Parallel Importing of Copyright Material in a Digital Age: Why it Should be Lawful and Why it May Never Be
| Author | Mark J Davison |
| Published date | 01 June 1997 |
| Date | 01 June 1997 |
| DOI | http://doi.org/10.22145/flr.25.2.3 |
| Subject Matter | Article |
PARALLEL
IMPORTING
OF
COPYRIGHT
MATERIAL
IN
A
DIGITAL
AGE: WHY
IT
SHOULD
BE
LAWFUL
AND
WHY
IT
MAY NEVER
BE
Mark JDavison*
INTRODUCTION
The legislative prohibitions
on
the parallel
importation
of copyright
material
should
not
survive
the
new
technological developments
in
the transmission of
that
material.
Australian
copyright
law
should
come to grips
with
that
reality
and
remove
the
existing prohibitions. Yet
the
adoption
of
current
proposals for
the
amendment
of
copyright
law
may
lead
to asituation
in
which
copyright
owners
could
effectively
prevent
parallel importing. This could
be
done
by
copyright
owners
even
if
the
existing
statutory
provisions specifically aimed
at
preventing
parallel
importing
were
repealed.
This article looks
at
the
justifications for prohibiting parallel
importing
and
the
strength
of those justifications
in
the light of
new
or
developing
means
of distributing
copyright
material. Those justifications
have
been
seriouslr
questioned
in
recent
years
by
aseries of
reports
of the Prices Surveillance
Authority
(PSA)
which
has
criticised
the
continuing
prohibition of parallel importing. The criticisms
in
these
reports
have
not
made
any
detailed reference to the effects
that
changes
in
technology will
have
on
the
means
of distributing copyright materia1.2Those criticisms, combined
with
the
impact
of
new
technology, tip the balance of
the
debate
concerning parallel
importing
in
favour
of
permitting
parallel importing.
The challenge is to re-write Australian copyright
law
so
that
it does
not
permit
copyright
owners
to
prevent
parallel importing. That challenge is complicated
by
the
need
to
comply
with
international conventions
on
copyright.
Proposed
changes
at
the
international level are substantially similar to the proposals for changes to
Australian
legislation. If those
proposed
changes are
made
without
appropriate
regard
to
the
issue
LLB
(Hons) (UQ); LLM (Mon) Senior Lecturer, Faculty
of
Law,
Monash
University. I
would
like to
acknowledge
the
assistance
of
Professor
Sam
Ricketson
who
provided
detailed
and
helpful
comments
on
successive drafts of this article.
Any
errors
in
the
article
are solely
my
responsibility.
The
Prices Surveillance
Authority
has
recently
been
merged
with
the
Trade
Practices
Commission
to
form
the
Australian
Competition
and
Consumer
Commission.
Brief reference is
made
to
this issue
in
PSA "Submission
to
Copyright
Law
Review
Committee's
Reference to Review
and
Simplify
the
Copyright
Act
1968",
http://www.agps.gov.au./customer/agd/clrc/submissions/sub_15_psa.html#RTFT.C5.
264
Federal
Law
Review
Volume
25
of
parallel
importing,
parallel
importing
will
be
unlawful
throughout
the
world
at
the
very
time
when
it
should
be
lawful.
What
is
parallel
importing?
Parallel
importing
of
copyright
material
occurs after
copyright
material
is
produced
I
overseas
either
by
the
owner
of
the
copyright
or
with
its authority. The creation
of
I
these
reproductions
is therefore legitimate
and
beyond
legal reproach,
unlike
pirate
copies of
the
material
that
are
so-called
because
they
are
reproduced
without
the
,I
copyright
owner's
authority.
However,
the
subsequent
importation
into
Australia
of
i
the
legitimately
created
copyright
material, for acommercial
purpose
such
as resale, I
without
the
consent
of
the
owner
of
the
Australian
copyright, is
parallel
importing.
,
Apart
from
some
limited
statutory
exceptions, parallel
importing
of
copyright
material
I
is illegal
in
Australia.3
The
effect of
prohibiting
parallel
importation
is to facilitate geographical division of I
the
market
for
the
copyright
material
in
question.4The
copyright
in
particular
material
I
can
be
partially
assigned
along geographical lines. The assignee is
then
assured
that
I
when
selling
the
copyright
material
within
the geographical
area
described
in
its;
assignment
that
it
will
not
be
competing
with
the
same
material
from adifferent I
source.
The basic justification for prohibiting parallel
importing
is
that
the
owner
of
the
~
Australian
copyright
needs
a
return
on
its
investment
in
promoting
the
copyright
I
material
in
Australia. It is less likely to invest this
money
if it
runs
the risk of
cheaper'
versions of
the
same
material
being
imported
and
sold
in
competition
with
the
~
Australian
copyright
owner's
material. A
publisher
may
be
less willing to
publish
and
I
promote
a
book
by
an
Australian
author
if there is apossibility
that
cheap
copies of
the~
book
may
be
imported
for sale into Australia. For example, this
may
happen
if
the~
owner
of
the
overseas
copyright
is unsuccessful
in
its
attempt
to
promote
the
book;
overseas
and
sells
the
book
at
a
discount
on
the
Australian
market
where
it is morel
popular.
The
present
law
As
already
stated,
parallel
importing
is
prohibited
in
Australia, subject to certainl
exceptions.5The
key
provisions are ss 37
and
102 of the
Copyright
Act 1968 (Cth) (thE
Act). Section 37 reads:
SECTION 37 INFRINGEMENT
BY
IMPORTATION FOR SALE OR HIRE
37 Subject to section 44A,
the
copyright
in
aliterary, dramatic, musical
or
artistic
work
is
infringed
by
a
person
who,
without
the licence of
the
owner
of
the
copyright,
imports
an
article
into
Australia
for
the
purpose
of
-
(a) selling, letting for hire,
or
by
way
of
trade
offering
or
exposing
for sale
or
hire,
the
article;
(b)
distributing
the
article -
(i)
for
the
purpose
of
trade;
or
3
4
5
See
Copyright
Act 1968 (Cth) ss 37, 38, 102
and
103
and
s44A for exceptions to
the
gener
prohibition
against
parallel
importing.
The
term
"market"
here
is
used
in
aloose sense to refer to
the
demand
for
and
supply
particular
copyright
material.
Copyright
Act 1968 (Cth), s44A.
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