Costco Wholesale Corp. v. Omega

What’s at stake?
Consumer access to discount goods.

Issue:
Whether the “first-sale” doctrine, allowing a purchaser of a product to sell or give away that product without the permission of the copyright holder, applies to imported goods manufactured abroad.

Decision date:
December 13, 2010

Outcome:
4-4 tie. Justice Kagan recused. 

What the court held:
Costco purchased genuine Omega watches with an Omega symbol from a New York-based supplier that imported the watches from distributors in other countries. As part of its sales strategy, Costco sold the watches at a significantly discounted price. Omega sued Costco for infringing on Omega’s right to distribute its copyrighted logo.

Costco argued that the first-sale doctrine allows a purchaser of a copyrighted work to sell or give away that work without interference from the copyright owner. For example, when a person buys a book, that person does not require the permission of the author or publisher to re-sell the book to a used bookstore or give it away as a gift.

In a split 4-4 decision that automatically upholds the lower court’s judgment, the Supreme Court held that corporations can control any sale or distribution of goods manufactured outside of the United States even after the corporation sold the goods. The Court’s ruling in Omega’s favor means that consumers will have less access to discounted goods and may face lawsuits for re-selling or giving away personal property that they purchased lawfully.   

Learn more:

• Forbes.com: Costco v. Omega Tests Power Of A Logo
• Wall Street Journal Blog: Watch Out For the Omega Copyright Windup – A case about pricing timepieces could crimp library lending. 

Merit briefs:

• Brief for Petitioner Costco Wholesale Corp.
• Brief for Respondent Omega, S.A.
• Reply Brief for Petitioner Costco Wholesale Corp.

Amicus briefs:

• Brief for the Retail Industry Leaders Association, the National Association of Chain Drug Stores, Amazon.com, Inc., Gamestop Corp., Quality King Distributors, Inc., Sam's West, Inc., and Target Corporation in Support of Petitioner
• Brief for Public Citizen in Support of Petitioner
• Brief for the Entertainment Merchants Association, and the National Association of Recording Merchandisers in Support of Petitioner
• Brief for the American Library Association, the Association of College and Research Libraries, and the Association of Research Libraries in Support of Petitioner
• Brief for the Public Knowledge, American Association of Law Libraries, American Free Trade Association, the Electronic Frontier Foundation, Medical Library Association, and the Special Libraries Association in Support of Petitioner
• Brief for Ebay, Inc., Google, Inc., NetCoaltion, the Computer and Communications Industry Association, and the Internet Commerce Coalition in Support of Petitioner
• Brief for Intel Corporation in Support of Petitioner
• Brief for Intellectual Property Owners Association in Support of Respondent
• Brief for American Watch Association in Support of Respondent
• Brief for Business Software Alliance in Support of Respondent
• Brief for American Bar Association in Support of Respondent
• Brief for the United States in Support of Respondent
• Brief for the Fujifilm Corporation, Seiko Epson Corporation, Epson America, Inc. and Epson Portland, Inc., in Support of Respondent
• Brief for the Association of American Publishers in Support of Respondent
• Brief for Software & Information Industry (SIIA) in Support of Respondent
• Brief for the Motion Picture Association of America, Inc., and the Recording Industry Association of America in Support of Respondent
• Brief for the American Intellectual Property Law Association in Support of Neither Party