Friday, March 11, 2011

Publishers have a Right to Protect their Territory: 2(m) – Parallel Importation, Copyright Law, and More

The proposed copyright amendment bill, 2010, contains a proviso  2(m) stating that ‘a copy of a work published in any country outside India with the permission of the author of the work and imported from that country into India shall not be deemed to be an infringing copy’. 

The proposal has thrown the publishing industry in India out of gear, giving rise to heated debates between publishers and a coterie of  IPR lawyers (in favour of an abstract theory of what they think copyright should rightfully be) on various forums – newspapers and online, turning them into blog warriors overnight.

Though they were not consulted in detail, towards the later stages publishers have made representations to the powers that be. However, they have seen neither engagement nor any detailing of the reasoning. Ironically, it seems to be the lPR lawyers generating the debates, but discount everything their interlocutors have to say, with remarkable callousness and no verification.

True they are not the lawmakers; and true too that they have no concrete evidence to buttress the claims they’ve been making. The publishers don’t really need to counter them, but are doing so only so that people will not be misled by warped ideas and theories.

This inherent ‘because-we-say-so’ attitude from these lawyers in any conversation so far has been rather irksome, especially since they are so blatantly blind to facts and deaf to logic. Some gross misconceptions:

  • The authors will benefit (because we say so)
  • The remainders will not flood the market (because we say so)
  • Exports will not be affected (because we say so)
  • Publishers are resistant to competition (because we say so)
  • Publishers are being protectionist (because we say so)
  • All publishers are villains; they offer a raw deal to their authors  (because we say so)
  • Parallel importation will bring down the prices of books (because we say so)
  • This must be about foreign publishers gaining (because we say so)
These men are ‘not convinced’ by the publishers’ arguments simply because they refuse to be convinced. We seem to be pitted against legal jargonauts and amazing new levels of jargonautery every day. And, ironically, it’s the publishers who’re accused of being ‘sanctimonious’.  

There are two levels where 2m poses a problem: parallel imports, and parallel exports. The way the clause has been worded, the meaning is ambiguous. One set of lawyers believes allowing parallel importation does not imply allowing parallel exportation as well. The other set of lawyers believes it does.

And, if that happens, it’ll be a huge blow to educational textbooks, most of which are marked down by 70-90% especially for India, while trade books are marked down by 30-35%. At the moment there is an illegal trickle of low-priced-editions (LPEs) to the US and the UK (the countries that license these special editions to Indian companies).

Abroad, educational textbooks are sold by a more scattered network ranging from campus stores to wholesalers, to jobbers, to a large chunk online. The huge price differential (cost arbitrage) incites leakage – both here and there. It’s against the law in the UK and US, so the original publishers can sue the people infringing, once they find them.

If this law is passed, the trickle will become a flood because it’ll legalise this activity. A catastrophe really, because those countries will certainly not welcome LPEs of their own titles into their own territories. And, even if they find the infringing editions, they wouldn’t be able to do anything about it because it would be legal in India.

So – they’ll do the easiest thing. They’ll simply cancel the licences to India.

Who’s the loser here?

No, they will not make the effort to do an edition for India directly, simply because it’s not worth the effort. The Indian market on an average is still only 2-3% of any major foreign educational publisher. Why would they jeopardise their home market for the sake of a 2-3% Indian market? Pearson UK is already threatening to do that if this law takes effect.

And, oh, we know what the lawyers will say – yet again!

‘It will not happen (because we say so).’

The fact is it will, in spite of all their claims.

There is a certain difference between protection and protectionism. The publishers are well within their rights to protect their territory. All the ‘competition’ is already here. Infringing editions do not qualify as ‘competition’.

A jaundiced view is a travesty of justice, fairness, and democracy the lawyers and policymakers claim to uphold.   


  1. witty and precise.

  2. Please note the response by Prashant Reddy on Spicy IP:

    To quote:

    'Another point that I would like to briefly touch on is this piece by Divya Dubey where she defends the ‘publisher’s right to protect their territory’. While her piece focuses on the ‘attitude’ of the IPR lawyers supporting Section 2(m), she also makes an argument linking the proposed amendment to an increase in the so-called ‘parallel exportation’. In brief she argues that if parallel imports are allowed, it will increase the so-called parallel-exports to the U.K. & the U.S. because this will now become legal. As a result she concludes that foreign publishers will cancel their licences for low-priced Indian editions.

    There could not be a more misguided argument. As noted by Dubey herself, the U.S. & the U.K. do not allow parallel imports, therefore any ‘flood’ of books from India to the U.S. or the U.K. would be illegal under the laws of those countries. There have been several cases where U.S. Courts have restrained the import of such books. To put it in brief, its their head-ache and they are pretty good at tackling the problem.

    As for Dubey’s assumption that ‘parallel exports’ are illegal, she fails to notice that the legal position on this is hardly conclusive. The John Wiley judgments are the first such cases where the Delhi High Court has given publishers a hitherto unknown right, which they do not enjoy in any other country. I will reconsider my position if anybody can show me a similar position of law in any other country. Moreover as stated above, the main issues in the Wiley case are pending trial before Court. Even in the U.S. and the U.K., although parallel imports may be illegal, resellers in those countries are free to export goods to any other country. It is for the law of the importing country to decide the legality of such action because copyright law is a territorial law, dependant on the laws of individual countries. Moreover the rights of resellers are linked to the Doctrine of ‘First Sale’ and not the theory of ‘parallel imports’.

    (Again, the airy dismissal and 'it is their headache' refrain. Honestly, why are we even trying? It's like banging your head against the wall.

    If he'd read carefully, the answer's already there in the article. The US & the UK will get rid of their headache precisely by cancelling the licences. If you don't believe that, please check Subroto Mozumdar's comment on Thomas Abraham's second rebuttal.

    It's ridiculous and presumptuous to say, 'its their headache and they are pretty good at tackling the problem'.

    But again, please note the tone.)

  3. Divya, I hope you will agree that import and export are controlled by 2 set of laws - export laws of exporting country and import laws of importing country. Currently there is double protection against LPE export. Even if we assume that protection from Indian side will go away (I don't believe so), you will have to agree that protection against it on US/UK side is still present. So why do the publishers need to cancel licenses? Is the judicial system in those countries less effective? As far as I know, the courts there are much faster and law enforcement much better.

    Sorry to say this but invoking the fears against LPEs in this discussion doesn't make much sense.

    In fact here is an idea to make a strong case if you must. Just ask Shroff guys to ask and get a quote from O'Reilly guys that they are worried and will consider cancelling the LPE editions. In one shot you will have the whole IT community on your side.

  4. Abhaya, this has already been explained. Yes, there are laws against it in the US and the UK, but they're not going to spend their time grappling with it, when their home market is threatened. They'll not make the effort because the Indian market is only 2-3%. Explained in the article already. They'll choose the simple way out and just stop it.

  5. Who are these konw-all lawyers? Parallel importation is allowed by both the US and the UK. We have taken legal action against certain bulk impoerters as they were misrepresenting the LPEs as being the originals. We have acted against bulk importers. We cannot act against internet resellers as there are too many. We do not have the wherewithal to detect and check individual packages being couriered from India by internet resellers. Nor are we in the business of litigation. Why bother with all that when we can simply stop the flow by cancelling the licenses.

    Subroto Mozumdar

  6. @Subroto Mozumdar
    1. Sir, you do not publish lower priced editions in India out of the magnanimity of your heart, but because business logic demands that you price your editions lower in India. Indeed, India is your fastest growing market: "With growth rate at 25-30 per cent, India is the fastest market for us," you said in an interview in 2006.

    Before 2010, no court in India had upheld a ban on export of LPEs from India to the US. Did that prevent you from printing LPEs? Facts show that you continued printing LPEs that could be exported. Why did you not stop printing them then? And why would you now suddenly stop printing LPEs if exports of LPEs is re-allowed? How is the situation now different from what prevailed for decades before the 2010 Delhi High Court judgment?

    Given all this, one cannot but see your threat to "cancel the licences" as anything more than mere posturing. Cancelling the licences would do you more harm than good, given that India is a fast growth country.

    2. If parallel importation from India is allowed in the UK, then how did you succeed in your legal action against bulk importers in the UK? Under what UK statute did you proceed? Could you please provide a link to the judicial decision?

    - Pranesh