Closing The IP Gulf

There is no doubt that opportunity abounds on the IP front for cash-rich Gulf State investors.

As the current kerfuffle about patent rights and the COVID-19 vaccines demonstrates, IP is a global game. One area of the world that has traditionally been underrepresented in terms of IP discussion is the Middle East, particularly the Gulf States and Saudi Arabia. Yes, my parent’s place of birth and the Arab world’s largest country, Egypt, made some IP news a few years ago, by refusing to grant patents for Gilead’s Hep-C cure, Solvadi. And Israel has long-enjoyed a reputation for innovation as the Start-Up Nation. But when it comes to thinking about other countries in the region, the public perception of those states as petro-economies — rather than innovation hubs — has been well-settled.

But the situation is changing, spurred on by a number of factors. First, the increased presence of global sporting events being hosted in the Gulf States, from Formula 1 races to big-purse golf events to the upcoming 2022 World Cup. These events signify an opening-up of the Gulf States, including the UAE and Saudi Arabia, to international tourism. Second and perhaps more importantly, the Gulf States are in the midst of a pivot from oil-based economies toward more outside investment-focused ones, using the cash flow generated by the sale of oil to invest more broadly in different industries worldwide. Which necessarily means investing in innovation, considering how much of the value of companies resides in their intellectual property nowadays. Indeed, increased investment ties around innovation has been credited as an impetus for the Abraham Accords between Israel and the UAE, which has led to the Abu Dhabi Investment Office opening its first overseas office in Israel.

While economic normalization between Saudi Arabia and Israel has not yet followed suit, the Saudi’s have a long history of investing in the United States — particularly in the real estate and defense industries. Lately, however, the Saudi sovereign wealth fund has announced a number of major investments in U.S. companies, including both Uber and electric car maker Lucid Motors — signifying a broadening range of investment at least in terms of industries targeted. It makes sense, of course, for the kingdom to diversify away from full reliance on gasoline-using autos and trucks, just as the U.S. auto industry itself has been moving toward electric vehicle technologies. Moreover, there remains a huge opportunity for Gulf State investors to invest in other intellectual property-driven  assets, from start-up companies looking to commercialize their nascent technologies to straight-up IP licensing along the lines of a France Brevets or Japan’s IP Bridge.

There is no doubt that opportunity abounds on the IP front for cash-rich Gulf State investors. At the same time, the historical lack of focus on IP issues in the regions puts the onus on the Gulf States to demonstrate a commitment to protecting IP rights in their own nations. To that end, a recent article notes “the Saudi government established the Saudi Authority for Intellectual Property (SAIP) to be Saudi Arabia’s competent authority for intellectual property. SAIP is considered a ‘one-stop-shop’ for all matters relating to the protection, regulation, and enforcement of intellectual property rights in Saudi Arabia.” For a country like Saudi Arabia, centralizing handling of IP affairs is a key step toward developing a cohesive IP strategy, both in terms of developing an internal IP knowledge base and infrastructure, as well as with respect to forging ties with other IP offices worldwide.

Every indication is that the Saudis have started taking those steps in earnest. In addition to reaching agreement with leading worldwide patent offices on cooperative efforts around patent prosecution and data-sharing, the Saudis have engaged in a robust IP piracy crackdown effort, leading to the shutdown of over 350 pirate sites thus far in 2021. Similarly, it was announced that the UAE was taken off an IP watchlist, due to its efforts on the anti-counterfeiting front.

On top of those regional IP enforcement efforts, the Saudis also “organized the IP20+ Global Intellectual Property Challenges Forum, convening the heads of IP offices in G20 countries.” An event of that importance heralds a clear turning point in Saudi attention to IP issues, as part of a drive to position the them as the regional leader in that area.

At the same time, it will be very interesting to see what steps the Saudis and the other Gulf States take in terms of partnering with existing IP experts in order to reach their investment goals. While they are surely engaged in the worthy effort of developing internal expertise on IP issues, my personal experience with clients located in Dubai suggests that there is a lot of opportunity for collaboration between Western IP expertise and Gulf State IP investors. Whether those investors gravitate to IP experts with an inherent understanding of Middle Eastern culture and business practices is an open question. But IP lawyers would be remiss if they ignored the opportunities presented by the increased awareness of IP in the region.

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Ultimately, becoming a global player in the IP space is not something that will happen overnight, despite the tremendous financial wherewithal that the Gulf States can bring to the table. It would be a mistake, however, to discount the tremendous strides that these countries have already made to position themselves in the IP conversation going forward, both in terms of direct investment in innovation and as a bridge between West and East. It is not hard to imagine the day in the near-future where stops in Riyadh, Abu Dhabi, and Dubai become as important for the global IP lawyer as Frankfurt, London, and Hong Kong — to the extent it is not happening already. As the world transitions to a more climate-friendly economy, it is great to see some of the leading beneficiaries of fossil fuels jumping on board the innovation train. Because closing the IP gulf promises benefits for the entire world.

Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.


Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

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