UK IP: BPI gets it right this time

Robert Langley, known as Mr Toad, is facing jail after being convicted yesterday of a sample five counts of producing and selling counterfeit music. Actually, what he sold did not directly harm either the bands concerned nor their record labels: he sold illicitly made recordings originating at concerts of major artists such as Led Zeppelin.

Led Zeppelin, it will be remembered, have not released any new material for more than a decade. Their record company has, however, released recycled (sometimes remastered) material fairly regularly.

But the fact is that Langley did make and sell copies of material in which third parties clearly have rights, and he profited therefrom without there being any benefit to the copyright holders. Langley has been remanded pending an investigation including a finding under Proceeds of Crime Act that he has benefited from his crime and therefore his assets are available for confiscation.

The situation is much less clear cut in the case that the BPI has run against record retailer CD WOW for the past seven years. We should declare an interest: when CD WOW first began its operations, at least some people here bought CDs from them. They were cheap, provided legitimate product, delivered faster than UK based operations - in one case delivering in just two days with product arriving the day before Christmas Eve. Their business model interested our sister publication - World Money Laundering Report, which showed that the orders were placed with a UK company, and paid for in the UK, but the UK company was owned by a company in an offshore jurisdiction and the product was in fact sourced and shipped from Hong Kong.

Now, we are very familiar with Hong Kong's CD pricing - for twenty years or so, Hong Kong was your editor's usual place to buy his own tapes and later CDs. Identical quality but prices of, in some cases, half UK prices was a powerful incentive.

But the BPI don't like this. They say that the arranging of parallel imports is unlawful under UK copyright law. The basis of their argument is that record companies license distribution within countries, and that the commercial importation of product from third countries is prohibited. The UK has had this argument before - over so called designer jeans. The BPI sought and got an undertaking before the High Court that CD WOW would cease parallel imports. Having given the undertaking CD WOW failed to police it properly and CDs for UK customers still came from Hong Kong. The BPI complained and CD WOW has been fined more than GBP40 million not for illegality but for breaching its undertaking and therefore being in contempt. CD WOW is appealing the order both in terms of size and in terms of principle: how can it, they argue, be just for the record industry to charge UK consumers multiples of the price charged for the same product elsewhere, especially where in many cases the additional profit is largely in the hands of retailers, not in the hands of the companies that BPI represents.

CD WOW's arguments have much moral merit. But the record, film and software industries have powerful friends and have much influence. The consumer is the loser - and ironically, so are the record companies and artists, for the end result is that the sale of illegal copies will continue to rise when CDs cost GBP15 in the high street, but just GBP2 from a stall selling illegal copies made in the Far East or Russia.

CD WOW points this out: the record companies and artists get an amount that they are satisfied with if product is sold in Hong Kong - or, incidentally, in the USA where prices are similar. The action in the UK is for the sole purpose of keeping UK prices artificially high. It's been a running battle for more than a decade.

But the chances of the UK consumer benefiting from globalisation of markets and from the use of technology (and, incidentally, working across time zones, hence the rapid delivery) are not high.

In truth, justice should not be a zero sum game - but the BPI and the Judge that found against CD WOW have seen it as such.