ACCESS TO PROTECTED ACCESS TO PROTECTED WORKS: LIMITS OF WORKS: LIMITS OF PARALLEL IMPORTSPARALLEL IMPORTS

By By

Nisha C.Nisha C.Vishnu Sankar P.Vishnu Sankar P.

COPYRIGHT AND PARALLEL COPYRIGHT AND PARALLEL IMPORTSIMPORTS

CopyrightCopyright is a set of is a set of exclusive rights granted to the granted to the author or creator of an original work, including the right author or creator of an original work, including the right to copy, distribute and adapt the work. to copy, distribute and adapt the work.

Copyright owners have the exclusive statutory right to Copyright owners have the exclusive statutory right to exercise control over copying and other exploitation of exercise control over copying and other exploitation of the works for a specific period of time, after which the the works for a specific period of time, after which the work is said to enter the public domain.work is said to enter the public domain.

A parallel importation means transportation of legitimate A parallel importation means transportation of legitimate works which are available at a cheaper rate in one works which are available at a cheaper rate in one country by independent buyers for sale in another country by independent buyers for sale in another country.country.

TRIPS and LEGAL IMPORTATION.

The TRIPS Agreement permits Members to enact special or limited exceptions to the exclusive rights granted to the right holder (Articles 13 and 30).

The above TRIPS exception flexibilities have had a tremendous impact on the national intellectual property policies of many developing countries.

Developing countries can very well utilise these flexibilities to effectively make available copyrighted works at a reduced rate.

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Generally it could be said that TRIPS has accepted Generally it could be said that TRIPS has accepted the international exhaustion principle.the international exhaustion principle.

This should be well appreciated as the agreement This should be well appreciated as the agreement enables countries of different economic status to enables countries of different economic status to implement the kind of exhaustion of their choice.implement the kind of exhaustion of their choice.

Art.6 of the TRIPS agreement deals with the Art.6 of the TRIPS agreement deals with the exhaustion principle.exhaustion principle.

Exhaustion principle-:Exhaustion principle-: Exhaustion principle says that the first sale of a copy of a Exhaustion principle says that the first sale of a copy of a

copyrighted work exhausts the rights of the owner of the copyrighted work exhausts the rights of the owner of the copyright in the work to control the resale of that copy, copyright in the work to control the resale of that copy, assuming that the first sale was a legal sale of a legal copy. assuming that the first sale was a legal sale of a legal copy. The exhaustion of rights may be international, regional or The exhaustion of rights may be international, regional or national. national.

Exhaustion principle may be divided into national exhaustion Exhaustion principle may be divided into national exhaustion and international exhaustion.and international exhaustion.

National exhaustion means once sold within the country National exhaustion means once sold within the country exhausts the right of the copyright owner.exhausts the right of the copyright owner.

International exhaustion means International exhaustion means the first sale of a copy of a the first sale of a copy of a copyrighted work anywhere in the world results in the copyrighted work anywhere in the world results in the exhaustion of rights in that copy exhaustion of rights in that copy everywhereeverywhere in the in the worldworld..

WHETHER THERE IS RIGHT TO IMPORT WHETHER THERE IS RIGHT TO IMPORT AVAILABLE TO OWNER OF COPYRIGHT AVAILABLE TO OWNER OF COPYRIGHT

UNDER INDIAN COPYRIGHT ACT.?UNDER INDIAN COPYRIGHT ACT.?

RIGHT TO REPRODUCE,PERFORM, ADAPT AND TRANSLATE

THESE RIGHTS

DOES NOT INCLUDE RIGHT TO IMPORT

IMPORTATION RIGHT UNDER IMPORTATION RIGHT UNDER INDIAN COPYRIGHT INDIAN COPYRIGHT

ACT,1957ACT,1957 Section 53 prohibits importation of infringing copiesSection 53 prohibits importation of infringing copies This implies importation of legitimate works is allowed.This implies importation of legitimate works is allowed. Parallel imports involves importation of legitimate works.Parallel imports involves importation of legitimate works. Thus the Indian Copyright Act,1957 itself recognizes the Thus the Indian Copyright Act,1957 itself recognizes the

concept of parallel imports.concept of parallel imports. The Act does not expressly grant the right to import to The Act does not expressly grant the right to import to

the owner.the owner. It only grants the right to the owner to object to the It only grants the right to the owner to object to the

importation of infringing copies importation of infringing copies Legally sold copies (first sale) will not come under Legally sold copies (first sale) will not come under

“infringing copies” defined in Section 2(m). “infringing copies” defined in Section 2(m).

Penguin casePenguin caseFACTSFACTS Penguin Books Ltd., England filed a suit for perpetual Penguin Books Ltd., England filed a suit for perpetual

injunction against India Books Distributors, Bombayinjunction against India Books Distributors, Bombay.. The suit was for restraining them from infringing Penguin’s The suit was for restraining them from infringing Penguin’s territorial copyright/licence in 23 books.territorial copyright/licence in 23 books.India Book Distributors, Bombay , were importing, distributing India Book Distributors, Bombay , were importing, distributing and offering for sale in India 13 books.and offering for sale in India 13 books.But the injunction was refused by the lower Court.But the injunction was refused by the lower Court.Aggrieved by this decision, Penguin went on appeal to Delhi Aggrieved by this decision, Penguin went on appeal to Delhi High Court.High Court.

The Delhi High Court examined whether the rights The Delhi High Court examined whether the rights recognized under the Indian Copyright Act include right of recognized under the Indian Copyright Act include right of importation also.importation also. It was held that infringement of copyright knowingly to import It was held that infringement of copyright knowingly to import to India for sale or hire infringing copies of work without the to India for sale or hire infringing copies of work without the consent of the owner of the copyright, though they may have consent of the owner of the copyright, though they may have been made by or with the consent of the owner of the copyright been made by or with the consent of the owner of the copyright in the place they were made.in the place they were made.

CRITICISMCRITICISM

International Exhaustion Principle is most acceptable to a International Exhaustion Principle is most acceptable to a country like India. But the Court failed to appreciate this fact.country like India. But the Court failed to appreciate this fact. The Court has considered Parallel Import as an import of The Court has considered Parallel Import as an import of infringing copies. infringing copies. The interpretation of s. 53(1) cannot be supported.The interpretation of s. 53(1) cannot be supported.

Limitations and exceptions to rights Limitations and exceptions to rights of the owner.of the owner.

““Limitations and exceptions" refers to situations Limitations and exceptions" refers to situations in which the in which the exclusive rights granted to authors, or granted to authors, or their assignees under their assignees under copyright law do not apply or do not apply or are limited for are limited for public interest reasons reasons

Exclusive rights stimulate investment and the Exclusive rights stimulate investment and the production of creative works and simultaneously, production of creative works and simultaneously, exceptions to those rights create a balance that exceptions to those rights create a balance that allows for the use of creative works to support allows for the use of creative works to support innovation, creation, competition and the public innovation, creation, competition and the public interest.interest.

FLEXIBILITY PROVIDED BY TRIPS FLEXIBILITY PROVIDED BY TRIPS AGREEMENTAGREEMENT

Thus every country is granted freedom to utilize either Thus every country is granted freedom to utilize either national or international exhaustion as they would find national or international exhaustion as they would find suitable for their country. suitable for their country.

Art.6 of the TRIPS agreement deals with the Art.6 of the TRIPS agreement deals with the exhaustion exhaustion principle.principle.

It says that “For the purposes of dispute settlement under It says that “For the purposes of dispute settlement under this Agreement, subject to the provisions of Articles 3 and 4 this Agreement, subject to the provisions of Articles 3 and 4 nothing in this Agreement shall be used to address the issue of nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights.”the exhaustion of intellectual property rights.”

This implies that concept of parallel import This implies that concept of parallel import will be imbibedwill be imbibedinto the copyright Act.into the copyright Act.

The rationale is a legally sound one — to align The rationale is a legally sound one — to align Indian copyright law with Indian patent and Indian copyright law with Indian patent and trademark law, both of which follow the trademark law, both of which follow the principle of “international exhaustion”:principle of “international exhaustion”:

HAS INDIA UTILISED THIS HAS INDIA UTILISED THIS FLEXIBILITY? FLEXIBILITY?

Even though TRIPs allows for choosing its own domestic Even though TRIPs allows for choosing its own domestic principle, India has not effectively utilized this provision.principle, India has not effectively utilized this provision. S.14S.14(d) of the Indian Copyright Act,1957 reads as follows- (d) of the Indian Copyright Act,1957 reads as follows- “In the case of cinematograph film, -“In the case of cinematograph film, -

(i) to make a copy of the film, including a photograph of any (i) to make a copy of the film, including a photograph of any image forming part thereof;image forming part thereof;

(ii) to sell or give on hire, or offer for sale or hire, any copy of (ii) to sell or give on hire, or offer for sale or hire, any copy of the film, regardless of whether suchthe film, regardless of whether such

copy has been sold or given on hire on earlier occasions;copy has been sold or given on hire on earlier occasions;

(iii) to communicate the film to the public;”(iii) to communicate the film to the public;”

The restriction placed by the s.14(d) is unnecessary. The restriction placed by the s.14(d) is unnecessary. The Parallel Importation provision should be imbibed into The Parallel Importation provision should be imbibed into the Act. the Act. The Act protects rights of the owners while public access is The Act protects rights of the owners while public access is largely curtailed.largely curtailed.

Parallel Imports and Benefits to Parallel Imports and Benefits to PublicPublic

It increases competition which is essential for It increases competition which is essential for the access of quality products to the consumersthe access of quality products to the consumers

Allows the consumers to obtain works at a Allows the consumers to obtain works at a lower rate.lower rate.

It keeps a check on any kind of monopoly that It keeps a check on any kind of monopoly that is being enjoyed by the owner of copyright.is being enjoyed by the owner of copyright.

Would help in reducing the use of pirated Would help in reducing the use of pirated works by the publicworks by the public..

POSITION OF PARALLEL POSITION OF PARALLEL IMPORT IN VARIOUS IMPORT IN VARIOUS

COUNTRIESCOUNTRIES

NATION-AL EXHAUSTION

HUNGARY,TURKEY

REGIONAL EXHAUSTION

EUROPIAN UNION

INTERNATIONAL EXHAUSTION

AUSTRALIA,CANADA

The proposed amendment to the The proposed amendment to the Act……Act……

CURRENT PROVISION:CURRENT PROVISION:Clause 2 (m) of the Act defines the expression 'infringing Clause 2 (m) of the Act defines the expression 'infringing copy' as a (a) reproduction of a literary, dramatic, musical or copy' as a (a) reproduction of a literary, dramatic, musical or artistic work ; (b) a copy of a cinematograph film made on any artistic work ; (b) a copy of a cinematograph film made on any medium by any means or (c) any other recording embodying medium by any means or (c) any other recording embodying the same sound recording, made by any means or the sound the same sound recording, made by any means or the sound recording or a cinematographic film or (d) broadcasting of a recording or a cinematographic film or (d) broadcasting of a programme or performance if reproduction of sound recording programme or performance if reproduction of sound recording is made or imported in contravention of the provisions of the is made or imported in contravention of the provisions of the Act.Act.

When amended-:The proposed amendment to this definition When amended-:The proposed amendment to this definition involves an addition of a proviso to the Act, stating:involves an addition of a proviso to the Act, stating:"provided that a copy of a work published in any country "provided that a copy of a work published in any country outside India with the permission of the author of the work outside India with the permission of the author of the work and imported from that country into India shall not be deemed and imported from that country into India shall not be deemed to be an infringing copy". to be an infringing copy".

HOW HOW THE AMENDMENT IS GOING THE AMENDMENT IS GOING TO AFFECT INDIAN SCENARIO…..TO AFFECT INDIAN SCENARIO…..

Warm welcome should be extended to this Warm welcome should be extended to this amendment as it could revolutionise the amendment as it could revolutionise the copyright law in India.copyright law in India.

Students who purchase books at a higher Students who purchase books at a higher price would be benifitted when they price would be benifitted when they receive the books at a cheaper rate.receive the books at a cheaper rate.

Public access to the copyrighted works Public access to the copyrighted works would increase.would increase.