High Time to Revisit the First Sale Doctrine: Omega S.A. v. Costco Wholesale Corporation

Screen Shot 2015-01-28 at 12.15.32 PMBy Chris Ferrell

Normally, James Bond is the fictional MI6 spy who subdues international chaos before it starts. However, James Bond has yet to stop the decade-long battle between Omega S.A. and Costco Wholesale Corporation. Neither side has backed down in their international fight to claim the title for the “first sale doctrine” of a watch made famous by Mr. Bond.

In 2003, Omega and Costco “discussed the possibility of Costco carrying Omega watches,” but an agreement was never met. A year later, Costco began purchasing Omega “Seamaster” watches on the “gray market” to sell in Costco warehouses in the United States. (Gray market goods, or parallel imports refer to genuine branded goods that are imported into a market and sold there without the consent of the owner of the trademark or copyright of the goods.) The Seamaster watches bore the “Omega Globe”—a copyrighted symbol—on their backs. When Omega caught wind of Costco’s actions, it sued Costco for copyright infringement, specifically the importation of copyrighted work without the copyright holder’s permission. Costco responded that its importation right was a subset of its distribution right, and that the first sale doctrine provided it with an exception to the distribution right. Continue reading