22 July, 2009

Restrictions on the Parallel Importation of Books

Restrictions on the Parallel Importation of Books

The Productivity Commission released a research report in June 2009 recommending that the present legislative restrictions on the parallel importation of books be repealed because the restrictions place upward pressure on book prices in Australia.

The Commission has also recommended that the current financial assistance provided to Australian authors be reviewed prior to the repeal of the Restrictions.

Under s. 37 of the Copyright Act 1968, it is an infringement for an Australian bookseller to parallel import copies of a book to sell in Australia without the permission of the copyright holder, even if those copies have been legitimately published by the copyright owner in another country. This provision is subject to two exceptions: "The 30 day release rule" and "The 90 day resupply rule": The 30 day release rule (under s. 29(5)) permits the holder of Australian copyright for a new book to supply copies of the book to the Australian market within 30 days of its release in another market. If the copyright holder fails to meet this requirement, Australian booksellers become free to import non-infringing copies of the book from any overseas supplier. The "90 day resupply rule" (under s. 44A) places an onus on Australian publishers to maintain a supply of the books they publish to Australian booksellers. An Australian publisher forfeits parallel import protection over a publication if it fails to respond to a request by a bookseller within 7 days to supply a book within 90 days or the publisher has not supplied a book within 90 days.

The present restrictions are designed to provide territorial protection for the Australian publishers of books and to prevent book sellers from sourcing cheaper or better value-for-money editions of those titles from world markets. However, the restrictions are blamed for higher book prices, which are met by Australian consumers. The Commission is also concerned that the restrictions are causing a significant transfer of income from Australian consumers to overseas authors and publishers.

Some of the findings of the Commission include:

  1. that some books were available at a lower price overseas. For example, an examination of selected trade books (being those which are not educational, professional or reference texts) sold in Australia were on average 35% more expensive than like editions sold in the US. In many cases, the price difference was greater than 50% or more;
  2. in the educational books sector, selected English-language textbooks sold in Asia for less than half the price of identical Australian editions; and
  3. much of the “assistance” provided by the Restrictions does not promote Australia-authored works.

The Commission considered a number of reform approaches including:

  1. restricting parallel imports for twelve months from the date of first publication in Australia, rather than for the full term of copyright;
  2. retaining the Restrictions only for books authored by Australian writers (although this could run foul of international treaties (as would a proposal to protect Australian versions of books));
  3. a price-cap model where Australian publishers, to retain PIR protection on their titles, would need to keep their prices consistent with foreign wholesale prices.

However, based on the perceived flaws within the existing scheme and the lack of viable options for significant reform within the legislative framework, the Commission considered that a repeal of the existing framework was the most appropriate solution.

The removal of the present restrictions would likely see an increase in imported books in the short term, however, it is the Commission’s view that most Australian publishers, including major publishing houses, would adapt and that Australian stories and content would continue to be demanded and marketable Australian authors would continue to be widely published.

The Commission proposes that the outcome from the repeal of the restrictions, together with the operation of any revised subsidy arrangements, should be monitored and assessed 5 years after their implementation.

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