VZCZCXRO2011
RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHVB #0183 0511326
ZNR UUUUU ZZH
R 201326Z FEB 07
FM AMEMBASSY ZAGREB
TO RUEHC/SECSTATE WASHDC 7323
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS ZAGREB 000183 
 
SIPDIS 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EUR/SCE, EB/TPP/IPE 
 
E.O. 12958: N/A 
TAGS: ECON KIPR HR INTELLECTUAL PROPERTY
SUBJECT: CROATIA 2007 SPECIAL 301 RECOMMENDATION 
 
REF: A) STATE 7944, B) ZAGREB 100, C) ZAGREB 164, D) ZAGREB 175, E) 
 
06 STATE 184074 
 
¶1. (SBU) Summary and Recommendation:  In light of the recent 
establishment of a mechanism of patent linkage and improving 
enforcement of IPR generally, Post recommends that Croatia be 
removed from the Special 301 Watch List this year.  Special 301 was 
a useful tool for effecting improvements in Croatia's IP regime.  It 
is now time to acknowledge that improvement and remove Croatia from 
the Watch List.  End Summary. 
 
Pharmaceutical Patent Protection In Place 
----------------------------------------- 
¶2.  (SBU) With the recent establishment of a system of coordination 
between its Drug Agency and the State Office for Intellectual 
Property, the GOC has taken the remaining step necessary to close 
the gap in its IP regime for pharmaceuticals (see Ref D).  Together 
with its 2004 data protection legislation, patent linkage means that 
a repetition of past infringements of pharmaceutical patents is 
unlikely.  Post is not aware of any recent case of pharmaceuticals 
being unlawfully placed on the market, which is borne out by the 
fact that PHARMA did not prepare a submission on Croatia for this 
301 cycle. 
 
Enforcement Improving 
--------------------- 
¶3.  (SBU) Croatia's patent authority, the State Office for 
Intellectual Property is activist and professional.  The GOC is 
encouraging economic reform policies to develop Croatia's "knowledge 
economy" and seems to be fully cognizant of the fact that a strong 
IP regime is one of the foundations of such an effort. 
Consequently, we have seen an across the board improvement in IP 
protection over the last year.  More people were arrested and 
charged for IP-related crimes in 2006 than in any previous year and 
more people sentenced by the judicial system, including imprisonment 
(see Ref C).  At the same time, a system of surcharges on recordable 
media was introduced to offset losses incurred by illegal copying of 
audio-visual IP (see Ref B). 
 
How 301 Was Ultimately Successful in Croatia 
-------------------------------------------- 
¶4.  (SBU) Croatia has made a lot of progress on IPR in recent years, 
which is visible in its enforcement statistics.  In the case of 
Special 301, the Embassy was able to use this as a lever to 
establish needed communication between the Drug Agency and the State 
Office for Intellectual Property.  Although reaction to Croatia's 
annual 301 listing was usually quite dismissive at the official 
level, with our interlocutors noting "that at least Croatia is in 
good company, given all the other countries included on the list", 
the desire to get Croatia off the list ultimately overcame 
resistance.  The effective message for the GOC was that although an 
individual listing may not be highly significant, the larger message 
sent to potential investors can be damaging.  The simple fact that 
Croatia was included among a list of serious IP violators had the 
potential to reinforce an impression that this is a country where 
investments are not protected by the law.  We told the GOC that the 
cost of closing the gap in the protection of pharmaceutical patents 
was essentially nothing, but the cost of doing nothing was 
potentially high.  This message ultimately got through and was 
successful. 
 
Time to Remove Croatia from 301 Watch List 
------------------------------------------ 
¶5.  (SBU) Croatia's IP regime is not perfect; this is still a young 
democracy with significant deficiencies in its legal system. 
However, the GOC has taken the right steps on IPR.  Most industry 
groups here concur with this view and consider Croatia an IPR bright 
spot in this region.  Now is the time to acknowledge this progress 
and remove Croatia from the Special 301 Watch List. 
BRADTKE