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

The effect of Part 2—while described by the Government as only technical—is that a registered trademark will not be infringed by the use of the trademark on parallel imported goods, where a trademark has been applied to the goods that have been put on the market anywhere else in the world. The National Party’s concerns with this part of the bill relate to the fact that we do not believe that the Government should be trusted in making these sorts of changes. We think that the cavalier attitude displayed by the Government in earlier parts prevent it from being given the trust of the Committee in respect of any other amendment. We are concerned because we simply do not believe that the Government has any commitment to the benefits of parallel importing.

It is clear, when we read the pages and pages of documentation we received under the Official Information Act, that this Government does not believe in the benefits that parallel importing has given the consumers of New Zealand. This Committee needs to be reminded that the Labour Party in Opposition opposed the legislation that brought parallel importing into New Zealand and dropped the prices on a whole lot of consumer items up and down this country. Previously, exclusive rights saw a number of holders of those rights extract extraordinary rents and premiums on the goods and services on which they held those rights, and that was paid for by ordinary New Zealanders. As a consequence of the previous National Government moving to open up parallel importing in New Zealand, we have seen a dramatic improvement in choice for ordinary people and for business in this country.

What is the consequence of that? The consequence of that is we have managed not only to reduce the inputs to many businesses in New Zealand but to open up the quality and the variety of goods that ordinary New Zealanders are able to purchase, and that was opposed by the Labour Party in Opposition. Labour members believe that any opening up of trade has to be bad. That is the argument they made in the debates. They argued that we should support the sort of arrangement that allows people to control the flow of goods into New Zealand and deny the rights of other New Zealanders to pass the benefits of cheaper goods on to ordinary people.

Members need just look at the reduction in prices we have seen in computer software. The price reductions we have seen in that area have been absolutely phenomenal, and that is the result of parallel importing, brought in by the National Government. Members should just look at the cost reduction we have seen in designer products like perfumes, clothing, and household goods. They have reduced in price dramatically because of parallel importing—which was opposed for days, hours on end, by the Labour Party when this was first proposed by the National Party in Government.

We oppose this Government wanting to make changes in this bill because we do not believe that this Government can be trusted to make changes that will preserve the integrity of parallel importing. We have just seen, during the debate on the previous part, that even when the advice they received from every Government agency told Government members that their 9-month ban on importing videos and DVDs would not work, they still did it. When this Committee was told, time and time again, in this Committee stage that that ban on parallel importing would not work, the Government has not listened. Parallel importing, introduced by the previous National Government, has been a runaway success. It has lowered the cost of inputs for hundreds, if not thousands, of businesses around the country.

I would like to pick up on a point that Deborah Coddington made. She said that I am not an intellectual. She is right; I am not an intellectual, and many times I am thankful for that. But what I do recognise are things that are common sense, as I am used to working, as they say, where the rubber hits the road and people actually have to get out there and do something to make a dollar. That is where I come from and that is why United Future will still be supporting this legislation.

As for the Hon Tony Ryall, he could not even interpret United Future’s position on one bill, and he maintains that people should be able to sell things that they have stolen from somebody who legitimately made it at a cheaper price for the benefit of consumers. I say to Mr Ryall that if I steal a car I can sell it, obviously, cheaper than can the person who may have owned it legitimately. So I do not think that that argument cuts much ground, at all. But under this bill, the importer must know, or reasonably ought to have known, that the goods are pirated copies. This is what we are dealing with. This is a vast improvement, because under the current law copyright owners find it difficult to prove knowledge. It is open to importers to argue that they did not know or have reason to believe that the goods were pirated. Under this bill, the copyright owner will have to prove only that the importer knows or reasonably ought to have known that the goods were pirated. This is fair and of use to both importers and copyright owners.

Let us look at the issue of film distribution, which has been much spoken of in the course of conversations. This bill affords relief to those organisations involved in film distribution. By introducing a ban on parallel importation of videos and DVDs for a period of 9 months from the date of international cinema release, this bill addresses the concerns of film distributors—the ones that have put all the money into making the films, etc. and who are concerned about the protection of their rights to control the intervals between video and television releases of films. It is giving protection to the people who have put all the money, time, and effort into producing something to be able to globally control the release of their product, and as we move into a global economy, I think that this makes sense.

The scope of this bill has clear parameters. It does not prohibit importation for a person’s private or domestic use. Private individuals can rest assured that if they want to import a copy of a film for their own use, ahead of the New Zealand cinematic release, they are free to do so. This bill has already had a noticeable effect on New Zealand’s good name in the international community. United Future is very interested in New Zealand having a good name in the international community. Partly as a result of the introduction of this bill into the House last December, the US trade representative has recently removed New Zealand’s name from the Special 301 Watch List. This watch list is a register of countries that trade representatives have concerns about regarding the effect of the parallel importing ban on US citizens’ intellectual property rights protection.

Before New Zealand was taken off this dubious list, we were tagged with the likes of Bolivia and other countries hardly known for protecting intellectual property rights. Now, with the help of this bill, New Zealand’s international reputation as a protector of the intellectual property rights of our citizens, and those of our trading partner is demonstrably healthier.

This bill is many things to many people. Importers and rights owners benefit from its passing. This bill goes some way to affirm our country’s intent and international standing with regard to the protection of intellectual property. Our trading partners are assured of our statutory obligations to outlaw abuses and infringements to intellectual property in the film industry. United Future stands proudly, as a common-sense party, in support of this legislation.

What a pity it is that Paul Adams and his “sensible party” do not understand and are totally confused by the difference between parallel importing and piracy. He has assumed that they are both the same. Parallel importing is the term for bringing goods in under a legitimate licence, parallel to the authorised licensee. Piracy is producing or importing goods without any licence and without any authority whatsoever. So Mr Adams should understand the difference between those two before he starts spouting on about how sensible his party is.

I would like to carry on the debate on Part 2. The trademark of parallel importation is that it is done with a legitimate licence. It is a legitimate means of importing, and generally it is at a lower cost to the authorised licensee. Because a person has purchased it and has used the exchange rates of a much cheaper source, he or she can bring it in and distribute it here at a more realistic price for general consumption by the public.

One of those wide distributors is the Red Shed, which brings items in from overseas and is able to distribute them at a much lower price than a lot of other distributors can. It does not mean it has purchased pirated copies; it has purchased legitimate copies, but has sourced them from a cheaper location.

Protection of the trademark is most important. Technologies these days have advanced to a great extent, and that means that a lot of products can be purchased over the Internet. Trademarks need to be protected, and I see this bill as a means of protecting them. The bill brings a more modern style of technology to the whole industry. The old Copyright Act of 1994 has fallen behind in terms of the technology side of things. It was put in place before DVDs were even thought of, and certainly before any were being distributed in this country. I suggest that this bill will fall behind in terms of the technology of the future, but at least it brings the current technology into line.

As far as protecting small cinemas is concerned, the bill attempts to do that, but, unfortunately, it allows the genuine distribution by the authorised licensee to distribute from the day the films and products are distributed to the public internationally. There is no limit on when distributors can distribute, so if an authorised distributor decides it wants to distribute within a small range of cinemas only, then other cinemas outside that range will be limited. They will not be able to get access to the films, and they certainly will not be able to make any profit or gain on them while they are in high demand in the initial stages of their release. Finally, when the authorised distributor allows the small cinemas to show the film, it is usually at the slack period when the demand is falling off. So, because of the general control by the authorised distributor, the bill does not really protect smaller cinemas. I think the bill should have looked a little closer at that.

But in general, New Zealand First supports this bill, because it brings the technologies up to date and recognises technologies we could not even imagine when the original bill was discussed and debated. New Zealand First will be supporting the passage of this bill into the third reading.