New Zealand has a way of preventing cinemas from having to compete with different formats such as DVD, Blu-Ray, Pay-Per-View or Free-To-Air.

The Copyright Act bans parallel importation of films into New Zealand for nine months from the international release date.

This protection mechanism looks set to continue for another three years due to new legislation introduced to Parliament this week. The only tweak is that the period of the ban will be shortened to five months from the current nine.

The current regime

The Copyright Act 1994 provides that a person infringes copyright in a film if that person:

  • imports a copy of the film into New Zealand within 9 months of first being made available to the public;
  • knows or has reason to believe that the film is imported into New Zealand within 9 months of first being made available to the public;
  • is not the licensee of the copyright in New Zealand; and
  • imports the film into New Zealand other than for that person's private and domestic use.

Background to the legislation

Government officials say the ban is there to:

'give sufficient time for the domestic film industry to profit from their investment in the distribution and exhibition of films before opening up the market to competition from retailers and other commercial users.'

In the late '90s an amendment to the Copyright Act did away with the ban. Following this, the United States Trade Representative (USTR) placed New Zealand on the Special 301 Watch List, a register of countries that the USTR considers to have inadequate copyright protection laws. A press release from the US Embassy stated that:

'New Zealand was placed on the Watch List ... after the New Zealand Government passed an amendment to the Copyright Act abolishing the exclusive importation right for copyright owners. The law was of serious concern because it eroded the level of copyright protection available to right holders in New Zealand and made it more difficult to combat pirated goods'.

The Government at the time revived the ban with an amendment to the Copyright Act in 2003. New Zealand was then taken off the Watch List.

The advice of the officials

Officials at the Ministry of Business, Innovation & Employment (MBIE) have set out three possible options for reform. The options are outlined in this Regulatory Impact Statement prepared by officials. These are:

  • allowing the ban to lapse from 31 October 2013 so that retailers can import film titles as soon as they are released overseas on formats such as DVD
  • continuing the ban for three years but shorten its period to five months
  • reinstating the current nine month ban for a further five years.

The officials recommend option one which is to allow the ban to lapse.

The proposed law

The Government has now tabled the Copyright (Parallel Importing of Films) Amendment Bill.

The Bill proposes to amend the Copyright Act to continue the ban for three years but shorten its period to five months. This is option two from the Regulatory Impact Statement.

Further steps

A Parliamentary Select Committee will now take submissions on the Bill and report back to the House by Friday 16 August 2013.

The Explanatory Note of the Bill states that the film industry will now have another three years 'to finish converting to digital exhibition technology and ensure that the film distribution model reflects developments in the market for films, particularly online'.

The proposed law will extend the ban and continue to protect the owners of the 120 cinema complexes spread around New Zealand, for another three years.