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Arab governments back stricter patent laws.

Increasingly, countries throughout the Middle East are adopting stricter copyright and patent laws. These laws do more than curb bootleg cassettes: They will encourage a whole range of high-tech commerce which had previously been discourage, and facilitate Arab integration into the global economy.

The days when cheap copies of western pop music cassettes could be bought in almost any Arab bazaar are coming to an end. The crackdown against bootleg cassettes - which presently account for up to 45% of total sales in Egypt and Saudi Arabia - is a price Arab countries find they must pay in order to expand their global trade relationships.

More is involved here than cassette tapes: Everything from airplanes and computers to pharmaceutical products and sophisticated heavy equipment involves proprietary goods and services. But companies are leery of selling cutting-edge technology in countries where that technology can be pirated with impunity. For decades, Western governments have tried to get Arab countries, particularly in the Gulf, to adopt and enforce laws to protect patents and copyrights. At present, the presence and strength of such laws varies widely from country to country. While some Arab countries have been party to international treaties for protection of intellectual property since the Paris Convention for the Protection of Industrial Property in 1883, others offer little or no protection - Qatar has no patent law, Kuwait has only now begun to adopt a significant copyright law.

Even when a country's legal code contains patent, trademark and copyright laws, there can be some glaring omissions. The most consistent of these has been the weakness or absence of laws protecting computer hardware and software. In some Arab countries, pharmaceuticals cannot be patented; instead, drug companies must patent the processes and instruments used in a particular drug's manufacture.

One international lawyer active in the Middle East points out that it is not simply a question of statutes. "You not only have to look at the laws," he observed. "You have to look at levels of enforcement."

Foreign companies say that even with laws on the books, the protection they afford is meaningless without strict enforcement. Oman, for example, has adopted the Gulf Cooperation Council's Patent Law, but that law has no effect because its Implementing Regulations have not yet been issued.

"Copyright laws are now becoming fashionable thanks to US pressure," says Talal Abu-Ghazaleh, chairman of the Arab Society for the Protection of Intellectual Property. "There are now patent laws in every Arab country except Qatar. But the most difficult area to develop is and will be copyright laws."

For several years, the US has maintained a special officer in its embassies in Saudi Arabia and the United Arab Emirates, to pressure those governments to adopt or improve industrial property rights (IPR) legislation and its enforcement.

Under the current GATT round, member countries - now including most Arab states - are obligated to enact intellectual property protection laws conforming to those GATT requirements before the GATT round ends in 1999.

"You cannot make changes in intellectual property rights legislation unless you educate the public and get their support," says Clark W. Lackert, partner in the New York-based law firm of Nims, Howes, Collison, Hansen & Lackert. "There is concern [in Arab countries] about how much increased IPR protection would cost."

There are costs and benefits to IPR enforcement. On the benefits side, IPR enforcement encourages more foreign investment, particularly in state-of-the-art plants; companies are more willing to allow cutting-edge technology transfers; and local companies and users can more easily acquire advanced technology and support services.

"Countries like Jordan can become a high-tech oasis in the region," says Lackert. "But you have to have IPR legislation in place for this to be realised."

A recent survey by the Washington-based International Finance Corporation, an affiliate of the World Bank bear this out. The survey asked major US companies in chemical, transport, electrical, food, metals, and machinery industries which areas of doing business overseas would be most affected by the strength or weakness of IPR legislation. While it was least important in determining sales and distribution, 48% said it has a "strong effect" on whether to set up facilities to manufacture components, 59% said it was a determining factor in building overseas facilities to manufacture complete products, and 80% said the presence of such laws was a key factor in whether they would establish research and development facilities in a given country.

There is a downside to adhering to global IPR standards; it means that Arab consumers will have to pay more for a wide range of goods formerly pirated or which illegally used patented materials. This will be most noticeable with books and tapes; pharmaceuticals and processed foods; and in small business operations that were performed using copied computer software or other copyright infringements.

"It is essential that people in the region see IPR as beneficial to them, not just something imposed from outside," says Lackert.

"Change is in the air," he says. A survey of Arab IPR laws shows that those countries with the most diversified economies, or which have positioned themselves as centres for global commerce, have made the most progress in bringing their laws up to international standards. Specialised organisations like the Arab Society for the Protection of Industrial Property are also looking at ways to make the laws in various Arab countries more consistent (making it easier for companies to do business regionwide).

"Development of a pan-Arab IRP/patent law is still in the conceptual stage," says Abu-Ghazaleh. But there are certain regional legal developments which provide much-needed groundwork, particularly in the GCC.

There remain areas where Western companies can significantly improve protection of their operations simply by examining existing laws and following local custom. For example, contracts with agents and distributors in the region are often the key to ensuring that trademarks and copyrights are properly registered with their relevant ministries, and thus protected. US-based Allied Chemical found that a Jordanian company could legally use its logo because Allied has not had it properly registered. Significant protection may be realised simply by the publication of so-called "cautionary notices" in local newspapers and magazines.

Development of adequate IPR laws and enforcement mechanisms will require the cooperation of Arab governments and companies that want to do business in the Middle East. This process can have unexpected results. The crackdown on bootleg cassettes is a good example of this. It may have been prompted by western recording companies, but the biggest beneficiary may be the Arab artists who have so far earned so little because their work has been so shamelessly pirated.
COPYRIGHT 1996 IC Publications Ltd.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996 Gale, Cengage Learning. All rights reserved.

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Author:Martin, Josh
Publication:The Middle East
Date:Feb 1, 1996
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