Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill

I move, That the Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill be now read a second time. This bill introduces a number of amendments to the Copyright Act and it gives effect to Government decisions to implement a ban on the parallel importing of motion picture films, to ensure the continued viability of the New Zealand motion picture industry and motion picture theatres. It makes changes to the onus of proof, to assist owners of copyright of films, sound recordings, and computer programs to take more effective action against alleged pirated goods.

This bill introduces a ban on the parallel importation of motion picture films. The ban will apply for a period of 9 months when a title is first released. The objective of the ban is to ensure the continued orderly distribution of films at the wish of the owners of the films, and to ensure the continued viability of picture theatres. When the Government reviewed the impact of parallel importing in 2001 it was apparent that copies of major films were being parallel imported for rental, ahead of the New Zealand cinematic release. This was seen as a factor in declining picture theatre attendance, and this in turn threatened the future viability of picture theatres, particularly in rural and provincial areas. We were also aware that the New Zealand film industry was increasingly exporting films and that this protection was necessary for commercial films made in New Zealand.

The 9-month ban is intended to provide a necessary window of opportunity for cinematic release in New Zealand. It also aims to ensure that communities outside the major cities continue to enjoy access to a wide variety of film titles through their local cinemas. We believe that the New Zealand film industry will benefit from this, as well as those who have made that investment into regional cinema complexes.

During the select committee consideration of the bill, submissions expressed concern to the Commerce Committee that a ban would affect the supply of educational films. This will not be the case. The ban applies only to films that are produced principally for cinematic release. It will not apply to films produced for television or educational purposes, nor will it apply to films that are directly released on video or DVD where no cinematic release is intended. The ban will not apply to importation for a person’s private or domestic use. The Commerce Committee has, however, taken into account the concerns that were expressed by libraries and educational institutions. In reporting the bill back to Parliament the committee has recommended an amendment to clause 4 to clarify the scope of the ban, and I am happy to support this amendment.

The bill provides for the ban to remain in place for 5 years from the commencement of the legislation. The sunset clause is important. It provides flexibility to review the ban and its effects over time.

The technology around film distribution is changing, as is that around film production. It will affect the economics of the film industry, and over the 5-year period the Government will be considering the effects of such changes and whether the ban is working effectively. The last National Government introduced permission for the parallel importation of films without looking at any of this work. We have been convinced that this ban is necessary for the well-being of the New Zealand film industry, and it will not harm New Zealand consumers.

I now turn to those amendments that deal with the reversal of the onus of proof. They reverse one aspect of the onus of proof. This change will apply to civil proceedings where it is alleged that an imported film, computer program, or sound recording infringes copyright. In such proceedings the onus will be on the defendant to rebut the presumption that an imported work is an infringing copy.

The bill also introduces an objective knowledge requirement, meaning that the defendant knows, or ought reasonably to know, that the imported work is an infringing copy. The current test in the Copyright Act is that the defendant knows, or has reason to believe, that the work is an infringing copy. These amendments aim to make it easier for owners of copyright in film, sound recordings, and computer programs to take civil proceedings. Our consultations with copyright owners indicated that they were reluctant to take court action because of the perceived problem with proving that the goods were infringing copies and proving knowledge on the part of the defendant.

The amendments relating to the onus of proof and knowledge requirements apply only to films, computer programs, and sound recordings. These goods are particularly vulnerable to piracy, and much of their value obviously is in the ongoing distribution. Around the world the current provisions of the Copyright Act will continue to apply in all other cases.

I am aware that some copyright owners have sought more extensive changes to copyright law. These include changing the onus of proof in relation to other aspects of infringement, in addition to the act of importing infringing copies. I have looked at this very carefully, and I consider that it would be difficult to introduce more extensive changes. It is important to recognise that as a basic legal principle the onus of proof lies with the plaintiff. Reversing the onus of proof is a serious step. The bill therefore takes a prudent and measured approach. It targets importation because importers, rather than rights holders, are more likely to have access to information about the goods being imported. It establishes whether they are pirated or legitimate copies. This information generally relates to such things as the origin of the goods and lines of supply—the sort of information that reputable importers would generally keep as a matter of good business practice. I believe that the measures we have introduced are a practical step in dealing with copyright infringement, which is an increasing problem around the world. The Government will be monitoring the amendments to determine their effectiveness.

In closing, I will now address two remaining aspects of the bill. The bill clarifies the scope of rental rights granted under section 9 of the Copyright Act, confirming that the rental rights of copyright owners do not apply to parallel imported copies of films, sound recordings, and computer programs. The bill also makes some consequential amendments to the Trade Marks Act of 2002, which will ensure that our trademark and copyright legislation is consistent in the way each deals with parallel importing.

I would like to thank the Commerce Committee for its work on this bill. The committee has proposed some technical drafting amendments to the bill, which I am happy to support. The bill introduces some pragmatic and useful measures to deal with the distribution of motion picture films, and with copyright infringement. It is a vital area of the innovation and knowledge economy that New Zealand must be part of to improve our economic future. I commend this bill to the House.

Debate interrupted.

The House adjourned at 10 p.m.