Facing exhaustion

It’s hardly a catchy term, and discussion about it quickly becomes mired in impenetrable language, but the issue of “international rights exhaustion” should be at the top of industry priority lists right now. Should it become law, as is being mooted, it would bring about the biggest structural shift in UK publishing since the ending of the Net Book Agreement. 

As a result of Brexit, the government this week launched a consultation on the future of exhaustion in copyright law, putting four options on the table for its post-EU Intellectual Property regime. Should one of the four, international rights exhaustion, be chosen, UK publishers would no longer have any control over export editions of their books being brought into the UK for sale—and as in many countries export editions are priced much more cheaply than in the home market, that would mean a cut in publisher revenues, estimated by a recent Ernst & Young report at up to 25%. 

A trade alliance comprising the Publishers Association, Society of Authors, Association of Authors’ Agents and the Authors’ Licensing & Collecting Society has launched an effective “Save Our Books” campaign in response to mobilise support against this option by pointing out the serious unintended consequences should it be adopted, including hefty cuts to author revenues (export edition royalties are lower), and pressures on publishers leading to more limited range and diversity in the books that come out. 

Damage to high street retail is also posited as another consequence; one can see why, as there is only one retailer equipped to source large numbers of books from around the world and sell them via a global store. The prospect of Amazon empowered legally to sell English-language books intended for a local market in India or China to UK book-buyers at low, low prices should make booksellers wince, as well as publishers. 

The government has spoken a lot about the value of the creative industries to the UK economy, so you would hope that a step so obviously damaging to publishing revenues would be a very distant prospect. Yet the International Property Office’s consultation material mentions greater consumer choice and lower prices as a potential benefit of international rights exhaustion, while copyright is posited as both a protection to rights-holders’ investment but also sometimes a barrier to innovation. 

In the US, the principle of international rights exhaustion was brought in via the Kirstaeng v John Wiley court case in 2013, but the environment there is very different, with a huge domestic market to serve and less reliance on the export industry. For an export-led publishing industry with a relatively small domestic market, such as in the UK, the weakening of our existing copyright regime via international rights exhaustion would be a disastrous development. Now is the opportunity (the IPO consultation is open to 31st August) for the trade to make that clear.