December 15, 2010 | By Rebecca Jeschke

Supreme Court Should Uphold the First Sale Doctrine

Today EFF joined with Public Knowledge and other groups to urge the Supreme Court to reject a bogus copyright theory, and uphold your right to resell or even give away the products you own — even if they were originally sold abroad.

The copyrighted work at issue is the small circular logo in the bottom of the back of the watch, seen here around 7 o’clock.
Omega Watch

At issue in Costco v. Omega is Costco's sale of genuine Omega watches at a discount from the regular U.S. price. Costco was able to provide this markdown by buying the Omega watches overseas, where they were available at a lower price. Omega sued Costco, claiming that the discount chain violated its copyright, as a small copyrighted image was stamped on the back of its watches. While the first sale doctrine normally allows lawful owners of copyrighted works to redistribute the works as they like, Omega argued that because the watches were not made in the United States, first sale did not apply.

Surprisingly, the U.S. Court of Appeals for the 9th Circuit agreed with Omega, ruling that the watchmaker could use a tiny little logo to control re-sale of its watches. In the amicus brief filed today, EFF and others point out that this is a misreading of the law that, if upheld, would threaten the traditional rights and expectations of consumers and businesses:

In an increasingly interconnected world, where the manufacturing of tangible products and knowledge goods can be distributed easily and widely, consumers should be confident that they retain the same rights to their belongings regardless of where those goods or their labeling were produced. The decision below provides a recipe for ensuring that all goods — consisting of copyrighted content or not — can no longer be lawfully resold, given away, or imported after a lawful sale abroad.

All kinds of products have some some bit or piece that could be copyrighted. But that is no reason to impose new restrictions on secondary markets for lawfully acquired products. We hope the Supreme Court realizes as much, and rejects the Ninth Circuit’s outrageous ruling.

UPDATE:

Disappointingly, the Supreme Court split 4-4 over the Costco v. Omega copyright first-sale question. (Justice Kagan recused herself based on her prior involvement in the case as solicitor general, so only 8 justices participated in the decision.) This means that the Ninth Circuit ruling in favor of Omega is affirmed, but in a limited sense—the decision is not binding on other circuits. Nevertheless, it's a frustrating result that leaves important questions about the first-sale doctrine unresolved.

Updated on December 15th, 2010


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