5. Protection of Property Rights
The Saudi legal system protects and facilitates acquisition and disposition of all property, consistent with Islamic practice of upholding private property rights. Non-Saudi corporate entities are allowed to purchase real estate in Saudi Arabia in accordance with the foreign-investment code. Other foreign-owned corporate and personal property is protected by law. Saudi Arabia has a system of recording security interests, and plans to modernize its land registry system. Saudi Arabia ranked 24th out of 190 countries for ease of registering property in the 2019 World Bank Doing Business Report.
In 2017, the Saudi Ministry of Housing implemented an annual vacant land tax of 2.5 percent of the assessed value on vacant lands in urban centers in an attempt to spur development. Additionally, in January 2018, in an effort to increase Saudis’ access to finance and stimulate the mortgage and housing markets, Saudi Arabia’s central bank lifted the maximum loan-to-value rate for mortgages for first-time homebuyers to 90 percent from 85 percent, and increased interest payment subsidies for first-time buyers. This further liberalized stringent down-payment requirements that prevailed up to 2016, when the central bank raised the maximum loan-to-value rate from 70 percent to 85 percent.
Intellectual Property Rights
In the last two decades, Saudi Arabia undertook a comprehensive revision of its laws governing intellectual property rights (IPR) to bring them in line with the WTO agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs); the changes were promulgated in coordination with the World Intellectual Property Organization (WIPO). The SAG updated its Trademark Law (2002), Copyright Law (2003), and Patent Law (2004) with the dual goals of TRIPs compliance and effective deterrence against IPR violations.
Saudi Arabia was included on USTR’s Special 301 “Priority Watch List” in April 2019 following an increase in the number of stakeholder complaints about the protection of IPR in the Kingdom, particularly with respect to pharmaceuticals, rampant digital and signal piracy, software, and counterfeit goods.
Recent steps by the Saudi Food and Drug Authority (SFDA) to license locally-manufactured, cheaper generic versions of patent-pending drugs within their five year regulatory data protection period have created significant concern among U.S. industry stakeholders, who allege commercial loss resulting from this abrogation of their patent and data protection rights. Additionally, in 2017, the SFDA granted a license to a local generic pharmaceutical manufacturer for an innovative treatment developed by a U.S. pharmaceutical company that had filed for patent protection with the GCC patent office. According to the U.S. pharmaceutical and biologics industry, the SFDA’s failure to recognize the patent and protect the data constitutes a serious breach of intellectual property rights.
During 2018, an illicit broadcast and streaming service called “beoutQ” became widely available in Saudi Arabia. beoutQ is suspected of satellite and online piracy, as well as supporting piracy devices and related services, such as apps that allow access to unlicensed movies and television productions, including sports events.
U.S. software firms report that the Saudi government continues to use unlicensed and “under-licensed” (in which an insufficient number of licenses is procured for the total number of users) software on government computer systems in violation of their copyrights. Other concerns include the lack of seizure and destruction of counterfeit goods in enforcement actions by MCI, and limits on the ability of MCI to enter facilities suspected of involvement in the sale or manufacture of counterfeit goods, including facilities located in residential areas.
The Saudi government is in the process of reorganizing its IPR agencies and centralizing responsibility for all IPR matters in the new Saudi Authority for Intellectual Property (SAIP). SAIP’s Board of Directors held its first meeting in March 2018 under the chairmanship of the Minister of Commerce and Investment. SAIP also signed a Memorandum of Understanding in September 2018 with the U.S. Patent and Trademark Office. SAIP’s objective is to ensure the unification and integration of IPR in Saudi Arabia. SAIP is expected to prepare a new national IPR strategy and oversee its implementation.
Resources for Rights Holders
Embassy point of contact:
+966 11 488-3800 Ext. 4140
Regional IPR Attache:
Pete C. Mehravari
U.S. Intellectual Property Attache for Middle East and North Africa
U.S. Embassy Kuwait | U.S. Department of Commerce
Office: +965 2259-1455