingdom occur most notably in the pharmaceutical and software 
sectors.  With regard to software infringement, the SAG is 
now collaborating directly with a Microsoft-led private 
sector group, calling itself the "Rights-Holders", on a 
six-point plan to combat IPR issues.  This plan seeks to 
ensure transparency in IPR cases, establish and enforce 
deterrent penalties, and improve coordination between SAG 
entities with IPR related equities.  Rights-Holders is 
claiming the existence of a link between IPR piracy and 
terrorism finance.  Intellectual property rights issues are 
also being covered increasingly in the Saudi news media.  End 
summary. 
 
2. (C) In a meeting August 13 EconOff met with Scott Butler 
of the Raven Anti-Piracy Alliance (RAPA), a Dubai based group 
that is linked to the Business Software Alliance (BSA), a 
group of 13 software companies in the Kingdom which includes 
Microsoft, Autodisc, Symantec, and Adobe.  RAPA also has 
powers of attorney with regional entertainment companies such 
as Rotana and Viva and liaises between these licensees and 
entertainment studios.  Butler told EconOff that earlier in 
the day he and Ayman Takrori, Partners Group Director for 
Microsoft and de facto representative of a private group of 
"Rights-Holders" (of which BSA is a part) met with Ministry 
of Culture and Information Under Secretary Abdul Rahman 
Al-Hazaa, who holds a mandate from Culture and Information 
Minister Dr. Eyad Madani to "fix the IPR issue." 
 
3. (C) Butler related that RAPA had presented al-Hazaa with a 
six point plan to address IPR issues:  1) ensure complete 
transparency in all IPR cases; 2) establish and enforce 
deterrent penalties to create real fear in the market; 3) 
eradicate street vendor piracy; 4) establish a mechanism to 
address internet piracy; 5) ensure the SAG uses software that 
was legally acquired; and 6) ensure effective coordination 
between the Ministries of Culture and Information, Interior, 
and Customs Enforcement.  According to Butler and Takrori, 
Under Secretary al-Hazaa pledged complete support from the 
SAG for all points. 
 
4. (C) The Rights-Holders's six-point plan includes fully 
populating the Violations Review Committee's online 
case-tracking database in both Arabic and English, 
imprisoning violators in lieu of simply imposing fines (Note: 
According to Butler, there is precedent legislation in the 
UAE for imprisoning IPR violators. End Note.), and providing 
training for inspectors and police on IPR and on how to 
conduct raids.  Butler also related a story of a raid 
conducted in 2006 that yielded 20 million pirated music and 
software CDs in a warehouse.  In the same warehouse weapons 
were found which led to the arrest and prosecution of several 
members of an organized crime ring.  Butler asserted that a 
clear link exists between piracy and organized crime, to 
include terrorism finance. 
 
5. (SBU) On August 17, Al-Watan, a moderate Arabic-language 
daily, published a full page story on IPR violations.  In the 
article both SAG officials and economists were quoted as 
saying that software piracy is both more lucrative and less 
risky than drug trafficking. 
 
6. (C) Comment:  The SAG has made significant progress in IPR 
enforcement but continues to cite lack of capacity to justify 
a dearth of major developments (Reftel).  Engagement at the 
ministerial level is an encouraging step and demonstrates an 
increase in political will to address the problem.  Ministry 
of Interior (MOI) interest is crucial to further progress in 
enforcement and prosecution, and would be critical to 
implement any of the directives outlined in the 
Rights-Holders six-point plan.  Previously, MOI involvement 
has been sub-optimal, but might be stimulated if  a strong 
link were to be substantiated between the supposedly 
"victimless" crime of IPR violations and and organized crime 
or even terrorism financing.  End comment. 
GFOELLER 

So, Microsoft has linked copyright infringement and terrorism. Wonderful.

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