Frequently Asked Questions
Counterfeits and Pirated Products on the Market
- 1. What are counterfeits?
- Counterfeits or counterfeit products are products that are designated with someone else’s protected trademark without authorization, most often imitating the genuine product designated with a trademark in the way to make an impression at first sight that it is a matter of the genuine product. Placing counterfeits on the market represents violation of the provisions of the Trademarks Act and other regulations governing the trademark rights. In spite of the measures undertaken against this global problem, counterfeit products can appear in trade not only on the markets of undeveloped countries but on the markets of highly developed countries as well, Croatia included.
- 2. How to recognize counterfeits on the market?
- A consumer can protect himself from buying a counterfeit (a product designated with a protected trademark without authorization) primarily by choosing a point of sale. Genuine products with protected trademarks are not generally being sold on benches, out in the open and on similar places (fairs, markets and the like). Poor quality of production and low price also indicate the possibility of a product being a counterfeit. The origin of a product is also one of potential indicators, and it can be established by checking a product notification originally sewn in by the manufacturer or enclosed to the product as a notification in Croatian, which is obligatory when placing a product on the Croatian market.
- 3. What are pirated products (“pirates”)?
- Pirated products (colloq. “pirates”) are products with musical (audio) works, cinematographic (audio- visual) or other copyright works recorded on sound recording media and/or pictures without the author’s or his authorized representative’s authorization. Placing pirated products on the market represents violation of the provisions of the Copyright and Related Rights Act and, in certain cases, the provisions of the Criminal Code (Chapter 27).
- 4. How to recognize pirated products on the market?
Consumers can recognize pirated products by the following factors:
- a place of buying a sound recording media can indicate that it is a matter of a pirated product. If such products are being sold on stands, fairs, markets or other occasional sales, there is a possibility of a pirated product being offered for sale;
- low price of the product can be one of the indicators to suspect the product’s originality;
- musical works are currently on the market as recorded on optical discs (CD, DVD etc.) whereby none of the renowned legal producers from musical industry produces or sells his products on optical discs that enable recording of music i.e. the ones named CD-R and DVD-R. Any product on such media therefore needs to be deemed suspicious;
- the majority of pirated products can be recognized by the outside layout. Some of the signs of pirated products are: printing and packaging are of low quality (often a photocopy of the cover), no reference to the record company, no copyright warning, no list of songs, spelling and grammar errors can be perceived on the cover. A buyer can recognize a pirated product by the aforementioned characteristics on the outside. Experts can recognize pirated products by a number of other signs that are not publicly announced by manufacturers of genuine products in order to avoid misuse with production of pirated products.
- 5. What should you do if you suspect to have bought a counterfeit or a pirated product?
If a consumer suspects to have bought a counterfeit or a pirated product, or that such product is out on the market, he may submit an application to the Ministry of Finance of the Republic of Croatia, the Customs Administration, by a free call to the Operative Duty Service of the Customs Administration’s phone number 0800 12 22.
A customer may submit an application in writing as well, to the head office address: Ministry of Finance of the Republic of Croatia, Customs Administration, Humboldtova 4a, 10 000 Zagreb or by electronic mail to the address: email@example.com.
- 6. What should contain an application to the Ministry of Finance of the Republic of Croatia, the Customs Administration?
An application to the Ministry of Finance of the Republic of Croatia, the Customs Administration, should contain:
- Name and surname of the natural person, or the name of the legal person submitting an application– if the applicant wishes to receive a notice about actions and measures undertaken, the address for a reply needs to be given.
- Name and surname of the natural person, or the name of the legal person against whom the application is filed, the head office address and the address of the facilities where the infringement has been made (if different from the head office) and if possible the personal identification number (OIB) of the concerned entity. The address of the concerned entity also determines the location of a Regional Customs Office or a Customs Office competent for the inspection.
- The subject of the application – to explain the infringement of regulations as briefly and precisely as possible.
- Accompanying documents – if available (purchase invoice and/or another documentation enclosed to the purchased product).
- 7. What can an inspector of the Ministry of Finance of the Republic of Croatia, the Customs Administration, undertake in the inspection, should he establish that there are products traded on the market, designated with a trademark without authorization (counterfeits)?
Should an inspector during the inspection find products with someone else’s trademark used, reproduced or imitated without authorization, affixed to the products or packaging, and when there are products traded with someone else’s trademark offered, placed on the market or stored, imported or exported, he temporarily seizes the products, issuing a Certificate of Temporary Seizure of Products.
An inspector undertakes the seizure of products in compliance with the provision under Article 50 of the Customs Service Act. Also, an inspector is obligated to submit an indictment to a competent misdemeanour court to initiate misdemeanour proceeding against the infringer pursuant to Article 80 of the Trademarks Act, whereas the amount of the fine, as well as permanent seizure and possible destruction of products shall be set by the judge of a competent misdemeanour court.
Instead of an indictment, a competent inspector can issue a misdemeanour warrant pursuant to Article 80 of the Trademarks Act.
- 8. What can a competent inspector of the Ministry of Finance of the Republic of Croatia, the Customs Administration, undertake in the inspection, should he find sound recording media and/or pictures and books traded infringing the copyright or the related rights (pirated products)?
Should a competent inspector of the Ministry of Finance of the Republic of Croatia, the Customs Administration, find during the inspection with the controlled entity sound recording media and/or pictures and books traded infringing the copyright and/or the related rights, he shall submit an indictment to a competent misdemeanour court to initiate misdemeanour proceeding against the infringer pursuant to the provision under Article 189 of the Copyright and Related Rights Act..
Also, a competent inspector shall temporarily seize sound recording media and/or pictures and books traded and generated by infringement, as well as the objects intended or used for infringement; in an indictment, he shall proposed a measure of seizing these objects to be imposed in compliance with the provision under Article 189 paragraph 5 of the Copyright and Related Rights Act.
Instead of an indictment, a competent inspector can issue a misdemeanour warrant pursuant to the provisions under Article 228 and 233 of the Misdemeanour Act, if a misdemeanour is committed as provided under Article 189 paragraph 1 of the Copyright and Related Rights Act.
- 9. What are the fines for infringers of a trademark (in trading counterfeits)?
The fines for infringers of a trademark are provided by Article 80 of the Trademarks Act in the following way:
- Any legal person who uses somebody else’s trademark, an identical or a similar one, reproduces or imitates it, affixes it to the goods or the packaging thereof, offers the goods under somebody else’s trademark, puts them on the market or stocks them for these purposes under somebody else’s trademark, imports or exports the goods under somebody else’s trademark, uses somebody else’s trademark when providing services or on business papers and in advertising, without authorization (Article 7, paragraph 2, item 1 and 2), shall be punished for the misdemeanour by a fine amounting from HRK 20,000.00 up to 100,000.00.
- The natural person shall be punished for a misdemeanour referred to in paragraph 1 of Article 80 by a fine amounting from HRK 2,000.00 up to 10.000,00.
- The responsible person in the legal person shall be punished for a misdemeanour referred to in paragraph 1 of Article 80 by a fine amounting from HRK 5,000.00 up to 10,000.00.
- The natural person - the craftsman or other self-employed person, respectively, shall be punished for a misdemeanour referred to in paragraph 1 of Article 80 committed in the performance of activities as a craftsman or other self-employed person, respectively by a fine amounting from HRK 5,000.00 up to 50,000.00.
- 10. What are the fines for infringement of a copyright (in trading with pirated products)?
Considering misdemeanours in relation to the infringements of copyright and related rights as provided under Article 189 paragraph 1 of the Copyright and Related Rights Act, the legal person shall be punished by a fine amounting from HRK 5,000.00 up to 50,000.00.
The same Article prescribes fines for the responsible person in the legal person (from HRK 2,000.00 up to 10,000.00), for the natural person (from HRK 2,000.00 up to 10,000.00) and for the natural person – the craftsman, or other self-employed person, for a misdemeanour committed in connection with the performance of activities as a craftsman or other self-employed person, respectively (from HRK 5,000.00 up to 50,000.00).
Import, Export and Transit of Counterfeits and Pirated Products
- 1. Who controls import, export and transit of counterfeits and pirated products?
- The Customs Administration of the Ministry of Finance is competent for foreign goods subject to the customs control with import, storage, transit, but also smuggled or unreported foreign goods as well as domestic goods with export.
- 2. The enforcement of what kinds of intellectual property rights lies within competence of the Customs Administration?
- The Customs Administration may exercise the enforcement of all kinds of intellectual property rights: a trademark, a patent, and industrial design, topography of semiconductor products, geographical indications and appellations of origin, protected plant varieties and copyright and related rights.
- 3. Does the Customs Administration enforce measures for the protection of all protected intellectual property rights?
- A precondition for the enforcement of customs measures is the approval brought in an administrative procedure by the Central Office of the Customs Administration on request of the right holder. In this way, the Customs Administration conducts the enforcement of customs measures only in relation to the rights included in the approval. The rights that are not included in the approval for the enforcement of customs measures can be enforced ex officio, which means that in case of a reasonable suspicion that certain goods infringe a particular right which is not included in an existing customs approval, a notice shall be forwarded to the right holder on establishing a suspicion and the quantity of goods, thus giving him an opportunity to submit a full application within three working days upon receipt of the notice for the enforcement of customs measures. In this case, upon approval of the application an administrative procedure shall be initiated and the resolution passed about temporary detention of the goods.
- 4. What happens in case of suspected counterfeit goods in the customs control?
When a customs official, with enforcing measures of the customs control, establishes a reasonable suspicion that the goods infringe a particular intellectual property right, he shall initiate prescribed proceeding by submitting a Notification to the holder of the approval and the holder of the goods or the declarant of goods, about temporary detention of the goods for the period of ten working days (upon receipt of the Notification).
On request of the holder of the approval, this period can be prolonged by further ten working days, in order to submit a lawsuit to a competent commercial court against the holder or the declarant of goods. During this proceeding, the goods remain under customs control and unavailable for use.
- 5. Who can examine the goods in dispute under customs control during the proceedings?
- In the presence of a customs official of the competent Customs Office, the goods can be examined by the declarant, the holder of the goods or the owner of the goods, as well as a representative of the holder of intellectual property rights suspected to be infringed.
- 6. Who can take samples of the goods in dispute under customs control?
- Only the holder of intellectual property rights suspected to be infringed can take samples of the goods, if an expert witness testimony (analysis) needs to be obtained in order to establish the actual infringement of his intellectual property rights. Samples, unless destroyed in the analysis, are to be returned by the holder of the rights immediately upon completion of the analysis, and not later than the completion of proceedings.
- 7. What happens upon completion of the enforcement of customs measures with suspected infringement of intellectual property rights?
There are two possible outcomes of this procedure: to release the goods into the requested customs procedure or proceedings, and destruction of the goods.
If the intellectual property right holder establishes by examination that it is a matter of genuine goods (i.e. no infringement of the rights), or declares not to be interested in the enforcement of the procedure, or fails to bring an action in an administrative procedure within the prescribed deadlines, the goods will be released into the requested customs procedure or proceedings.
If, on the other hand, the intellectual property right holder establishes that the goods infringe his rights, he has various options at his disposal. The most efficient one is for the right holder to start negotiating with the owner of the goods and to conclude an out-of-court settlement for destruction of the goods (at the cost of the owner of the goods or the right holder). The right holder may request the goods under the customs control to be destroyed at its cost, if he encloses a declaration that the goods infringe his rights and a declaration of the declarant, the holder of the goods or the owner of the goods to agree on destruction of the goods. If the right holder cannot make contact with the owner of the goods, or cannot obtain a declaration of the declarant, the holder of the goods or the owner of the goods to agree on destruction of the goods, he can file a unilateral request for the goods to be destroyed which will be approved unless the declarant, the holder of the goods or the owner of the goods has explicitly objected to the destruction of the goods in writing.
If the right holder is not able to conduct into an out-of-court settlement or is not able to initiate a simplified procedure for destruction of the goods under the customs control, and still wants to protect his intellectual property rights, he has a possibility to submit a lawsuit to the competent commercial court (in Osijek, Zagreb, Rijeka or Split). In this case, the goods in dispute shall be seized by a resolution until a binding decision of the competent court has been received.
- 8. Can the Customs Administration detain the goods purchased abroad via the internet?
- Yes, it can. Namely, in terms of the customs regulations, it is a matter of importing foreign goods, and the Customs Administration is competent to enforce customs control in such cases as well, and accordingly, with enforcing the measures of the customs control to establish suspicion in the goods’ infringing intellectual property rights (i.e. if counterfeited) or not.
- 9. Can the Customs Administration detain the goods that are sent free of charge in letters and packages from natural person from abroad to natural persons in Croatia?
Yes, it can. Pursuant to the Regulation (EU) No. 608/2013 of the European Parliament and of the Council of 12 June 2013 on the customs enforcement of intellectual property rights, it is only the goods of non-commercial nature in personal luggage of a traveller that is exempt from the application of the Regulation.
Namely, the goods in letters and packages sent by natural persons from abroad (outside of the EU) to natural persons in Croatia are also subject to the customs control and the assessment whether customs debt needs to be charged for such goods.
- 10. Can counterfeit goods upon enforcement of an appropriate legal procedure be donated instead of being destructed?
- They can, pursuant to the valid regulations in Croatia, but only if both, the owner of the goods and the right holder agree on it and under condition that it is not a matter of the goods that can exert a negative effect on consumers’ health and safety. Accordingly, counterfeit food and beverages, cosmetic products, sunglasses, electric and electronic devices, mobile phones and equipment, machinery, car parts, medicinal products, lighters, batteries and other similar products cannot be donated.
International Activities of Combating Counterfeiting and Piracy
- 1. What is ACTA?
ACTA is an English abbreviation for a proposed multinational (plurilateral) Anti-Counterfeiting Trade Agreement initiated by a group of countries aiming at more efficient international enforcement of intellectual property rights, considering the existing global proportions of counterfeiting and piracy. The countries that initiated this agreement and in the process of negotiations agreed upon its final reading are Australia, Canada, Japan, Republic of Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland, USA and the European Union with its 27 member states then.
Although a part of the countries that initiated ACTA signed this agreement, ACTA has not yet come into effect in either country. In connection with the development of this legal instrument, that aroused great interest in the international public, it needs to be said that in May 2012 the European Commission sent the text of ACTA to the European Court of Justice for examination of compliance of its provisions with the Charter of Fundamental Rights.