Hard on Software Fraud

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With a spate of recent raids against software pirates throughout the UAE, the Abu Dhabi authorities are once again showing their determination to act on intellectual property rights (IPR) violations.

The recent crackdown also comes at a time when Free Trade Agreement (FTA) talks with the US continue to raise the question of guarantees for intellectual property, and protection for innovation.

The police recently sent a strong message to software pirates by raiding an Emirati computer company, leading to the confiscation of nine PCs and 15 CDs loaded with illegal software. Two persons were also arrested in the raids and charged with violating IPR laws, Albawaba reported on October 24.

This followed a summer wave of police actions in the UAE against IT piracy operations, with 17 people arrested between April and August, according to the Ministry of Information and Culture. Typically, the actions have involved raids on computer software firms, and have resulted in the confiscation of PCs and pirated discs.

Much of the intelligence used for such raids comes from organizations that are dedicated to detecting IPR violations, such as the Arabian Anti-Piracy Association
(AAA), and the Business Software Alliance (BSA), both of which have been working closely with the Abu Dhabi and UAE authorities.

The results have been impressive.

"By vigorously enforcing IPR laws, the UAE has achieved creditable success in containing the menace of software piracy," Scott Butler, CEO of AAA, told Albawaba. "The country records the lowest piracy rate in the region and has today become a model for other countries in the region looking to curb piracy. Moreover, the success of the UAE's anti-piracy campaign has also had a positive impact on the national economy, as it has inspired many international companies to set up their regional headquarters in the country."

The BSA calculates that the UAE maintained a piracy rate of just 34% in 2004, placing it well ahead in the Arab world and also lower than France (45%), Greece (62%), Ireland (38%), Portugal (40%), and Spain (43%). The US had the lowest rate, at 21%, while the UK came in at 27%. Overall, the AAA estimated the worldwide value of software piracy losses at $33bn in 2004, up from $29bn in 2003.

However, due to the overall growth of the IT industry and computer usage over the 2003/04 period, along with the decline in the dollar, there was a worldwide decline in piracy levels of around 1%. With many new PC users living in high-piracy markets, and the increasing availability of unlicensed software on internet peer-to-peer (P2P) file-sharing sites, the decline was even more surprising.

The UAE's achievement was not only the result of several years of police work, but also of convincing consumers that computer piracy does great damage to the development of the indigenous IT industry.

"The success of the UAE has translated into major business deals in IT," Jawad al-Redha, co-chairman of the BSA for the Middle East, told Emirati news agency WAM at the start of September. He explained that this had led to the consolidation of "the country's role as the regional knowledge hub. Regional countries have a lot to learn from the UAE."

The AAA says that improvements began back in 1996, when a more sustained approach to tackling breaches was adopted. In 2002, a new copyright law was passed that brought the UAE closer to compliance with the requirements of the Berne Convention, the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement and other WTO legislation.

Back in September, however, news came that the government was now ready to go to the next stage and was undertaking a comprehensive review of its IPR legislation.

Insiders say that these laws will be updated by the end of the year, with the aim of bringing them into line with the framework of the FTA agreement with the US.

In this regard, the UAE is also following a regional trend. Back late September, a commercial fraud and counterfeiting symposium in Abu Dhabi concluded that the Gulf Cooperation Council (GCC) should draft a unified law to combat these twin perils, as well as developing a joint consumer protection law for the GCC states.

Meanwhile, the GCC Secretariat is also considering several draft regulations relating to e-commerce transactions to combat fraud.

Yet the problem is by no means now over. Strict regulation will still be necessary as the UAE seeks to keep its IT sector on track and welcoming to foreign and local investors alike. In a world in which for every $2 of software purchased legitimately, $1 worth was obtained illegally, the UAE still has plenty to watch out for.

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