Jake's View

Making fools of ourselves with 'Jackie Chan law'

With parallel imports legislation we effectively are using our taxes to allow foreign copyright holders to charge more than we should pay

PUBLISHED : Tuesday, 02 October, 2012, 12:00am
UPDATED : Wednesday, 03 October, 2012, 9:31am

Immigration officers extended their joint operation with police against parallel importers …
SCMP, September 29


No, wrong. Let's clear up this confusion. These are parallel exporters, not parallel importers, and the reason we don't like them is that they make a nuisance of themselves at the border, not that they engage in unofficial trade.

Parallel imports is another matter entirely, a self-imposed twist of law whereby we needlessly inflict high consumer goods prices on ourselves for the benefit of foreign brand-name owners. Let's not confuse this with soap runners at the border.

Parallel import restrictions, otherwise known as the "Jackie Chan law", came about when Hong Kong film producers, faced with universal piracy of their productions across the border, decided they might be able to make at least a little money by licensing mainland distribution at very low cost.

They then found that these made-for-the-mainland recordings were coming straight back to Hong Kong and undercutting prices of their local offerings. They appealed to the customs bureau to stop them at the border, but customs said it did not have the authority. The recordings were legitimate, copyrighted products.

But, protested the producers, we didn't authorise them for distribution back in Hong Kong.

That's between you and your distributors, then, customs said. Take them to court if you want. It's none of our business.

The result was demonstrations by celebrities, most obviously Jackie Chan, who said he would move out of Hong Kong if the law wasn't changed. The government caved in and enacted legislation that banned distribution in Hong Kong without the approval of the copyright owner. Chan moved to Los Angeles anyway, but that's another story.

The restrictions have been softened since that time, but they still prohibit imports of copyrighted material for commercial distribution within 18 months of the original publication. They have also been invoked by producers of other trademarked products, notably soft drinks, to keep prices high in Hong Kong.

It's a ridiculous situation for precisely the reason that customs first cited. An agreement between a copyright owner and his distributor is a matter for civil action in case of a dispute between them. There is no good reason for imposing criminal sanctions.

This is particularly pernicious, because the whole point of parallel import restrictions is to make consumers pay more than they would if the market were an open one. What we are doing is using our tax money to help foreign copyright owners overcharge us. We make fools of ourselves with this silly law.

Other countries have long dropped their restrictions on parallel imports. In the United States, for instance, the Supreme Court has ruled that if a product is lawfully made and sold anywhere in the world, it may be imported and sold in the US without violating any of the copyright owner's rights.

Why then do we allow US producers to do to us what their government does not allow them to do at home?

There are other reasons why it is bad law. In the first place, the market has changed dramatically in recent years. People mostly buy from the internet now, and this is entirely legal as there is no ban on parallel imports for personal use.

But it is much easier to obtain pirated products on the internet than it is from commercial outlets. By discouraging commercial outlets, the law only encourages internet piracy, a wonderfully ironic example of unintended consequences.

It's also bad law because Hong Kong lives on entrepreneurial drive. The more open our economy, the more it thrives, and our future, if New York or London offer any lead, probably holds a greater emphasis on cultural activities.

Proponents of copyright restrictions argue that they encourage artistic effort by rewarding the originators of it. The originators rarely get more than pennies. It is invariably the entertainment industry that makes all the money. Cultural expression always does best in an unrestrained environment. We endanger the future of the Hong Kong economy with parallel import restrictions.

But most of all they are simply offensive. They are a self-inflicted insult that our government has imposed on us at the behest of foreign interests that seek only to squeeze us for every cent they can get.

Let's not get this mixed up with our problem at the border.