Much rhetoric and hyperbole has been thrown about recently by Australian writers in the wake of the Productivity Commission report on parallel import restrictions. In his Miles Franklin acceptance speech, Tim Winton said that "the Productivity Commission is hostile to Australian rights. The commissioners have displayed a touching faith in the implacable genius of the market. As an interim measure they want Aussie rights to be limited to merely 12 months. After that all bets are off."
An editorial in The Age entitled "Do not abandon our writers and publishers" stated that "The commission, long a standard bearer for free trade, called on the Federal Government to abandon the existing system of territorial copyright protection for Australian writers and publishers, a change it believes will result in lower book prices for consumers."
What else could one expect from a profession that makes a living from the (creatively) written word?
I understand that writers who benefit from healthy royalties might be worried, and The Age is perhaps correct to be sceptical about the actual impact of abolishing the restrictions. Such perspectives are, however, illustrative of a frightening lack of humility concerning the relatively cushy profession of writing — let’s face it, we’re not doctors, are we? They also reveal a degree of ignorance about the nature of copyright and the very questionable rationale behind why we, as a society, offer exclusive control over intangible things such as written words.
The first thing that requires clarifying here is what copyright is and how it works. This is important for two reasons. Firstly, the controversial recommendations have nothing to do with copyright per se. The fundamental protection afforded to authors is not even remotely threatened. Secondly, irrespective of that, some knowledge of the principles that underlie copyright is necessary for properly understanding the implications of what the report is recommending.
There are two justifications for copyright. The first justification is often called a moral one, but it should be really called a psychological justification: that individuals have a natural right to the fruit of their labour. In real terms however, "copyright" is simply a bundle of decidedly economic rights. Moral rights, such as the right to be properly attributed as the author, do exist, but do not bring in much money, as one might expect — hence their invisibility; they were only established in Australia in 2000.
These economic rights entail important things like the exclusive right of the copyright owner (not necessarily the author) to distribute a work, to sell it, and, of course, to copy the work. The rights exist for the life of the author plus 70 years, and, importantly, they are fully transferable. The importance of this is that copyright owners can permit, via contract, other parties in other countries to exercise the rights for limited periods or for the full term of the rights, usually in return for payment. In the case of the publishing industry this payment takes the form of a percentage of each book sold: a royalty.
The ability of copyright owners to do this all over the world, irrespective of nationality, is thanks to the global intellectual property regime established by the Berne Convention. Under this, all national copyright systems offer protection to the citizens of all the signatories of the Berne treaty. A Brit can benefit from the Australian copyright system and an Aussie can benefit from the UK system, as well as each of their own. A global market thus exists for the exploitation of copyrights, and copyright owners — whether they are authors or publishers — are very adept at efficiently licensing their works in all the available markets.
Another aspect of copyright law that is important for our purposes is what is known as the exhaustion of rights doctrine. The copyright owner has the exclusive right to sell, or give permission to another to sell, the copyright work. But once that first sale has occurred, the owner has "exhausted" their right. How else do you think second hand bookstores manage to exist?
Such questions reflect the bigger debate about copyright, one which should always be borne in mind by authors when they get chippy about making a little less money at the expense of slightly cheaper books; why protect such works in the first place?
Intangible things, such as the "expressions of ideas" represented in a book, are not like tangible things. The granting of rights in land and other tangibles emerges from the economic characteristics of tangible things; they are scarce and rival, and so, in order to ensure some degree of justice regarding how things are distributed, we have exclusive rights of use. Intangible things do not suffer from the same economic characteristics — as new technologies are illustrating.
In this light, one can accurately see copyright as the imposition of an artificial scarcity (and rivalry) on intangibles. This gives them exchange value, something which the recent economic crisis has exposed as being highly questionable. Property speculation, such as the purchase of an additional home for the purpose of simply making money, drives the price of property up. Somewhat similarly, the imposition of copyright on intangibles gives them an exclusivity, and resultant high exchange value, which they might not ordinarily have, all things being equal.
But, no matter what opinion one holds regarding the very existence of copyright, Australia has a copyright regime in place which has not been even moderately threatened by this report.
What has been explored by the report is a separate legal rule, confusingly contained within the Copyright Act 1968, but one that is actually a trade and competition related rule. The rule allows for the restriction of so called parallel imports — imports of foreign, but legitimate and non-infringing, copies of works into Australia for sale.
The rationale behind such restrictions is simply this: the creation of markets. The restrictions are not unlike the DVD regional security settings that prevent legitimately purchased and authentic DVDs from being played in different regions. Such markets are created so that price differentiation can be enforced. As a copyright owner, why would I want my royalties to be less than they could be? By establishing falsely separate markets — false in the sense that they are the product of an artificial separateness, since cheaper DVDs can be purchased from the global market over the internet — I can charge whatever I like. It is like cutting off the water supply, hoarding bottled water, and then ripping people off.
Of course, internet purchases of foreign, legitimate works are not prohibited under the current restrictions. But the importation of such works can be prohibited. As a result, to purchase the work in the country of origin you must pay the price the copyright owner has artificially established, one which might not even reflect the true cost of production.
The Productivity Commission report proposes getting rid of the possibility of restricting parallel imports, arguing that the consumer will benefit. Opponents say that if the restrictions are abolished and parallel importations are allowed then the market will be flooded, and Australian publishing and writers will suffer.
I’m no so sure that it will, and, in any event, that sense of humility I mentioned earlier needs to be restored. A national publishing industry and cache of successful writers is a very nice thing but successful writers should remember who put them where they are. They are only "authors", in the modern understanding of the word, because they are read. And readers choose how much they are prepared to pay to read. Those readers should not be made to feel that they are being unpatriotic by wanting cheaper access to books. Cheaper books might even encourage more people to read.
Irrespective of whether or not we have copyright or parallel import restriction, the simple fact is books will always be written, sometimes for reasons other than the maintenance of a career. Publishers will publish, since there are always ways to make money from the desire of the public to read, and because some people do not primarily require profit from publishing. And writers will make a living, whether that be as an "author" or something slightly more prosaic. They should not forget the shoulders they stand on in their creative and intellectual pursuits, and they should give some bread back to those who help to support them in their solitary endeavours.
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