The UK High Court has awarded the country's record industry more than £41 million in damages and interest against Hong Kong-based internet retailer CD WOW.
Music industry trade group BPI said that the damages are the largest it has ever been awarded and would serve as a "major deterrent to any would-be illegal importers".
The BPI launched legal action on behalf of UK record companies against CD WOW seven years ago, accusing it of importing CDs illegally into the UK.
Although the CDs were genuine, they had not been licensed for sale into the European Economic Area by the copyright owners.
Days before the case was due to be tried, CD WOW pledged to stop any further illegal imports. But the BPI claimed that the company later reneged on its undertaking and it reopened legal proceedings. In March this year the High Court found the importer in contempt of court and in breach of copyright.
At the time, Mr Justice Evans-Lombe 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 claimants claim for damages for primary infringement of the claimants copyright".
A damages inquiry was due to take place in July. Instead, however, the judge decided to assess the damages last week on the grounds that CD WOW had failed to co-operate with the court's orders for disclosure and payment of security.
"CD WOW is no consumer champion; it is a rogue trader that now has to face the consequences of its actions," said BPI chief executive Geoff Taylor.
BPI General Counsel Roz Groome said that the industry association would use the ruling to take "firm action" against other retailers that import illegally.
Paul Mitchell, a partner with Taylor Wessing, said the ruling would make it easier for copyright owners to sue similar websites in the UK.
He added: "What was really helpful was that the decision itself made it clear that the "issuing" [of the copyright infringing material] took place when the delivery to the buyer in the UK took place, even though the website was based in Hong Kong."
The BPI has already begun taking steps to enforce the damages award and has obtained a freezing order on the retailer's Hong Kong bank accounts and assets. But the trade association conceded that getting CD WOW to pay up could be a difficult task, given that the company's assets are located in a number of jurisdictions.
