Romana Matanovac Vučković: We Practically Have No Patents Because We Are a Technologically Under-Capacitated Country

A terse explanation states that intellectual property is a collective term for subjective rights to intellectual creations as intangible goods. However, that sentence does not convey the most important point: intellectual property is designed to generate money or at least contribute to business. If the cards are played well, intellectual property can bring billions of euros, so it is not surprising that certain industries are contemplating how to protect intellectual property in space.

Croatia is neither here nor there. It is as if we have not even understood what intellectual property is, let alone how to manage it, although everyone knows that one example of a Croatian patent has secured millions, perhaps even billions, for Pliva. Can we repeat that success, do domestic companies have the will and money to register patents, who is suing whom today regarding intellectual property, and how to protect artificial intelligence products, we discussed with Romana Matanovac Vučković, a professor at the Faculty of Law in Zagreb and one of the leading experts on intellectual property in Croatia.

What are your impressions, how is intellectual property managed in Croatia?

– My general impression is that this area has developed quite a bit in the last twenty years and that awareness of intellectual property is growing. We are a little better at protecting copyright than at patent registration, but the reason is not that we do not register patents, but the problem is that we in Croatia have almost no patents. They are tied to research and development, technology, and production processes and their outcomes, and unfortunately, we are not that developed in this area. We have very few patents. This is currently bad for Croatia and is something that definitely needs to change. That is why the book ‘Managing Intellectual Property in Organizations’ was written, primarily as a book for entrepreneurs, but also as a university textbook for students, to encourage not only reflection on these topics but also investments, which are a key problem when we talk about patents.

So our companies invest too little in research and development, so they do not have patents to register?

– That’s right. This is also an indicator that we are a technologically under-capacitated country.

The main reason is certainly of a financial nature?

– Of course. Although at the level of the European Union there are many programs and projects that companies can apply for to finance such research and development, today very few do so. There are examples, of course, but they are exceptions. And even those who invest in this segment protect intellectual property too little.

Briefly explain to us how the whole thing works. I have a product and want to protect something. How do I decide what is the right option for my company and me?

– First, you need to decide which intellectual property you want to protect, that is, whether you want to register a patent or protect a trade secret. For example, with a patent, you must disclose the entire invention behind something you are putting on the market, which is not insignificant because it means that the competition will see it, while with a trade secret, you keep the confidentiality of what you are doing. This is a strategic decision: to go for patenting or to stick with a trade secret.

Patenting takes quite a long time.

– Yes, that is why few entrepreneurs enter such processes. Patent protection is expensive and, among other things, carries a significant risk. There is a lot of work involved, and when you go into patenting, the entire process must be respected, which is preceded by research, then an examination of whether something can even be patented, followed by the patent examination process, and then the patenting process. Then you realize that one patent is usually not enough because even when you register 100 patents, ten will be commercialized, and only one will bring extra profit. It can be said that patents operate on the principle of a method of many trials and errors to arrive at something that will be commercial and highly profitable. Unfortunately, this is an expensive process, so only strong, large companies can afford patents.

But Croatia has a good example of its own patent.

– Yes, azithromycin, or Sumamed, is a world example of an excellently crafted patent.

Do we have any other examples?

– There are no more such examples. Pliva had other patents, but only that one was maximally commercialized and achieved exceptional extra profits. Even the company Rimac Automobili, while it was independent, decided that it would generally not patent, but as soon as new owners entered the company, they began to contemplate developing their own intellectual property portfolio or patent registration. When it comes to companies, such a decision must be strategic, as it was with Mate Rimac, although I do not have data on how commercial and profitable his patents are. But that is certainly a good path that Croatia and domestic companies must follow. However, without institutional support, changes cannot be expected. As I said, it is an expensive process, and the state and the EU must provide financial support here.

So there are instruments for economic entities that help in these processes?

– Of course, but we do not use them.

We do not use them because there is not enough awareness in the business sector that these instruments are at hand, or because there are not enough ideas?

– I would say it is a combination and that attention is not paid to this part either in the academic community, and consequently not in private business. And we do not have such a structure of the economy.

How do we stand when it comes to the protection of trade secrets? What challenges are there?

– Trade secrets are protected when it comes to some know-how. This is also one way to protect oneself within a company, so that employees cannot disclose certain business processes to others. So, if someone offers you a software development service or something similar, then you protect yourself with trade secret protection so that the competition cannot copy you because anyone who comes into a position to learn your trade secret is under threat of some huge damages. This is, for example, very important for companies in the financial industry. In addition, branding, or the value of their trademark, is very important for them. As soon as it is heard that a bank whose name is trademarked is in trouble, people line up in front of the branches, withdraw money, and a collapse occurs in a very short time. What would happen if anyone came to the market, took some part of the name of a bank, and started doing suspicious business? That would be a reputational scandal.

Where do we stand well?

– Trademark protection or branding, we are quite strong in that area, and, like with authorship, at the level of the European Union. The creative industry, architecture and design, cultural and media industries, publishing have done a great job in this area, we are good at it. The tourism industry can also give us a bit more momentum, which, for example, can work a bit more on brand protection through the registration of distinguishing marks, in collaboration with local communities and producers of consumer goods.

For example?

– You already have various food products, such as kulen, prosciutto, olive oil… with registered geographical indications, and these indications generate great value. Now, organic, higher-quality food is popular, and as soon as you have a geographical indication, it indicates that it is a higher-quality food product, which also generates value.

Read the entire interview in the digital edition of Lider.