APAA 54TH COUNCIL MEETING IN ADELAIDE

ANTI-COUNTERFEITING COMMITTEE

New Zealand Group Report

Presented by Frank Callus

Introduction

The importation and sale of counterfeit goods remains a problem in New Zealand, with goods often imported into the country and sold cheaply in markets or over the internet, through online auction sites.

Legislation

Sensible trade mark and copyright owners rely on the border protection measures in the Copyright Act 1994 and Trade Marks Act 2002 to prevent counterfeit goods entering the country.

Border Protection

Under the Copyright Act and the Trade Marks Act (“the Acts”), the New Zealand Customs Service (“Customs”) is empowered to intercept counterfeit goods at the border, for example at airports and at the International Mail Centre. Since 1997, 1.1 million counterfeit goods have been removed from the market by Customs, with the most common types of goods being clothing and accessories, CDs, DVDs, watches, toys and footwear.

Copyright and trade mark owners must give notice to Customs, requesting that pirated and/or infringing goods be detained at the border. Customs may then detain the goods and carry out an investigation to determine whether they are pirated and/or infringing copies. The copyright or trade mark owner is informed of the determination. Those would-be importers may voluntarily forfeit the goods. If it does not, the goods will be released unless the copyright or trade mark owner commences court action against the importer within 10 working days (extendible to 20 working days).Court orders can include forfeitureof the goods to the copyright or trade mark owner and destruction of the goods.

The border protection measures contained in the Acts do not apply to goods imported for private and domestic use.What volume of goods amounts to private and domestic use has not been judicially considered.

Criminal Provisions

Both of the Acts also provide for offences relating to the making of and dealing with infringing material.

Under the Copyright Act, it is an offence to, amongst other things, make for sale or hire, or in the course of business offer or expose for sale or hire, an object that is, and that the person knows is, an infringing copy of a copyright work.

The Trade Marks Act containssimilar provisions, under which it is an offence:

  • to import for the purpose of trade or manufacture any goods to which that person knows a registered trade mark is falsely applied;
  • to sell or expose for sale any goods to which that person knows a registered trade mark is falsely applied; or
  • to have in possession for the purpose of trade or manufacture any goods to which that person knows a registered trade mark is falsely applied.

Importantly, to constitute an offence under the Acts, the offender must have knowledge of the offence. For example, under the Copyright Act, an offender must know that the object is an infringing copy of a copyright work, while under the Trade Marks Act, an offender must know that a registered trade mark is falsely applied to the goods. This requirement for knowledge protects innocent offenders, such as internet service providers and online auction operators, who may provide services that enable counterfeit goods to be sold, but who do so without knowledge that the goods are counterfeit.

In the chain of supply and sale, it is the importers and sellers who are potentially the most liable. Offenders, under both Acts, risk fines of up to $10,000 for every infringing item or $150,000 for a single transaction, or up to 5 years imprisonment. Previous penalties contained in the Copyright Act were significantly less than those currently in the Act. The Court may also order that the counterfeit goods be delivered up, forfeited or destroyed.

Film piracy in New Zealand

The film industry in New Zealand is a high profile example of an industry that has been adversely affected by counterfeiting, whereby illegal copies of films are sold and distributed – often before the movie has been released in cinemas.In response, the industry and the New Zealand Police have worked together in taking action against film pirates, while the industry has taken on the responsibility of educating the public about what piracy is and how it affects the community.

DVD piracy actions – 2007

June 2007 - A man was charged and found guilty of a number of offences relating to the copying of the local film “Sione’s Wedding”. The copy that he made was recopied and distributed around the country, resulting in an estimated $700,000 loss to South Pacific Pictures, the production company behind the film “Sione’s Wedding”. He was sentenced in July to 300 hours of community service.

July 2007 - Police raided an Auckland home and found hundreds of pirated movie DVDs, including a number which were either showing at the cinema or had not yet been released. Following the raid, a man was arrested for selling counterfeit DVDs on a regular basis at markets in Auckland and Hamilton and charged with 33 offences.

August 2007 - Former employees of a local video store were charged with making and selling counterfeit DVD movies. The charges followed a raid in which hundreds of pirated DVDs, including a number which were either showing at the cinema or had not yet been released, and DVD copying equipment such as software, blank DVDs and DVD sleeves, were found.

New Zealand Federation Against Copyright Theft (“NZF@CT”)

In June 2007, NZF@CT – a New Zealand body established by the Motion Picture Association to protect the film and television industry in New Zealand from the adverse impact of copyright theft – launcheda nationwide campaign to raise awareness of film and television piracy in New Zealand.The “Buy Original; See Original” campaignappeals to the public to turn their backs on the film and television piracy trade.

In addition to raising the awareness of copyright theft, NZF@ACT assists law enforcement agencies throughout New Zealand in bringing prosecutions against those who conduct pirate operations.

Sales of Counterfeits online – Who is liable and what remedies both legal and administrative are available against them

Those who sell counterfeit goods online are liable, on conviction, to fines of up to $10,000 for every infringing item or $150,000 for a single transaction, or up to 5 years imprisonment.

The deterrent nature of the penalties faced by online sellers of counterfeit goods was demonstrated in July 2006, when NZF@CT announced that it had reached a settlement with 14 online auction sellers who were selling pirated video cassettes and DVD movies. The sellers paid a settlement sum, agreed to cease and desist from all illegal sales of pirated movies and delivered up the infringing material.

Importers of counterfeit goods are also liable, under the Trade Marks Act, to the penalties that sellers face, however the infringing goods must have been physically received in New Zealandbefore the Courtscan claimjurisdiction.

Other related parties, such as online auction operators and internet service providers will not be liable unless they have knowledge of the goods being counterfeit.

In addition, aBill to amend the Copyright Act proposes to insert a number of new sections that limit internet service provider liability in relation to copyright infringement by those who use their services (the Copyright (New Technologies and Performers’ Rights) Amendment Bill). The new sections reinforce the requirement that, to breach the Copyright Act, the internet service provider must have knowledge of an infringement by a user. However, the sections would only apply if the internet service provider has “adopted and reasonably implemented a policy that provides for termination, in appropriate circumstances, of the accounts of repeat infringers.”

The Bill also features a proposal to include provisions that relate to technological protection measures (“TPMs”). TPMs are measures that are designed to prevent or inhibit the infringement of copyright in a work. Under the Billit would be an offence to, in the course of business, sell, import or let for hire a TPM circumvention device where the person providing the device knows or has reason to believe that it would be used to infringe copyright in a protected work. An offender would face a fine of up to $150,000 or up to 5 years imprisonment. This would affect the sale of online counterfeit goods at a very early stage, where counterfeit goods, such as unauthorized copies of TPM protected works, are first produced.

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