Parallel line drawn in sand

Parallel line drawn in sand

The Federal Government's push to lift parallel importing restrictions on software is "all over bar the shouting", an industry expert has warned.

According to some industry pundits, the Government has only one more nail to hammer into the Copyright Act coffin, therefore allowing "open slather" on software importing, after it held the second of three readings on proposed amendments before the House of Representatives recently.

According to Fleur Hinton, PricewaterhouseCoopers' legal counsel, the Government's intention to lift restrictions on the importation of software will hurt legitimate distributors and the greater IT channel.

"The law as it now stands is very complex and uncertain," Hinton said at a PwC legal business seminar on parallel importing held last week in Sydney.

"However, while the Government appears to be trying to ensure consumers get a better deal by easing parallel importation restrictions, in the long run the effect could be negative for both businesses and consumers alike. I can clearly see why changes to legislation frustrate legitimate distributors and confuse consumers."

The Government has made a number of recent amendments to the Copyright Act which Hinton claims, combined with a new report entitled Review of Intellectual Property Legislation under the Comp- etition Principles Agreement, could cost the channel more than the Government's intended saving to the consumer.

The report, released on December 6, has the potential to further change legislation, due to its recommendations to amend a trademarks loophole which protects branded goods from parallel importation.

Under current legislation, goods which bear a trademark company logo or image can be prevented from being imported by companies that do not own a licence to that trademark. In effect, this means companies that own or (in the case of a distributor) have been assigned the rights to a logo, have the right to stop goods entering Australia because the logo is granted the status as a work of artistic or intellectual merit.

According to Hinton however, if the proposed legislation is amended to allow branded goods to enter Australia regardless of who holds the rights to the trademark, it opens the floodgates for unscrupulous distributors to import whatever products they choose.

"People who are authorised distributors are losing out," Hinton said, who added that most authorised distributors are required to set up a service and support infrastructure to maintain a product's brand and quality, which will be significantly impacted if customers are demanding support regardless of where they bought the product. "Eventually Australian distributors won't be able to provide backup and support services."

Hinton also claims there is a moral issue at stake, with an authorised distributor losing out on advertising and marketing investments made to promote products locally. "The parallel importer benefits from this activity unfairly, and at the same time contributes little to other local industries," she said.

But one of the major problems caused by any change to the current legislation seen by Hinton is the specification difference between similar products in separate regional markets.

"Often products are built to different standards or modified to suit individual market conditions," Hinton said. "Parallel importing can cause problems by introducing product variations not designed for the local market."

A spokesperson for Senator Alston could not be reached at press time.

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