The Supreme Court this week heard oral arguments in a copyright case that publishers say holds major implications for their businesses—even though the case doesn’t involve books. In Costco Wholesale Corporation v. Omega, S.A, the court will decide whether retail giant Costco can re-sell copyright-protected, foreign-made Omega wristwatches exclusively licensed for sale abroad in the U.S. market. But wristwatches aside, the copyright case holds larger implications for the publishing industry, as well as for libraries and booksellers, as it could also apply to the sale and importation of foreign-made editions.
The conflict began after Costco purchased Omega watches from third parties overseas which had legally acquired the watches from licensed Omega dealers. Costco then imported and sold the foreign-made watches in the U.S. at a steep discount, exploiting the foreign price differential. Omega watches, however, are subject to copyright, and after authorized Omega dealers in the U.S. complained about Costco’s price-cutting tactics, Omega sued to enjoin Costco from selling the foreign watches.
Costco countered that its importation and sale of the watches was protected by “the doctrine of first sale.” First sale generally limits copyright holders’ control to the initial sale, and gives consumers the right to re-sell physical property they have legally acquired without permission of the copyright holder. First sale is a cornerstone of the used book business, as well as libraries, allowing them to legally acquire and redistribute copies of books and other materials.
In 2005, a district court granted summary judgment to Costco, citing first sale. But in September, 2008, the U.S. Ninth Circuit Court of Appeals reversed, ruling that the term “lawfully made” in the statutory language meant that first sale applied only to goods that were made in the U.S., not to goods originating abroad. The Supreme Court is now considering whether the appeals court erred in limiting the doctrine of first sale to goods made in the U.S.
Continues at: Publishers, Libraries & Booksellers Await Supreme Court Decision in Key Copyright Case.
Related articles
- Supreme Court Hears Arguments in Costco Copyright Case (ipwatchdog.com)
- Omega vs. Costco: Consumers Will Pay If Gray-Market Goods Get Banned (dailyfinance.com)
- Why Publishers Care About The Costco v. Omega Supreme Court Case (paidcontent.org)
- Costco v. Omega: Supreme Court argument recap (descentintodarkness.wordpress.com)
- Costco argues before Supreme Court for ability to sell imported goods for less (seattletimes.nwsource.com)
- High Court Reviews Costco Sale of Swiss Watches (abcnews.go.com)
- Costco v. Omega Is About Much More Than Cheap Watches (blogs.forbes.com)
- Costco’s Swatch Sales Trigger High Court Import Clash (businessweek.com)
- High court reviews Costco sale of Swiss watches (sfgate.com)
