Pride and Productivity: Commission recommends allowing parallel importation of books

The Productivity Commission (Commission) has recommended the abolition of parallel importation restrictions on books in Australia, in a report released on Tuesday.  This controversial recommendation has been heralded both as a victory for Australian book consumers and a death knell for Australian literature.  The Government’s response to the Report is yet to be released.

Current scheme

Under the Copyright Act 1968 (Cth) (Act), as it currently stands, copyright is territorial.  That is, the Australian copyright on a literary work only covers Australia, and a person can only exercise the exclusive rights of a copyright holder in Australia if licensed to do so in Australia.  For example, a person licensed to reproduce a work in the UK could not reproduce that work in Australia without infringing the owner’s copyright.

This restriction also extends to the importation of literary works.  Section 37 of the Act says that copyright in a literary is infringed by anyone who imports an article into Australia which, had it been made in Australia, would have constituted copyright infringement.  This means that (subject to the qualification below) copies of a book legitimately published overseas cannot be imported into Australia for the purposes of sale, without copyright being infringed.

There is one exception to the rule, introduced in 1991.  Copyright subsists in an original, published literary work only if the first publication of the work took place in Australia: s 32(2)(c).  However, if a work is first published outside Australia, the Australian publication of a work is not taken to be other than the “first publication” provided it took place not more than 30 days after the overseas publication: s 29(5).  In the context of parallel imports, this means that, provided the Australian edition of a literary work is (a) never published or (b) published more than 30 days after the overseas edition, parallel imports are permitted.

Other exceptions to parallel import restrictions are set out in s 44A, including where a publisher cannot fill a store’s request for an edition within 90 days, where a customer places a single, verifiable order and the supply of books to a library.

Commission’s recommendations

The Commission has recommended that the parallel import restrictions (PIRs) on books be repealed.  The central reason for the recommendation is:

“The PIRs provide benefits to publishers, authors and also printers, but impose costs on consumers and the broader economy. These effects stem principally from the protected higher prices of many books …  The current PIR regime is unnecessarily costly for consumers, restricts the commercial operations of booksellers and is not a well targeted mechanism for supporting cultural externalities.” [at p 137]

The recommendation contrasts with that proposed by the Commission in its discussion draft (that PIRs be limited to a period of 12 months).

The Coalition for Cheaper Books, an association of Australian booksellers, welcomed the recommendation. In their submission to the Commission, the Coalition stated that “[w]e believe the costs incurred by the community through the prevention of parallel imported books – higher prices, less availability and concentration of market power in the hands of publishers – greatly outweigh the alleged benefits to authors and publishers.” It points to the increasing availability of electronic books and the outcomes of similar reforms to the recorded music market in 1998.

However, the Commission’s recommendation has been subject to vociferous criticism from Australian authors and publishers.  Writer Richard Flanagan’s response to the recommendations was to state, “[i]f Kevin Rudd adopts this report he will go to his grave as the man who made a bonfire of Australian writing, and hailed the ash as reform.”

The Government’s response to the report will be eagerly anticipated by industry participants and copyright enthusiasts alike.

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