Trade body the British Phonographic Industry (BPI) took a case
against CD WOW! alleging that the company was engaged in parallel
importing. In March the company was found guilty of breaching
previously given undertakings to the court over its sale of CDs,
and the level of damages has just been set at £35 million plus
costs.
"We are outraged by the judgment. We will fight this all the way
to the European courts even if it takes another three years to win
justice," said Henrik Wesslen, co-founder of the business. "There
will be no let up on our part and CD WOW! will continue to trade
now and in the future. We make tiny margins on our goods and it is
the consumer who benefits not the big high street stores who rip
off their customers by adding massive margins."
The BPI welcomed the damages order and said that it had won a
freezing order on the Hong Kong bank accounts and assets of the
company.
"CD WOW! is no consumer champion; it is a rogue trader that now
has to face the consequences of its actions," said Geoff Taylor,
chief executive of the BPI. "The vibrancy of British music depends
on a fair return on the investments that allow British talent to
shine. This decision is an important step in ensuring that British
music has a bright future."
In March the High Court found that CD WOW! had infringed
copyright and had broken undertakings given to the court by its
sale of CDs that were not licensed for the UK market.
Many of the CDs the company sells are shipped from Hong Kong.
Record companies charge different prices for CDs in different
countries, and to protect those price differences they issue
copyright licences for the sale of CDs on a country-by-country
basis. To sell a CD licensed only for Hong Kong in the UK, for
example, infringes copyright.
The High Court heard that the BPI had made a number of test
purchases and had been sent CDs by CD WOW! that were not licensed
for sale in the UK. CD WOW! said that those were sent in error.
Judge Justice Evans-Lombe said that he "unhesitatingly rejected"
the claims that only human error was at fault. He said there was
"strong evidence that CD WOW! was committing widespread breach of
the undertakings ... when the contempt application was launched"
and that "CD WOW! had taken no effective steps to ensure compliance
with the undertakings even after an application for contempt had
been served".
CD WOW! said after this week's damages announcement that it does
abide by the laws but that it does not believe they are good
ones.
“The current copyright laws are mad, but that doesn’t mean we
don’t stick to them," said Wesslen. "We have always acted
transparently and where we have been pulled up on a small number of
unintentional instances we are big enough to hold our hands up. The
fact is though, it shouldn’t matter whether we are buying from an
official distributor in the UK, Europe or the Far East, what is
important is that we are buying legitimate products from the record
companies themselves. Isn’t it time we focussed on a combined
effort to stop the pirating that is hurting all of us?"
