State and Society

In today’s economy based on knowledge, innovations and creativity represent the basic driver of economic development, so that the protection of intellectual property rights remains among central issues of every developed state, Croatia included.
Trade in counterfeit and pirated goods is a growing global problem. Proportions of counterfeiting and piracy today affect almost all branches of the economy. The days when only luxury products were counterfeited, and musical CDs and DVDs with movies were sold in the street, belong to the past times. Today, everything is being counterfeited – from children’s food and medicinal products to car parts. There are often chains of the international organized crime standing behind the production and distribution of counterfeit products and pirated software, music and films. Therefore, the fight against crimes in the field of intellectual property became again one of the ten priorities of the European Union in the fight against organised crime.
OECD and EUIPO conducted several research works related to these forms of illegal trade. According to the results of recent research published in the EUIPO’s Report on Risks and Damages Posed by IPR Infringement in Europe in June 2021, counterfeits represent 6.8 % of European Union imports worth EUR 121 billion.

Hence, the worldwide trade in counterfeit pharmaceutical products had been estimated at EUR 4 billion.
As a consequence of counterfeiting and piracy, national income has been on a decrease (due to outstanding taxes and customs fees), workplaces are being closed or new ones are not being opened in innovative and creative activities.

In addition to the aforementioned primary negative effects of counterfeiting, one should bear in mind there are also secondary social effects present, since certain categories of counterfeit products have a negative effect on human health (for example, counterfeit food, beverages, medicinal products, cigarettes, cosmetic products and the like), causing higher expenditures from the state budget within health care for the citizens.

Furthermore, counterfeiting and piracy instantaneously affect not only the reduction of income in the real sector and the reduction of tax income, thereby also the reduction of GDP and the number of newly opened workplaces, but also the competitiveness of the Croatian economy in its entirety. Considering the economic future of Croatia, efficient protection of intellectual property is the first step in the development of highly technological and highly profitable industry branches, contributing to the development of science and education and affecting the value system within our society to change.

Intellectual property has been assessed to be a crucial driver of growth and innovations in the European Union, so the fight against counterfeiting is directly connected also with further strengthening of industrial competitiveness of the EU in the world.

The study of the EUIPO and the European Patent Office titled “Intellectual property rights intensive industries and economic performance in the European Union”
shows that IPR-intensive industries generated 45% of total economic activity in the European Union, they have a share of 29.2% in all jobs in the EU, they accounted for most of the EU’s trade with the rest of the world, having generated a trade surplus. These industries employ 63 million people in the EU.