ESR GROUP (NZ) LIMITED v BURDEN [2023] NZCA 335

ESR GROUP (NZ) LIMITED v BURDEN [2023] NZCA 335 [31 July 2023]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA439/2022[2023] NZCA 335BETWEEN ESR GROUP (NZ) LIMITEDAppellantAND IAN JAMES BURDENFirst RespondentPGT RECLAIMED (INTERNATIONAL)LIMITEDSecond RespondentPLANTATION GROWN TIMBERS(VIETNAM) LIMITEDThird RespondentHearing: 8 and 9 February 2023Court: Miller, Brown and Katz JJCounsel: J G Miles KC and A J Pietras for AppellantA H Brown KC, J Oliver-Hood and J R E Wach for RespondentsJudgment: 31 July 2023 at 10.30 amJUDGMENT OF THE COURTA The appeal is allowed.B The respondents must pay the appellant costs for a standard appeal on aband A basis and usual disbursements. We certify for second counsel.____________________________________________________________________Table of ContentsPara NoIntroduction [1]The key statutory provisions [4]Factual overview [9]The High Court judgment [14]Issues on appeal [18]The derivation of the distribution right [23]The right to publish a work [24]Infabrics v Jaytex [28]Copyright, Designs and Patents Act 1988 (UK) [32]Copyright Act 1994 [40]Can the sale or distribution of an imported product (not previouslyput into circulation) constitute primary infringementnotwithstanding the absence of the knowledge component inss 35 and 36? [43]ESR's contention [43]The Judge's analysis [50]"Mere" importation [52]Discussion [56]Is the distribution right spent only when the copies of a work areput into circulation by the copyright owner or with their consentor licence? [63]The Judge's analysis [63]The parties' contentions [66]The s 29(1) argument [69]The role of downstream developments in statutory interpretation [81]The particular "related developments" [89]Conclusion [103]If a copy is first distributed abroad has it been "previously put intocirculation"? [104]The notion of extraterritoriality [104]The text of s 9(1) [109]"Subsequent importation" [113]Conclusion [127]The consequences of our interpretation [128]Does the act of exporting or otherwise dispatching infringingcopies to New Zealand constitute "previously [putting] intocirculation" in New Zealand? [130]Result [135]REASONS OF THE COURT(Given by Brown J)Introduction[1] One of the exclusive rights conferred by the Copyright Act 1994 (the 1994 Act)on the owner of the copyright in a work is "to issue copies of the work to the public",1an activity defined in s 9(1) of the 1994 Act as "the act of putting into circulationcopies not previously put into circulation".[2] The first respondent (Mr Burden) contended that the sale and offering for salein New Zealand by the appellant (ESR) of infringing copies of Mr Burden's artisticworks, which copies had been acquired by ESR in Vietnam, was an infringement ofMr Burden's right of first circulation of such copies in New Zealand. In theHigh Court Downs J accepted Mr Burden's contention, construing s 9(1) in thismanner:2References in this Act to the issue of copies of a work to the public mean theact of putting into circulation copies [in New Zealand] not previously put intocirculation [in New Zealand by or with the consent of the owner].[3] ESR appeals, challenging both the territorial and authorisation qualificationswhich it submits were erroneously introduced by the Judge's interpretation of s 9(1).The key statutory provisions[4] Section 16 of the 1994 Act provides that the owner of copyright in a work hasthe exclusive right in New Zealand to do certain specified restricted acts, whichinclude (among other things) to:(a) copy the work (s 16(1)(a));(b) issue copies of the work to the public, whether by sale or otherwise(s 16(1)(b)); and1 Copyright Act 1994, s 16(1)(b).2 Burden v ESR Group (NZ) Ltd [2022] NZHC 1818, [2022] 3 NZLR 380 [High Court judgment]at [55].(c) authorise another person to do those acts (s 16(1)(i)).The right to copy the work is often referred to as the reproduction right. The Judgefavoured the expression "the right of first circulation" as a convenient shorthand forthe s 16(1)(b) exclusive right.3 However, as the Supreme Court noted in Ortmann vUnited States of America, the right to issue to the public is commonly referred to asthe "distribution right".4 We will adopt that terminology.[5] Copyright in a work is infringed by a person who, other than pursuant to acopyright licence, does any restricted act.5 The 1994 Act distinguishes between twotypes of copyright infringement: primary and secondary.6 The focus of the presentappeal is the species of primary infringement specified in s 31:31 Infringement by issue of copies to publicThe issue of copies of a work to the public is a restricted act in relationto every description of copyright work.[6] The meaning of the phrase "[t]he issue of copies of a work to the public" isexplained in s 9(1):79 Meaning of issue to the public(1) References in this Act to the issue of copies of a work to the publicmean the act of putting into circulation copies not previously put intocirculation; and do not include the acts of—(a) subsequent distribution or sale of those copies; or(b) subject to subsections (2) and (3), subsequent hiring or loanof those copies; or(c) subsequent importation of those copies into New Zealand; or(d) distribution of imported copies that are not infringing copieswithin the meaning of section 12 subsequent to theirimportation into New Zealand.3 At [1].4 Ortmann v United States of America [2020] NZSC 120, [2020] 1 NZLR 475 at [244], notingcomments in Gillian Davies, Nicholas Caddick and Gwilym Harbottle (eds) Copinger and SkoneJames on Copyright (17th ed, Sweet & Maxell, London, 2016) vol 1 at [7-126].5 Copyright Act 1994, s 29(1).6 Part 2.7 As discussed below at [90], para (d) was not in the original section but was added by the Copyright(Removal of Prohibition on Parallel Importing) Amendment Act 1998.[7] Acts of secondary infringement include infringement by importation and bypossessing or dealing with an infringing copy, as provided for in ss 35 and 36respectively:35 Infringement by importation(1) A person infringes copyright in a work if—(a) that person imports into New Zealand an object that is aninfringing copy of the work and,—(i) in the case of a work that is a sound recording, film,or computer program to which subsection (6) applies,that person knows or ought reasonably to know thatthe object is an infringing copy; or(ii) in the case of other works, that person knows or hasreason to believe that the object is an infringing copy;and(b) the object was imported into New Zealand without acopyright licence; and(c) the object was imported into New Zealand other than for thatperson's private and domestic use.36 Possessing or dealing with infringing copyCopyright in a work is infringed by a person who, in New Zealand,other than pursuant to a copyright licence,—(a) possesses in the course of a business; or(b) in the course of a business or otherwise, sells or lets for hire;or(c) in the course of a business, offers or exposes for sale or hire;or(d) in the course of a business, exhibits in public or distributes; or(e) distributes otherwise than in the course of a business to suchan extent as to affect prejudicially the copyright owner—an object that is, and that the person knows or has reason to believeis, an infringing copy of the work.[8] The term "infringing copy" is defined in s 12:12 Meaning of infringing copy(1) In this Act, the term infringing copy, in relation to a copyright work,shall be construed in accordance with this section.(2) An object is an infringing copy if its making constitutes aninfringement of the copyright in the work in question.(3) An object that a person imports, or proposes to import, intoNew Zealand is an infringing copy if—(a) the making of the object constituted an infringement of thecopyright in the work in question in the country in which theobject was made; or(b) the importer would have infringed the copyright in the workin question in New Zealand had the importer made the objectin New Zealand, unless the object is one to which subsection(5A) or subsection (6) applies.Factual overview[9] Between 30 July and 12 September 2014 ESR imported for the purpose of salein New Zealand furniture manufactured in Vietnam. In a liability judgment dated7 July 2016 Duffy J ruled that the imported furniture constituted infringing copies ofMr Burden's artistic works and found ESR liable for secondary infringement unders 35 of the 1994 Act.8 Leave was reserved to Mr Burden to return to Court to pursuerelief by way of damages or an account of profits.9[10] On appeal this Court ruled that the second and third respondents, but notMr Burden, were the relevant owners of the copyright works.10 It further ruled that,while the High Court was correct to find that ESR was liable for secondaryinfringement in respect of the importation of goods into New Zealand on 28 Augustand 5 and 12 September 2014, ESR lacked the requisite knowledge of infringement ofcopyright in respect of the importation of goods on 30 July 2014.118 Burden v ESR Group (NZ) Ltd [2016] NZHC 1542 at [201], [241], [244] and [263].9 At [309].10 ESR Group (NZ) Ltd v Burden [2017] NZCA 217 at [53]–[55].11 At [62]–[64].[11] Having learned via the subsequent discovery process that there had been earlierimportations by ESR from May 2013, the first, second and third respondents(the Burden interests) amended their claim to allege secondary infringement since atleast 2013. However they also added a claim of primary infringement of s 31 by ESR'soffering for sale and selling the imported furniture in New Zealand.12[12] ESR denied primary infringement for all items of furniture in issue. Its fifthamended statement of defence included the following paragraph:24. Without limiting the generality of its denials, the defendant refers tos 9 of the Copyright Act 1994 and says;a) it has not put into circulation any items of the furniture notpreviously put into circulation;b) while it has sold and offered to sell the furniture, it has notdistributed the furniture; andc) it only imported or sold the furniture after the furniture hadbeen put into circulation in at least Vietnam and/orNew Zealand by one or more entity, other than the defendant,referred to at paragraph 17 hereof.[13] While ESR was plainly liable to account as a secondary infringer for the netprofit from sales of the furniture imported from 28 August 2014 until the date of thesale of the last item on 22 November 2014 ($9,316.50), the point of contest waswhether ESR was liable to account as a primary infringer for the net profit from salesbetween March 2013 and 22 November 2014 ($221,134.50).The High Court judgment[14] The Judge commenced by recognising the opposing contentions:13(a) the Burden interests contended that "putting into circulation copies notpreviously put into circulation" meant circulation only in New Zealand,and by or with the consent of the copyright owner; and12 Leave to file the fourth amended statement of claim was granted by this Court in Burden v ESRGroup (NZ) Ltd [2020] NZCA 560, (2020) 157 IPR 217 at [50].13 High Court judgment, above n 2, at [3].(b) ESR contended that circulation could occur anywhere in the world, andirrespective of whether the copyright owner consented to thedistribution.[15] The Judge embarked on a detailed review of the 1994 Act, the equivalentprovisions in the Copyright, Designs and Patents Act 1988 (UK) (the CDPA) on whichthe 1994 Act was based, and a number of subsequent developments (includingthe 1998 amendment to permit parallel importing,14 the World Intellectual PropertyOrganization Copyright Treaty of 1996 (the WCT),15 and the 2003 amendment to theTrade Marks Act 2002).16 Having done so, the Judge observed that the correctinterpretation of s 9 must be ascertained not merely from text and purpose but fromthe statute as a whole "informed by recent developments".17[16] He considered that "this broader analysis [was] decisive",18 as revealed bynine points which we summarise:(a) An elementary feature of copyright is its territorial nature.19(b) The rights of a copyright owner that are codified in s 16 of the 1994 Actare exercisable in New Zealand only.20(c) Contravention of the distribution right is primary copyrightinfringement. It is no answer to an infringer of this right to say aplaintiff may have recourse to secondary copyright infringement.That would invert the statutory purpose.2114 Copyright (Removal of Prohibition on Parallel Importing) Amendment Act 1998, ss 4–5, via theaddition of s 9(1)(d), the substitution of s 12(3) and the insertion of s 12(5A) in the Copyright Act1994.15 World Intellectual Property Organization Copyright Treaty 2186 UNTS 121 (opened for signature20 December 1996, entered into force 6 March 2002).16 Copyright (Parallel Importation of Films and Onus of Proof) Amendment Act 2003, s 5; andHigh Court judgment, above n 2, at [12]–[30].17 At [45].18 At [45].19 At [46].20 At [47].21 At [48].(d) If antecedent foreign circulation of infringing copies constitutes firstcirculation the copyright owner would have no actionable primaryinfringement.22(e) The Burden interests' construction was consistent with s 9(1)(d)whereas ESR's interpretation presupposed that amendment was amistake.23(f) ESR's construction cut across the distinction between genuine andinfringing copies and was inconsistent with the statutory regime inrelation to parallel imports.24(g) The Burden interests' contention was consistent with the concept ofexhaustion, the approach of the United Kingdom to that concept andthe international law obligation in art 6 of the WCT.25(h) The Burden interests' construction was consistent with the concept ofexhaustion in relation to other forms of intellectual property, such as ins 97A of the Trade Marks Act 2002.26(i) The Judge considered27 that the preceding eight points were consistentwith observations in a 2019 paper of the Ministry of BusinessInnovation and Employment (MBIE),28 which we discuss below.29[17] The Judge was in no doubt that, once the statute's text and purpose wereconsidered "alongside related developments",30 s 9(1) had the meaning earlier noted.31He explained:22 At [49].23 At [50].24 At [51].25 At [52].26 At [53].27 At [54].28 Ministry of Business, Innovation and Employment Discussion Paper: Intellectual Property LawsAmendment Bill – Patents Act 2013, Trade Marks Act 2002, Designs Act 1953 (May 2019)[MBIE discussion paper].29 At [98] below.30 High Court judgment, above n 2, at [55].31 At [2] above.[56] This is not adding words to the Act, nor is it recrafting it. Rather,to quote Burrows and Carter Statute Law in New Zealand, it is "justdrawing out what is already implied in it" by virtue of ss 9, 12, 16, 29and 31.(Footnote omitted.)Issues on appeal[18] The parties submitted the following agreed statement of issues:1. Whether the Judge's construction of the scope of ss 9, 16, 29 and 31 iscorrect in law.2. In particular, whether the copyright owners' exclusive right to issuespecific copies of their works to the public in New Zealand pursuant toss 9, 16, 29 and 31 is "exhausted" by:(a) an act of circulation of those infringing copies which occurs elsewherein the world (in this case in Vietnam); or(b) an act of circulation of those infringing copies elsewhere in the worldwhich has occurred without the consent or licence of the copyrightowners; or(c) an act of exporting or otherwise dispatching infringing copies toNew Zealand without the consent or licence of the copyright owners.3. Whether the acts of circulation relied on by ESR involved any issuing ofthe infringing copies to the public in New Zealand.[19] We will follow a different sequence. There are two reasons. First, in presentingESR's case, Mr Miles KC emphasised the distinction between primary and secondaryinfringement, submitting:The High Court held that an innocent third party importer without knowledgeof any copyright infringement could be liable for primary infringement underss 29 and 31 – unprecedented and effectively removed the primary defence forsecondary infringers by deleting the knowledge requirement. It effectivelysubsumes secondary into primary infringement.[20] Mr Miles structured his argument by reference to "two principled issues",namely:a. Whether an innocent importer and subsequent on-seller can be liable forprimary infringement.b. If an innocent importer can be sued for primary infringement pursuant toss 16 and [31] then is it entitled to the [statutory defence in s 9(1)].[21] Consequently, before proceeding to consider the questions concerning theinterpretation of s 9(1), we consider it is appropriate to first address Mr Miles' pointabout the legitimate reach of s 31 primary infringement. The second reason is weconsider that the consent/authorisation question is logically addressed prior to theterritorial issue.[22] Hence we will discuss the issues by reference to the following headings:(a) Can the sale or distribution of an imported product (not previously putinto circulation) constitute primary infringement notwithstanding theabsence of the knowledge component in ss 35 and 36?(b) Is the distribution right spent only when the copies of a work are putinto circulation by the copyright owner or with their consent or licence?(c) If a copy is first distributed abroad has it been "previously put intocirculation"?(d) Does the act of exporting or otherwise dispatching infringing copies toNew Zealand constitute "previously [putting] into circulation" inNew Zealand?The derivation of the distribution right[23] As a prelude to our consideration of the issues, it is instructive to brieflytraverse the history culminating in the distribution right.The right to publish a work[24] As Lord Wilberforce observed in 1981 in Infabrics Ltd v Jaytex Ltd, all throughthe history of copyright, under both the common law and the legislation enacted in thepast 280 years, there had been a well-known contrast between unpublished works andpublished works.32 It was a distinction which he considered lay at the roots of thelaw.33 That distinction, manifest in the imperial statutes, was replicated in theNew Zealand legislation modelled on them.[25] Thus the Copyright Act 1913,34 which abolished common law copyright,35defined copyright to include the right to publish a work which was previouslyunpublished.36 Publication was defined to mean "the issue of copies of the work tothe public".37 A work was not deemed to be published if publication occurred withoutthe consent or acquiescence of the author or their assigns.38 A work was deemed to befirst published in New Zealand, notwithstanding that it had been publishedsimultaneously in some other place, unless the publication in New Zealand was"colourable only and [was] not intended to satisfy the reasonable requirements of thepublic".39[26] Similarly, in the Copyright Act 196240 one of the acts restricted by thecopyright was "publishing the work",41 although, unlike the 1913 Act, there was noexplicit provision to the effect that the work must not have been published previously.It was provided that an artistic work "shall be taken to have been published" if, butonly if, reproductions had been issued to the public,42 but that concept was not furtherdefined. Furthermore, in determining whether a work had been published, no account32 Infabrics Ltd v Jaytex Ltd [1982] AC 1 (HL) at 16.33 At 16.34 Which has been described as an adaptation of the Copyright Act 1911 (UK) 1 & 2 Geo V c 46 byH Alleyn Palmer (ed) The Public Acts of New Zealand: 1908–1931 (Butterworth & Co,Wellington, 1932) vol 2 at 1.35 Copyright Act 1913, s 4.36 Section 3(2).37 Section 3(3).38 Section 2(2).39 Section 2(3). The phrase "colourable only" was defined by reference to the surrounding statutorywords and simply referred to a case where there was no intention to satisfy the reasonablerequirements of the public: Francis, Day & Hunter v Feldman & Co [1914] 2 Ch 728 (CA) at 733.40 Which was adapted from the Copyright Act 1956 (UK) 4 & 5 Eliz II c 74.41 Copyright Act 1962, s 7(3)(b) and (4)(b).42 Section 3(2)(a). The position was the same for literary, dramatic and musical works.was to be taken of any unauthorised publication or the doing of any otherunauthorised act.43[27] Interestingly, the authors of Laddie, Prescott and Vitoria: The Modern Law ofCopyright suggest that it may have been the intention of the framers of the CopyrightAct 1956 (UK) to confer a distribution right for original literary, dramatic, musical andartistic works, but acknowledge that the House of Lords in Infabrics v Jaytex was notprepared to accept that.44Infabrics v Jaytex[28] Jaytex ordered shirts in Hong Kong, which they imported into theUnited Kingdom, featuring an infringing copy of a design of competing racehorses.45Infabrics, the owner of copyright in the artistic work, could not prove that Jaytex knewthat they were importing infringing copies at the relevant dates and hence Jaytex couldnot be liable as a secondary infringer.46 Following the close of Jaytex's case at trialInfabrics contended for the first time that Jaytex was liable for primary infringementon the basis of "publishing" the work.47 However no evidence was called (it wasapparently not available) that the artistic work was unpublished at the date of thealleged publication by Jaytex.48[29] Whitford J's decision49 that there was no act of primary infringement wasreversed by the Court of Appeal, which held that the acts of importation and saleconstituted infringement by publishing.50 As Buckley LJ explained:51It seems to me to be beyond dispute that a commercial retailer of an artisticwork, or of some article embodying an artistic work, issues reproductions ofthat work to the public. It may be arguable that retailers are not themselves aclass of the public for this purpose and that consequently a wholesaler sellingto retailers does not issue reproductions of the work to the public; butinfringement comprises not only doing a restricted act but also authorising43 Section 3(5).44 Adrian Speck and others Laddie, Prescott and Vitoria: The Modern Law of Copyright (5th ed,LexisNexis, London, 2018) vol 1 at [15.5].45 The "past the post" design.46 In respect of the first batch of importations.47 Infabrics Ltd v Jaytex Shirt Co Ltd [1978] FSR 451 at 463 and 467–468.48 Infabrics Ltd v Jaytex Ltd (HL), above n 32, at 14.49 Infabrics Ltd v Jaytex Shirt Co Ltd, above n 47.50 Infabrics Ltd v Jaytex Ltd [1980] Ch 282 (CA) at 291–292.51 At 289–290.another person to do it (section 1(2)) and it seems to me that a wholesaler whosells to a retailer with a view to retail sales to the public must thereby authorisethe distribution of the subject matter.[30] The House of Lords viewed the matter differently. Three possible meaningsof the undefined term "publishing" were considered:52(a) the first (the Court of Appeal's interpretation), that publishing consistedof the issue of reproductions of the work to the public;(b) the second (Infabrics' contention), that publishing is what is done by apublisher; and(c) the third (Jaytex's contention), that publishing meant making public, inthe relevant territory, a work which had not previously been madepublic in that territory.[31] The House of Lords favoured the third interpretation.53 A defendant couldtherefore only be liable under this head if copies of the work had never been issued tothe public in the United Kingdom. Since Infabrics was unable to prove that, its casebased on publishing failed and Jaytex's appeal was allowed.54 The effect of thisdecision was to significantly confine the application of the publishing right.Indeed Laddie, Prescott and Vitoria commented that the provision conferring thepublishing right was interpreted almost out of existence so that it became almost, ifnot quite, a dead letter.55 It was against that backdrop that the distribution rightemerged.Copyright, Designs and Patents Act 1988 (UK)[32] In the CDPA the previous publishing right was replaced with the right to issuecopies of a copyright work to the public. Section 16 relevantly provided:16 The acts restricted by copyright in a work52 Infabrics Ltd v Jaytex Ltd (HL), above n 32, at 14–15.53 At 16–17.54 At 16–17.55 Hugh Laddie, Peter Prescott and Mary Vitoria Laddie, Prescott and Vitoria: The Modern Law ofCopyright and Designs (2nd ed, Butterworths, London, 1995) vol 1 at [2.123].(1) The owner of the copyright in a work has, in accordance with thefollowing provisions of this Chapter, the exclusive right to do thefollowing acts in the United Kingdom—(a) to copy the work (see section 17);(b) to issue copies of the work to the public (see section 18);(c) to perform, show or play the work in public (see section 19);(d) to broadcast the work or include it in a cable programmeservice (see section 20);(e) to make an adaptation of the work or to do any of the abovein relation to an adaptation (see section 21);and those acts are referred to in this Part as the "acts restricted by thecopyright".(2) Copyright in a work is infringed by a person who without the licenceof the copyright owner does, or authorises another to do, any of theacts restricted by the copyright.(3) References in this Part to the doing of an act restricted by thecopyright in a work are to the doing of it—(a) in relation to the work as a whole or any substantial part of it,and(b) either directly or indirectly;and it is immaterial whether any intervening acts themselves infringecopyright.[33] The infringement provision corresponding to the distribution right was s 18:18 Infringement by issue of copies to the public(1) The issue to the public of copies of the work is an act restricted by thecopyright in every description of copyright work.(2) References in this Part to the issue to the public of copies of a workare to the act of putting into circulation copies not previously put intocirculation, in the United Kingdom or elsewhere, and not to—(a) any subsequent distribution, sale, hiring or loan of thosecopies, or(b) any subsequent importation of those copies into the UnitedKingdom;except that in relation to sound recordings, films and computerprograms the restricted act of issuing copies to the public includes anyrental of copies to the public.[34] Despite the similarity of terminology with the former publishing right ("issueto the public copies of the work"), the right conferred by s 18(1) was new, with noequivalent concept in the preceding legislation. At this time we simply highlight thekey points of difference.[35] The primary point of difference is that the right was not concerned with thestatus of the copyright work itself. Instead it focused on individual copies of acopyright work. The restricted act applied in relation to every copy made.[36] Secondly, the restricted act of issuing could be performed only once in respectof any particular copy. Once the restricted act was done in respect of a particular copy,then (except in rental cases) it was no longer possible to commit the restricted act withrespect to that copy. The copyright owner had no further control over the distributionof the particular copy.[37] Thirdly, the prevailing view was that the distribution right applied whether thecopy was made legally or not. As J A L Sterling stated in his informative article:56The fact that a copy was previously circulated without the copyright owner'sconsent, or that the copy was illegally made, is irrelevant in determiningwhether or not a copy is, at a particular time, to be classified as 'circulated'.Similarly Copinger and Skone James on Copyright opined that, as under the 1956 Act,it did not matter whether the copies put into circulation were made with the consent ofthe copyright owner or were in fact infringing copies.5756 J A L Sterling "Copyright, Designs and Patents Act 1988: The New Issuing Right" [1989] 8 EIPR283 at 286. Sterling considered that the "issuing right" was a more appropriate shorthand becausedistribution was merely one of several acts listed in s 18(2): at 284.57 E P Skone James and others Copinger and Skone James on Copyright (13th ed, Sweet & Maxwell,London, 1991) at [8-94]–[8-95]. See also Laddie, Prescott and Vitoria, above n 55, at [2.125],where this was implicit in the authors' discussion of old stocks which "[n]eed not be pirate copies"in order to attract liability under s 18.[38] Fourthly, the CDPA expressly stated that the relevant prior circulation was notto be confined to the United Kingdom. The implications of this change were describedin Laddie, Prescott and Vitoria in this way:58In other words, it would not be an infringement of the distribution right to buycopies already circulating in the market and put them on sale in this country.So ordinary shopkeepers would not be liable, unless they had the requisitestate of mind to be secondary infringers. But it would be an infringement toorder their manufacture abroad and then launch them into trade channels inthis country, thus reversing the effect of Infabrics Ltd v Jaytex Ltd.[39] The distribution right was aimed at primary dealers at the top of thedistribution chain. If they put copies into circulation without due authority, theyinfringed copyright. However the authors of Laddie, Prescott and Vitoria make thepoint that, while the distribution right as originally enacted in the CDPA was fairlyeasy to understand, the subsequent history has not been a happy one. Section 18 hasbecome increasingly complex following amendments made via regulations of theSecretary of State for the purpose of implementing various European Directives.59The relevant parts of the text of s 18 (as currently in force) read as follows:(2) References in this Part to the issue to the public of copies of a workare to the act of putting into circulation in the United Kingdom copiesnot previously put into circulation in the United Kingdom or the EEAby or with the consent of the copyright owner.(3) References in this Part to the issue to the public of copies of a workdo not include—(a) any subsequent distribution, sale, hiring or loan of copiespreviously put into circulation (but see s 18A: infringementby rental or lending)(4) References in this Part to the issue of copies of a work include theissue of the original.Copyright Act 1994[40] The Copyright Act 1962 reflected the 1928 Rome Revision of the BerneConvention for the Protection of Literary and Artistic Works.60 One of the primary58 Speck and others, above n 44, at [15.5].59 At [15.2] and [15.7].60 Berne Convention for the Protection of Literary and Artistic Works, as revised at Rome 123 LNTS233 (opened for signature 2 June 1928, entered into force 1 August 1931). The Berne Conventionwas adopted in 1886 and has been the subject of numerous revisions. New Zealand became aparty to the Rome Revision on 24 April 1928.reasons for updating the Copyright Act 1962 was to give effect to the provisions oncopyright in the Agreement on Trade-Related Aspects of Intellectual Property Rights(TRIPS).61 The TRIPS Agreement required New Zealand copyright law to reflect the1971 Paris Revision of the Berne Convention.62[41] As stated in the explanatory note to the Copyright Bill 1994, the 1994 Act islargely derived from the CDPA.63 That explains why the 1994 Act abandoned thepublishing right and adopted the new distribution right. The inclusion of the new rightwas not attributable to the influence of the Berne Convention, which did not in 1994(and still does not) provide for a distribution right.64[42] The New Zealand provisions as introduced, which are spread across ss 2(1), 9,16(1)(b) and 31 of the 1994 Act, were essentially similar to their equivalents in theoriginal CDPA, save that the definition of "issue to the public" was not explicit as tothe geographical reach of circulation, an omission which gives rise to the third issueon this appeal.Can the sale or distribution of an imported product (not previously put intocirculation) constitute primary infringement notwithstanding the absence of theknowledge component in ss 35 and 36?ESR's contention[43] Mr Miles took aim at the Judge's statement that secondary infringementrequires proof of knowledge that the copy infringed copyright whereas primaryinfringement does not.65 He described that proposition as highly misleading because,he said, primary infringement inherently involves copying, or participation in copying,61 Copyright Bill 1994 (32-1) (explanatory note); and Marrakesh Agreement establishing the WorldTrade Organization 1869 UNTS 299 (opened for signature 15 April 1994, entered into force1 January 1995), annex 1C (Agreement on Trade-Related Aspects of Intellectual Property Rights).The TRIPS Agreement was one of several agreements resulting from the Uruguay Round ofMultilateral Trade Negotiations.62 Paris Act relating to the Berne Convention for the Protection of Literary and Artistic Works1161 UNTS 3 (opened for signature 24 July 1971, entered into force 15 December 1972).63 Copyright Bill 1994 (32-1) (explanatory note) at i. This was partly as a result of the time pressureto comply with the TRIPS Agreement and partly because of New Zealand's historical reliance onUnited Kingdom copyright law: Ortmann v United States of America, above n 4, at [251].64 See discussion below at [100]–[101].65 High Court judgment, above n 2, at [15].an object that is protected by copyright.66 Knowledge, whether proved or inferred,was necessary for copyright infringement. Because copying inherently requiresknowledge that one is copying, s 30 does not need an explicit reference to knowledge.[44] The point was made that, while s 30 is effective against manufacturers whoundertake copying in New Zealand, it is not helpful against manufacturers that do sofrom a factory in another country. Addressing that difficulty was said to be therationale of s 31:However, that is where s 31 comes in. It enables a copyright owner in NZ tosue the offshore manufacturer and those that participate with them when theirproduct is sent to NZ. By causing infringing copies to arrive in NZ themanufacturer is issuing them. It matters not whether the copies are receivedin NZ by a wholesaler, a retailer or an end user, because the public includesthe corporate public; all the companies involved in the chain.(Footnote omitted.)[45] ESR's contention is that, similar to s 30, "[k]nowledge is assumed for ss 9and 31 because the manufacturer, and those that participate with them, know whenthey have copied something." This Court's decision in Jeanswest Corp (New Zealand)Ltd v G-Star Raw CV was explained on that basis, namely that the finding of primaryinfringement (issuing) was only the result of participation in copying "coupled with"selling.67 By contrast, ESR contended it had no involvement in the design ormanufacture of the furniture it imported. It was not complicit in the copying activityin any way. Consequently, it could not be an issuer.[46] ESR's proposition that a s 31 infringement could not be established in isolationfrom the act of infringement by reproduction was made clear in the followingexchange:66 Citing Fisher & Paykel Financial Services Ltd v Karum Group LLC [2012] NZHC 3314, [2013]2 NZLR 266 at [145]–[147].67 Jeanswest Corp (New Zealand) Ltd v G-Star Raw CV [2015] NZCA 14 at [100].THE COURTOkay. So you say a person who distributes for the first time an infringing copyin New Zealand can only be guilty, only infringe s 31, if they also made thecopy or had been party to the making of that copy?MR MILES KCAbsolutely.[47] ESR argued that ss 9 and 31 are not a mechanism to hold liable importers andresellers who have dealt with copies without knowing that they were dealing ininfringing copies. Liability could only arise under ss 35 and 36. Hence the submissionthat importing can never be primary infringement but only secondary infringement,and even then, only in cases where the importer knew or should have known that thegoods were infringing.[48] ESR's argument then progressed from importation to sale. It submitted thatlogically, if a business is entitled to innocently import, then it should be entitled toinnocently sell what it has imported. This was said to be consistent with s 36 whereselling is permitted in the absence of knowledge that the item is infringing.The High Court judgment was criticised as problematic in removing that right andrendering the lack of knowledge defence redundant, at least for s 36 selling anddistributing.68 Mr Miles prayed in aid the observation of Lord Wilberforce inInfabrics v Jaytex:69 it is implausible that a person who escapes secondary infringement liabilitythrough lack of knowledge should be condemned for primary infringementirrespective of knowledge. The result of the respondents' contention indeedwould be to take away almost entirely the protection, in respect of lack ofknowledge, given by section 5(3) and (4) notwithstanding that theseprovisions substantially reproduce the terms of section 2(2) of the Act of 1911conferring similar protection.[49] Consequently it was submitted that the High Court judgment left New Zealandimporters in an invidious position. They would be strictly liable for infringement evenif they had taken all reasonable steps but "just got it wrong through a lack of68 And, in practical reality, for s 35 importing, because an importer will never be able to sell whatthey had imported.69 Infabrics Ltd v Jaytex Ltd (HL), above n 32, at 17.knowledge with no fault of their own". It was said that Parliament clearly did notintend such consequences.The Judge's analysis[50] The Judge made a brief acknowledgment of ESR's argument on what wedescribe as the liability overlap issue:[40] Mr Pietras [counsel for ESR] contends the plaintiffs' constructionwould "tyrannise" New Zealand businesses importing and selling goods "ingood faith". Relatedly, he argues secondary infringement liability is sufficientprotection of the plaintiffs' intellectual property rights and the rights of othersin this situation.[51] However, his response addressed only infringing copies:[57] Contrary to Mr Pietras' submission, this conclusion will not"tyrannise" New Zealand businesses. Only those importing and sellinginfringing (or pirated) goods will be affected. Moreover, s 121(1) of the Actprovides a defendant who did not know or have reason to believe copyrightexisted in the work is not liable for damages (as against an account of profits).In any event, tyranny is often in the eye of the beholder. It bears repeatingthat infringing (or pirated) copies can damage sales of the copyright owner'sproducts and reputation. Therein lies at least part of their harm."Mere" importation[52] The potential for overlap between infringement of the distribution right andsecondary infringement has long been recognised. Proceeding on the hypothesis thatan unauthorised act of mere importation could infringe s 16(1)(b) of the CDPA,J A L Sterling wrote:70If this reading of section 18(2) is correct as to the effect of importation, therewould appear to be some overlap with section 22, which provides that thecopyright in a work is infringed by a person who, without the licence of thecopyright owner, imports into the UK, otherwise than for his private anddomestic use, an article which is, and which he knows or has reason to believeis, an infringing copy of the work. If an infringing copy has not beenpreviously circulated and a person 'knowingly' imports the copy into the UKwithout the copyright owner's permission and with the intention of selling it,it could be argued that the one act of importation constitutes two infringementsof copyright, namely infringement by breaches of section 16(1)(b) and ofsection 22.70 Sterling, above n 56, at 287.[53] The respondents did not directly confront ESR's liability overlap argument.However they substantially blunted ESR's importer-based submission by theirconcession that mere importation would not constitute a s 31 infringement.Their submissions stated:Plainly, the importation of infringing copies into New Zealand does not per seamount to distributing or selling these for the purposes of "issuing to thepublic". For example, an importer may in theory import infringing copies butsimply keep them in storage. Unless and until the importer sells or distributesthe infringing copies there is no issuing to the public.(Footnote omitted.)[54] Noting the observation in Copinger that it is difficult to see how the mere actof importation could amount to putting copies into circulation,71 attention was drawnin particular to the footnote which reads:72While the inclusion of this act in CDPA 1988 s 18(3)(b)73 suggests that thereare circumstances where importation could amount to an issue to the public,the better view is that this is also the result of muddled drafting. The intentionas expressed in Parliament seems clearly to have been that mere importationcould not amount to infringement. See Hansard, cols 214, 215 (2 November1988) (Lord Young).We discuss Lord Young's speech below in the course of considering the phrase"subsequent importation".74[55] We agree with the respondents' analysis. Importation of a copy, whethergenuine or infringing, cannot in isolation constitute the restricted act of issuing a copyto the public. Some additional step in the nature of distribution of the copy to thepublic would be necessary for liability to arise under s 31.Discussion[56] Despite our conclusion above, the anomaly remains in respect of unauthoriseddistribution within New Zealand. Take for example a person who comes across a box71 Gwilym Harbottle, Nicholas Caddick and Uma Suthersanen (eds) Copinger and Skone James onCopyright (18th ed, Sweet & Maxwell, London, 2021) vol 1 at [7-147].72 At [7-147], n 708 (footnote added).73 In the original version of s 18 as enacted, the provision was s 18(2)(b). In the current version ofthe Copyright, Designs and Patents Act 1988 (UK), s 18(3)(b) (which referred to "subsequentimportation") has been omitted as a result of regulations made in 2018.74 At [117] below.of books by the side of a New Zealand road and proceeds to sell them on TradeMe.If they are second-hand books, then the person will not contravene s 31. However ifthose books had not previously been sold into the market, then they will not have beenput into circulation and the vendor will have infringed s 31. Similarly, if a person inNew Zealand sells infringing copies (whether made in New Zealand or abroad) which,it transpires, have never previously been put into circulation, then while the absenceof knowledge will avoid liability under s 36, it can have no bearing on liabilityunder s 31.[57] Where a vendor (who it transpires is the first distributor) is unaware that thecopies they are selling have never previously been put into circulation, weacknowledge that a finding of primary infringement may appear harsh. That outcomeis simply a reflection of the fact that ss 31 and 36 concern exclusive rights which aredifferent in nature. In the case of s 36, the vice lies in the infringing nature of the copy.Selling it with knowledge that its making was a breach of the reproduction right is aninfringement. By contrast, the restricted act the subject of s 31 is the distribution right.The vice lies in depriving the copyright owner of the right of first distribution ofany copy. It applies whether the copy is infringing or genuine.[58] ESR's proposed solution to the perceived harsh consequences of primaryinfringement is to read into s 31 a defence of absence of knowledge. It was implicitin ESR's submission that the nature of the "knowledge" component which it envisagedfor s 31 would be the equivalent of that expressly provided for in ss 35 and 36.Thus, for example, its submissions stated:The judgment blurs the distinction [between primary and secondaryinfringement] by making ESR, as an importer-reseller acting during therelevant period without knowledge that the objects were infringing copies,strictly liable for primary infringement.[59] However that contention fails to recognise the quite different nature ofreproduction and distribution infringement. The issue under s 31 is whether a copy,be it infringing or genuine, has been prior distributed. In the case of an infringingcopy the presence or absence of knowledge that the making of the copy infringed thereproduction right is simply not relevant for s 31. Unlike secondary infringement,75primary infringement does not depend on a primary act of infringement having firsttaken place. It follows that the nature of the "knowledge" which ESR urged shouldbe read into s 31 would be different from that expressly provided for in ss 35 and 36.[60] In our view it is not possible to construe s 31 as incorporating a defence toinfringement of the distribution right in circumstances where the distributor is unawarethat the copy they are selling has never previously been distributed. Parliament sawfit to categorise contravention of the distribution right as primary infringement. It isnot the role of the Court to read into s 31 a knowledge component which wouldtransform the scope of the restricted act.[61] The likelihood of vendors selling copies not previously put into circulation,without having had prior notice of circumstances which call for caution, is a matterfor conjecture. However it is possible that the statutory consequences may not be asharsh as assumed. The notion inherent in the distribution right is that the first issuedcopy will be new. Referring again to our example of the finder of books by theroadside, if the books were new and still wrapped in plastic, then the finder shouldrealise that they had not previously been put into circulation. So when a person, whois not the copyright owner, elects to sell into the market a brand new product,caveat venditor.76[62] We turn to consider the interpretation issues which arise in respect of what ESRdescribed as the statutory defence in s 9(1)(c).75 Ortmann v United States of America, above n 4, at [249].76 That is, "let the seller beware".Is the distribution right spent only when the copies of a work are put intocirculation by the copyright owner or with their consent or licence?The Judge's analysis[63] Following a discussion of the distinction between "genuine"77 and infringingcopies,78 the Judge noted the evolution of s 18 of the CDPA,79 stating:[23] To recapitulate: in the United Kingdom, a copyright owner's right offirst circulation is exhausted only when the acts of prior circulation have beenby the copyright owner or with her, his, or its consent. Exhaustion does notoccur when an infringer puts infringing goods into circulation, irrespective ofwhere that occurs.[64] The Judge addressed the consent and territoriality issues concurrently,commencing in this way:[41] I begin in the thick of things with ESR's central and strongest point— s 9(1)(c). By definition, importation to New Zealand means bringing herefrom overseas, hence "subsequent importation" suggests circulation outsideNew Zealand qualifies as first circulation, irrespective of how it came about.And, because paragraphs (a), (b) and (c) of s 9(1) are apparently silent on thequestion of the copyright owner's consent, it is arguable these provisions areunconcerned about that. All of which is to say ESR's construction is plausible,a position reinforced by two leading texts.(Footnote omitted.)[65] While the Judge's subsequent analysis focussed primarily on the territorialityissue, Mr Brown KC, counsel for the respondents, contended that the respondents'submission on the consent issue was accepted in the Judge's seventh point:[52] Seventh, the plaintiffs' construction is consistent with the concept ofexhaustion (discussed earlier), the approach of the United Kingdom in relationto that concept and, importantly, art 6 of [the WCT], an international lawobligation. Once the owner (or licensee) of a copyright places a copy incirculation in New Zealand, they may not control subsequent acts ofdistribution, sale, or importation of those copies. The owner has, by dint oftheir first circulation, exhausted her, his, or its rights.77 The Judge explained that a genuine copy is made by the copyright owner or someone under licenceof the copyright owner, the best example of which was said to be parallel imports: High Courtjudgment, above n 2, at [18].78 At [18]–[19].79 At [20]–[22].The parties' contentions[66] ESR contended that the Judge erred in failing to construe s 9 in accordancewith its plain meaning. It submitted that the Judge instead relied on a convolutedseries of rationalisations based on the later version of the CDPA, misleading analogieswith other statutes and vague generalisations from the TRIPS Agreement andother treaties. In consequence the carve-out reflected by s 9(1)(c) had been effectivelydismantled.[67] ESR argued that the correct meaning of s 9 was that adopted in theUnited Kingdom when the distribution right was first introduced in the CDPA, namelythat the unauthorised distribution of a copy (whether genuine or infringing), while aninfringement of the distribution right, resulted in that copy being put into circulation.80[68] The respondents' rejoinder stated:8.4 This submission misunderstands the essence of the concept ofexhaustion of the right to distribute articles in which intellectualproperty rights subsist. That concept is common to copyright,trade marks and patents. The basis for the concept is that theintellectual property rights-holder is entitled to the economic benefitof the first sale of a specific article, but once that sale occurs with theowner's consent in the relevant jurisdiction, subsequent acts ofcirculation fall outside the control of the rights-holder. This allowsfor the secondary market for the exchange of goods in whichintellectual property rights otherwise subsist.The respondents' argument invoked s 29(1) of the 1994 Act. They also placed relianceon three subsequent developments.81The s 29(1) argument[69] The respondents' argument82 that the prior act of circulation (wherever itoccurs) must be an act by or with the consent of the copyright owner was explained asbeing "based specifically" on s 29(1), which states:8380 Copyright, Designs and Patents Act, ss 16 and 18 (as enacted). See [32]–[33] above.81 Copyright (Removal of Prohibition on Parallel Importing) Amendment Act; Copyright (ParallelImportation of Films and Onus of Proof) Amendment Act; and MBIE discussion paper,above n 28.82 Described as "additional" to the territorial argument.83 Emphasis as in the respondents' submissions.Copyright in a work is infringed by a person who, other than pursuant to acopyright licence, does any restricted act.[70] That is the equivalent provision to the original s 16(2), of the CDPA whichstated:Copyright in a work is infringed by a person who without the licence of thecopyright owner does, or authorises another to do, any of the acts restricted bythe copyright.[71] Section 16 was headed: "The acts restricted by copyright in a work".Section 16(1) listed rights equivalent to those in s 16(1)(a)–(h) of the 1994 Act andprovided a definition of those rights, namely the "acts restricted by the copyright".For reasons which are not apparent but which presumably reflect a different draftingstyle, in the 1994 Act the New Zealand parliamentary drafters chose to relocate theequivalent of s 16(2) of the CDPA as s 29(1). A definition of "restricted act" wasincluded in the interpretation section, namely "any of the acts described in section16".84[72] The respondents' argument involved two steps. First, they referred to thecurrent version of s 18 of the CDPA and submitted:The conduct in question is the plaintiff's conduct, and the question is whetherthe plaintiff has already put the copies in suit into circulation.(Emphasis in original.)That, of course, is an accurate description of the current United Kingdom provision.The respondents then submitted:8.9 This position has been expressly recognised in the wording of s 18 ofthe CDPA(UK) since 1996. Section 18(2) states that it is a restrictedact to commit the act of "putting into circulation copies notpreviously put into circulation by or with consent of the copyrightowner". This is replicated in s 29(1) of the NZ Act.(Emphasis in original.)[73] We do not accept the proposition in the final sentence. Section 29(1) simplyrecognises that only an unauthorised performance of a restricted act is an infringement.84 Copyright Act 1994, s 2(1).Although unhappily located away from s 16(1), s 29(1) does no more than did theoriginal s 16(2) of the CDPA on which it was based. Contrary to the respondents'submission, s 29(1) neither foresaw nor anticipated the legislative developments inthe United Kingdom subsequent to the introduction of the 1994 Act.[74] It is worth reflecting on the implications of the respondents' proposition forsequential sales of a copy of a work. For simplicity our example assumes unauthorisedsales of genuine copies, thereby avoiding the emotions which appear to be stirred byinfringing copies. Suppose a music publisher assigns their copyright in a musical workbut continues to sell off their existing stock of genuine copies. Absent the distributionright, a claim by the assignee for infringement would be unsuccessful because theprinting of the copies was done while the assignor was still the owner of thecopyright.85[75] Relying on the distribution right, the assignee is able to sue the assignor unders 31 of the 1994 Act in respect of the sale of the existing stock and obtains an awardof compensation for the infringement. As a consequence of the sales the assignor'sexisting stock is, in ordinary parlance, "released into the market", an expression weadopt deliberately to avoid confusion with the "putting into circulation" concept ins 9(1). The compensation awarded to the assignee would presumably reflect the lossoccasioned by that release.[76] However the implication of the respondents' argument is that, although now inthe market, those released copies had not been put "into circulation" because they weredistributed without the copyright owner's consent (the very fact that caused theirdistribution to be an infringement). If they are not in circulation, then the copyrightowner's distribution right is not spent. It must follow, therefore, that when thosemusical scores are subsequently resold (say on TradeMe) the assignee will have aclaim for infringement of the distribution right against the new vendor who will beattempting to sell copies which have not previously been put into circulation.Similarly when the scores are sold a third time (say, at a second-hand store).85 These were the facts of Taylor v Pillow (1869) 7 LR Eq 418.[77] This sequence would be perpetuated unless and until the assignee itselfacquired ownership of those particular copies and either sold them or authorisedtheir sale. Only at that point, on the respondents' argument, would those copies havebeen put into circulation, regardless of their extensive history of exchange within themarket.[78] In our view such an outcome is the antithesis of the purpose of the distributionright, both in its original manifestation in the CDPA and in the 1994 Act. We agreewith the appellant that it is highly unlikely that Parliament would have intended sucha consequence. That is especially so given the fact that s 31 infringement is primaryinfringement. While the vendor of a new item should be on guard,86 a downstreamacquirer of a second-hand item, be it a book, a music score or even a motor vehicle,could have no way of knowing whether in selling the item they might be liable for aclaim of primary infringement at the suit of a copyright owner who had neverconsented to the item's disposal.[79] We consider J A L Sterling's interpretation of the CDPA (in its original form)to be correct: the fact that a copy was previously circulated without the copyrightowner's consent was irrelevant in determining whether a copy was to be classified as"circulated" for the purposes of the distribution right.87 While the copyright owner'sexclusive right to issue copies would be thwarted by the unauthorised issue of copiesby others, the loss of that right would be reflected in compensation awarded in anaction for infringement. In our view the New Zealand distribution right should beinterpreted in the same manner.[80] Exactly the same analysis would apply in respect of infringing copies. Indeedit was common ground before us that, as in the United Kingdom, the distribution rightextended to infringing copies.88 However the Judge appeared to consider that"[o]nly those importing and selling infringing (or pirated) goods" would be affected86 See [61] above.87 Sterling, above n 56, at 286. See [37] above.88 The respondents' submissions commenced with the statement: "This case is a straightforwardexample of a trader being liable for distributing infringing copies of the plaintiffs' copyright worksto the public in New Zealand".by his interpretation of the distribution right.89 As our music publisher exampledemonstrates, that is not the case.The role of downstream developments in statutory interpretation[81] As earlier noted,90 the Judge stated that the correct interpretation of s 9 was tobe ascertained, not merely from text and purpose, but from the 1994 Act as a whole"informed by relevant developments".91 A footnote to that sentence referenced s 10of the Legislation Act 2019, which states that the meaning of legislation must beascertained from its text and in light of its purpose and its context.92 The same themewas echoed in the Judge's conclusion invoking "related developments".93 We inferthat the Judge considered such later developments to be "context" as recognisedin s 10.[82] As Burrows and Carter Statute Law in New Zealand observes, by and largecourts have been anxious to give statutes an "ambulatory" or "dynamic" interpretationthat keeps them up-to-date in the modern world.94 It is suggested this is particularlyso in respect of new developments and inventions which overtake old statutes95 andchanges in social attitudes and values.96 The author opines that s 11 of theLegislation Act 2019, which provides that legislation applies to circumstances as theyarise, supports this ambulatory approach.97[83] Burrows and Carter cites several examples where courts have been preparedto accept what Lord Wilberforce described as "mobile" expressions98 in statutes asbeing capable of interpretation in a way which fits with modern attitudes and values.99The author recognises, however, that the distinction between changed meaning and89 High Court judgment, above n 2, at [57].90 At [15] above.91 High Court judgment, above n 2, at [45].92 At [45], n 24.93 At [55]. See [17] above.94 Ross Carter Burrows and Carter Statute Law in New Zealand (6th ed, LexisNexis, Wellington,2021) at 540.95 At 527–532.96 At 533–538.97 At 540.98 Director of Public Prosecutions v Jordan [1977] AC 699 (HL) at 719. Examples include"indecent", "fairly" and "just and reasonable".99 Carter, above n 94, at 533–538.changed application is a fine one.100 He also notes the observation of Chilwell J inMcClenaghan v Bank of New Zealand that even an ambulatory approach cannotchange the law; that would amount to Parliament not just "continually speaking" but"continually thinking".101 Chilwell J considered that the only way in which the lawcould be changed was by Parliament rethinking and changing its speech.102[84] Clearly there are limits to the ambulatory approach. Suffice to say, we agreewith the observation of Lord Bingham in R (Quintavalle) v Secretary of Statefor Health that there is no inconsistency between the rule that statutory languageretains the meaning it had when Parliament used it and the rule that a statute isalways speaking.103[85] Subsequent amendments to a statute may be of such a nature as to change themeaning in some of its provisions for the future, albeit such amendments will likelyhave been made in a different context from that which prevailed when the statute wasfirst passed. However the respondents did not contend, either below or in this Court,that the later statutory provisions which the Judge referred to as "relevant/relateddevelopments" caused the meaning of the 1994 Act to change from its meaning asoriginally passed. Rather their theme was that such later amendments can beinformative in determining the meaning of a statutory provision, here s 9 of the1994 Act, at the time it was enacted.[86] Burrows and Carter addresses such a proposition as a matter ofreinterpretation:104Sometimes it is argued that a word in an old Act needs to bereinterpreted to align it with other, more recent, legislation.The assertion, in other words, is that Acts must be interpreted in thecurrent legal landscape, and that landscape (or "wider context") may100 At 538.101 At 536; and McClenaghan v Bank of New Zealand [1978] 2 NZLR 528 (SC) at 532–533.The phrase "continually speaking" was a reference to s 5(d) of the Acts Interpretation Act 1924,which provided that "[t]he law shall be considered as always speaking".102 McClenaghan v Bank of New Zealand, above n 101, at 533.103 R (Quintavalle) v Secretary of State for Health [2003] UKHL 13, [2003] 2 AC 687 at [9].Lord Bingham reasoned that if Parliament (however long ago) passed an Act applicable to dogs,it could not properly be interpreted to apply to cats; but it could properly be held to apply toanimals which were not regarded as dogs when the Act was passed but are so regarded now.104 Carter, above n 94, at 539.require a shift in meaning in the words of an older Act. This isobviously detaching the legislation from what the original Parliament"intended". In one case Mann LJ regarded such an argument as"a bold submission".105 However, it cannot be entirely dismissed.[87] The author notes that it has been surmised that the longstanding interpretationof old Acts may have to be updated in the light of the New Zealand Bill of RightsAct 1990, observing that Tipping J did not dismiss such an approach in Quilter vAttorney-General,106 where he said:107For the purpose of deciding whether, pursuant to s 6 of the Bill ofRights, the Marriage Act can, notwithstanding this background, nowbe interpreted so as to allow same-sex marriages, it is appropriate toexamine relevant legislation enacted since the Bill of Rights came intoforce. if a shift in the meaning of marriage can be discerned fromsuch material, that will support the case for a reinterpretation ofthe Marriage Act to accord with the shift.[88] We will consider the statutory developments relied on by the respondents inaccordance with that approach.The particular "related developments"[89] The respondents relied on three such developments as supporting the Judge'sinterpretation.[90] The first in time was the Copyright (Removal of Prohibition on ParallelImporting) Amendment Act 1998, which was addressed in the Judge's fifth point.108That amendment added s 9(1)(d), which excluded from the scope of "the issue ofcopies of a work to the public" acts of:(d) distribution of imported copies that are not infringing copies withinthe meaning of section 12 subsequent to their importation intoNew Zealand.105 Director of Public Prosecutions v Bull [1995] QB 88 (QB) at 93 per Mann LJ. See alsoHolden and Co v Crown Prosecution Service [1994] 1 AC 22 (HL) at 31–32.106 Carter, above n 94, at 539.107 Quilter v Attorney-General [1998] 1 NZLR 523 (CA) at 579. Further examples include theimplications of important changes to the right of trial by jury, a change in costs policy and leaveto appeal to this Court under the Commerce Act 1986.108 High Court judgment, above n 2, at [50].[91] The respondents placed particular emphasis on the amended definition of"infringing copy" in s 12(3) and the new s 12(5A), which reads:(5A) An object that a person imports or proposes to import intoNew Zealand is not an infringing copy under subsection (3)(b) if—(a) it was made by or with the consent of the owner of thecopyright, or other equivalent intellectual property right, inthe work in question in the country in which the object wasmade; The reason these amendments were said to be highly relevant lay in the propositionthat the legislature enacted s 9(1)(d) as a "carve out" from liability under s 16(1)(b).This was said to clearly indicate that otherwise the same conduct would be a restrictedact under s 16(1)(b).[92] Prior to the 1998 amendment, where an authorised copy of a work was madein another jurisdiction (but was not issued to the public in that jurisdiction) and wasimported into New Zealand, the sale and distribution of that product would constitutean act of infringement if the act of sale or distribution was done otherwise than by thecopyright owner or their licensee. The effect of s 9(1)(d) is that such conduct will nolonger be an infringement of s 31.109[93] The distinction between (d) and categories (a) to (c) is explored by the authorsof Intellectual Property Law (NZ):110The categories of acts in paras (a)–(c) of s 9(1) are all acts described as beingsubsequent to the act of putting "those copies" into circulation."Those copies" are the copies of a work which have been put into circulation,and it follows that the subsequent dealing with those copies, whether by reasonof distribution, sale or importation, cannot be infringements of copyrightunder s 31. However, unlike in paras (a)–(c), there is no reference back to"those copies" in para (d): furthermore, the reference to "subsequent" in para(d) is a reference to the period subsequent to the importation into New Zealandof imported copies that are not infringing copies within the meaning of s 12(that is, not pirated goods but genuine goods). The reference to "subsequent"in para (d) is not (as in the case of paras (a)–(c)) a reference to an activitywhich is subsequent to the act of putting the copies into circulation. It isimportation subsequent to the copies being put into circulation which para (c)recognises is not included within the definition of the act of issuing copies ofa work to the public.109 Clive Elliott and others Intellectual Property Law (NZ) (online ed, LexisNexis) at [COP9.6].110 At [COP9.6].[94] As the Supreme Court observed in Ortmann, the rights in s 16 are independentof each other and can be held by separate persons.111 Given the independence of thereproduction and distribution rights, we confess to some difficulty in comprehendingwhy the making of a copy overseas (which by virtue of s 12(5A) is not an infringementof the reproduction right) should deprive the New Zealand copyright owner of theirseparate and distinct distribution right. In a footnote to the penultimate sentencein [41], the Judge stated that because s 9(1)(d) concerns parallel importation ofgenuine copies, the copyright owner has consented to their first circulation.112The basis for that conclusion is not readily apparent. By contrast, in the case of agenuine copy made not overseas but in New Zealand the copyright owner'sdistribution right would not be lost.[95] Perhaps it was assumed that the parallel import product would have alreadybeen put into circulation in the place where it was made and for that reason the rightof first distribution would be spent. However such a rationale would underminethe respondents' contention that distribution abroad cannot constitute s 9(1)circulation. The authors of Intellectual Property Law (NZ) conclude that theamendment to include s 9(1)(d) was unnecessary and misconceived.113 We sharethat view.[96] The second related development was the Copyright (Parallel Importation ofFilms and Onus of Proof) Amendment Act 2003, which inserted s 97A into theTrade Marks Act 2002 so as to provide for "international exhaustion" of rightsconferred by a registered trade mark.114 The respondents submitted that if Parliamenthad intended that the distribution right in s 16(1)(b) should be limited in the same way,it could and would have done so. They reasoned that the fact the 2003 Amendment Actmade only limited changes to the definition of importing under s 35 of the 1994 Actstrongly signalled that Parliament did not intend New Zealand copyright owners tolose their rights under s 16(1)(b) "by overseas, unauthorised third party conduct inimporting and selling in New Zealand infringing copies".111 Ortmann v United States of America, above n 4, at [242].112 High Court judgment, above n 2, at [41], n 20. See [64] above.113 Elliott and others, above n 109, at [COP9.6].114 Copyright (Parallel Importation of Films and Onus of Proof) Amendment Act, s 5.[97] In our view that process of reasoning is tenuous to say the least. But in anyevent the short answer is that, if s 9(1) has the meaning for which ESR contends, thenthere would be no need for Parliament to make an amendment to the 1994 Act similarin concept to s 97A of the Trade Marks Act.[98] The third related development was publication of the 2019 MBIE discussionpaper, an extract from which was recited in the judgment.115 ESR first submitted, withsome justification, that the opinion of an unknown author proffered some 24 yearsafter the enactment of s 9 is irrelevant to the proper construction of the section.ESR then proceeded to argue that, critically assessed, the comments are supportive ofESR's position. The three paragraphs reproduced in the judgment discuss the conceptof exhaustion of rights at a high level of generality. We do not consider that they aresufficiently focused to support a conclusion either way.[99] Before leaving the topic of related developments, it is appropriate to addressthe proposition in the Judge's seventh point that the respondents' construction is,"importantly", consistent with art 6 of the WCT, which he described as an internationallaw obligation.116[100] The history of unsuccessful proposals to add a general right of distribution tothe Berne Convention is reviewed by the authors of International Copyright andNeighbouring Rights, who explain:117Thus, Berne contains no general recognition of a right of putting intocirculation as there is in the case of the basic right of reproduction. (The WCTdoes, however, include a general right of distribution of copies, discussedfurther below.) Likewise, lending rights and the droit de suite are protectedonly in a relatively small number of states. In consequence, the protectionaccorded by the Berne Convention in relation to the distribution of works andtheir copies is patchy, to say the least.[101] However such a right was adopted in art 6 of the WCT, which the authorsdescribe as "a side agreement to the Berne Convention".118 It provides:115 High Court judgment, above n 2, at [30] and [54], quoting MBIE discussion paper, above n 28,at [239]–[241].116 High Court judgment, above n 2, at [52].117 Sam Ricketson and Jane C Ginsburg International Copyright and Neighbouring Rights (3rd ed,Oxford University Press, Oxford, 2022) at [11.46].118 At [11.55].Article 6Right of Distribution(1) Authors of literary and artistic works shall enjoy the exclusive rightof authorising the making available to the public of the original and copies oftheir works through sale or other transfer of ownership.(2) Nothing in this Treaty shall affect the freedom of Contracting Partiesto determine the conditions, if any, under which the exhaustion of the right inparagraph (1) applies after the first sale or other transfer of ownership of theoriginal or a copy of the work with the authorisation of the author.[102] New Zealand acceded to the WCT in 2018, some 23 years after the introductionof the 1994 Act. The National Interest Analysis dated 25 January 2016 observed thatNew Zealand already complied with the obligations in the WCT through the1994 Act.119 It is apparent that the art 6 obligation was perceived to be satisfied bythe existing s 16(1)(b) distribution right. In our view New Zealand's accession tothe WCT is not informative on the second issue.Conclusion[103] We conclude that the Judge erred in accepting the respondents' contention thata copy of a copyright work will only be put into circulation for the purposes of s 9(1)if the relevant act (distribution, sale, etc) is performed either by, or with the consentof, the copyright owner. In our view the release of a copy to the market, whether thatrelease is unauthorised or non-infringing, causes the relevant copy to be placed"in circulation". The copyright owner's exclusive right to distribute that copy is thenspent, notwithstanding that the act of issuing was an infringement of the owner'ss 16(1)(b) right.If a copy is first distributed abroad has it been "previously put into circulation"?The notion of extraterritoriality[104] It is desirable at the outset to address the proposition that acceptance of ESR'sinterpretation, that the circulation contemplated in s 9 may occur abroad, wouldamount to giving the 1994 Act extraterritorial effect. The respondents submitted thatthe Judge was correct to hold that ESR's interpretation would grant the 1994 Act119 Ministry of Foreign Affairs and Trade WIPO Copyright Treaty National Interest Analysis(25 January 2016) at 3.extraterritorial effect by allowing what they describe as an "extraterritorial exception".Although the Judge does not expressly state this, it would appear that was his view.[105] Both his first and second points focus on the issue of territoriality:120[46] First, s 16 identifies an elementary feature of copyright: that it isterritorial. Section 16 affords the owner of copyright in a work "the exclusiveright" to do various things "in New Zealand". Territoriality was highlightedby Tipping J in relation to the Copyright Act 1962 in Atkinson Footwear Ltdv Hodgskin International Services Ltd, and recently reiterated by the Court ofAppeal in Gao v Zespri Group Ltd in an analogous context (the Plant VarietyRights Act 1987).[47] Second, s 16 creates a code of rights of a copyright owner. The rightof first circulation is one such right. As with the others, it is exercisable inNew Zealand only.[106] That the Judge considered that s 18(2) of the CDPA (as enacted) was intendedto have extraterritorial effect may be inferred from his earlier observation:[44] The common law presumes a statute does not have extra-territorialeffect unless it expresses a (sufficiently clear) contrary intention. Carefulreaders will have noticed that, unlike the version of the United Kingdom Actin force when we enacted our Act, s 9(1)(c) does not say "or elsewhere";see [20]. This has some significance: the [1994] Act is largely based on theUnited Kingdom Act, yet we did not copy the phrase "or elsewhere". (Footnote omitted.)[107] However, as Copinger explains, the phrase "in the United Kingdom orelsewhere" refers back to the expression "copies not previously put intocirculation".121 The phrase could not refer back to the prior words "the act of puttinginto circulation" since the exclusive right under s 16 of the CDPA was to do that actonly in the United Kingdom.122[108] So, to the extent that it may be implicit in the judgment that a reading of s 9 toinclude circulation abroad would be to give extraterritorial effect to the 1994 Act,we disagree. It would be no different from, for example, s 75(1) which refers to anartistic work having been applied industrially "in New Zealand or in any othercountry". By contrast, as Laddie, Prescott and Vitoria observe, the version of s 18(2)120 High Court judgment, above n 2 (footnotes omitted).121 Skone James and others, above n 57, at [8-95].122 At [8-95], n 88.of the CDPA in force between 1996 and 2018, if read literally, did purport to haveextraterritorial effect.123The text of s 9(1)[109] The respondents submitted that s 9(1) should be read with the phrase"in New Zealand" inserted in two places. Accepting that submission, the Judgeconsidered that there was no doubt that that is what s 9(1) meant, once the text andpurpose of the 1994 Act were considered alongside related developments.124 Such aninterpretation was said to be just drawing out what was already implied by virtue ofss 9, 12, 16, 29 and 31.125[110] It seems clear that the introduction of the distribution right in the CDPA was,in material part, a response to the less than enthusiastic reaction to the ultimatedecision in Infabrics v Jaytex. We suspect that accounted for the explicit reference ins 18(2) to "in the United Kingdom or elsewhere". We are not aware of any suggestionthat Infabrics v Jaytex was viewed more favourably in New Zealand than in theUnited Kingdom. If that had been so, such that New Zealand intended to depart fromthe United Kingdom approach, we would have expected that to be explicit, inparticular by the inclusion in s 9(1) of the phrase "in New Zealand" following thephrase "not previously put into circulation". That did not happen.[111] Unlike the Judge, we view the absence of any territorial qualification of theword "circulation" as a neutral factor. The New Zealand parliamentary drafters madeseveral changes to the wording of s 18 of the CDPA and to the location of itscomponents within the 1994 Act. One possibility is that they considered that thereference to circulation envisaged the international market and that no specificqualifier was required to give effect to that intention.123 Speck and others, above n 44, at [15.20]–[15.21]. This version of s 18(2) provided that referencesto "the issue of copies of a work" were to:(a) the act of putting into circulation in the EEA copies not previously put into circulation in the EEAby or with the consent of the copyright owner, or(b) the act of putting into circulation outside the EEA copies not previously put into circulation in theEEA or elsewhere.(Emphasis added.)124 High Court judgment, above n 2, at [55].125 At [56].[112] A more significant interpretative pointer, in our view, is the reference to"subsequent importation" in s 9(1)(c), which echoes s 18(2)(b) of the CDPA(as enacted). However the adoption of that phrase has generated debate on thequestion whether the adjective "subsequent" serves any purpose."Subsequent importation"[113] Each of the four excluded categories in s 9(1) employs the word "subsequent",although as earlier noted, not all in the same manner.126 The focus here is on theparticular use of "subsequent" in s 9(1)(c). ESR submitted that, far from being "a littleDelphic", as the Judge suggested,127 the meaning of s 9(1)(c) is clear: the relevantimportation of copies into New Zealand must be subsequent to the first issue of thosecopies in some other country.[114] The respondents took a different view, observing:6.7 There is a twist. The 13th edition of Copinger, dated to 1991, explainsthat the word "subsequent" in s 18(2)(b) [of the CDPA](ie "subsequent importation") was inserted "at a late stage in thepassage of the Bill". The addition of the word "subsequent" appearsto have been redundant. The text notes that as the Bill previouslystood, it was clear that no importation of copies of a work couldamount to issuing copies to the public in contravention of s 18.(Footnote omitted and emphasis in original.)The respondents then submitted:6.9 The addition of "subsequent in s 18(2)(b) by the House of Lords ata late stage may have been thought necessary as symmetry with thewords "subsequent distribution or sale" in s 18(2)(a). It can be seenhowever, that the term was never necessary because importationper se, let alone subsequent importation, could never amount todistribution or sale.(Footnote omitted.)[115] There is merit, we believe, in tracing the evolution of s 18(2) of the CDPA.As originally introduced, cl 18(2) of the Copyright, Designs and Patents Bill 1988read:126 At [93] above.127 High Court judgment, above n 2, at [55].(2) References in this Part to the issue to the public of copies of a workare, except as mentioned in subsection (3), to the act of first putting thosecopies into circulation, and not to—(a) any subsequent distribution, sale, hiring or loan of thosecopies, or(b) their importation into the United Kingdom.[116] The House of Commons proposed an amendment (among others) as follows:(2) References in this Part to the issue to the public of copies of a workare to the act of first putting those copies into circulation, and not to—(a) any subsequent distribution, sale, hiring or loan of thosecopies, or(b) any subsequent importation of those copies into theUnited Kingdom.except that in relation to sound recordings, films and computer programs, therestricted act of issuing copies to the public includes any rental of copies tothe public.(Emphasis added.)[117] The House of Lords disagreed with the Commons amendments for reasonsexplained by Lord Young of Graffham:128Clause 18 defines the second of the acts restricted by copyright — the issueof copies to the public. As subsection (2) makes clear, this means the act offirst putting the copies in question into circulation. This is obviouslysomething that could take place anywhere in the world, but equally clearly thecopyright owner only has a right under our law in respect of copies first putinto circulation in the United Kingdom.Subsection (2) as presently drafted, makes it clear that the restricted act doesnot relate to distribution after the first issue has taken place but there is someambiguity in the present drafting in respect of imported copies.Where importation precedes first issue, as where copies are imported in bulkby the publisher, that import should not prevent the first issue being arestricted act. But where copies of a work are first issued abroad and thenimported into the United Kingdom there is no infringement under Clause 18.The importation may constitute secondary infringement under Clauses 24 and27(3) because the copies were made without licence covering theUnited Kingdom, but that is a different matter. There is no primaryinfringement under Clause 18. Amendment No. 21A will remove any doubtson that score.128 (2 November 1988) 501 GBPD HL 214.[118] The House of Lords proposed a new cl 18(2):(2) References in this Part to the issue to the public of copies of a workare to the act of putting into circulation copies not previously put intocirculation, in the United Kingdom or elsewhere, and not to—(a) any subsequent distribution, sale, hiring or loan of thosecopies, or(b) any subsequent importation of those copies into theUnited Kingdom;except that in relation to sound recordings, films and computer programs therestricted act of issuing copies to the public includes any rental of copies tothe public.[119] Thus the introduction of "subsequent" was originally mooted in the Commons'amendment. The Lords' amendment, which substituted the phrase "putting intocirculation copies not previously put into circulation, in the United Kingdom orelsewhere", was intended to address a perceived ambiguity concerning two differentimportation scenarios. It is apparent that "subsequent" was not introduced simply toreflect a desire for symmetry between cl 18(2)(a) and (b).[120] Given our view that mere importation without more cannot amount toinfringement of the distribution right,129 the phraseology of s 18(2)(b) was lessthan ideal. Nevertheless, the meaning of the provision in its entirety was clear.Bringing into the United Kingdom copies which had already been put into circulationelsewhere would not, in due course, culminate in infringement of the distribution right,whereas introducing to the United Kingdom market (ultimately by sale there) copieswhich had never previously been circulated would do so. The inclusion of"subsequent" was to emphasise that in the former scenario (but not the latter)circulation had already occurred.[121] That was clearly the intention of s 18(2) of the CDPA. In the absence of anycredible alternative, we do not consider that some different meaning should be placedon the near identical wording of s 9(1)(c) of the 1994 Act.129 At [53]–[55] above.[122] However the respondents suggested another rationale for s 9(1)(c), whichseemed to gain the Judge's endorsement:130[36] Mr Brown says s 9(1)(c) is not an impediment to the plaintiffs'construction. Its reference to "subsequent importation of those copies intoNew Zealand" refers to copies put into circulation in New Zealand by thecopyright owner (or licensee) which are exported and then subsequentlyimported, hence its language of subsequent importation.[44] Moreover, as Mr Brown observes, sometimes genuine copies of aNew Zealand-made product (protected by copyright) are exported, only tolater return to our domestic market. It follows s 9(1)(c) could well be directedat importation truly "subsequent" to first circulation of a genuine copy withinNew Zealand.[123] The precise ambit of this proposed exception was unclear. In the first passageabove, the Judge was referring to copies put into circulation by the copyright owneror licensee, namely non-infringing distribution. However in the second passagethe Judge referred to genuine copies, namely copies which did not infringe thereproduction right. The latter scenario would extend beyond authorised distributionand would encompass our example of the unauthorised disposal by a former copyrightowner of stock of musical works lawfully made.131[124] The alternative interpretation advanced by the respondents in this Court did notincorporate either of the Judge's qualifications. However their submissions made clearthat their alternative interpretation was coextensive with that advanced to and acceptedby the Judge.[125] ESR responded that the Judge overlooked the fact that, in the unusualcircumstances of someone putting into circulation in New Zealand genuine copieswhich were then exported from New Zealand and later reimported, s 9(1)(a) wouldalready provide a complete defence. ESR suggested that the fact that the Judge neededto resort to such a convoluted exception to justify the gloss added by the Judge servedto confirm ESR's argument that s 9(1)(c) is clear in its terms and has a very specificpurpose.130 High Court judgment, above n 2.131 See [74]–[76] above.[126] In addition we observe that confining the proposed exception to genuine copieswould represent a departure from the way the equivalent CDPA provision wasconstrued. It also would appear to be superfluous given the Judge's view on thetyranny proposition, being that only those importing and selling infringing (or pirated)goods were affected by his interpretation of s 9(1).132 Consequently, for a number ofreasons the respondents' interpretation of s 9(1)(c) does not commend itself as a viablealternative interpretation to the meaning adopted in the United Kingdom.Conclusion[127] We conclude that the Judge erred in accepting the respondents' contention thatcirculation abroad of a copy of a work cannot qualify as circulation for the purposesof s 9(1).The consequences of our interpretation[128] The Judge considered that, whether ESR was liable to account as a primaryinfringer for the net profit of $221,134.50 (or only as a secondary infringer for$9,316.50), turned on "how first circulation operates" under s 9(1).133 He explained:[11] If the provision confines first circulation to New Zealand by orwith the consent of the copyright owner, ESR is liable for the obvious reasonit put into circulation, here, the furniture in contravention of the plaintiffs'right. But, if first circulation in s 9(1) extends to anywhere in the world,irrespective of consent, ESR is not liable: the furniture was earlier availablefor purchase by others in Vietnam, and it is immaterial it was copiedwithout the plaintiffs' consent.(Footnote omitted.)In a footnote the Judge recorded that Mr Brown had accepted as much in response toa question from the Judge at the beginning of the hearing.134[129] Because he accepted the respondents' contention on that issue, the Judge foundESR liable for primary infringement of s 31.135 However we have reached the oppositeconclusion on both the issues of consent and territoriality. It follows from the Judge's132 High Court judgment, above n 2, at [57]. See [51] above.133 At [11].134 At [11], n 7.135 At [66].analysis above that the conduct of ESR in selling the furniture which it had importedwas not a contravention of s 31.Does the act of exporting or otherwise dispatching infringing copies toNew Zealand constitute "previously [putting] into circulation" in New Zealand?[130] ESR advanced this as a fall-back proposition in the event that the Courtrejected its contention that the relevant first act of putting the furniture into circulationoccurred in Vietnam. The principle ESR espoused is that an offshore entity that sendsinfringing products to another country can be an issuer of copies to the public in thatcountry even if they operated only within an external territory.[131] Applying that principle to the facts of this case, ESR argued thatMorrow Marketing (the Vietnam-based wholesaler from which ESR purchased thefurniture) would be the issuer who put the furniture into circulation in New Zealandby reason of its conduct in dispatching the furniture to New Zealand. The respondents'rejoinder was that ESR's proposition would involve the Court creating anextraterritorial exception from the restricted act of issuing copies to the public.[132] The Judge proceeded on the basis that the furniture imported by ESR hadearlier been available for purchase by others in Vietnam.136 Consequently we viewthis contention as a hypothetical question and address it only briefly.[133] In our view the act of exporting product from a country to New Zealand couldnot of itself amount to issuing the product to the public in New Zealand. For issuingto occur it would be necessary for the product to be received in New Zealand and thento be made available for distribution to the public here. We do not consider that thestaged process of export, import and subsequent distribution can be conflated into asingle course of conduct so as to treat the exporter as the dealer at the top of thedistribution chain137 and thereby confer on the exporter the identity of issuer for thepurposes of s 31.[134] Consequently the answer to the fourth issue is in the negative.136 At [2].137 See [39] above.Result[135] The appeal is allowed.[136] The respondents must pay the appellant costs for a standard appeal on a band Abasis and usual disbursements. We certify for second counsel.Solicitors:AJ Pietras & Co, Lower Hutt for AppellantJames & Wells Solicitors, Auckland for Respondents