The Croatian Criminal Act entered into force on January 1 2013, replacing the Criminal Act of 1997. The new Act, besides other changes, substantially alters the enforcement process as it relates to acts which violate IP rights.
In order for the act to be considered a criminal violation, and processed as such under the Criminal Act, the amount of damage to the IP holder, or the acquired benefit by the infringer, must be "considerable". Although the Act itself does not define what amount is considerable, the Supreme Court in December 2012 decided that considerable benefit or damage amounts to kn60,000 ($10,000).
This change has had a great impact on the enforcement of IP-related infringement, particularly as it relates to infringement activities online, as most singular instances do not amount to violations involving kn60,000 or more. Consequently, the infringing activities cannot be classified as criminal offences but as misdemeanours. The result of this interpretation affects prosecution of these activities, as search warrants are not issuable for misdemeanour offences. In order for a warrant to issue to search the premises of suspected infringers, the courts must confirm that the infringement is considerable. Naturally the lesser value associated with counterfeit goods impedes the willingness and ability of county courts to issue the necessary search warrants to permit the police to enter private properties of suspected sellers of goods believed to infringe, which are advertised over e-commerce websites.
The experience of IP practitioners and the police is that infringers, usually individuals, keep minimal stock of infringed goods on hand. This result also supports the reluctance of courts to issue search warrants in these types of cases.
Additionally, the state Inspectorate, another enforcement agency responsible for supervision of trade activities by commercial entities for compliance with legal requirements, argues that they are not responsible for supervision of individuals as individuals are not commercial entities.
As a result, we are witnessing the rapid growth of online ads and sales offering infringing goods via e-commerce sites in Croatia.
The Croatian State Intellectual Property Office is discussing with the Ministry of Justice effective solutions to this issue. Proposals so far include lowering the requested limit of IP crimes to well below $10,000; allowing the amounts associated with the acts of one infringer to accumulate over a certain period of time into one act; and making the considerable damage threshold include determinations of loss of goodwill through the sale of infringing goods.
At this point, it is not clear what will be decided as a solution to this issue. However, it is certain that IP owners are concerned and insistent that changes must be made to correct the current situation as soon as possible.
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