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Published online by Cambridge University Press: 24 January 2025
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 a situation 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by copyright owners even if the existing statutory provisions specifically aimed at preventing parallel importing were repealed.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 a series 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 material. Those criticisms, combined with the impact of new technology, tip the balance of the debate concerning parallel importing in favour of permitting parallel importing.
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.
1 The Prices Surveillance Authority has recently been merged with the Trade Practices Commission to form the Australian Competition and Consumer Commission.
2 Brief reference is made to this issue in PSA “Submission to Copyright Law Review Committee's Reference to Review and Simplify the Copyright Act http://www.agps.gov.au./customer/agd/clrc/submissions/sub_l5_psa.html#RTFT.C5".
3 See Copyright Act 1968 (Cth) ss 37, 38, 102 and 103 and s 44A for exceptions to the gener prohibition against parallel importing.
4 The term “market” here is used in a loose sense to refer to the demand for and supply particular copyright material.
5 Copyright Act 1968 (Cth), s 44A.
6 Interstate Parcel Express Co Pty Ltd v Time-Life International (Nederlands) BV (1977) 138 CLR 534;Computermate Products (Aust) Pty Ltd v Ozi-Soft Pty Ltd (1988) 12 IPR 487.
7 CLRC,The Importation Provisions of the Copyright Act 1968 (AGPS, Canberra, 1988) and CLRC, Computer Software Protection (Office of Legal Information and Publishing, Canberra, 1995) at Ch 11.
8 PSA, Inquiry into Book Prices Interim Report (August 1989); PSA, Inquiry into Book Prices Final Report (December 1989); PSA, Inquiry into the Prices of Sound Recordings (December 1990); PSA, Inquiry into Prices of Computer Software Interim Report (October 1992); PSA, Inquiry into Prices of Computer Software Final Report (December 1992); PSA, Progress Monitoring Report on Book Prices and the Impact of the 1991 Amendments to the Copyright Act 1968 (September 1993); PSA, Inquiry into Book Prices and Parallel Imports (April 1995).
9 The CLRC did make recommendations leading to the enactment of s 44A: The Importation Provisions of the Copyright Act 1968 at 3-6. Some members of the CLRC have also recommended a review of the provisions concerning computer software in two or three years: Computer Software Protection at 229. The CLRC has also recommended that computer manuals be brought within the operation of s 44A: Computer Software Protection at 231-232.
10 Copyright Act 1968 (Cth), s 44A.
11 CLRC, The Importation Provisions of the Copyright Act 1968 at 98-99.
12 PSA, Inquiry into Book Prices Interim Report at 50.
13 Ibid at 51-52.
14 Ibid at 33.
15 Ibid.
16 Ibid at 17-22.
17 Ibid at 33-34.
18 Inelastic demand exists when a price increase has no significant impact on the demand for the product. The more that demand for a product decreases as a result of price increase the greater is the elasticity of that demand.
19 PSA, Inquiry into Book Prices Interim Report at 34.
20 Ibid at 72.
21 PSA,Inquiry into Book Prices Final Report at 25.
22 Sunk costs are those costs that are not recoverable if a person withdraws from the market in which those costs are incurred.
23 PSA, Inquiry into Book Prices Final Report at 25-26.
24 PSA, Inquiry into Book Prices Interim Report at 66. Ibid.
25 Ibid at 67.
26 Ibid.
27 Ibid at 68.
28 Ibid.
29 Ibid at 71.
30 Ibid at 72.
31 PSA, Inquiry into Book Prices Final Report at 35.
32 PSA, Inquiry into Book Prices Interim Report at 69.
33 PSA, Inquiry into the Prices of Sound Recordings; PSA, Inquiry into the Prices of Comput Software.
34 CLRC, The Importation Provisions of the Copyright Act 1968 at 44.
36 Such claims were unsuccessfully made in Broderbund Software Inc v Computermate Products (Australia) Pty Ltd (1991) 22 IPR 215.
37 Ibid. PSA, Inquiry into the Prices of Computer Software Final Report at 35 and PSA, Inquiry into Book Prices Final Report at 14; TPC, Application of the Trade Practices Act to Intellectual Property (July 1991) at 32.
38 Broderbund Software Incv Computermate Products (Australia) Pty Ltd (1991) 22 IPR 215.
39 TPC, Application of the Trade Practices Act to Intellectual Property at 19.
40 TPC, above n 39 at 22.
41 (1980) 144 CLR 83.
42 Ibid at 102 per Mason J and at 108 per Wilson J.
43 TPC, above n 39 at 13.
44 CCG, Highways to Change: Copyright in the New Communications Environment (1994).
45 For present purposes, the distinction between the right of reproduction and the right to copy is not relevant. References to the right of reproduction should be treated as including a reference to the right to copy.
46 CCG, above n 44 at 25.
47 Ibid.
48 Ibid at 29.
49 Ibid at 41-44.
50 Ibid at 43-44.
51 Intellectual Property and the National Information Infrastructure: The Report of the Workin Group on Intellectual Property Rights (the Report) (1995).
52 Ibid at 312-314.
53 Ibid at 310.
54 Ibid at 312-313.
55 Ibid.
56 Ibid at 321 and 322.
57 National Information Infrastructure Copyright Protection Bill of 1995.
58 The treaties have been signed by about one hundred countries but have yet to be ratified. “Protection of Intellectual Property” (1997) 15 European Union News 5.
59 Copyright Treaty, Art 1(4).
60 WIPO, Basic Proposal for the Substantive Provisions of the Treaty on Certain Questions Concerning Literary and Artistic Works to be Considered by the Diplomatic Conference prepared by the Chairman of the Committee of Experts, WIPO document CRNR/DC/ 4 (August 1996) at 9.
61 Committee of Experts on a Possible Protocol to the Berne Convention, Comparative Table of Proposals and Comments received by the International Bureau WIPO Document BCP /CE/VI/12 arising out of the sixth session of the Committee's deliberations held in Geneva from 1-9 February 1996 at 13-18.
62 WIPO Document CRNR/DC/96 (23 December 1996).
63 Aboven57.
64 Agreed Statements Concerning the WIPO Performances and Phonograms Treaty WIPO Document CRNR/DC/97 (23 December 1996)
65 This issue is further complicated by the need to consider who is the copyright owner in this context. Is it the person who owns the copyright in the place from which the transmission originates or the person who owns the copyright in the place where the transmission is received?
66 The Copyright Treaty, Article 10 relating to Limitations and Exceptions suggests this may be possible. Art 10(1) provides in part “Contracting Parties may ... provide for limitations or exceptions ... in certain special cases that do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the author.” The Agreed Statements Concerning the WIPO Copyright Treaty state that Article 10 permits Contracting Parties to devise new exceptions and limitations that are appropriate in the digital network environment.
67 Copyright Act 1968 (Cth), s 196.
68 TPC, above n 39 at 32.
69 Ibid.
70 Article 8(1) of TRIPS acknowledges the entitlement of member countries “to prevent the abuse of intellectual property rights by rights holders or the resort to practices which unreasonably restrain trade ...”.
71 J Ginsburg, “Global Use/Territorial Rights: Private International Law Questions of the Global Information Infrastructure” (1995) 42 Journal of the Copyright Society of the USA 318.
72 WIPO, Draft Report of the Committee of Experts on a Possible Protocol to the Berne Convention, WIPO Document BCP /CE/VI/16 (February 1996) at 14 and 46.
73 Ibid at 9 and 10-11. In contrast, developing nations such as China and India have indicated the need for more caution in proceeding. See 13-14 and 15.
74 In the context of databases, the response has been to advocate the creation of a separate and additional right. The impetus for this move has come from the European Community and the USA. WIPO, Basic Proposal for the Substantive Provisions of the Treaty on Intellectual Property in Respect of Databases to be considered by the Diplomatic Conference, WIPO Document CRNR/DC/6 (August 1996) at 2-3.
75 WIPO, USA Proposal presented to the Committee of Experts on a Possible Protocol to the Berne Convention, WIPO Document BCP /CE/VI/8 (February 1996).