Costco v. Omega: 4-4 Decision Upholds Lower Court Ruling

December 17th, 2010 · 3 Comments

Well, the case of Costco v. Omega has ended unfavorably for Costco, but also could cause a problem for other retailers and even individuals that sell goods in the US that have been manufactured abroad.  The Omega suit revolved around copyright issues: since they are US copyright holders of the Omega Globe Design symbol that is engraved on the watches when they are manufactured, their claim was that Costco was infringing on their copyright by selling the watches.  However, Costco felt that the first sale doctrine should apply, since the goods were bought outside the US by another party and imported to the US where they were then sold to Costco.

I posted about the suit earlier this year after the U.S. Court of Appeals for the 9th Circuit Court (Costco Wholesale Corp. v. Omega, S.A., 08-1423) had ruled in favor of Omega and Costco had appealed to the Supreme Court to review the case.  The Supreme Court heard the case this week and handed down a 4-4 decision, which serves to uphold the earlier ruling by the 9th Circuit Court.  Justice Elena Kagan did not participate since she had urged the court to deny review when she was solicitor general.

“There are many basic consumer issues at stake, and having the Court uphold the lower ruling on a tie vote leaves many of those issues up in the air,” said Sherwin Siy, deputy legal director for Public Knowledge, in a statement. “Because of this ruling, the critical ‘first sale’ doctrine in U.S. copyright law is severely limited for goods manufactured outside of the U.S. but sold here.  He added that “anyone, from a single person, to a giant corporation, which resells goods made abroad, could find themselves sued under copyright law unless they determine where a product was made and purchase the licensing rights.”

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3 Responses so far ↓

  1. 1 Jason Alexander // 2010.12.26 at 5:47 am

    Wow….. That just completely flies in the face of what I understood the First Sale Doctrine to be defined as. Apparently, at least half the Supreme Court agrees, so I don’t feel completely stupid, but that really stinks. I understand not letting Big Business (read: WALMART) get the upper hand, but this is a little much…..

  2. 2 Emily - Bentobloggy.com // 2010.12.18 at 8:59 pm

    Wow that irks me. Too bad Omega won this one.

    • 3 Kimberly // 2010.12.21 at 7:48 am

      @Emily – I agree, it makes me sad. I’m hoping that Costco tries to find another way to fight this though.

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