IP News

On May 18, 2009, Costco Wholesale Corporation petitioned the U.S. Supreme Court for a writ of certiorari to the U.S. Court of Appeals for the Ninth Circuit in the case of Costco Wholesale Corp. v. Omega, S.A. On Oct. 5, the Supreme Court invited the Solicitor General to file a brief expressing the views of the United States, perhaps indicating that the Supreme Court intends to grant the writ.

In May 2004, Omega filed suit against Costco alleging that Costco's acquisition and sale of certain Omega watches constituted copyright infringement. The accused Omega watches had been sold by Omega to authorized foreign distributors in Egypt and Paraguay. Costco then purchased the accused watches from the foreign distributors and resold them in the United States for far less than Omega's suggested retail price or the price offered by U.S. Omega retailers. Costco argued that it was not liable for copyright infringement under the first-sale doctrine. The district court granted summary judgment in favor of Costco, but the Ninth Circuit reversed, holding that the first-sale doctrine did not apply. The Ninth Circuit held that the first sale doctrine only protects copies legally made and sold in the United States ' not those made overseas. The Ninth Circuit distinguished the Supreme Court's precedent in Quality King v. Distribs., Inc. v. L'Anza Research Int'l, Inc., 523 U.S. 135, 138 (1998), since in that case (where the first-sale doctrine was held to apply) the copies were domestically manufactured before being exported and then imported again.