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Focus: Copyright – March 2003

Senate passes Copyright Amendment (Parallel Importation) Bill 

In brief: The Copyright Amendment (Parallel Importation) Bill 2002 was passed by the Federal Parliament on 27 March. Parallel importation means the importation into Australia of legitimately made ('non-pirate') copyright subject matter for commercial use without requiring the permission of the Australian copyright holder. Partner Jim Dwyer (view CV), Senior Associate Miriam Stiel and Law Graduate Prataal Raj report.

Background and policy

The Bill as passed includes a number of amendments to the version that was introduced into the House of Representatives in March 2002 and debated in December 2002. An identical Bill had previously been introduced in 2001, but lapsed when the election was called later that year.

The Government

The Bill was introduced as an extension of the Government's policy, which saw the Copyright Act amended in 1998 to allow the parallel importation of sound recordings (music, CDs and tapes). In the original Bill, the Government sought to permit the parallel importation and subsequent commercial distribution of:

  1. computer software products, including computer games and enhanced CDs; and
  2. books, periodicals publications, such as journals and magazines and sheet music.

The Government argued that lifting restrictions on parallel importation would benefit Australian consumers by reducing prices and increasing availability of copyright material. This position has been strongly advocated for many years by the Australian Competition and Consumer Commission (the ACCC), although the evidence upon which the ACCC based its claims has been heavily criticised.

The Government has not sought to extend its policy of relaxing parallel importation restrictions to films.

Australian Labor Party

The ALP has been opposed to the Bill throughout the legislative history of the Bill. It has focused on the need to strengthen intellectual property protection and reduce piracy. The ALP argued that the priority should be to introduce the recommendations made by the Parliamentary Inquiry, which examined the enforcement of copyright in Australia (the Andrews Committee) in its report, handed down more than two years ago.

Under the ALP's 'use it or lose it' policy, where an Australian copyright holder has not released its products onto the Australian market, others would be entitled to import them without infringement.

The Australian Democrats

The Democrats, who hold the balance of power in the Senate, were originally opposed to the lifting of any further parallel importation restrictions. However, they recently entered into a deal with the Government which resulted in:

  1. the removal of books and other printed material from the ambit of the draft legislation; and
  2. the inclusion of provisions that are said to produce 'a more robust anti-piracy and copyright regime'.

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Key provisions of the Bill
The 'parallel importation' provisions

When the Act comes into force, it will be lawful to import into Australia and subsequently commercially distribute:

  1. computer software;
  2. computer games; and
  3. enhanced CDs.
  • Under the new provisions, in an action for infringement, an imported computer game or other software product is presumed to be an infringing copy unless the defendant proves otherwise. A similar presumption already exists for civil importation actions involving sound recordings.
  • The provisions also close what the Federal Government asserts is a 'loophole' in the current legislation, which allows some Australian rights holders to prevent the parallel importation of sound recordings by relying on the copyright in secondary material (for example, computer programs or short video clips) included on a music CD.
  • Following the decision of the Federal Court in Australian Video Retailers Association v Warner Home Video Pty Ltd (2001) 53 IPR 242, which considered whether a motion picture embodied on a DVD should be characterised as a cinematograph film or a computer program, the Bill has introduced an amended definition of 'feature film', which is aimed at ensuring that films made for the home DVD market, which have an interactive capability, like other films, are excluded from the parallel importation provisions.
The enforcement provisions

The enforcement provisions, which will be introduced when the Act comes into force, draw on some of the recommendations made by the Andrews Committee. A large number of the recommendations have not been addressed in this legislation, although the Government has yet to issue a formal response to the Committee's 2000 report.

(a) Punitive damages

The provisions of the Copyright Act that allow a court to award additional damages for serious infringement have been extended so that the court can now take into account:

  1. the flagrancy of the infringement;
  2. the need to deter similar infringements of copyright; and
  3. the defendant's conduct after being made aware of the alleged infringements,

in awarding such damages.

(b) Evidentiary provisions

For the first time, Australian law will accept foreign certificates, such as US copyright registration certificates, as prima facie evidence of copyright subsistence, ownership and the year and place of first publication.

Where a defendant puts subsistence and ownership in issue, presumptions can also now be drawn from:

  1. the inclusion of an appropriate copyright line on the product or packaging; or
  2. a statement regarding chain of title from the copyright owner,

in civil proceedings and criminal prosecutions.

These presumptions can be displaced by contradictory evidence from a defendant.

(c) Jurisdiction

The jurisdiction to hear civil copyright infringement cases has been extended to the Federal Magistrates Court, in addition to the existing jurisdiction conferred upon the Federal Court of Australia under the Copyright Act. This does not affect the jurisdiction to hear copyright matters that is given to additional courts by other legislation, such as the Judiciary Act.

(d) Penalty

The maximum criminal penalty for the infringement of copyright by importation has been increased by $11,000 to $71,500 per offence for individuals and by $55,000 to $357,500 for corporations.

Other amendments

The Act also includes some minor amendments to correct typographical errors in the Copyright Amendment (Digital Agenda) Act, which came into effect in 2001.

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Commencement

There are two relevant commencement dates:

  1. The parallel importation provisions will come into effect on the day on which the Act receives Royal Assent. The latest information that we have from the Attorney-General's Department is that the Act is likely to receive Royal Assent within two to three weeks from 27 March 2003, when the Bill was passed through both Houses of Parliament.
  2. The enforcement provisions will come into force 28 days after the date on which the Bill receives Royal Assent. The legislation prescribes that a review into the impact of the enforcement amendments must be conducted four years after the provisions come into effect.

The amendments, which correct the typographical errors in the Copyright Amendment (Digital Agenda) Act, have retrospective effect, from 4 March 2001.

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Comment

Copyright owners should be aware of the keen interest with which these amendments will have been followed by those involved in the manufacture and importation into Australia of counterfeit computer software and games. It must be acknowledged that there is a real risk of an increase in the levels of pirate copies being imported once the new law comes into effect.

The effects of this new legislation need to be considered carefully, in conjunction with Australia's trade practices legislation. 

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