April 01, 2020 Feature

IP Rights in the Middle East: Cultural Complexities behind Legal Enforcement

Kari P. Kammel

©2020. Published in Landslide, Vol. 12, No. 4, March/April 2020, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

The enforcement of intellectual property (IP) rights varies widely from country to country. This article will examine the cultural context enveloping the enforcement of IP rights in the Middle East and posit some ideas for companies looking to understand or protect their IP in this region. While not an exhaustive list, several impacts on the legal systems of the Middle East in relation to the protection of IP will be explored, namely: (1) collectivism and individualism; (2) economic development, history, and age of population; (3) shari’a, or Islamic, law; and (4) corruption and culture.

While these topics are approached from an academic perspective, as many legal practitioners know, it is of vital importance to have practical implementation and a local on-the-ground network in the Middle East consisting of lawyers, investigators, and others who might aid in intelligence gathering or preparing other information for IP enforcement cases.1

Collectivism and Individualism: How They Impact Our Perception of IP Enforcement

Collectivism and individualism are terms that are used to describe the worldview of an individual or society. Much research has been done in this space by a variety of disciplines. This section examines some of this research that pertains specifically to the Middle East region, applies it to the understanding of trade and IP rights, and argues that it is important to understand the worldview of the society in which a company is seeking to do business and enforce its IP rights.

Empirical research conducted on the Greater Middle East and the impact of collectivism and individualism on management shows how complex these issues are across countries in the region.2 In a study by Ralston et al., collectivism (the idea that the group is more important and binds the individual),3 individualism (which focuses on the individual and personal decisions and actions),4 and universalism (which focuses on the well-being of everyone)5 were examined to show whether historical influences, economic development level, and political systems were predictors of these values of collectivism, individualism, or universalism.6 This study is important because it seeks to show why countries in the Middle East and individuals within these countries have certain perceptions or make certain decisions and whether their decisions can be predicted—all of which could have an impact on a company’s legal strategy within a given country in regard to its IP protection.

Some have argued that the cultural factor of collectivism hampers IP protection in Arab countries.7 This can certainly be the case, particularly if a company is seeking to protect its IP in the same way it might do in its home country, expecting a similar process and similar results. However, there may be some other ways to approach IP protection, albeit not in the same manner that one might approach in a non-collectivist society.

The Ralston et al. study found that collectivism is higher for Arab Islamic nations than non-Arab Islamic and more religiously diverse countries.8 This finding has an impact on what IP enforcement may look like in a given Middle Eastern country. A higher level of collectivism in a country may impact whether a government is willing to protect IP rights at all, but also whether individuals within the country feel that it is acceptable to steal IP since it may be better for the community in which they live (as opposed to an individual or an individual company).

What Impacts IP Enforcement in the Middle East?

Many argue that both economic development and the complex history of the Middle East region could have an impact on the worldview of the governments and population. This article notes that while economic development may influence elements of trade or governmental protection, it may not have an impact on the point of view of collectivism or individualism, which could have an impact on IP enforcement.

Economic Development

Economic development is often cited as a reason for different worldviews, particularly IP protection. Some have argued that the lack of economic development in the Middle East impacts IP protection.9 Additionally, studies conducted on other parts of the world show economic development to be a predictor of individualist or collectivist values; in the Middle East, however, it has not shown to be a predictor.10

In another study by Hajikhameneh and Kimbrough on individualism and collectivism within the context of trading partners, individualism and collectivism were studied to see if they had an impact on whether an individual would seek a more lucrative trading partnership with a stranger (for example, an outside merchant).11 Although much has been researched on the economic impact of collectivism or individualism,12 most of that research has focused on personal exchange; whereas Hajikhameneh and Kimbrough’s study looked at “impersonal exchange, characterized by one-off interactions with strangers and mediated by formal institutions, often involv[ing] severing (or weakening) ties to local trade partners in order to form new, potentially more lucrative, ties with an unknown party.”13 This is important to examine because the concept of being interested in trading with a stranger might also be extended to protecting trade through IP enforcement and how an individual would perceive this being economically beneficial or not based on his or her collectivist or individualist worldview in mind.

The findings of this study note that individualists are more willing to trade with the theoretical outside merchants than collectivists; specifically, collectivists are concerned with the cost to local merchants when considering trading with an external merchant, and their perception of the outside merchant is impacted by behavior of others in the merchant group, since the collectivist focuses on group characteristics.14 As applied to IP protection, the behavior could be a predictor in areas in which a local businessperson would either seek to protect an outside company’s IP or be more concerned with whether a local company, which perhaps was counterfeiting that product, would lose business or income. The collectivist businessperson would be likely to seek to protect the counterfeiter in this case if there were no other intervening factors.

Hajikhameneh and Kimbrough’s study additionally suggests that stronger formal enforcement could help mitigate the unwillingness to pursue enforcement outside of the traditional community route; it has not yet been finished, but preliminary research is showing that the collectivist would still choose informal enforcement over formal if given a choice.15 This reflects what many businesses and brand owners already practically know—for example, that tribal or family systems seem to be more powerful than the court systems, or that government officials may protect a group that is committing IP violations because they do not want to hurt the group economically. These behaviors and many more can be explained by the collectivist worldview. But, generally, this study can give us some insight into why and how trademark enforcement is executed or not executed in collectivist societies, including the Middle East.

Country’s History

Additionally, the history of a Middle Eastern country and its relation to colonizing countries (such as Great Britain or France), as well as the level of democratization, were found to be relatively impactful on whether a country is more collectivist or individualist. The Ralston et al. study found that historical social-cultural influences and democratization were a moderately strong predictor of individualist values,16 which could vary widely by country based on the history of colonization, impact of the colonizing countries’ influence on the legal system, and viewpoint of the population toward the former colonizers. Others have argued that “violating intellectual property rights could be seen as a means of revenge to balance the West’s conquest of Arab countries, commercially or otherwise.”17 Although there are few empirical studies to support this, this could be a viable sentiment in some locations. Because each country in the Middle East has a differing and complex history, they should be examined individually. At the end of the day, it is important for legal practitioners to understand the general historical overview of the country in which they are doing business and how that can impact the individual’s and society’s view of IP.

Population Age

Finally, age was an important predictor of these values, with the younger population leaning more toward individualism,18 which is an interesting point given that approximately 65 percent of the populations of the Middle East are under age 30.19 This has the potential for a major worldview shift for the Middle East in their viewpoint on IP, meaning that a company’s approach to IP enforcement in the region, even if effective today, may have to undergo a rapid shift when these worldviews start to shift.

Shari’a Law

The main source of law in the Middle East is shari’a law,20 or Islamic law. Although many Middle Eastern countries have a combination of shari’a and other civil code systems, this is the predominant system and it does not specifically protect IP rights. However, it has been argued that shari’a law’s norms and concepts equivalent to other systems’ laws and rights do protect IP rights, while any barriers to IP protection are instead due to religious beliefs (not law), culture, and economic development.21

Some scholars have noted that most shari’a schools of jurisprudence recognize IP as pieces of property,22 which can be a useful argument but falls short in application to intangible property. Conversely, some scholars argue that the shari’a law system regards property as “communal and owned by Allah . . . , thus piracy is not considered stealing,”23 providing no protection for IP rights.

One of the issues surrounding some perceived tension between shari’a law and enforcement of IP rights is the concept of compensation. From a classical shari’a law jurist perspective:

[A] holder of intellectual property rights cannot be compensated beyond his initial investment. However, it seems logical and in line with modernist jurists to allow a holder of intellectual property the right to recover an amount that goes beyond his initial investment, as long as that amount is fair and balanced with the time and effort exerted. The holder of intellectual property should be allowed a reasonable return on his investment.24

While the modern interpretation seems to make sense, interpreting what is fair and balanced against the time and effort exerted becomes a complicated decision, particularly around ideas of trademark and when a company, rather than an individual, owns the IP rights. Any concept of interest, however, would not be valid given that generally “[c]ompensation for loss of income includes opportunity costs and would equal interest, which is prohibited under [shari’a].”25

Despite not having articulated IP law and doctrine under shari’a, governments in the Middle East have enacted IP laws in conformity with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement);26 but, in most cases, the laws are “relaxed and tend not to be enforced”27 or are deemed ineffective.28

Interestingly, and in line with the above-referenced theories on collectivist and individualist cultures, trademark counterfeiting and other IP violations of Western or American products seem to be widespread in the Middle East,29 but local “intellectual property” is often not duplicated illegally.30 This demonstrates the tendency to provide protection for the local economy and known businesspeople and none for outsiders to the culture.

Intriguingly, one researcher notes that while the West expected “an expansion of their intellectual property rights into the [Middle Eastern] states, this expansion did not occur because the [Middle Eastern] states failed to enforce the intellectual property rights of foreigners. And contrary to the desires of the developed nations, the [Middle Eastern] states actually benefitted from the newly enacted laws”31 and their lack of enforcement. The reasons why this occurred and still occurs are vital for a company looking to protect its IP rights and do business in the Middle East. A successful venture may not just include registering, recording, and traditional enforcement of trademarks in order to launch a product in a Middle Eastern country, but instead must include working with the local population and the local government in a way that would not only not be in conflict with the local interpretation of shari’a but also involve local ownership.

Corruption and Culture

“Conventional [Western-style] approaches to fighting corruption, such as legal and administrative reforms that promote democratization, transparency, and the rule of law” may not work for legal professionals or corporations trying to do business in the Middle East, as those approaches “risk missing some key factors that contribute to popular perceptions of corruption.”32 In Transparency International’s Corruptions Perceptions Index of 2018, the Middle East and North Africa continue to have systemic corruption, which weakens their institutions.33 While the United Arab Emirates leads the region with a score of 70 (being less corrupt than others), Syria, Yemen, and Libya are in the bottom five of the index.34

Areas such as Dubai where there are active free trade zones may be active global hubs for money laundering35 and use a largely unregulated system called hawala, a type of banking practice in the Middle East, which is often cited as a mechanism for the flow of criminal financing but can be much more complex if understood in its cultural context.36 Hawala, which comes from Islamic traditions, is essentially based on a trust system that allows a party to transfer or remit money quickly and cheaply without a bank.37 This system was created as a trust system in a collectivist society, and as mentioned above, collectivists tend to lean more toward informal enforcement mechanisms for trade than to formal ones from the government. Thus, the people engaging in this activity may perceive “illicit” or “criminal” behavior differently from global regulators, especially in contexts where many activities are deemed criminal by the Western world.38 Hawala is not the panacea in the fight against organized crime; criminal money flows through the hands of hawaladars just as through any other conventional financial mechanism.39

Another Middle Eastern concept, wasta (which often manifests as interceding on behalf of an individual to obtain some benefit from a third party),40 like other non-Western legal concepts in the Middle East, has its roots in tribal chieftainship predating the modern nation-states.41 The foundation of wasta is based on personal relations, and “[o]rganizational life in the Middle East relies heavily on personal relations, in both the private and the public sector.”42 Understanding this cultural element and how it plays into the Middle Eastern legal system can have an impact on how multinational corporations approach their legal cases. Additionally, it is of vital importance to have a local on-the-ground network in the Middle East.43

Conclusion

Understanding the legal structure, corruption, and cultural remnants of the past and present, and ideas why IP theft may be seen as a benefit, are all important when looking to address trademark counterfeiting in the Middle East. While these issues are complex and vary between country, and even within a country, a greater understanding in how and why they occur can perhaps lead to a better proactive legal and business strategy in protecting IP in the region.

Endnotes

1. See, e.g., Customs, Consumers, and Cooperation: How to Fight Fakes in the Middle East’s Free Trade Zones, 73 INTA Bull., no. 3, Feb. 15, 2018, https://www.inta.org/INTABulletin/Pages/Anticounterfeiting_in_the_Middle_East_Interview_7303.aspx.

2. David A. Ralston et al., Managerial Values in the Greater Middle East: Similarities and Differences across Seven Countries, 21 Int’l Bus. Rev. 480 (2012) (surveying Algeria, Egypt, Israel, Lebanon, Pakistan, Turkey, and the United Arab Emirates).

3. Id. at 482 (defining collectivism as “focusing on the in-group orientation of the individual”); see also Daphna Oyserman et al., Rethinking Individualism and Collectivism: Evaluation of Theoretical Assumptions and Meta-Analyses, 128 Psychol. Bull. 3, 5 (2002) (defining collectivism as “the assumption that groups bind and mutually obligate individuals”).

4. Ralston et al., supra note 2, at 482 (defining individualism as “a worldview that centralizes the personal—personal goals, personal uniqueness, and personal control—and peripheralizes the social”); see also Oyserman et al., supra note 3, at 4 (defining individualism as “the assumption that individuals are independent of one another”).

5. Ralston et al., supra note 2, at 482 (defining universalism as “understanding, appreciation, tolerance, and protection of the welfare for all people and for nature”).

6. Id. at 483.

7. Bashar H. Malkawi, The Alliance between Islamic Law and Intellectual Property: Structure and Practice, 10 U. St. Thomas L.J. 618, 643 (2013) (citing Frederick V. Perry, Shari’ah, Islamic Law and Arab Business Ethics, 22 Conn. J. Int’l L. 357, 371–74 (2007)).

8. Ralston et al., supra note 2, at 488–89.

9. Malkawi, supra note 7, at 643–44 (citing Raj Bhala, Discovering Great Opportunity in the Midst of Great Crisis: Building International Legal Frameworks for a Higher Standard of Living, Doha Round Betrayals, 24 Emory Int’l L. Rev. 147, 180 (2010)).

10. Ralston et al., supra note 2, at 488–89.

11. Aidin Hajikhameneh & Erik O. Kimbrough, Individualism, Collectivism, and Trade, 22 Experimental Econ. 294 (2019) (looking specifically at the “relationship between subjects’ degree of individualism/collectivism and their willingness to abandon a repeated, bilateral exchange relationship in order to seek potentially more lucrative trade with a stranger, under enforcement institutions of varying strength”).

12. See generally Avner Greif, The Fundamental Problem of Exchange: A Research Agenda in Historical Institutional Analysis, 4 Eur. Rev. Econ. Hist. 251 (2000) (examining the impact on contract enforcement). See also Hajikhameneh & Kimbrough, supra note 11, at 295–96.

13. Hajikhameneh & Kimbrough, supra note 11, at 296.

14. Id. at 321.

15. Id. at 321–22 (noting that the author in a working paper has found that collectivists will still choose an informal reputation system to enforce trade when that and a formal enforcement option are available).

16. Ralston et al., supra note 2, at 488–89.

17. Malkawi, supra note 7, at 643.

18. Ralston et al., supra note 2, at 488–89.

19. Kristin Lord, Here Come the Young, Foreign Pol’y (Aug. 12, 2016), https://foreignpolicy.com/2016/08/12/here-comes-the-young-youth-bulge-demographics.

20. Malkawi, supra note 7, at 620 (defining the sources of shari’a as the Qur’an and the sunna (traditions based on the hadith, sayings and actions of the prophet)).

21. Id.; see also Chad M. Cullen, Can TRIPS Live in Harmony with Islamic Law? An Investigation of the Relationship between Intellectual Property and Islamic Law, 14 SMU Sci. & Tech. L. Rev. 45, 51–52 (2010) (citing Steven D. Jamar, The Protection of Intellectual Property under Islamic Law, 21 Cap. U. L. Rev. 1079, 1093 (1992) (arguing the shari’a law favors IP protection); Silvia Beltrametti, The Legality of Intellectual Property under Islamic Law, in The Prague Yearbook of Comparative Law 2009, at 57 (T. Mach et al. eds., 2010)).

22. Malkawi, supra note 7, at 623 (noting the exception of the Hanafi school of jurisprudence).

23. Id. at 642 (citing Simon Buckingham, In Search of Copyright Protection in the Kingdom, 11 Middle East Executive Rep., May 1998, at 15).

24. Id. at 629.

25. Id. at 639.

26. Id. at 641; see also Beltrametti, supra note 21, at 71; Cullen, supra note 21, at 58–59.

27. Malkawi, supra note 7, at 641 (citing Elizabeth Mirza Al-Dajani, Post-Saddam Restructuring of Intellectual Property Rights in Iraq through a Case Study of Current Intellectual Property Practices in Lebanon, Egypt, and Jordan, 6 J. Marshall Rev. Intell. Prop. L. 250, 256 (2007)).

28. Cullen, supra note 21, at 59; see also Mohamed R. Hassanien, Bilateral WTO-Plus Free Trade Agreements in the Middle East: A Case Study of OFTA in the Post-TRIPS Era, 8 Wake Forest Intell. Prop. L.J. 161, 165 (2010).

29. Cullen, supra note 21, at 59–60 (citing Beltrametti, supra note 21, at 88).

30. Id. at 60 (citing John Carroll, Intellectual Property Rights in the Middle East: A Cultural Perspective, 11 Fordham Intell. Prop. Media & Ent. L.J. 555, 589–93 (2000) (discussing Bahraini gold merchants respecting the integrity of local jewelry designs and not copying them)).

31. Id.

32. Yazan Doughan, Corruption in the Middle East and the Limits of Conventional Approaches, GIGA Focus: Middle East, no. 5, Sept. 2017, at 1, 2.

33. Middle East & North Africa: Corruption Continues as Institutions and Political Rights Weaken, Transparency Int’l (Jan. 29, 2019), https://www.transparency.org/news/feature/regional-analysis-MENA.

34. Id.

35. Karina Shedrofsky, Dubai’s Golden Sands, Organized Crime & Corruption Reporting Project (June 12, 2018), https://www.occrp.org/en/goldensands/dubais-golden-sands.

36. See Dulce M. Redín et al., Exploring the Ethical Dimension of Hawala, 124 J. Bus. Ethics 327 (2014).

37. Id. at 327–37.

38. Id. at 330–31.

39. Id. at 334.

40. Wasta is an Arabic term meaning “mediator” and “means,” and is “the practice of mediating between adversaries in a tribal conflict” or “interceding on behalf of a supplicant to obtain some kind of advantage from a third party.” Doughan, supra note 32, at 3.

41. Id.

42. Id.

43. Customs, Consumers, and Cooperation, supra note 1.

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Kari P. Kammel is assistant director of education and outreach at the Center for Anti-Counterfeiting and Product Protection and adjunct professor of law at Michigan State University, specializing in legal research of trademark counterfeiting. She was deputy chief of party in Iraq for the International Human Rights Law Institute.