REPRESENTATIONS OF THE MUSIC PUBLISHERS ASSOCIATION
ON THE DRAFT COPYRIGHT BILL
INTRODUCTION
The Music Publishers Association ("MPA") welcomes the opportunity to comment on the draft Copyright Bill.
While we support all measures aimed at maintaining or enhancing the protection of copyright in general, we wish to comment specifically on the proposals affecting so-called "parallel imports".
The MPA supports the continued civil prohibition on the so-called "parallel importation" of any item which contains or embodies any work the subject of copyright, especially (but not limited) in relation to any work which takes the form of a musical composition. The MPA opposes the decriminalisation of this activity.
BACKGROUND
The Music Publishers Association ("MPA") represents the interests of music publishers locally, with members across the entire industry.
Music publishers own, control or administer the intellectual property constituted in songs, scores and other musical compositions. Apart from compositions in the public domain, every recording or other commercial use of a musical composition, including the use of such a composition as part of the soundtrack to a film or video, involves the exploitation of the intellectual property which a music publisher enjoys in that work.
The source of all such intellectual property is the effort and talent of countless songwriters, lyricists and other composers all over the world.
It would be fair to say that, without a continuously replenished supply of new musical compositions, the entire music industry would stagnate.
It is this intellectual property (and not the disc, cassette or other medium by which such property is delivered to the consumer) which represents essentially the entire investment of time, energy and talent, as well as money, which the music publishing industry, and all who work in that industry, have committed to the composition of music for public consumption.
As mentioned above, the MPA supports the continued civil prohibition on the so-called "parallel importation" of any item which contains or embodies any work the subject of copyright, especially (but not limited) in relation to any work which takes the form of a musical composition, and opposes the decriminalisation of this activity.
We say this for a reason quite apart from he economic arguments which have been deployed respectively by opponents or supporters of the Bill.
We say this because "parallel importation" is wrong.
EXPOSITION
We should not confuse intellectual property with the medium by which it is delivered for public consumption.
To a shopkeeper, and to the consumer, it may appear that the music industry is selling compact discs, music cassettes, laser discs, video tapes and any number of similar "products". In reality, these "products" merely function to deliver to the consumer a piece of intellectual property, namely the composition, performance and recording of a musical work, usually for private and domestic use only.
Gone are the days when gifted composers and performers, whose work might enrich the cultural heritage of the world, were left to live off the charity of others.
Intellectual property is a concept, recognised by enlightened society, under which composers, performers and other creators of musical works are able to protect the fruits of their labour. This is the meaning of "copyright".
If a composer, the writer of a song, permits the recording of a performance of that song to be embodied in compact discs or other media for sale to the public, he is entitled to enjoy some part of the proceeds of those sales.
Moreover, he is entitled to restrict the exploitation of that song as he sees fit, not because consumers and retailers permit him to, but because he is the owner of that song. It is for him, as owner, to restrict the manner in which his work my be exploited. He may refuse to permit his work to be exploited in certain ways (eg. by way of copying) and in certain places (eg. in foreign territories).
A "licence" merely describes the permission which a copyright owner grants to others. A licence does not restrict that which would otherwise be permissible, but rather permits that which would otherwise be restricted.
Anyone who is unhappy with the licence attached to a music product is entitled not to buy it. But it is not in his right to buy it and then to act in defiance of the licence. That is not what is meant by "consumer rights". Nor is it anything to do with an "open market" or "free competition".
A society which protects the owner of intellectual property is naturally to be expected to protect those who act with his licence, and to deter and to hold accountable those who act, or encourage others to act, in abrogation of his rights as owner.
The infringement of a copyright owners not to have his work reproduced in a given territory without his licence is "piracy". The infringement of a copyright owners right not to have his work sold in a given territory without his licence is "parallel importing".
We do not see how Hong Kong should prohibit the former but permit the latter.
"PARALLEL PIRACY"
In essence, a "parallel import" means an article imported into Hong Kong which, if it had been manufactured in Hong Kong, would be an infringing copy,. ie, a pirated article.
In point of principle, "parallel importing" would be much more aptly termed "parallel piracy. There seems to the MPA to be little point in hiding the true nature of this activity behind euphemisms.
There is nothing "grey" about importing products containing intellectual property whose exploitation in a given territory has not been permitted by the owner and, indeed, has been licensed to another party.
If copyright infringement is wrong, then we contend that no economic argument, much less the use of clever language, can make it right.
Just as there is no such thing as an "acceptable" amount of theft, or a "permissible" degree of corruption, there is no such thing as a "grey" infringement of intellectual property rights.
HISTORICAL CONTEXT
This is not a novel view of the matter. The system of law from which we draw our own laws has recognised the unacceptability of "parallel imports" and has prohibited them since at least the 18th century (see the Act of 1709 (8 Anne, c.19)).
Indeed, exactly one hundred years ago, in ruling against the parallel importation from Germany of books the subject of copyright in Britain (under the then International Copyright Act of 1844), the Court of Appeal observed :
"Under conditions of trade favourable to books printed in Germany the copyright in the British dominions under the Act would be absolutely worthless, and the beneficial object of the Act of 1844 entirely frustrated."
[per Rigby L.J., Pitt Pitts v
George & Co. (1896) 2 Ch.866
at 882, our emphasis]
To those who would have our laws permit "parallel imports", we would ask why it should be that a principle so well enshrined in our system of law should now be abandoned?
The value of intellectual property to its owner, and the need to deter those who seek to undermine that ownership, can hardly have diminished over the last three centuries,
We would suggest that, as the importance of intellectual property increases with the growing sophistication of modern society, the need to protect that property, rather than diminishing, grows apace,
"ECONOMIC" ARGUMENTS
It seems to the MPA to be extraordinary that something as plainly wrong as the wilful abrogation of a copyright owners rights should be the subject of even an attempt at justification.
That such an attempt is made in the name of "consumer rights", "free competition" or the "open market" by those who openly flout our system of law is a cynical distortion of principles which Hong Kong rightly holds dear.
The suggestion that piracy promotes greater consumer choice, free competition and a more open market would be incapable of being supported by any body interested in the protection of legal rights - even if, on a perversely simplistic view, such a suggestion were in some way true.
This is because piracy is an affront to the very principle which underpins consumers rights, free competition and the open market - namely that property is capable of being owned. Without ownership, there would be no such thing as a "market", nothing for "consumers" to choose and no business for which to "compete".
If this is accepted, how can it be right to permit anyone to bring into Hong Kong and to traffic in any article which, if it had been manufactured in Hong Kong, would be a pirated article?
(insofar as "economic" arguments are to be considered, we support those put forward by the International Federation of the Phonographic Industry and their allies.)
INTERNATIONAL PERSPECTIVE
If we are to expect the rest of the world to respect the intellectual property rights of Hong Kongs own composers and, indeed, the work of anyone in Hong Kong the subject of copyright protection, how are we to justify indifference to respecting the equivalent rights of composers and other copyright owners abroad?
We suggest that to allow the importation of products infringing the licence of a copyright owner abroad (and the rights of that owners local licensee) would be in effect to render Hong Kong, in the international community, a parasite - feeding off but not contributing to the very system which supports it.
DECRIMINALISATION
The MPA opposes the decriminalisation of "parallel imports" for the same reasons.
If Hong Kong is to maintain credibility in the international community as a protector of intellectual property rights, it cannot afford to put out the message that the one entity in Hong Kong incapable of protecting copyright owners and their licensees in the government itself.
Moreover, we respectfully disagree with the suggestion that the rights of a copyright owner and/or of his licensee are merely "contractual". Copyright does not spring from contract. It is the inherent right of the creator of a work capable of such protection.
When a copyright owner licenses his work to another, it is true that there arises a contract between those parties. But the subject of that contract is not in itself contractual. It is plain that, under our system of law, a licensee has the rights to enforce copyright as if he were an assignee of those rights.
To say that the matter is purely contractual is like saying that a house is "contractual" because it is bought by a purchaser under a contract of sale.
What matters, and what needs to be protected by both civil and criminal measures, is the underlying subject matter of the contract - an item of property, albeit "intellectual".
Furthermore, the MPA would point out that, since the draft Bill would entitle and aggrieved owner or his exclusive licensee to obtain an order of the High Court requiring the Customs and Excise Department to detain infringing articles (including "parallel imports" as the term is used here), it would seem unjustified to deprive that same Department, or other governmental authorities, of the power to act on their own initiative.
CONCLUSION
Hong Kong has fought hard to cast off its reputation as a haven for pirates - opportunists who do not respect the legal rights of others.
The MPA submits that no amount of "economic" expediency will justify supporting the opportunity known as the "parallel importer".
To backtrack on a legal prohibition which has been recognised for three centuries would be both retrograde and contrary to the international system of copyright protection.
We therefore support the continued civil prohibition on so-called "parallel imports" and oppose the decriminalisation of this activity.
___________________________
Music Publishers Association
of Hong Kong Limited
2 December 1996
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