U.S. Supreme Court

Supreme Court Split Leaves Intact Ruling Against Costco in Copyright Dispute

The U.S. Supreme Court has split 4-4 in a copyright battle between Costco Wholesale Corp. and Swiss watchmaker Omega, leaving intact a federal appeals court ruling in favor of Omega.

The vote is the first 4-4 split in 20 cases heard by the court without the participation of Justice Elena Kagan, according to the Associated Press. The 9th U.S. Circuit Court of Appeals had found that Costco violated Omega’s copyright by purchasing watches without the watchmaker’s permission that had been manufactured abroad and sold through overseas distributors. Reuters and SCOTUSblog also have stories on the split decision.

Costco was able to sell an Omega watch for $1,299, despite a suggested retail price of $1,995, because it bought the watches at a discount overseas.

The case turned on the Copyright Act’s “first sale” doctrine, which holds that copyright holders can’t stop the resales of their products. A 1998 Supreme Court decision held that the doctrine applies to imported goods, so that copyright holders cannot prevent their resale. But ruling in the Costco case, the 9th Circuit said the 1998 decision applies only to goods made in the United States, not to goods made overseas.

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