Tizard Judith: Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill — First Reading 
Tizard Judith: Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill — First Reading 
[Volume:607;Page:4648] 
Hon JUDITH TIZARD (Associate Minister of Commerce) 
: 
 I move  
That the Copyright (Parallel Importation of Films and Onus of Proof) Amendment Bill be now read a first time. 
 I give notice that I intend that this bill should be sent to the Commerce Committee. 
This bill will introduce a ban on the parallel importation of films and make changes to the onus of proof in civil proceedings concerning the importation of specified copyright works particularly films sound recordings and computer programs. This bill amends the Copyright Act 1994 and gives effect to the Government’s commitment signalled in the Speech from the Throne in 1999 to support strongly our creative industries particularly music publishing and film. 
The Labour-Progressive Government has a special interest in the promotion of arts and culture and we believe that New Zealand as a small country in a globalising world has to work hard to maintain and develop our own cultural identity. We also believe that our creative industries have much to contribute to our economy to job growth and to the promotion of our country. Worldwide the cultural and heritage sectors are amongst the key growth areas for the 21st century. Creativity is at the heart of innovation and creative industries have input into many other sectors. This is why we have made creative industries a target sector of our growth and innovation framework along with biotechnology and information and communications technology. Within the creative industries screen production design and music are key sectors with the potential to generate a great deal of further growth. 
Our commitment to nurture our creative industries has been realised through the cultural recovery package of May 2000 and many other measures. This is one of them. We established the Film Production Fund to fund the next level of New Zealand films and the benefits of this investment are already proven with the first Film Production Fund film  
Whale Rider 
 currently sitting at No. 1 at the New Zealand box office and second only in box office sales to another New Zealand film  
Once Were Warriors 
. We established the New Zealand Music Industry Commission and increased funding to New Zealand On Air and many other programmes. Our concern is to have a vibrant active creative industry where New Zealanders can tell hear and see their own stories and make a living from jobs doing that. We must have the environment in which New Zealanders can express themselves and pursue satisfying careers in the creative sector. 
This bill follows a very extensive review and consultation process which considered the impact of parallel importing on creative industries. We were very disappointed when the National-led Government in 1997 removed the ban on parallel importing under urgency and with no select committee process and after a New Zealand Institute of Economic Research report had stated there would be no effect on creative industries. The institute was wrong. As part of this Labour-led Government’s creative industries strategy we undertook an extensive review of the impact of parallel importing on creative industries. The objective of the review was to determine whether parallel importing was having an adverse effect on investment in New Zealand film music book-publishing and software industries. We carried out two rounds of consultation with those sectors. Some industry representatives made it clear that they did not like parallel importing and that their businesses were often marginal in New Zealand terms and in international terms. However we found no clear evidence that parallel importing was the central issue affecting investment in all creative industries. The consultation also made it clear that there were some benefits to consumers in the form of lower prices and greater availability. 
Our consultation did however show up specific problems in relation to film. It appears that parallel importing might be harming the orderly and cost-effective distribution of motion picture films. Not only do the people who put a huge investment of time and money into films need to be able to manage the release of those films for the best return but they are entitled to do so because it is their property. Parallel importing meant that copies of major film titles were becoming available for rental in advance of the films’ theatrical release. Cinema owners were also concerned that this was contributing to a decline in cinema audiences. This in turn could threaten the availability of movie theatres particularly in small and rural communities. The Government believes that it is important that these communities continue to enjoy access to film facilities. 
We therefore agreed to introduce a ban on parallel importing of films for a period of up to 9 months from the titles’ first release. The 9-month ban will provide the necessary window of opportunity for theatrical release in New Zealand before copies become available for rental. The ban is specifically targeted at films made primarily to be shown in public. This is consistent with the Government’s policy objective of ensuring that the widespread cinematic release of films is able to continue. The ban will apply regardless of the format of such films including videos and DVDs. The ban is intended to prevent the parallel importation of films for commercial purposes—that is importation for the purposes of showing to the public or sale or rental. It does not prohibit importation for a person’s private or domestic use. Private individuals who wish to import a copy of a film for their own use ahead of the New Zealand theatrical release will still be able to do so provided of course that they get it from a legal source overseas. 
The bill provides for the ban provision to remain in place for a period of 5 years. This will enable the effects of the ban to be assessed in a changing environment. The Government has also announced that it intends to keep the effects of parallel importing on creative industries under review in the near future. This will enable us to determine whether our policies are working as intended or whether they need to be expanded or changed. 
I also wish to describe the provisions of the bill that deal with the onus of proof. The theft of intellectual property is a matter of increasing international concern. The Government has on many occasions stressed the importance of measures to combat the theft of intellectual property. We have already introduced a number of measures to deal more effectively with this issue; for example in the Trade Marks Act 2002 new offences and increased penalties were introduced to deter the counterfeiting of trademarks and the pirating of copyright works. The bill I am introducing today contains further measures to constrain copyright infringement. It is targeted at those works that are most vulnerable to piracy—namely films computer programs and sound recordings. Digital technology is making it easier to produce perfect copies of these works very cheaply simply and in large quantities. 
The measures in the bill are intended to make it easier for copyright owners to uphold their rights through civil proceedings. The Copyright Act currently requires copyright owners taking civil proceedings for infringement to prove that the goods in question were pirated and to prove that the defendant knew or had reason to believe that the goods were pirated. Our consultations indicated that copyright owners felt it was difficult to establish this level of proof. They indicated that it can be expensive and time consuming to do so and as a result there is a risk that civil enforcement action will not be taken. 
The bill therefore shifts some of the burden of proof to the defendant. It establishes a presumption that specified imported copyright works are infringing copies and the defendant will be required to rebut that presumption. It is not usual practice to require a defendant to be a part of the onus of proof—it usually falls on the plaintiff. We considered that matter very carefully and agreed to the changes to the onus of proof as we believe that importers rather than the rights holders are more likely to have access to information about the goods that establishes whether they are pirated or legitimate copies. That information generally relates to such things as the origin of the goods and the lines of supply. Because importers are more likely to have this information as a matter of good business practice we believe that the bill will not impose undue additional costs on defendants nor require onerous changes to current parallel-importing practices. 
We have considered other risks—for example the risk that copyright owners might take legal action against legitimate parallel importers in order to identify then cut off lines of supply. The bill aims to prevent that type of harassing action. It provides that the court must not require any person to disclose any information concerning sources of supply if it appears to the court that it would be unreasonable to do so. That provision will protect commercial confidentiality of information required to prove a defendant’s goods are not infringing copies. This amendment provides for an objective knowledge test which aims to help address the problem of piracy. 
I will now turn briefly to the issue of rental rights. Under section 9 of the Copyright Act of 1994 the copyright owner has the right to issue to the public copies of sound recordings and films. That includes the rental of copies of those works in public. A recent court case  
Video Ezy New Zealand Ltd 
 v  
Roadshow Entertainment 
 confirmed the question of public rental rights for both films and sound recordings. This amendment confirms that. It also deals with trademarks. 
I look forward to this bill going to the Commerce Committee. I hope the committee will consider it carefully listen to the public and proceed quickly with it.