The UK record industry yesterday scored a court victory against online retailer CD-Wow when the High Court in London ruled the etailer was in "substantial breach" of a 2004 agreement with regard to the sale of CDs sourced outside the EU.
As previously reported, oh yes, prior to 2004 CD-Wow's owners Music Trading Online frequently sourced CDs from non-EU distributors, allowing it to considerably undercut high street and rival online music sellers. However, UK copyright law does not allow the sale of CDs from non-EU sources without the permission of the content owner, and when the UK record label trade body the BPI began legal proceedings against CD-Wow to enforce that law, the online company pledged to only source music from EU sources from that point forward.
However, the BPI claims it has evidence of CD-Wow selling UK customers CDs sourced in Hong Kong. The etailer argued that incidents of CDs from such sources being sold to British customers were isolated and down to human error, but the UK courts this week did not accept that excuse. Mr Justice Evans-Lombe said he "unhesitatingly rejected" CD-Wow's defence, adding there was "strong evidence that CD-Wow was committing widespread breach of the undertakings" and that the company "had taken no effective steps to ensure compliance with the undertakings even after an application for contempt had been served".
The judge concluded that in "meeting the criminal burden of proof" the BPI's case had established "beyond reasonable doubt" that CD-Wow's actions were a "substantial breach of the court order" and that the retailer had "no tenable ground of defence to the claimant's claim for damages for primary infringement of the claimant's copyright".
Welcoming the ruling, BPI legal counsel Roz Groome told CMU: "This judgment confirms that CD-Wow have not only consistently flouted the law in their business practices, but have flagrantly ignored the undertakings that they themselves gave to the court that they would trade legally. The court has now given a clear message to CD-Wow - stop infringing copyright and pay for your past misdemeanours or face serious consequences. In addition, the Court has delivered a clear message to all companies engaged in importing music CDs and DVDs into the UK from outside Europe without consent - such conduct is clearly and unequivocally a breach of copyright. The BPI will be using this judgment to ensure that no other company unfairly undermines legitimate retailers in the UK that are trading successfully and respecting the law".
Needless to say, CD-Wow were critical of the judgment. Company founder Henrik Wesslen told reporters: "At a time when the record industry is losing vast revenue to piracy, it seems ludicrous that they can set out to destroy a section of the market that is actually making them money". He added that his company would now call for a "full review" of copyright law because the existing system "serves to line the pockets of the music industry at the expense of the consumer" - which, in a way, is true, though arguably that's the whole point of having copyright laws in the first place.