Trade Marks (International Treaties and Enforcement) Amendment Bill

I am not sure how I would feel if I was Elspeth Buchanan, after the debate on Part 1, but we are on to Part 2 now. Of course, Part 2 is a much smaller, more focused part than Part 1, which I am very pleased about. It means that debate will be constrained to the very specific clauses contained in Part 2, and I guess the Committee is the poorer for not having the Hon Judith Tizard to guide this particular part through the Committee, given her somewhat chequered association with copyright legislation, because of course Part 2 amends the Copyright Act 1994.

Part 2 has three broad purposes. The first is to amend sections 87 and 188 of the Copyright Act to restore an exception to copyright infringement that was unintentionally removed by way of a drafting error in the Copyright (New Technologies) Amendment Act 2008. It also contains amendments to that Act to strengthen the enforcement of criminal offences for copyright piracy, in the same manner that Part 1 introduces amendments to the Trade Marks Act to do the same. Finally, Part 2 includes amendments to the Copyright Act to make a small change to the border protection measures against the importation of pirated copyright works. To increase the efficiency and effectiveness of the Customs Service in administering these measures, an amendment is being made to allow the service to temporarily suspend enforcement of a border protection notice under certain conditions.

That is really all I have to say about Part 2, because, as I say, if members look at the structure of this bill they will see that Part 2 is a much smaller part than Part 1, with a far more specific focus.

Part 2 is to copyright what Part 1 was to trademark. In any case, it is intellectual property regulation—it is IPR—it is how we ensure that innovations that derive from our fair shores can make it across, and that we can export those innovations and protect them. It also means that we are protecting the New Zealand consumer from counterfeit goods arriving on our shores from somewhere else.

Let me give the Committee a couple of examples, so that we can now begin to understand the strident import of this sort of legislation. The first example I offer up will be the golden kiwifruit, which has a trademark called Zespri. It has a bunch of intellectual property around it that one can buy and sell—in fact, that has been bought and sold in the last 10 years—and that needs to be protected. If one goes to Italy, one will see Zespri Gold being grown there. If one goes to an island off the mainland of South Korea, one will see quite a lot of Zespri Gold being grown there. Some Zespri Gold is also being grown in South America, but all of it has to be branded—whether that is by a copyright, trademark, or whatever other type of intellectual property protection it enjoys—in a way that consumers can believe they are buying the real thing.

What is more, Zespri set aside a certain proportion of its budget to defend a certain proportion of the counterfeits that come along. In this case, the counterfeit is in the form of plant material that is derived from sources other than New Zealand. The end result is that the kiwifruit industry is able to extract a premium, because it controls not only those who grow the stuff but also the science of it and, really importantly, its quality. That is why the industry wants to protect its trademark or copyright to the extent that it does.

A more serious example concerns pharmaceuticals. The reason it is more serious is that a pharmaceutical will be counterfeit not only in the sense that Johnson and Johnson might be getting done in the eye—you know, being put out of pocket by someone who is selling one of that company’s products in a counterfeit manner—but also in the sense that its bioactivity might be different. At that point, human health and safety come into play, and that is why the management of counterfeit pharmaceuticals—we are not talking here of generic pharmaceuticals; that is not what I am talking about, at all—is really important. The World Health Organization estimates that 10 percent of pharmaceuticals are counterfeit, and they are largely sold and traded in Third World nations but not entirely so.

In New Zealand we have to maintain a level of vigilance, which we do through Medsafe and other organisations, including the Pharmacovigilance Centre that happens to operate out of the very fine electorate of Dunedin North, which I have the privilege of representing. We maintain an eye on that stuff—a very, very close eye. It is actually very close to a closed system, notwithstanding the internet and people being able to buy and sell as they will, in small quantities. So the idea of getting on top of any counterfeit pharmaceuticals becomes terribly important, because that deals much more with human health and safety as well as the loss of cash. Those are a couple of examples, then, when it becomes immediately apparent that intellectual property rights are of consequence.

I will make one other comment before I resume my seat. The use of intellectual property rights in New Zealand is growing, reliably and quite encouragingly, off a really, really low base. This goes back to an old saw about how New Zealand science is good but how the New Zealand commercialisation ability of science is not good. That has gone on as an argument or debate for yonks, so I shall not go on about that. But I will make the point that more and more New Zealand innovators—he said broadly—are realising the importance of getting good intellectual property rights.

Some quite interesting dilemmas are raised in clause 30, in which new sections 87 to 87B are substituted in the Copyright Act. We are talking here about what infringes copyright and what does not infringe copyright, and there are some interesting precedents around that. New section 87 is headed “Free public playing or showing of communication work”. For example, if someone plays something that is free—that is, if people have not come to see a movie or hear a soundtrack—then it states in this provision that that “does not infringe any copyright in—(a) the communication work;”. For example, one could have a fire truck with a stereo on the top of that fire truck. If one drove around the streets and played music, then that is not an infringement of copyright in any way, shape, or form, because no one has paid to come out specifically to hear a concert or has been led to believe that they are paying to hear any song for that matter.

But there are some interesting precedents in relation to that, and one I remember—and Mr Chair himself might remember—is that there was a National Party conference where a Muttonbirds song was played. I think it might have been Nature—

💬 Hon Tau Henare: Were you there?

“Mr 40”! I think a good nickname for “Mr 40” might be “Rip Van Winkle”, because he slept for 40 years, came back, and found that things had changed. Nothing has changed about “Mr 40” over there.

Anyway, I go back to my example. At a National Party conference, the song Nature by the Muttonbirds was played. The lead singer, Don McGlashan, of the Muttonbirds came out and said—and I quote—that he would rather have sex with an ugly crayfish than have one of his songs played at a National Party conference. There was a big debate about that—about what constituted copyright. Had the National Party infringed a copyright by playing someone’s song without his permission at a gathering where people had actually paid to attend that gathering?

I must admit that that same case came to mind when I was watching the news and saw a 3-second snippet about the last National Party conference, when I think all the members were quizzing the Minister of Finance about asset sales, and were disagreeing with him. A Feelers song was played, and I happen to know that the Feelers were huge supporters of Helen Clark when she was Minister for Arts, Culture and Heritage. I said to myself “Goodness me, I wonder if the National Party stole that song or actually paid money or got permission to play it in an area where people had gathered for a specific purpose. Does that infringe copyright?”.

I am looking through this bill but I am not too sure whether that does infringe copyright, because it states in new section 87(2), inserted by clause 30: “For the purposes of this section, the public playing or showing of a communication work is not free if—(a) the audience has paid for admission to—(i) the place where the communication work is played or shown … or (b) goods or services are supplied at the venue or a place of which it forms part at prices … or (c) the venue is a hotel, motel, camping ground, … that admits persons for a fee for purposes of temporary accommodation, and the audience is made up of persons residing at that hotel, motel, camping ground, or other place.” So I was reading this and I was very unsure—perhaps the Minister of Commerce could answer—whether, for example, at a National Party conference the broadcasting of a song infringed copyright if the National Party had not got specific authorisation to play such a song.

The other thing this brings up is, for example, if I went to a hotel to see a concert by a certain band and I paid money to get in, and on a jukebox they were playing Rolling Stones songs but I had paid money to go in to hear a song played, would that infringe copyright? Maybe it would not for a jukebox. I am sure there are rules around that, because one puts money into it. If they had put in a CD, for example, and that is counted as broadcasting the Rolling Stones in a public place where people have paid to hear music, does that infringe copyright? This bill is a little unclear in that area. Maybe I am not reading it correctly. That is probably the case. The Minister, no doubt, will be able to stand up and clarify that. The implications for this are that pubs, bars, hotels, camping grounds, etc. will need to be very, very careful.

Let me give members one example. A school in Napier does not have a bell that rings to denote the end of interval or the beginning of lunchtime; it has music. It plays music.

I move, That the question be now put.

Mr Chair—

💬 Stuart Nash: I thought I was being very relevant.

I would like to say that the speech from the previous member, Stuart Nash, was very relevant to the discussion, generally, about copyright and about the problematic nature of infringement and alleged infringement. I will return to the seriousness of counterfeiting and copyright infringements that happen with large-scale copyright and counterfeiting breaches and breaches of trademarks, which my colleague Pete Hodgson referred to. With reference to Part 2 of the Trade Marks (International Treaties and Enforcement) Amendment Bill I will return to what was considered to be the public policy objective of this bill. The public policy objective of this bill was about reducing the trade in New Zealand of counterfeits and about deterring people from becoming involved in that trade, through increased prosecution by a Government agency for the criminal offences that are provided under the Trade Marks Act and the Copyright Act. This bill is providing for more provision for enforcement.

I think the ministry talked about prosecution by Government agencies for those criminal offences as being infrequent and ad hoc, which was contributing to the growth of counterfeits being offered for sale in New Zealand. Greater volumes of counterfeits being offered for sale could lead to reduced profits by the trademark owners and the copyright holders. They are otherwise known as the rights-holders. This bill is about being on the side of the rights-holders and trying to ensure that there can be updated and harmonised legislation—which has taken several years to come back before the House to be passed—that can provide more protection and entrenchment in society, so that there is not an acceptance of counterfeits and so that people cannot get away with doing that and making a lot of money out of it while ignoring the law. There are also health risks, which have been alluded to, and the wider impacts on the economy as a whole.

All those things are very important. I think that across the House we all agree on those fundamental principles, but, unfortunately, we have taken nearly 3 years, or whatever it is, for the legislation to get back to the House to be passed. There has been virtually no debate on the importance of the scope of the issue, yet there has been an enormous amount of discussion and legislation passed in the House on putting a penalty on people who are doing it for their own benefit because, generally, they cannot get access to the material elsewhere.

I think one of the most important things about this bill is that it is about the importance of brands. Virtually all my colleagues have alluded to that. In the spirit of the importance of brands I will make reference to some breaking news that is sort of relevant. I hope that the Chair, Lindsay Tisch, and the Committee would consider it to be relevant. There has been a lot of discussion in New Zealand in the last few weeks about brands, particularly about rugby jerseys and controversies about them. The Highlanders have made a decision tonight—

💬 Hon Tau Henare: Who?

—the Highlanders—to keep the original colours of their brand in the home games. If Eric Roy was in the Chair, he might be interested in that piece of news, and a few other people in the House might be, too. The Highlanders may keep that new green strip for the away games, but the original colours will be kept in Otago and Southland for the home games. That is a piece of good news. I thank the Chair for his indulgence in allowing me to announce that. I wish I had the aforesaid Highlanders jersey here tonight—which I certainly would not be wearing in the Chamber—as a significant symbol of the importance of a brand and what it means.

Mr Chair—

💬 Hon Tau Henare: Ooh, ooh! Why don’t you just let her finish?

The CHAIRPERSON (Lindsay Tisch): Order!

Thank you, Mr Chair. With anticipation of those noises Tau Henare—

💬 Hon Tau Henare: Why didn’t you just let her finish?

She did, she was. She wanted to announce the news about the Otago strip and then she wanted to sit down. That was the climax. Her piece was coming to that climax. I will talk about—

💬 Hon Rodney Hide: The Labour Party knows nothing about climax.

Let us not go there. I will talk about enforcement. A lot of Part 2 of the Trade Marks (International Treaties and Enforcement) Amendment Bill is about the powers of enforcement in the bill—in particular, the powers of enforcement of customs officials in being able to ensure that the trademark and copyright parts of this bill are upheld. Obviously, with the growing problem of the manufacture, distribution, and sale of counterfeits we are seeing a steady stream of these goods coming into New Zealand. Pete Hodgson mentioned the number—more than 500,000, I think—of goods in 2007. Clearly, the flood of these fakes, effectively, undermines the profitability of businesses dealing in the genuine article—that is, as Steve Chadwick talked about, our own goods themselves. Our Māori artefacts, for example, are sometimes manufactured overseas and are sold as the real thing when in fact they are not, at all.

New Zealand’s international obligations require us to include a criminal offence for cases of wilful counterfeiting, piracy, or commercial sale. The penalty for a person convicted of that is a fine of $150,000 or imprisonment of up to 5 years, so it is quite a serious thing to be caught for. The bill will empower the Ministry of Economic Development and the Customs Service to play an active role in enforcing those criminal offences under the Trade Marks Act and the Copyright Act alongside the cooperation with other enforcement agencies and rights-holders.

If we look at clause 31 of Part 2—we are looking at the enforcement officer’s power of entry—we see that the powers are quite widespread. When I look at new section 134E, I see it is entitled: “What enforcement officer and person assisting may do when exercising power of entry”—in this case, an examination—“and examination without warrant”. So these are the powers they can apply without a warrant. Enforcement officers can examine the place and all things, including any document; seize anything that he or she has reasonable grounds to believe is evidence; bring and use in or on the place equipment for the purposes of carrying out the examination; take photographs, sound, or video recordings; or take any person to the place to assist him or her with the examination. In other words, they are quite wide-ranging powers that these officials have in trying to combat the infringements of both trademarks and copyright.

I wanted to highlight that because the places where enforcement officers can carry this out without a warrant include mainly public places. New section 134D(1) is about an enforcement officer’s power of entry and examination without warrant for the purpose of carrying out his or her functions, and it says that an enforcement officer may enter and examine any place where goods are being offered for sale, exposed for sale, or publicly displayed in a public place. An enforcement officer can do that and go into that under this new legislation without the need for a warrant. So it certainly extends the powers of these enforcements officers, the people able to do this, quite considerably.

This is extremely important, because when I was glancing through some of the past work on this I saw that there were no prosecutions, as I understand, in 2002 under the Trade Marks Act. Customs officials say they are determined to make a public example of importers of patented goods.

I move, That the question be now put.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Paper 268 in the name of the Hon Simon Power to Part 2 be agreed to.

Amendments agreed to.

Part 2 as amended agreed to.

Clauses 1 and 2