Frequently Asked Questions about Parallel Importing
[ Last Updated 18 December 2007 ]
What Is Parallel Importing?
"Parallel importing" allows retailers, wholesalers and other parties to obtain goods subject to intellectual property rights directly from licensed or authorised overseas sources, rather than dealing with local suppliers, licensees or agents. The intent of parallel importing is to allow for the competitive supply of the goods in question.
What Is the Relationship between Copyright and Parallel Importing?
Copyright, as provided under the Copyright Act 1994, has generally been the intellectual property right of most relevance to the issue of parallel importing in New Zealand. One of the core rights granted to copyright owners under section 16 of the Copyright Act 1994 (the Act) is the exclusive right to issue copies of a work to the public. This right is, however, subject to certain exceptions. Section 9(1)(d) was inserted into the Act in 1998 to allow for parallel importing of non-infringing copies of a work into New Zealand.
The Copyright (Parallel Importation of Films and Onus of Proof) Amendment Act 2003 reintroduced a partial ban on the parallel importation of films and altered the onus of proof in relation to certain works. Section 35 of the Copyright Act 1994, which relates to infringement by importation:
- imposes a ban on the parallel importation of films (which includes VHS videos, VCDs and DVDs) into New Zealand, other than for the importer's own private and domestic use, within nine months of the film first being made available to the public, whether in New Zealand or elsewhere. In order to be infringement, the importer must know or have reason to believe that the the film is being imported into New Zealand within this nine month period. The provision includes a sunset period of five years which will provide an opportunity to assess whether the ban should be continued in light of technological developments;
- shifts the evidentiary onus of proof to the defendant in civil proceedings concerning whether the imported goods in question are infringing copies. These changes to the onus of proof only apply to sound recordings, films and computer programs;
- provides an objective knowledge standard in civil proceedings concerning the act of importation, namely that the defendant "knows or has reason to believe" to a requirement that the defendant "knows or ought reasonably to know" that the imported object is an infringing copy. Again, these changes only apply to sound recordings, films and computer programs.
- provides that the Court must not require the defendant to disclose information on sources of supply where it appears to the Court that it would be unreasonable to do so; and
- clarifies that the existing provisions relating to rental rights in films, sound recordings and computer programs apply to copyright works that have been parallel imported.
Are Parallel Imported Goods "Real" or "Fake"?
Parallel-imported goods are sometimes confused with pirated and counterfeit goods. The association is not correct. Parallel imports are goods that are manufactured and put into circulation in another country either by, or with the consent of, the owner of the applicable intellectual property rights. In contrast, pirated and counterfeit goods are goods produced without the consent of the owner of the intellectual property right. Therefore, parallel imported goods are "real".
Why Has the Government Changed the Parallel Importation Provisions?
(a) Parallel Importing and the Viability of Cinemas
The changes to the parallel importing regime are the culmination of an extensive review of the impact of parallel importing on the creative industries initiated by the government in 1999. This was one of a wide range of initiatives under the government's arts and culture programme. The review involved extensive consultation with creative industries stakeholders.
The review raised concerns that the availability of parallel imported copies of major new release film titles for rental or sale in advance of New Zealand theatrical release was contributing to declining cinema box office takings. Left unchecked, it was considered that this could lead to declining theatre audiences, which, over time could mean that:
- distributors would theatrically release fewer films in New Zealand. Distributors would, if possible, have to release films earlier, in conjunction with, or closely following, the international release date and would therefore no longer have access to second-hand prints. This would increase costs, could result in increased ticket prices, and would create disincentives to make films available for theatrical release in New Zealand; and
- rural and smaller communities could face a loss of facilities (picture theatres) as a result of fewer films being available for exhibition in smaller theatres and audiences having to wait longer for a smaller number of prints to become available after exhibition in major centres.
(b) Changes to Onus of Proof
The review also indicated that creative industries stakeholders face a number of problems in taking legal action in respect of suspected pirated or counterfeit material, including:
- proving that the goods in question are pirated; and
- proving that importers of such goods knew or had reason to believe that the goods were pirated (infringing) copies.
The government's objective is to constrain copyright piracy and, in particular, to ensure that effective action can be taken against copyright infringement in relation to sound recordings, films and software products - copyright works that are particularly susceptible to piracy.
Does That Mean I Can't Import DVDs over the Internet to Watch at Home?
The ban on parallel importing introduced by the Bill will not apply to the purchase of videos or DVDs for a person's private or domestic use and individuals will be still able to privately import motion picture titles not yet theatrically released in New Zealand for viewing in their own homes.
Will I Be Able to Rent Films in Advance of Their Theatrical Release in New Zealand?
No. Under the Copyright Act 1994, owners of copyright in films, sound recordings and (subject to certain restrictions) computer programs have the sole right to the rental of copies of those works to the public. Following the enactment of the Copyright (Removal of the Prohibition on Parallel Importing) Amendment Act 1998, however, some ambiguity has arisen concerning the application of rental rights to parallel imported copies of copyright works. Therefore, the Bill will amend the Copyright Act to make explicit that the rental of parallel imported copies of these types of works is not permitted.
Further Information
If you require further information on parallel importing, please see the Parallel Importing in New Zealand information sheet.
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