High Court to view Costco sale of Swiss watches
WASHINGTON - The U.S. Supreme Court is weighing whether Costco Wholesale Corp. and other discount sellers can offer cut-rate goods from foreign manufacturers without violating U.S. copyright laws.
WASHINGTON - The U.S. Supreme Court is weighing whether Costco Wholesale Corp. and other discount sellers can offer cut-rate goods from foreign manufacturers without violating U.S. copyright laws.
The justices heard arguments Monday in a dispute between Costco and Swiss watch maker Omega over a line of watches that Costco sold for a third less than they cost elsewhere. The court is debating whether Omega can use a copyrighted logo on its watches as a basis to block Costco from selling them in U.S. stores.
The software, book, music, and movie industries say a broad ruling for Costco could threaten their ability to retain control over copyrighted works. By contrast, public and university libraries worry that a decision in favor of Omega could force them to withdraw foreign-made books from circulation.
Omega sued Costco for copyright infringement after the wholesale membership club offered Omega's Seamaster watch for $1,299. The suggested retail price was $1,995.
Costco purchased the watches from a company in New York. Omega initially sold at least some of the watches to an authorized distributor in Paraguay.
The case has important implications for discount retailers such as Costco and Target as well as eBay, Amazon and other companies. Together, they form a market with an estimated $58 billion in annual sales of goods that are purchased abroad, then imported to the United States and resold here without the permission of the manufacturer.
The high court already ruled in 1998 that copyright protections do not apply when the goods are made in the U.S., sold abroad and then reimported. This case concerns only foreign-made items. Costco is asking the court to extend the 1998 ruling that limited the ability of manufacturers to block the importation into the U.S. of goods originally sold overseas. A decision is expected by spring.
