Major record labels gang up and screw over indie record store

A small indie record store owner in Ottawa, Canada, has plead guilty to a charge of copyright infringement for importing rare CDs from abroad. Apparently, these discs (which are themselves licensed, as far as I can tell) aren't licensed for sale in Canada, and Canadian law (apparently) bans this kind of parallel importation.

But none of these CDs are actually available in Canada. And no one orders rare, expensive imports unless he's already got the artist's entire catalog. And, of course, the record labels that went after this record store owner (whose whole purpose in life is to sell their CDs) are presently being sued for $60 billion in copyright damages for ripping off artists, and have admitted to $50 million in liability already.

"I can't believe I'm standing here right now," Nolan said outside court. "I've never bought a pirated item in my life."

Prosecutor Rob Zsigo said in an agreed statement of facts that the Canadian Recording Industry Association (CRIA), acting as experts for the RCMP, concluded that 294 discs -- including live concerts, imports and CDs without UPC codes -- violated Canadian copyright law...

Nolan said the 100 CDs represent a tiny fraction of the hundreds of thousands of recordings in his collection and that the discs at issue are mostly imports.

An example is a recording of 1950s singer Gale Storm. Big labels don't press them but seniors still want to buy them so he orders them from import distributers [sic], Nolan said.

"I have to have the things the bigger chains don't have," Nolan said. "It's kept my business alive.

"I feel like the RCMP has robbed me."

CD seller pleads guilty to breaking copyright law


  1. That’s just sickening.

    Because someone coming in to find a rare pressing of some long-since deceased artist is clearly the enemy of all creative people trying to earn a living?

    The companies being “protected” by this law already made back their money when these discs were sold the first time! Now they must haunt every subsequent purchase as well? What next, asking people to keep their receipts handy to validate every entertainment purchase was made in an approved zone?

    I have a number of old classical recordings from the UK and Europe that have never been sold in the US but were imported, at a pretty healthy mark-up, by my local record shop. Better that those discs have stayed thousands of miles away from my local shop and my cash right?

    Anyone really surprised that the Music industry is a broken model?

    1. Hear, hear! Thank you for expressing my own thoughts so elegantly. No wonder people turn to piracy to get the things they want when the legal channels seem so ridiculous. Why can’t companies see that people will buy their products if they could access them easily and at a fair price? These companies could make so much more money and not waste it in the courtroom. I hope this record seller doesn’t lose his home!

  2. I used to live just down the street from Legend, and popped in frequently enough. The selection, service and prices make the name “Legend” a perfect fit. It’s in every way the record shop that we dreamed of visiting as kids, but whose chances were gradually eroded away to nothingness in the nineties.

    I’m appalled at what the CRIA and the RCMP have done here. I’ll be making a special visit to the shop to show my support, along with writing to the CRIA, my MP, and Charlie Angus.

  3. I worked at several independent record stores that brought in foreign copies of records on American labels that were unavailable in the states all the time. Back then, there were entire artists’ catalogs the majors in the states didn’t seem to think there was a market for: Bootsy Collins, Julie London, Graham Central Station, tons of classic Blue Note records, etc., that were available out of Japan or Germany. If they were available in the states, both we and our customers would gladly pay less for them. But they were not and we had a loyal following of collectors more than willing to pay for $30 for Japanese imports of CDs that should have been available at reissue prices.

    There was mention of “live CDs” and some “without bar codes.” Bootlegs are one thing. There are laws against that and the owner’s use of the word “pirated” is likely chosen carefully to address that. But I run an independent label and on our last CD, the manufacturer forgot to print the bar code on the cover. Some perfectly legit labels don’t use bar codes at all, though I imagine that’s not as common as it used to be.

    If the goal of the record companies is to shut down all the stores that sell their product, they’re doing a damn good job. Here in L.A., there are a precious few indie stores and the wonderful black hole of time and money called Amoeba Music. But Tower, Virgin, Blockbuster, Sam Goody and others are gone. That leaves people with the awful choice between Best Buy, Target and Wal Mart.

    Amoeba and others only thrive because they can sell used product. Were the recording industry ever to find a way to put a stop to it (and I have no doubt they have lawyers trying to figure out how to do just that,) there would be no brick & mortar shops to go to anymore. Maybe that’s the way the majors want it– to sell no physical product, only the “right” to play their artists’ music on select devices.

    It’s a shame the store owner had to plead guilty. But it’s absolutely outrageous they were sued for $60 billion.

  4. $60billion hey? so at, say $20 per CD that’s maybe 30, 000, 000, 000 CDs they’ve ripped off and sold!!!! you know what…I don’t think this shop is an ‘indie’ at all, they’re shifting a lot more units that the majors.

  5. The post was confusing. The $60 billion isn’t what this store owner was charged, it’s what the CRIA could be liable for in a completely unrelated case (just because the CRIA is being sued for copyright infringement doesn’t affect the validity of this person’s case, Cory).

    In fact, the CRIA wasn’t even suing him — this was a criminal charge brought on by the RCMP. The CRIA was acting as an expert on the subject; they offered an opinion on whether or not the CDs were infringing copyright.

    There are a few things going on here. The live albums may be bootlegs, in which case, it’s an infringement of copyright, and distributing something that infringes is also a crime. As for the rest, there are separate rights for distribution of both songs and albums and these apply to specific areas. It’s the same reason Canada doesn’t get Pandora or Hulu: the rights for distribution in Canada need to be licensed separately from those in the US. In fact, they are separate companies. And this isn’t just a Canadian thing: all companies have holding companies in different countries.

    Also, I agree with whoever said it above: the lack of UPCs doesn’t make something infringing. Batches are made from time to time that are accidentally missing UPC codes or other things. Collectors eat these up. It’s no surprise that albums without UPCs would be found at a collector’s shop.

    This guy almost certainly doesn’t have distribution rights for these albums within Canada, and whoever he bought it from in another country doesn’t have distribution rights outside of that country. So, whether he realized it or not, he was distributing without a license, which you can be charged for. I’m surprised this is a criminal matter (isn’t licensing a matter for civil contract law?), but then again, I am not a lawyer.

    By the way, before you bring out the pitch forks: the unlicensed material was seized and he will receive a discharge if he makes a $1,000 donation to a charity. The RCMP aren’t throwing the book at him.

    Still, this shows just how ridiculously complicated the licensing and copyright laws are. Separate license for distribution and copying of the album, the song, and the lyrics of that song, all with different expiry dates and rights owners. Seriously. It’s time this was regulated and simplified.

  6. I don’t blame the record companies. They are doing business.

    The true blame goes to the politicians who make laws like this that allow the record companies to file this type of suit.

    Boot the corrupt politicians, rewrite the laws, and the problem is solved.

  7. I believe the CRIA are actually being sued for $6 billion, not $60 Billion.
    The initial figure of $60 b was a multiplication error. this doesn’t make their actions any less evil.
    They are ripping off the artists they claim to support.
    They are ripping off their customers by selling defective DRMed products.
    Now, they are having the people who sell their product charged as criminals.

    When you purchase music legitimately, you are supporting these actions. Vote with your dollars. Refuse to support this corrupt organization.

  8. Parallel importation for resale isn’t legal in the US or Europe, either. Hong Kong doesn’t implement this particular consumer-screwing, so if you go to HMV there you have your choice of US, UK, or local product. (You can order Japanese as well, but they don’t stock much because it’s somewhat more expensive.)

  9. This is happening to ALL used CD outlets, we just aren’t seeing it because it is all done behind the curtain. Small mom and pop CD stores are all going out of business, not because of pirates, but because the record companies are all a holes.

  10. Thanks RevEng for that post. I wonder which charitable donation would be most appropriate? Does the EFF do anything in Canada?

  11. “Nolan will receive a conditional discharge if he makes a $1,000 charitable donation within three months.”

    I say he makes a $1,000 donation to a watchdog of some sort to prevent this sort of thing.

  12. yep probably they got him with live bootlegs and parallel imports. collectors pay good money for both and both are illegal and everybody knows it.

    not a big deal since we are probably talking very few copies but considering the 760.000$ paid for 24 downloaded songs he got away with nothing.

    the RIAA is against their best customers (yet again). people that pay a lot of money gladly for a badly printed live bootleg more than likely already own everything official, including stupid best ofs and merchandise.

    1. And the impact of sales of these incredibly esoteric CDs in a non-authorized market is zilch. If anything it helps spread word of the artist and popularizes the artist. If they are live bootlegs, that’s one thing. But the general impression I get these are the equivalent of Region 1 versus Region 2,3,4,5 versions of DVDs; international rights and permissions which we all know is a crazy and borderline asinine division.

      And anyone defending the judgement here needs to pull their collective heads out of their arses: If it wasn’t for imports, many artists would never have gotten deals in the U.S. to begin with. Case in point: The Clash’s first 1977 album was one of (perhaps still is?) the best selling import of all time. Technically speaking that fact in and of itself could be considered the greatest crime on Earth.

      Does that make any sense?

      Also, you know why Brit-pop bands were all over the place on MTV and such in the 1980s: Imports as well. Heck, technically speaking MTVs launch could be considered illegal since they took promo videos for songs and converted them into programming on a paid channel. Is anyone suing MTV and Viacom into a new dimension? Hell no! Quite the contrary.

      And back to albums, you also realize if it weren’t for the efforts of fans and labels in France and Japan preserving the history of jazz, American jazz fans would be up shit creek. Why? Because American labels didn’t give a rats ass back then!

      Sorry, I understand the right for a company to protect their product but this is clearly an abuse of the law and will destroy the life of a FAN and SALESMAN of esoteric material for what exactly? This guy is not getting rich; he’s making a living and advocating for artists who in-turn profit from the sales of this material.

      It makes no sense and cannot be justified.

  13. Oh I’m not so sure about this one. Anti parallel import rules are actually quite important to the upkeep of the local industry. Australia just fought tooth and nail to retain parallel import rules on books, so that the big chains wouldn’t have everything brought in from overseas, thus screwing every facet of book making in Australia. The CD industry went thru the same fight two decades or so ago and unfortunately lost, and many claim that the sudden rush of CDs made overseas was a contributor to the fall of Mushroom records and the greater decay of local music as an industry. If this guy was running a record store, surely he’d know parallel import laws, and that what he was doing was illegal. If not, ignorance has never been a defence against crime. I think Boing Boing is lumping this story on with the online piracy debate, when I think it’s a separate thing and not the grand evil they make it out to be. Were there no other ways he could have legally found these pressings, or applied for special permits if no local versions existed?

  14. The ABSOLUTELY SICKENING thing here is this: The record label pays many artists a lower royalty rate on foreign sales. Many labels then print albums overseas, and import them themselves, thereby paying a lower rate.

    Then they make it illegal for a third party to do what they do themselves. This industry needs to die painfully.

  15. Considering that this stuff is otherwise unavailable, it is pretty hard to take seriously any claim of “damages”.

  16. How do “parallel import” laws impact the doctrine of first sale? Hypothetical time: Say an individual living in England bought a CD there, then moved to Canada and sold it to a used record shop. Would the record shop be breaking the law to resell that CD? What about first sale? (Would the answer be the same for the US instead of Canada?)

    Distribution contracts can’t be enforced against people that aren’t signers on that contract.. but I’m not sure what is codified in law and how it applies in this instance.

    1. The problem with first sale laws is determining the origin of a CD that way is practically impossible.

      But the basically message being sent by rulings like this is: Go online and download the CD from some Russian site or some other questionable source where revenue is guaranteed to never the artist.

      That’s what drives me crazy about this particular report. Here is someone keeping CD SALES alive, and he’s punished.


    2. “Say an individual living in England bought a CD there, then moved to Canada and sold it to a used record shop. Would the record shop be breaking the law to resell that CD?”

      My understanding is yes. certainly it worked that way with a couple PSP games i bought in the UK. While there’s no region coding on games, the ratings system in the UK is different making the games unsalable in Canada. This was mainly the most obvious rule that got in the way. I strongly suspect there were others. Most of these laws are baffling, to say the least. I hope they make sense to someone.

  17. The future of music: all pirate, all criminal, all the time. Being a music fan will become synonymous with being a criminal.

  18. So… wait…

    These companies are actually expending a great deal of time and money to punish someone for purchasing and importing their records?


    Do they like money… or… not? I’m very confused. They’re trying to prevent their music from being sold?

  19. man, i spent my youth buying imports from ottawa indie record shops. when did that suddenly become illegal? either it was illegal all along but never ever enforced (in which case, why was it still on the books?) or it is a new law (in which case, why was no one told the law was changing?) feh.

  20. Sounds like they have officers going round all the small CD shops checking for copyright infringements.

    I wonder if they would go to the big stores and look for big selling compilations that have not had royalties paid the artists and confiscate them? But no, their advisers are the same companies who who have pirated the artists’ work and sell it illeglly.

  21. Does Canadian Copyright Law have a similar First Sale Doctrine? If so, then Legend should just claim all of their product was acquired used & is therefore legal for them to distribute and sell. Simple as that. Physical product music retailers would have the best Get Out of Copyright Infringement Jail Free Card if they just removed the shrink wrap from all of their media before they sold them. Digital (online) music retailers/distributors, on the other hand, aren’t so lucky.

  22. And to think that Canada is supposed to be a pirate friendly country, according to the US. You can’t even buy music legally now, because of the copyright. Sometimes (most of the time) it feels as if the entire goal of the recording industry was to make it impossible to listen to music. If the record is unavailable, there are two options: import it or download it. Since a legal download doesn’t exist, and importing is illegal… their answer is “don’t listen to that”. Looking after musicians, yeah, right.

  23. I think we need some clarification on what the contents of the “illegal” CDs actually are. From the article, this does not sound like a case of “parallel importation” or of the record shop selling bootlegs. This sounds a lot like the CDs in question are not in print in Canada. Apparently, that makes the sale of those CDs to the public illegal.

    Osno@35 has it spot on. The big record companies want the buying public to only have the choice of whatever crap “artist” the record company’s accountants have decided *might* become profitable. They want to control what we hear, what we can buy and what format that purchase is available in. They are attempting to criminalize any music fan with the tiniest modicum of taste.

  24. Just one more reason to illegally download anything anything released by the major labels. They’re doing all that they can to show us that they don’t deserve our money.

  25. Australia had this same problem with books and, to its credit, the Gov’t changed the law. Rather sensibly, I think.

    They didn’t do away with copyright. But what they did do, as I understand it, is make it so that a copyright owner can only enforce the rights if they make the items available. So you can’t stop stores importing from U.S., for example, if you don’t provide the item for sale.

  26. There’s a whole issue around alienating rights. It seems pretty clear that the acquisition of rights to a creative work has to carry a corresponding obligation of agency. If I buy the rights to your work, I have an agent relationship to you, and that means I must always act in your best interests. Clearly, preventing your creative works from being available is not acting in your best interests, so a record company that failed to make catalogue they owned available wouldn’t be able to act this way.

    On the other hand, it could be said that any making available a creative work not your own carries an implied agency. So if I file share, I am obligated to ensure that the artist benefits. The value can be negiotiated between artist and agents ie record company. If a record company contracts a low value to be paid to the artist on each sale they act as agents for, they are in effect making it less expensive for someone to fileshare that product. Their best protection against filesharing becomes paying the artist a decent amount.

    A record store would carry that obligation, meaning that they would have to remit a percentage of their sales to the artist or to some umbrella organization that would manage these revenues on behalf of artists.

    This would leave the record companies free to profit to whatever degree they were able to, by setting up beneficial contracts to act as agents for the artist. In the jurisdiction that the agreement covered, any copying of the work would carry the cost as agreed for that domain between the artist and the record company. These costs could be partly reciprocal: the artist would owe the agent a percentage of their revenue from sources not derived from sale by the contracted agent, allowing the agent to be insured against the artist end-running them.

    The same mechanism would cover resale of works, possibly prorated by the number of copies in existence. This would mean that creators of unique works, like visual artists would benefit from the increasing value of their works, but that the cost of reselling works of which there were many copies would approach zero. It would also discourage intermediaries, people or organizations that act as middle men in distributing product, since each transfer of product would carry the same costs. Copying for backup, use on other devices and so on would be exempt, since no new user is created.

    All of this comes about by agency arrangements, and rights and oh-so-manipulable royalties become irrelevant. This means that over time, we should prevent artists of any kind from selling rights to original works, in the same way that selling your land to a foreign sovereign power doesn’t imply that that land is then a part of the other country. We have the right to buy and sell land, which is our patrimony, to benefit from use of it and allow others to benefit from it, but not to alienate the underlying sovereignty of it. And culture is much like land: artists should be treated as custodians, not sellers of it, by prohibiting alienation of rights.

  27. This really makes me want to cry.

    It is just so mind-boggling the extent that these organizations go to stop “copyright infringement”. Makes me sick.

  28. It’s hard to know without seeing the discs, but it’s pretty common practice here in the states to pass off bootleg discs (usually live performances, but often demos and OOP albums as well) as “imports.”

  29. Ahh, a victimless crime…. actually wait, it’s a crime where everyone involved actually benefited.. not like the record companies lost any money on these transactions. Hell they could have made money on them if they carried them for the canadian market to begin with.
    Give the people what they want, and some A$$ will step all over them

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