I don't care much for the sentence as written. As it stands, it sounds as if she read the film after reading the book.Originally Posted by LeeLoo
The best, and most formal, would be to use the past perfect:
"I spoke to my sister-in-law, and she said that she hadn't read the book before she saw the film."
The past perfect puts the reading before the seeing.
However, this is less necessary because of the timing clue provided by the conjunctive adverb "before". It also places the reading before the seeing. So, many would accept the simple past tense there.