VZCZCXRO6982
RR RUEHAST
DE RUEHVB #0719/01 1641126
ZNR UUUUU ZZH
R 131126Z JUN 06
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC 6280
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 ZAGREB 000719 
 
SIPDIS 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR EB/TPP/IPE URBAN 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KIPR HR
SUBJECT: CROATIA IPR UPDATE 
 
 
ZAGREB 00000719  001.2 OF 002 
 
 
SENSITIVE BUT UNCLASSIFIED 
 
¶1.  (SBU) Summary:  Although it remains on the 
Special 301 list for insufficient protection of 
pharmaceutical patents, the legal framework for the 
protection of IPR in Croatia is relatively strong. 
IPR infringements have been criminalized in Croatia 
since 1994 and the Ministry of Interior maintains a 
special IPR enforcement unit for these crimes. 
Seizures and the number of criminal cases brought 
for IP crimes have risen steadily in recent years. 
Software piracy rates have fallen from 92 percent to 
57 percent over the last ten years and continue to 
decline.  However, problems remain.  Geography poses 
Croatia's greatest challenge in securing IPR, as its 
long coast and land borders with Bosnia and Serbia 
make it a major transit route.  Also, despite 
regular police seizures of pirated and counterfeit 
goods, Croatia's court system has not developed as 
far in its ability to tackle this problem, 
frequently releasing violators with little more than 
a verbal warning and forfeiture of goods seized. 
End Summary. 
 
Police Enforce IPR Laws 
----------------------- 
¶2.  (SBU) Croatia criminalized IPR violations in 
¶1994.  Enforcement, with the exception of Customs, 
is the province of the national police, under the 
Ministry of Interior.  Data shared with Econ Off by 
Mirjana Vukovic of the Interior Ministry's 
Department for Economic Crime and Corruption shows 
steady growth both in seizures of pirated goods 
(mostly CDs and DVDs) and overall cases opened for 
IP violations, including the sale of counterfeit 
brand-name consumer products.  In 2005, the Croatian 
police referred 1090 cases to the State Prosecutor's 
Office for IPR-related crimes, 16.5 percent more 
than in 2004.  Most of these (640) were for 
copyright violations, including those stemming from 
police seizures of over sixty-six thousand pirated 
CDs, DVDs and cassettes.  However, neither Vukovic 
nor the head of the Economic Crime Department, Ante 
Orlovic, could say if rising numbers reflect better 
enforcement or simply growth in the problem.  They 
suspect that it is a combination of the two. 
 
Destination and Transit Country, Not Producer 
--------------------------------------------- 
¶3.  (SBU)  Croatia is not an important producer of 
pirated and counterfeit goods.  Vukovic said that 
most of the pirated goods made in Croatia that have 
been seized by police are of very poor quality with 
no effort made to pass them off as originals. 
Croatia, however, is a destination country for 
counterfeit consumer goods produced elsewhere 
(mostly in China, according to Vukovic) and also an 
important transit country for goods headed for 
neighboring Bosnia and Serbia.  In the case of 
Bosnia, Vukovic said that many counterfeit goods 
eventually find their way back to Croatia, either 
purchased by consumers on trips across the border or 
for resale.  The summer season poses a particular 
challenge as tourists swell the population of 
Croatia's coast and islands, creating a larger 
market for counterfeit goods.  At the same time, 
police numbers are spread thin, effectively relaxing 
enforcement when the problem is greatest. 
 
Courts Not Backing IPR Laws Sufficiently 
---------------------------------------- 
¶4.  (SBU) A common theme both from the Ministry of 
Interior and from Mladen Vukmir, Zagreb IPR attorney 
and Business Software Alliance representative, is 
that Croatia's courts are not up to the task of 
enforcing the country's IPR laws.  According to 
Mirjana Vukovic, many of the cases that the police 
bring for IP crimes result in little more than a 
reprimand for the perpetrators, as well as the 
forfeiture of any contraband seized.  Given the 
economics of counterfeits, this is an acceptable 
risk to most of these merchants who, much to the 
frustration of the police, are usually back in 
business and fully stocked within a few weeks. 
 
¶5.  (SBU) All of our interlocutors agree that the 
courts are the weakest link in Croatia's IPR 
protection regime, particularly at the municipal 
 
ZAGREB 00000719  002.2 OF 002 
 
 
level.  The Ministry of Interior organizes periodic 
seminars for judges on IPR, but lacks resources to 
carry this out in a comprehensive way. 
Nevertheless, Vukovic related the story of a judge 
in Slavonia who, after hearing how counterfeit 
consumer products can endanger public health, began 
to issue much tougher sentences.  Vukmir concurred 
with the view that training of judges and the 
establishment of IPR as a specialty in Croatia's law 
schools would go a long way toward strengthening IPR 
enforcement. 
 
Software Piracy Declining 
------------------------ 
¶6.  (SBU) Vukmir said that software piracy has 
declined substantially in Croatia over the last 
decade.  In 1996 it was estimated that nearly 92 
percent of all computer software used was illegal. 
Now that figure has been reduced to 57 percent, 
which Vukmir said was about the same as in Greece, 
but higher than neighboring Slovenia, where he said 
it was estimated that 50 percent of software in use 
was illegal.  Vukmir attributed the decline in 
software piracy both to better enforcement and also 
to the increasing practice of bundling software as 
original equipment on new PCs, particularly 
notebooks. 
 
FRANK