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U.S. Supreme Court

Justices See Outsourcing Implications in Omega Copyright Case

Posted Nov 9, 2010 11:09 AM CDT
By Debra Cassens Weiss

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A bargain Omega watch sold by Costco has spurred a Supreme Court case that could have outsourcing implications.

Costco was able to sell an Omega watch for $1,299, despite a suggested retail price of $1,995, because it bought the watches overseas where they were sold more cheaply, Bloomberg News reports. Omega, in an argument supported by the U.S. government, claims copyright infringement.

At issue in the case is whether copyright owners can assert rights over imported goods that are manufactured abroad and sold through overseas distributors.

Costco is asking the court to extend a 1998 decision that said copyright owners can’t prevent the resale of goods after they are manufactured in the United States and then sold abroad. Costco says the decision should also apply when goods are made abroad. The case turns on an interpretation of the first-sale doctrine, which holds that copyright holders can’t stop the resales of their products.

Some justices expressed concern that a ruling for Omega would favor outsourcing, according to Bloomberg and Courthouse News Service.

"What earthly sense would it make to prefer goods that are manufactured abroad over those manufactured in the United States?" asked Justice Ruth Bader Ginsburg.

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