1. What is the purpose of these regulations?
Canada’s Book Importation Regulations operate under the Copyright Act. Their purpose is to extend the Act’s protection of copyright holders to exclusive distributors of foreign-published books in case of “parallel importation,” provided that certain requirements have been met.
In any country, “parallel importation” occurs when a retailer or institutional buyer imports copies of a foreign-published book without sourcing the copies through the appropriate rights holder in the given territory.
In Canada, specifically, foreign-published books may be imported by Canadian distributors and supplied, in turn, to Canadian retailers. If a distributor wishes to be the “exclusive” distributor of an imported book—the only legal source of the book in Canada or any part of Canada under the Copyright Act—the distributor must meet the distribution and notice requirements set out in the Book Importation Regulations. If the distributor fails to meet these requirements to secure exclusive distribution rights, retailers are free to “parallel import,” i.e., to source copies of the book from a foreign supplier.
Before these regulations came into effect in 1999, the Copyright Act protected only copyright holders in Canada against parallel importation. The additional requirements that these regulations impose on exclusive distributors help protect Canadian retailers against the possibility that increased market exclusivity could result in higher book prices or lower standards of service and availability.
2. What are the key elements of these regulations?
These regulations require the exclusive distributors of imported books to do the following:
- Give advance “notice of exclusive distributor” to retailers;
- Make shipments to retailers within a certain number of days after an order has been placed; and
- Set a suggested retail price (SRP) for an imported book that is no more than a certain percentage higher than the SRP in the book’s country of origin (10% if the country of origin is the US; 15% if it is in Europe). This puts a “ceiling” on the SRP of imported books. A mark-up is allowed because distribution costs in Canada are greater, but the ceiling is designed to protect retailers—and, indirectly, their customers—from unfairly higher pricing in Canada.
If a retailer parallel imports copies of a book when the distributor has met these requirements, the importation constitutes an infringement of copyright and the exclusive distributor has access to all the remedies in the Copyright Act, with the exception of statutory damages and criminal penalties. A remedy specific to the parallel importation of books allows the exclusive distributor to obtain a court order for the seizure and detention, by customs officials, of illegally imported shipments of books at the border.
3. How do these regulations affect Canadian businesses?
These regulations support investment in Canada’s book industry by protecting the commercial interests of book businesses operating in Canada.
In practice, they establish the terms of trade for businesses within the supply chain for imported books in Canada.
It should be noted that these regulations do not apply to any of the following:
- books published in Canada;
- retail pricing (the actual selling price set by the retailer for its customers);
- individual consumers, who are free to “import” books from a foreign bookseller, such as Amazon.com, at any time; or
4. Where can I get more information?
Regulatory Impact Analysis Statement (at p. 2055) and