CD WOW! agreed in 2004 to stop selling CDs in
the UK which were imported from south east Asia. Though the CDs
were genuine, their sale in a market for which they were not
intended broke trade mark laws. The practice is known as 'parallel
importing'.
CD WOW! shareholder Philip Robinson's lawyers
admitted in court that the company had breached the undertakings it
made to the High Court in 2004 and said that it would pay £50,000
in costs to BPI but believed that it was not liable for fines or
damages.
The BPI said in court that it had made test
purchases of albums from CD WOW! and found that discs such as
Robbie Williams' Greatest Hits and the Live Aid DVD were being
despatched from Hong Kong.
"We believe CD WOW! is guilty of flagrant and
systematic breaches of a High Court order," said Roz Groome, BPI's
general counsel. "The penalties for such breaches can be
significant."
Richard Spearman QC, representing the record
companies, said in court that the company had long worried the
record companies.
"The CD WOW! business has at all material
times been a very substantial concern," he said. "As at 2002 it was
supplying some 10,000 units per day to the UK market."
The BPI says that CD WOW! sold £21.7 million
worth of music in the UK in 2005, and that it is the third biggest
online music retailer with 23% market share.
The BPI sought a court order that CD WOW! is
in contempt of court and a fine, as well as damages for breach of
copyright to record labels and the full cost of the BPI case.
The case rests on the licences involved in the
Hong Kong-sourced CDs and DVDs. The licences permit the sale of
those discs only in the Hong Kong market. The UK arms of the record
labels hold exclusive licences for sale of the material in the UK
and claim that the Asian discs breach their copyright.
The judge in the case has reserved judgment to
a later date.
