Parallel imports (2): Publishing and the 2(m) amendment

(This was a follow-up to the blog post on parallel imports, below; carried in the Business Standard, February 19th. Thomas Abraham and Prof Shamnad Basheer continue the debate over at Divya Dubey’s blog, in considerable depth.)

Call this the war of the slogans. On one side, copyright lawyers and the Ministry of Human Resource Development offer the lure of cheaper books for Indian readers. On the other, publishers and authors speak of the death of Indian publishing as we know it.

Section 2(m), a proposed amendment to India’s copyright law that would allow the parallel import of books, is a dry piece of legalese, but it’s sparked a blog war, a flurry of publisher white papers, and a wide debate on copyright and territory.

The rationale is a legally sound one — to align Indian copyright law with Indian patent and trademark law, both of which follow the principle of “international exhaustion”: once a product has been legitimately sold, that product can be resold anywhere in the world without the consent of the owner of the copyright, be that the author or the publisher.

According to the Association of Publishers of India, “This proviso would mean that books published in any country could be freely made available and sold in India, without this amounting to infringement of copyright.”

Theoretically, parallel imports would allow a publisher or a printer who does not hold copyright to an Indian edition of a book to print his or her own editions of the book, under certain conditions, and release them back into the Indian market. There is also a fear among publishers that this might lead to widespread “dumping”, where the market is flooded with cheap, remaindered books.”

When this applies to books, specifically, one side argues that allowing “parallel imports” of books would open up the Indian publishing market to competition and would allow readers access to cheaper books. The other side argues that authors and publishers would suffer, and that in the long run, so would the reader. Thomas Abraham, managing director, Hachette India, states his position succinctly: “This would be the death of publishing and writing as we know it in India — and ironically by a surfeit of books.”

Step back from the rhetoric and the very complex issues involved about the intricacies of copyright law, territoriality in publishing, the book remainders market and book dumping, and here’s how the amendment is likely to affect readers, authors, publishers and booksellers.

Booksellers

Perhaps the sharpest summary comes from Landmark Bookstore’s Madhu Mohan: “As booksellers, we want to give our customers a wider range at a lower price. An open market immediately affords both: the cost of this is that publishers with Indian market rights might suffer. The more significantly affected parties are authors, publishers and readers. If, arguably, territorial rights are not sold, authors might earn lower advances. Publishers who have paid for territorial rights, are not able to get the full benefit of their monies. Readers should welcome the change, because at the outset they will get lower priced books.”

His view is echoed across the bookselling industry, with reactions ranging from indifference to the possible repercussions to cautious alarm — for many booksellers, a weak or damaged Indian publishing industry is also a negative.

Almost all booksellers agree that the short-term benefits of allowing parallel imports would be to lower the price of books. India already has among the lowest-priced English language books in the world, but it would be interesting to see if even lower prices reeled in a different kind of reader. As Mohan points out, book imports would be cheaper; books published in India by Indian or foreign authors would be adversely affected. The long-term scenario is another matter; if the Indian publishing industry is hit hard, we could be flooded with cheap, low-quality remainders, or lose price benefits in the long run.

Authors

For authors, what’s key about the 2(m) amendment is the way in which it would affect the writer’s copyright over his/ her work — and also the shifts it might bring about in the industry in general. Copyright lawyer Nandita Saikia observes that once a publisher effectively loses control over an edition of a book — if competing editions are allowed into the market — “This would significantly diminish the ability of publishers to invest in Indian authors and Indian writing.” From Abraham at Hachette to Chiki Sarkar at Random House to Tata McGraw Hill, there seems to be consensus on this aspect of the amendment.

In contrast, Pranesh Prakash of the Centre for Internet and Society argues strongly in favour of 2(m) and dismantling the “licence raj” that requires booksellers and distributors to have authorisation to import books: “Allowing people to import goods without permissions (with appropriate duties) is taken for granted in all other areas, so why not copyrighted works? After all, it is not the act of publication that gets affected, but the right of exclusive distribution.”

But many authors point out that publishing and bookselling operate differently from other industries, and the dynamics of writing and bookselling are not comparable. Author Amit Varma puts forward the writer’s objections: “As the author of a book, I should have the right to assign the rights to sell my book to any publisher in India that I feel like, and the law should protect that right, and my contract with the publisher. Parallel import obviously makes a mockery of that right, and can deny me significant potential royalties.”

Publishers

At Penguin India, Andrew Phillips is blunt: “We stand firmly against the amendment. Penguin is both a ‘foreign’ publisher and an Indian publisher and we believe it will affect both parts of our business. We don’t believe the effects will be minor — to the contrary, this would have a fundamental impact on the publishing business both for international authors and Indian authors who aspire to be read outside India.”

The publishers’ arguments are complex, but stripped of the technicalities, they rest on the question of territoriality. When publishing worldwide operates on the basis of territorial agreements — authors sell rights to their works for specific regions — opening up the market unilaterally makes little sense. India might open its market, via 2(m), to competing imports and editions; but Indian publishers don’t have the right to sell similar editions of books in the UK or US markets.

In other words, the market would open up only in one direction — and this could diminish Indian publishers’ ability to nurture new writing, release Indian editions of foreign authors, and pay authors significant royalties.

Behind the rhetoric, nothing about this proposed change in copyright laws is simple, and the repercussions for authors and publishers are likely to be both significant and adverse. There’s an interesting parallel in the Australian market, which, like the Indian publishing industry, is thriving but relatively young, and lacks the clout of the formidable US, UK and European markets.

Two years ago, when the move to allow parallel imports of books was discussed in Australia, that discussion was fierce, impassioned and hotly contested. Nor was it limited to the industry; when readers realised that the debate was really over what they would get to read, which authors would benefit or lose out, and how this would impact their intellectual lives, the debate went public.

In the case of Australia, it took a full year of discussion before it was finally decided not to introduce parallel imports for the publishing industry. Whatever the possible adverse effects — or benefits — of parallel imports, we haven’t had that discussion yet in India. It’s a necessary one, and it affects anybody equipped with a mind, a wallet and the ability to walk into a bookstore. This would be a good time to have it, before the law is set in stone.

(Thomas Abraham, MD, Hachette India, responded in a mail that he’s given me permission to share:)

It is amazing that we are embarking on lawmaking without one of the questions below being answered conclusively to show that the matter in hand was studied and due diligence done:

1. The assumption that prices will drop and current editions. This presumes that as a norm (enough to necessitate a law) prices are therefore too high and current editions are not available. What evidence exists for this? What are the current price points that exist by segment? Is any segment with common use books higher priced on average than it should be? Can this law succeed in dropping prices? By what estimated levels and with what resultant collateral damage? Is there a single book (whether consumer or educational) that can be cited as example of not being available in India on the same day and much cheaper than abroad?

2. Following from the above, is a 70-90% level drop in pricing from international levels not good enough for textbooks? Why not? Not that publishers want it (subsidies i.e) because they say books for common use are cheap enough, but why can’t the equivalent of the ELBS (a low priced Book scheme that existed between 1960 and 1997 funded by the British Govt) be rolled out again (by the Indian govt. this time) to aid student purchasing (their biggest stated concern)?

3. Assuming the market is opened up: what happens to stocking patterns as remainders flow in? How much do readers benefit? Will the same choice exist?

4. Author’s legal position: How does this affect their rights? If the economic right to exploit their work as they choose is valid, providing the societal need for ‘greater good’ (availability and pricing) is also served, then why is this law necessary?. How can one part of the same law support author revenues (film, music) and the other (books) deny it? What sort of intellectual position is this that puts the author in competition with a wholesaler for their own work (yes with this law a wholesaler will have greater right than the author in controlling the economic rights pertaining to a book in India)?

5. Author royalties hit: Has anybody looked at the question to see –by how much? Why is it bad if authors are derived of rightful income? Should the reader care?

6. Is this just a law that governs foreign imports? Will Indian authors/Indian’ publishers also be hit? how?

7. The dynamics of publishing: why is the 80:20 rule critical to survival and the fostering of literature & cultural development; and why will that be severely hit by this amendment?

8. A section of IPR lawyers support of the amendment flows from a love for uniform law (remove ‘national exhaustion’, bring copyright law on par with patents and trademarks)? Why is it not justified for books? Is the notional elegance of uniform law clouding their ability to see ground reality? Are these legal organizations (some of whom publicly advocate piracy) actually advising the government?

9. The case for Libraries: why can’t the law just address this gap (if it is a gap and can be proved as such) by giving libraries the right to import up to 5 copies for self –use? But why do publishers say direct ordering from abroad would still be a waste of the tax payer’s money?

10. Why are the UK, US, Australia, Canada, S. Africa– the five biggest English markets following territorial copyright? Why should or shouldn’t we follow the same? Why are Japan and New Zealand not valid markets to emulate? Why is reciprocity not being delivered?

11. Who has looked at impact on ancillary industries—from large scale printers to hole-in-the wall typesetters?

12. On what basis did the standing committee say that foreign exchange outflow will fall since licensing will come down? Why do publishers say the opposite will happen? Why are they (the lawmakers concerned) refusing to read the various representations that have been made, and engage with the detailing?

13. Booksellers: Is there even a mid-term benefit for booksellers? Will the Rs 10-20 average drop (proved statistic right now) bring in more customers? What will happen to any bookstore’s buying/stocking when book prices fluctuate like stock prices? How much will they stock? How much will they invest in a promotion (which means stack-up displays, spending on POS, organizing author events etc)? Do they want a situation where they are permanently calculating that a week later they’ll be forced to drop prices because the neighbouring bookshop is selling it cheaper? So are books to be permanently reduced to a month long window?

14. Any book can flow in violating local libel, sedition, defamation laws (let’s not forget “religious sentiments”) and be discovered after the fact. How will you hold anybody liable for violating Indian law?

15. Why do publishers say that the flow of remainders can’t be addressed by anti-dumping law for books (the way they perhaps can for cellphones or microwave ovens)?

16. Educational publishers are worried about re-export inherent in the wording of 2m and there’s been no clarification. Is the statement of law clear on re-export?

17. Scarcity: why do publishers say that today you can actually get in any book in the world cheaper than buying from Amazon, and in about the same time? Is there any real scarcity?

18. Is there any validity to publishers’ statements that the last 20 years have steadily seen a growth in publishing industry (writing, publishing, intellectual engagement, cultural development) like never before and all of it can come undone by this new law?

19. Look at comparative prices of essentials—the roti, kapada aur makaan argument. Prices of essential commodities are skyrocketing and are higher than developed countries (from onions in London, to a 1 acre plot in Melbourne being cheaper than a Gurgaon apartment, to petrol in almost any country). Is this then the priority of govt. needs to follow (to make John Grisham cheaper by Rs 15?)?

20. The existing environment under which publishers’ exist—rampant piracy, low reading habits, hugely lowered prices and bad credit cycles. Rather than fixing those to foster reading (which every major country is investing in for the next generation), do we need 2m?

5 comments

  1. Will respond to the other points (& some of them are good, and might even be valid). But in response to Q1 (Is there a single book (whether consumer or educational) that can be cited as example of not being available in India on the same day and much cheaper than abroad?), would Mr. Abraham like to look up the price of Sam Lipsyte's The Ask in various markets please? Also, any book by Daniel Pink? And while we are at it, what about the Sandman series by Neil Gaiman?

  2. Q14. The government will hold the importer liable. Duh!Q19. implies that the government should pass no laws & essentially do nothing till the "essential needs" are addressed. In which case, perhaps Mr. Abraham would like the government to stop enforcing copyright & allow us all to pirate books freely?! (Oh we know it exists, but the publishers want the government to fix it, don't they?)

  3. I'm a Gaiman fan, and I notice his books are available at the pound rate, with some places–Landmark, Crossword at one point–offering discounts. Pulling out isolated examples is easy, but I'm looking at the books on my desk: The Hare With Amber Eyes, 8.99 POUNDS in the UK, available here at Rs 399, The Thousand Autumns of Jacob De Zoet, 18.99 POUNDS in hardback, special Indian price Rs 595, Joyce Carol Oates' Shadowlands, $ 25.99, special Indian price $19. We take the special Indian price for granted more often than not, and while I have my own greedy reasons for wanting books to be even cheaper, I think it should be pointed out that the prices in Indian markets in general are lower than most places in the world. Unjustly, the books you mention, where the prices in India match the prices abroad, are books for which distributors and publishers have not been able to acquire Indian edition rights. In other words, those are imports, not special Indian editions; and creating a marketplace where the publisher has little incentive to create his/ her own special Indian editions is not going to be good news for the reader in the long run.

  4. Nila-di,Mr. Abraham's question was very specific: "Is there a single book (whether consumer or educational) that can be cited as example of not being available in India on the same day and much cheaper than abroad?"And I have pulled out specific examples. The discounted rates at Landmark & Crossword are still WAY higher than Amazon.uk. Further, a number of books (Lipsyte's for example) are NOT available in India on the SAME DAY that they are launched in the West.

  5. @Unjustly: That's what Nilanjana just explained. From the millions of books published all over the world all the time, the Indian publishers acquire rights for only some — the ones they think would have a good enough demand in India to make the purchase viable.Regarding the more obscure or less popular books, Thomas has mentioned in his rebuttals already, and I quote : 'If not available instantly it can be ordered on procurement’ (the same way it would come post-amendment) and the special marked down price will still apply. Is one seriously to believe that a bunch of importers will sit down to analyse that an obscure book has not been brought in, and yes that needs to be brought in and will then make it available everywhere? That is exactly what publishers, distributors and retailers do right now (Booksellers like KD Singh or Ajit Vikram Singh can and do order the more ‘obscure’ book that their particular clientele will want to read).'Divya

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