Wednesday, February 09, 2011

Parallel imports: what readers should know

Just a quick summary of the intense debates around the possibility of opening up the Indian publishing market to "parallel imports". This is in many ways a very technical issue; the proposed amendments to the Indian Copyright laws would allow parallel imports of books in India, and would effectively change the way publishers in the country do their business, the kind of books readers would see in bookstores, and the kind of royalties and exposure Indian authors would receive.

The debate is being framed as "the death of publishing in India" versus "readers should have access to cheaper books and intellectual property should flow freely"; both arguments have some merit and many areas of contention.

Hachette's Thomas Abraham raised the alarm (supported by most of the key players in English-language Indian publishing) in this article in the Hindustan Times:

"So what exactly is proviso 2m and why are writers-publishers so incensed about it? Simply put, the proviso seeks to remove the protection that India had as a copyright territory. Any book published anywhere in the world can now be sold here infringing an exclusive Indian edition — published or imported. To understand this, one needs to realise that authors own copyright to their works and then assign publishing rights to different territories, so that the book and readers are best served. Vikram Seth, for example, is published in Britain by Hachette, in the US by HarperCollins, in Canada by McArthur, and by Penguin in India. Each territory is protected by law to best publish the work. Without this legal shield, any of the four editions could infringe on each other.

So why is the HRD ministry doing this? Baffling as it is, (since it demonstrates no due diligence and a complete lack of understanding of the dynamics of the publishing) let’s look at possible reasons:

The ‘It benefits the end consumer because open market competition will bring prices down’ argument: This is rubbish because India is the lowest priced market in the world, and no benefit outside short-term spoiler pricing can accrue to the customer. Quoth jesting Pilate,“If India is the lowest priced market surely publishers have nothing to worry about!” Not true! Here one needs to understand how business is done around the world. Almost all world markets practise what’s known as ‘remainder’ sales. Essentially surplus stock is cleared-off at ‘raddi’ prices. (I kid you not.—Books are sold by the roomful or by weight!) These stocks, if not prohibited by law, will just flow in and wipe out local editions and eventually industry.

Will the end customer get this any cheaper? No, not really, because we have the occasional remainder trickle now and know pricing patterns. Remainder merchants still sell these just below existing price points to maximise their own profits. In any case that can’t surely be the rationale in a country that prides itself on culture and learning — that we turn India into a remainder bin?"


This drew a response by Rahul Matthan in The Indian Express:


"Seen in this light, the opposition to the proposed amendment is quite obviously protectionist, allowing publishers to artificially extend their monopoly over the works they have licensed at the cost of the readers they are supposed to serve. As a result, consumers are denied access to new and fresh intellectual property and the breadth of choice that the more mature markets have to offer. What’s more, readers are denied the pricing choices that exist in developed markets which allow them to choose to either pay more for fresh content, or forgo the pleasure of buying the latest book as it comes out in exchange for an eventual reduction in price."

And a blog post at Original Fakes argued for opening up the Indian market, but got many aspects of the Indian publishing industry dead wrong (I'll try and post a full critique later in the week):

"As I have written elsewhere, I owe my education in English entirely to low-cost editions of books bought from pirate street vendors or less-frequently at second hand bookstores (who typically would stock books imported from overseas library sales). So I’m eagerly anticipating the changes this new amendment promises to unleash – more of the same. (Aside, officially sold English books in India have always been much more highly priced than vernacular books of identical print quality – prompting us to speculate who pockets the difference. And why. The interests of the reading public or the author are very far removed in this calculus.)"

(In just this one paragraph, there are three sweeping errors: the assumption that piracy benefits readers--book pirates aren't interested in hawking copies of GV Desani or Kolatkar's Jejuri, they're busy selling ersatz copies of Paulo Coelho and Aravind Adiga; that there is some conspiracy to price English language books higher than regional-language books (the difference lies in the fact that the print, binding, design and paper quality are usually more expensive than in regional language publishing, and I would be hard pressed to find books of "identical print quality" in these very distinct markets); and that this new amendment would work well for readers and authors.)


The interesting thing is that this debate has been played out before, in almost exactly the same terms--in Australia. There are some similarities between the Australian and Indian markets, in English language publishing. Both have a wide local pool of readers, but a smaller pool than, say, the UK or European markets--the average print runs for books in Australia and in India would be much smaller than the average print run in the UK or the US, though these numbers have been steadily increasing over the last 15 years. Both have to compete to sell rights of local authors in the Western, UK and US-dominated marketplace, and publishers in both countries have often complained that these markets are only interested in a certain kind of literature. Both markets have shown great growth in the last 10-15 years, but are still not independent enough to thrive without access to the big souks of the US, the UK and Europe.

Anyway, to cut to the debate. This blog post, made in 2008 at the Australian Writers Marketplace, covers most of the points we're discussing in India:


"However, Bernard Keane has weighed in at Crikey with the argument that the Australian publishing industry should essentially get over it. Software and music import restrictions have fallen, and he asks why books should be any different.

Australian publishers, like other beneficiaries of media regulation like the FTA TV networks and music companies, have had to watch as their fortresses of protectionism have been bypassed by the internet, with consumers exercising the power it hands them to get what they want when they want it, legally or illegally. With a strong Australia-US exchange rate, there’s never been a better time to buy GST-free books from Amazon.

Keane goes on to argue that import regulation is actually a lack of trust in the Australian consumer, that publishers do not believe Australians will buy Australian stories, and the industry must be regulated to keep sales of Australian literature up. He compares it to the broadcasting industry’s Australian Content Requirements, and the theory that Australians wouldn’t watch Australian TV shows if the industry wasn’t forced to make them.

However, it’s not just about the content. Garth Nix makes an incredibly important point in his letter, one which should probably be the sticking point to the entire debate:

I am surprised there is support for an “open” market in Australia because it would be no such thing. It would actually be a “surrendered” market. The entire publishing world still works on the basis of territorial copyright and it will do so for a long time to come, despite electronic editions and the Internet, of which I will have more to say down the page. This is particularly the case with English language publishing. The USA and the UK have actually been strengthening their respective book copyright regimes, not surrendering them. What is “open” about Australian-published books not being able to be sold in the USA or the UK, but American, British or any other English-language edition from anywhere being able to be freely sold here?

Perhaps I’m missing the point, but why should we accept American and British versions of our books, when they won’t do the same?"

I think this covers the basic problem with allowing parallel imports--quite apart from the fear publishers have expressed of India being turned into a giant remainder bin. The problem is that this law goes one way; we open up our markets, without having similar and equal access to the markets of the US and the UK. I just don't see how this will benefit authors and publishers--and if there is any benefit to readers, it will be exceedingly short-term.

I'll try to explain why later, either in next week's column for the Business Standard or in a more detailed post. But for the moment, think about this: this is not a simple open-up-the-market-so-that-readers-can-buy-cheaper-books situation. In theory and in practice, the rise of ebooks will force a rethink worldwide about the territorial model of publishing, where publishers buy and own the rights to sell books in a specific geographical area. At this point, though, the global publishing marketplace operates on the territorial model, for better or for worse. The UK isn't opening up its markets to Indian publishers, neither is the US. To unilaterally open up our markets without thinking about the consequence could seriously hurt authors--who lose out on royalties--and set back the gains Indian publishing in the English language arena has made in the last 15 years.

If anyone thinks readers will benefit in this situation, they need to take a long hard look at the realities of the publishing marketplace--or to think about the kind of books they would find in bookstores if booksellers no longer have an incentive to source anything but cheap bestsellers or editions of books that undercut the original Indian edition.

Update: Thomas Abraham responds to the Original Fakes blogpost (thank you, Thomas, now I don't have to write my rebuttal!):


There are essentially two views—according to us, we as publishers have a certain viewpoint founded in experience, knowledge of the markets while the lawyers (or more specifically this group of three cited here) have a viewpoint founded mainly in abstract theory—an ideal construct (ideal in their notion of a harmonious statement of law—which however has no engagement with practicalities, and chooses to ignore fundamental questions).
Each iteration has put forward a fresh round of erroneous assumptions—it started with this being just something foreign publishers wanted (that notion amazingly still persists below despite statements by all to the contrary), then the boldly stated fact that author royalties will not be impacted…and the persistent delusion that the consumer will benefit. No direct data or credible evidence anywhere.

20 comments:

  1. I can understand, lets say, for the sake of argument, that the Indian consumer takes a liking to cheaper tomatoes from abroad, because the tomatoes taste the same (if not better) and cost lesser. That should be enough incentive for an Indian seller to stock more of the imported tomatoes. That for sure will drive the Indian tomato producer out of business and will benefit the Indian consumer. The benefits hold even if the foreign exporter of tomatoes bars or levies duties on imports from India.

    Why will bookstores stock up only cheap bestsellers and not something that the reader would be interested in reading, even if it costs more? It is never easy to guess what a customer wants but it is difficult to believe that good work will stay out of stores even when there is a market for it.

    I do think that price of a book matters but I doubt anyone sorts by lowest price when wanting to purchase books. Of course, one may want to buy the lowest priced edition of a given book. Many Asian students (including me) in the US buy eastern editions of books that have the same content but may not be in color and may not be printed on very good quality paper. I am certain that the students benefit. Also, when no eastern edition exists, those who buy books do buy the costly American editions and not just any book on the subject that is cheaper.

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  2. Just so I'm clear, you're saying you'd be okay with this if it were reciprocal? So you really think Indian publishing could compete in the US and UK markets? Really?

    As for royalties, how many authors published in India actually make a significant amount of money from royalties, by which I mean an amount significant enough to make them less likely to write if their royalties suffered? I'm just curious. I'd love to see some stats on that.

    The way I see it, either Indian publishing in English has really made gains in the last 15 years, by which I mean it's built a real readership (and not just a bunch of people who're buying these books because it's all they can get), in which case it'll survive the competition. Or it hasn't, and won't, in which case I'm not sure why it's worth protecting.

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  3. Just wanted to respond to your comments about my blogpost.
    1) I agree that the pirate market only caters to the popular, never the high-brow. You denigrate the popular as ersatz, but in doing so I think you miss the crucial role that the popular has always played in the proliferation of any technology - including the reading habit, and the culture of books. Piracy opens up avenues, otherwise unavailable, to merely curious, non-serious, itinerant readers who may (and frequently do) end up hooked for life. I'm drawing here from a impromptu ethnography-of-self. It's been many years since I bought a pirate copy of a book simply because my interests rapidly outgrew the stuff that is sold on the streets. Today, I spend large amounts of money in bookstores, but my 'bibliophilia' owes its origins entirely to the pirate bookseller and the second hand bookstores who are, I feel, more humane and welcoming to the itinerant, uncertain reader than the intimidating glass-and-chrome Crosswords of the country. (And of course there's the price as well)

    2) About the Conspiracy - if any other manufacturing industry behaved this way, it would be labeled an international price-fixing cartel! It's only the specter of the author which saves the industry from this charge.

    3) I'm familiar with books published in Telugu which are equally glossy as the best English book you can find (an expensive book in Telugu would be around Rs. 200). But even if I concede this point, it begs the question of what the English publishing industry has ever done to cater to the entire class of people/readers who *don't* want their fine binding, but would be happy with an average quality of print at a lower price. For years, the English publishing industry has pretended that these readers either don't exist, or worse, that their aspirations don't count. I think (as I've said in an update to my blogpost) that parallel import might prompt (although I realize this is being optimistic) the English publishing industry in India to rethink its treatment of its clientele.

    4) Lastly, I find the arrogation by the English publishing industry to the status of stewards of our cultural taste a bit too sanctimonious. I know they would like every Indian to read Nietzsche, Kafka, or Manto, and not, die of an overdose of.. I dont know.. Sophie Kinsella (though I like her stuff) which, if their worst fears are realized, would flood our markets through parallel import. But who anointed them moral guardians, censors and arbiters of our taste?

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  4. Thanks for that helpful restatement of the issues. I'd like to chip in with a couple of points.

    1. On Australia:
    http://www.austlii.edu.au/au/legis/cth/consol_act/ca1968133/s44a.html

    They already allowed for (extended/limited, depending on your point of view) parallel importation of books. The issue at stake there was not whether to introduce parallel importation, but whether to expand it.

    2. On reciprocity
    That the United States doesn't allow for parallel importation seems to be a popular opinion. I disagree. This issue has gone to the United States Supreme Court twice. Once (in the Quality King case) the Court held the parallel importation activity to be legal. The second time (in the Costco case) the Court split 4-4 (Kagan having recused herself), and no precedent was set on the law. So on a nation-wide scale, there is no ban on parallel importation in the US. (To get a bit more technical: it now depends on which Circuit you fall under, and how that Circuit has ruled.)
    See: http://www.patentbaristas.com/archives/2010/11/01/costco-v-omega-parallel-importation-and-its-implications/
    and
    http://copyright.columbia.edu/copyright/2010/12/16/costco-omega-libraries-and-copyright/

    See also the Pearson v. Liu case order:
    http://scholar.google.com/scholar_case?case=3357164752919737781&hl=en&as_sdt=2&as_vis=1&oi=scholarr

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  5. Apologies in advance--these will be quick responses, and I'll keep posting updates whenever possible.

    @Sanjit: Fair question, and the quick answer is that the availability of cheap books greatly reduces the average bookseller's interest in supplying what's called the "long tail"--why go to the extra trouble of sourcing good books with small but intensely interested readership when you can make your profits by flooding the market with cheaper, more commercial books? It's a complex argument, though, and some booksellers will argue that Indian publishers and distributors can be very slack in supplying the needs of the current market as it stands. More on this later.

    @Falstaff: I can't show you stats on royalties, because there's been no formal survey on this; but from observation, there has been a significant rise in the average print run, and a rise in the number of authors who can now look at their royalties as a useful second income. By and large, the 80-20 rule applies to India as much as it does elsewhere; roughly 80% of authors shouldn't quit their day jobs, roughly 20% will make it big. It's not just the royalties, though. At present, despite its many flaws, Indian publishing in English is very open to publishing new authors--it's easier to find a publisher here than it is in New York, for instance, and many subcontinental authors have benefited in the long term from this. If publishers lose their incentive to develop Indian editions, as they will if the amendment in its current form goes through, you could see a return to the days when authors had to go to the West to find a publisher/ agent. Also, add in translations, and I'd say while the Indian market doesn't match the UK or the US, it would have roughly the same clout as, say, Italy or Spain.

    @Prashant: my problem with the book pirates is not the ersatz quality of the books they choose to pirate--many, like the pirated copies of Seth and co, are good books. It's that pirates are indifferent to quality, either in terms of good pulp fiction or in terms of great literary fiction; all they care about is making money off the bestsellers of the month. Any benefit that accrues to the reader is accidental, not intentional, and that should be kept in mind--book pirates aren't exactly known for their interest in growing and nurturing new readers.

    2) I don't see a "conspiracy", or a cartel. I see a publishing industry reacting in accordance with the realities of the business--which is that currently, copyright is allocated worldwide by geographical territory. This may be a bad model, but it's the model we're stuck with, and Indian publishers are well within their rights to point out that they might have to limit or seriously cut down on the kind of books they publish if this law goes through, which would be of benefit to nobody. To set this up as a Big Bloodsucking Publishing Houses opposing a mythical freemarket of books is tempting, but it doesn't reflect the reality.

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  6. @Pranesh: Not quite true about the US market, and this is where the technicalities of bookselling come in to play. The US market allows parallel importation with these caveats:

    Ultimately, though, the request of publishers for a right to prevent the importation of copies made overseas and brought in contrary to a contract with a foreign copyright owner granting them the exclusive right to distribute in this country was successful (see Section 602), but with three exemptions: (1) importation of copies or phonorecords under the authority of or for the use of the United States, any state, or political subdivision of a state (but not including schools); (2) importation of one copy or phonorecord of any one work at any one time for personal use (and and (3) importation by a scholarly, educational, or religious organization not for private gain of no more than one copy of any audiovisual work for archival purposes, or no more than five copies or phonorecords of any other type of work for lending or archival purposes.

    That's key; there isn't a situation currently in the US where a competing publisher can buy the copyright to a book already published in the US and reimport it--in other words, that market is not opening up to parallel imports in the same way that the amendment suggests the Indian market should.

    There are two big issues here. Is allocation of copyright by geographical territory really the best model for readers? I think you and I would agree that it's time to review this model, and to see what would serve readers better--I find it frustrating, for instance, that if you're a Kindle or ebook fan, books will "disappear" off the UK stores or stores in other countries, even though there's no need with e-books to hold physical copies of the book in actual warehouses. It demonstrates the ways in which territorial copyrights don't work for consumers--why should a Kindle user be able to buy x book in the US, but not the UK, just because of an old model of licensing agreements? Theoretically, opening up markets so that readers can benefit from a wider choice of books is absolutely the way to go.

    In practice, you're looking at a still-nascent market, in a country where we don't yet have bookstore penetration outside the metros to the extent that we should. Until there is a massive review of copyright worldwide, with mutual agreements between countries to open up their territories sufficiently to one another, there is no good reason for India to be the pioneer, especially when the risks for publishers, authors and by extension, readers, are as high as they currently stand. I appreciate your examples, but at present, there is no parallel situation where an Indian publisher can re-import a US edition or a UK edition of a book by an author into those countries--that would be true reciprocity.

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  7. Nila: I'm not sure the 80 / 20 rule applies. I suspect it may be more like 95 / 5. Let's do the math. An author makes what, Rs. 30 - Rs. 50 on a book? So to make a significant income you'd have to sell, at the very least, 10,000 books a year? Year after year. What percentage of authors do you think (I know you don't know. But guess.) sell that many books. And how many of them write anything worth defending.

    In any case, the royalty question is a mere tangent. The real question is: if people would stop reading your books because they could buy dirt cheap remaindered paperbacks instead, do you really deserve royalties? Personally, I'd like to think that the royalties I earn from my books come from people who actually want to read my work, and would do so even if they did have access to dirt cheap remaindered paperbacks. As a writer, I'd be ashamed to make money from a captive audience that had no other choice. In other words, while I agree completely that the change will make it a lot harder for Indian writers to get published. I just think, based on the quality of what I've seen come out of the Indian publishing scene in the last ten years, that that might not be a bad thing.

    In your post, you point out that this has happened before - in Australia. I think it's happened before in India as well, just in other industries. I can certainly remember a lot of people crying wolf when other industries were globalized - 'industry experts' who were convinced that India would become a dumping ground for obsolete car models, and electronic goods from ten years ago. In retrospect, those fears seem little more than fairy stories cooked up by insiders afraid of competition. I suspect that's exactly the pathology at work here.

    P.S. I notice that you don't really respond to my question about Indian publishers competing in foreign markets. Can we just agree that this whole "why should we open our markets if they don't open theirs" is a jingoistic red herring?

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  8. @Falstaff: I'd disagree with you on the 80/20 rule; from my limited experience in publishing, it does hold true here. Many of the success stories are not necessarily those covered by the media--authors of reference books, travel guides, cookbooks, a certain kind of non-fiction writing, or home-grown successes like Devdutt Patnaik, for instance. I agree that too much of what's being published is dross, but there is also just enough in the way of talent for me to think that 95/5 wouldn't be the right percentage. (A quick look at the lists I have with me on sales figures over the last decades--not lists I can share freely, I'm afraid--would confirm the 80/20 ratio.)

    I like your argument on royalties a lot--it's an unusual and very independent perspective.

    We are going to have to disagree on the "jingoistic red herring" bit. Given an amendment that would change the way Indian editions are commissioned, bought and sold and that would significantly change India's current position in the marketplace as a young, expanding territory, I do not think that this is a red herring at all. Given, also, that Indian publishers have been quietly plugging away at the global market, and have broken through in terms of translation sales (translations into European languages) quite significantly, I do think that Indian publishers are capable of being competitive in a true open market system. What's happening here, however, is a one-sided opening up of markets, and that is actually a huge problem. I know how I would have reacted to this amendment had I still been in publishing--with great concern and serious worry for the future--and I don't find it at all surprising that Indian publishers are worried.

    The Indian books and publishing market is not like the car market, or the cornflakes market--or even like the music market. The way it's developed has been significantly different from most other consumer goods, and while I'm not about to write a paper on the key differences, I do see why a well-intentioned amendment to copyright laws could be really bad news for Indian publishing in general.

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  9. Urmila Dasgupta3:12 PM

    Thank you Nilanjana for such a sympathetic but balanced post on the fallout of the proposed amendment to the copyright act.

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  10. @Sanjit: you ask why the book stores will not store non-bestsellers? Ask them why they don't even right now -- even without interference from the foreign remainders or 'competing' editions. So many bookstores have shut down in the last few years.

    I'm a new publisher, and have done some good titles in the past one year, but distributors are not keen to keep them. They only want sellers -- priced at Rs 99, never mind if you've spent Rs 80 at producing a good book! Why? Because they sell -- regardless of what the content/quality is.

    How many really want serious titles? And that too from smaller/newer publishers that don't have a an already well-recognised logo? Not that selling serious fiction is easy for the biggest players.

    Plus there are books for which we only have the rights for the subcontinent. Can you imagine what havoc the new law would wreak? We're talking about our own titles. Publishing firms ours wouldn't stand a chance!

    @ Falstaff: It's not even about fair 'competition'. This is about your own title coming into your own market/country to kill your own edition. If one calls it 'growth', it's a Cancerous one we're looking at.

    Divya

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  11. @Nilanjana
    Your reading of the law makes it seem much more clear-cut than it is. (If it was that clear-cut, why would the case have gone all the way to the Supreme Court?)

    Section 602(a)(2) of the US Copyright Act is clear insofar as *infringing* works are concerned. That is, books that were produced abroad *without* the permission of the author. Those clearly cannot be imported because of the bar under Section 602(a)(2). However, the question before the Supreme Court in the Costco case was whether that bar also applies to goods produced *with* the permission of the owner.

    Section 602(a)(1) talks of copies that are "acquired", not necessarily upon purchase after entry into commerce. So one way of reading it would be that an exclusive licensee cannot reroute it into the United States. It doesn't say that a buyer from the exclusive licensee cannot export it to the United States. After all, section 602(a) makes it makes it clear that violation of it is a violation of section 106. And section 109 (the first sale doctrine) overrides section 106 after first sale has occurred.

    If you're interested in these legal minutiae, I would suggest looking at the SCOTUS Blog, as it provides all the briefs (including amicus briefs), summaries of the arguments, etc.:
    http://www.scotusblog.com/case-files/cases/costco-v-omega/

    For a helpful "recap" of the arguments in the case:
    http://www.scotusblog.com/?p=108438

    For a transcript of the arguments themselves (which in the US Supreme Court are always of a very high quality):
    http://www.supremecourt.gov/oral_arguments/argument_transcripts/08-1423.pdf

    BTW, some judges (such as Justice Ginsburg) seemed to have problems with this narrow interpretation of section 602. Others (such as Justice Breyer) seem to use the reasoning I illustrated above. However, the final verdict was split 4-4. In any case, there is no definitive position of law on this matter as some in India seem to think there is.

    And reading through the amicus briefs makes it clear that parallel importation of copyrighted works into the United States happens at very large scale.

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  12. @Pranesh: I'm not a legal expert by any means, but here's a really simple question. Is there a situation in the US where mainstream publishers have had to live with parallel imports, say, of Franzen's Freedom or of the latest Stephen King? Trade publishers in the US have protected their rights to territory fairly fiercely over the years, as have their counterparts in the UK; given that these are two of the biggest markets in the English-speaking world, I don't think the exceptions you've cited are significant. (Legally, yes, but we're speaking of the realities of the publishing world here. I can't think of a single mainstream trade publisher in the US who allows parallel imports of their editions.)

    In Australia, the debate over parallel imports ended up with book retailers and authors arguing on different sides of the fence. Here's an argument from a children's book author that sets down some of the main points. It's significant, again, that Australian authors came strongly out against parallel imports during this debate:

    http://liliwilkinson.com.au/blog/tag/parallel-imports

    And here's an interesting overview:

    "Over 2008-2009 the Australian Productivity Commission conducted a public inquiry into the existing qualified book exception to the parallel importation right introduced in 1991. Under that exception, the parallel importation right can be exercised unless a book is unpublished in Australia 30 days after its foreign publication or is otherwise not supplied 90 days after a customer order for the title has been placed. Larger Australian book retailers sought expansion of the exception and the abolition of the parallel importation right for books. This would have enabled the retailers to have unfettered access to cheaper books wholesaled abroad. Australian authors sought retention of the qualified exception upon the parallel importation right, arguing that the ability to exercise some territorial control upon books was important to protect against (for example) offshore remaindered stocks of Australian authored-titles flooding the local market, and prejudicing the viability of Australian professional authors."

    And here are Nix and Earls arguing against parallel imports in Australia--the NZ example, incidentally, doesn't appear to hold good, since that country had relatively little local publishing at the time that it allowed parallel imports of books.

    http://www.talkingsquid.net/archives/344

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  13. @Divya
    "If one calls it 'growth', it's a Cancerous one we're looking at." Hah. A most excellent turn of the phrase. I must remember to use it sometime (elsewhere from this debate, of course).

    @Nilanjana
    1. The situation of "Indian authors will lose royalties" will only happen if it is Indian authors whose books are remaindered abroad. That would mean that the overseas publisher overstocked the Indian author's works. Which would mean that the expectations from that Indian author were much higher than the actual sales, and that too only in a fast-moving market (which is where books are forced to be remaindered).

    I'd like to hear from the publishing industry (and authors) on how frequent a phenomenon this is (i.e., Indian authors' books being remaindered). If it is infrequent, then Indian authors haven't much to worry about. If it is frequent (that expectation exceeds actual sales vastly enough to cause a remainders problem), then Indian authors would apparently have much more to worry about than parallel importation.

    I think that ties in well with Falstaff's argument about authors not wanting a captive audience, though s/he (though I'm guessing 'he', going by the handle) may find reason to disagree.

    2. On India being a pioneer
    You write:
    "Until there is a massive review of copyright worldwide, with mutual agreements between countries to open up their territories sufficiently to one another..."

    Ain't gonna happen anytime soon. It takes decades to get moving at a multilateral forum on IP (such at the WIPO). Getting a global exception in copyright law for persons with disabilities (now who would oppose that? the US and EU, that's who) has been going on for several years. And the TRIPS Agreement specifically leaves this question open because there was irreconcilable disagreement between developed and developing countries during negotiation of Article 6, with the latter wanting to be able to import freely.

    "... there is no good reason for India to be the pioneer, especially when the risks for publishers, authors and by extension, readers, are as high as they currently stand.

    India's not really being a pioneer. A great many countries allow for parallel importation of copyrighted works, including: New Zealand, Mexico, Chile, Egypt, Cameroon, Malaysia, Singapore, Pakistan, Argentina, Israel, Vietnam, South Korea, and Japan. A key commonality between countries that push for allowing parallel importation and those that wish to prohibit it is that the former all tend to be net importers of IP, while the latter tend to be net exporters of IP.

    New Zealand's example is most instructive as they've documented the before-and-after of the removal of the ban on parallel importation excellently. They've overall been very satisfied allowing for parallel importation. (The one hiccup was for movies, for which they subsequently decided to have a 9-month moratorium before allowing for parallel imports.)

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  14. @Nilanjana Thanks for the post and also the reply. At the least I understand an iota more about being an Indian publisher.

    @Divya I, from what I have read and understand, do think that there is a good chance that Indian publishers will suffer. And maybe that the author and the reader (the discerning one) will suffer, mostly (I think) in the short term (I doubt forecasting about the long term is easy or likely to be accurate irrespective about ones knowledge about the current situation).

    However, that does not make the amendment a bad one (Sorry!). I have only one issue and that has to do with how much control an author has on where and when the work gets published. For example, can the author choose to allow publishing of the US edition only a month after the Indian edition is released (I think that is the case)? If so, the author can choose to delay foreign editions, give the Indian edition more time. In fact the Indian publisher could ask for the same before agreeing to publish.

    If a foreign edition of a book is remaindered way too soon then maybe the foreign publisher is stupid and hence will suffer a loss or maybe there isn't a market for the book. With the amendment such an act on part of the foreign publisher can reduce the price of the book in India. It seems to be a too much supply and little demand scenario to me. It will hurt the Indian edition, of course, and also the author. However, if the book is good it may inadvertently, in the future, benefit the author and the Indian publisher. The lowering of price (due to foreign remaindered editions) will benefit greatly the discerning Indian reader and may in fact expose the general reader to quality writing, who seems to be interested only in low priced books, hopefully encouraging the reader to shell a few more bucks for another book from the author or other Indian authors...

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  15. @Pranesh: I have to repeat this, but New Zealand didn't *have* a thriving local publishing industry--any step up from that was an improvement, in much the same way that it was better for the Indian reader some decades ago to have the market flooded with cheap books from Russia in the absence of other alternatives. None of the countries you've mentioned are known for strong local publishing (Japan's case was, as mentioned above, slightly different). I don't see a single case of a country with a thriving indigenous publishing industry allowing or wanting unilateral parallel imports. See Divya's comment, above, for how this would affect small publishers and independent presses--and it is these small presses who do some of the best work.

    In all of this, I don't see your case for explaining how parallel import will help publishing and authors in India, or don't these two segments of the industry count? I also don't see how an amendment that authors and publishers strongly oppose will work in the long-term for readers.

    I think also there's an understandable ignorance about how remainder merchants function, and how that would change in the wake of 2m--completely understandable, because no one would expect those outside the business to know. If you look at Thomas' original argument, what he was trying to explain was how this would change the definition of remaindered copies:

    "One certain fallout of this is that the author who was planning to get designated royalties by territory will hardly get an income stream. Because royalties on remainders are near zero. Which also means we are placing authors in competition with a third-party non-holder of copyright — the remainder merchant who brings the book in against the author’s wishes because the law permits him to do so — a completely unjust intellectual property system."

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  16. Nilanjana, we're going round in circles. What's the point? Thomas's rebuttals (three exhaustive ones) have already covered these grounds. Somehow, they haven't registered, simply because there has been no genuine effort from the lawyers to understand the issues. We're simply being looked upon as 'opponents' -- for reasons that defy our comprehension.
    In the realm of theory, yes, one could go on arguing till the cows and buffaloes come home. Eventually, what purpose will it serve? Tomorrow, if this law is passed, it's going to affect these very people who're fighting so passionately for it, too. It's a pity that they cannot see it.

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  17. Vinutha Mallya11:51 AM

    While we go around in circles, the basic questions that Thomas raised in his latest post on Divya's blog persist:
    "1.) What was wrong with the existing law?
    2.) What gaps were seen (VM:in real terms, not theoretical) that made the lawmakers think that this amendment was needed?
    3.) What current price patterns need to be addressed, given that India is already the lowest priced market in the world (VM:Compare the simultaneous Indian edition of a newly released title in the US and UK)?
    4.) Why do other mature markets (the case studies cited by these lawyers are most often from these same mature markets) still prefer territorial copyright?
    5.) Why has there been no in-depth engagement with publishers, and why has there been no substantiation of any theory made by the ministry (as reason for the amendment) or these defenders of this retrograde law?"

    I find no argument that takes ground realities of India (and, by extension, the current model of Indian publishing industry and its networks with global publishing industry) into account, but rather find an abstract view derived from experiences of other countries and/or the manufacturing sectors.

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  18. Publishers have major issues with "open" markets, or markets where the same book published by two different publishers can be sold. For instance, the Harry Potter books were published in the UK by Bloomsbury and in the US by Scholastic--and both English-language editions were available in the German market, along with the German-language edition. I am sure that this would have led consumers to look at the cheaper of the two English-language editions when purchasing the book (English-language books are popular in Germany, the Scandinavian countries and Holland). The UK publishers were worried that the cheaper US editon would "leak" into the home market.
    Incidents such as these have led US and UK publishers to try and demarcate the specific territories where they can sell their books or the rights to print a particular edition of their books.

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  19. Hi Nilanjana:

    Read your BS piece today--very well articulated. I've come into this debate rather late, but am posing the same queries that I asked of Divya on her blog. So here goes:

    I have been watching the exchanges on section 2(m) with fascination. Its terrific that IP law making in this country is getting more participatory and nuanced, when compared with a rather secretive law making past. I still remember the passage of the '94 copyright amendments when some sections made their way verbatim from a note (passed under the table) by just one IP stakeholder without so much a discussion or debate! Indeed, we've come a long way and i must thank you for fostering this lively debate on this platform.

    I come at this issue from the perspective of an academic who is interested in sound IP policy for India. To me, there is at least one basic norm to any IP policy making endeavour and let me place it before you to seek your views before we dive in any further:

    The presumption ought to always favour principles of free market competition. IP norms restrict competition and should be introduced only when the benefits outweigh the costs i.e absent such protection, the rate and production of IP goods would suffer, owing to threats of free riding. In the absence of concrete evidence one way or the other, the fall back position ought to favour free competition.

    If we're settled on the presumption above, I want to raise a few issues, mainly to better my own understanding of the situation:

    1. What current evidence do we have to suggest that parallel import norms would harm the industry? And that the gains to consumers and free market competition would be too modest to effectively outweigh this harm? Please note that when using the term "industry", I restrict myself to industry that is in some way helping the Indian economy and Indian authors by inter alia disbursing its profits in this country and not repatriating it. I don't think Indian policy makers should be too keen on enriching the coffers of foreign publishers and distributors...

    2. If India anyway has the cheapest editions (and I see this sentiment articulated repeatedly by even the publishers), then what harm can come from parallel imports? If there is no possibility of cost arbitrage, haven't we anyway curtailed the scope for profitable parallel importers?

    3. Does the concern pertain to remaindered copies? Is there evidence of such copies harming markets such as Australia that provided for parallel imports (qua books that were not published in Australia within a month of first publication elsewhere)? And if this is really a concern, can the government not prohibit only "remaindered" copies OR even tax such copies? Or impose anti dumping penalties.

    In other words, we retain section 2(m) and provide a carve out from 2(m) only for "remaindered copies"?

    4. Is the concern that low priced editions would be exported out of India? If true, section 2(m) cannot address it, as it relates to "imports". Exports have to be dealt with separately, as you will appreciate.

    5. It may be of interest to note that both patent law and trademark law in India provide a wide parallel import provision. These have operated for years without any palpable damage to industry (at least I haven't seen any evidence and would be curious to see it)... Why should copyright be treated any different?

    Would greatly appreciate any clarifications from you on this. Look forward to a healthy discussion on this count.

    Shamnad Basheer
    MHRD Professor of IP law, NUJS
    Founder, SpicyIP

    ps: While I hold a chair instituted by the MHRD, I am an academic enjoying the freedom to harbour independent views, which have often clashed with those of the government. In particular, I've been part of a group that staunchly opposed a key provision in the current bill relating to disability. In short, I don't speak for the government here.

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