I think we all recognize that there is something wrong with this case. Unfortunately, given the questions the court had to answer, they ruled in the most sensible way they could.
I would say the f-ed up part is that copyright law is being applied to these watches. Personally, if I had been arguing Costco's case, I would not have tried to go the first sale route. Instead they should have argued that, by putting the copyrighted "design" on the backs of the watches, Omega had given an implied license to import the copyrighted design, because Omega attached it to an object whose primary purpose is in no way at all connected to any artistic value that the design might have. The real value of the "copy" of the copyrighted work is as a watch (which is something that normally doesn't qualify for copyright protection) not as a work of art or anything like that. Personally, I think that is what is wrong with this case. Unfortunately, this is not the approach Costco took. Since they didn't raise this issue, the court could not address it.
Yes, and that's precisely why this case had to go to court. You have competing interests between the need for copyright holders to have a remedy for dealing with unauthorized copies that someone may attempt to import, and the right of purchasers to do what they wish with copies they buy.
The court really had no option but to rule the way they did, because otherwise the first sale doctrine provides a trivial way to work around 602(a) -- making 602(a) practically meaningless. Since they are not allowed to rule in a way that makes a statute meaningless, they had to rule that first sale cannot trump 602(a).
There is no legitimate reason for this requirement
Again, the reason is because without this requirement, there would be nothing preventing unauthorized copies from legally entering the country. If some guy in China makes a whole bunch of unauthorized copies of Harry Potter, then he could import them into the US and wouldn't be infringing copyright. J.K. Rowling couldn't sue him (in the US) for making the illegal copies, because when he made them he was in China and therefore did not violate US law. She could try to sue him in China, but that's not really a viable option in general because it leaves US copyright holders at the mercy of Chinese copyright law. This law [section 602(a)] gives J.K. Rowling the ability to sue him in the US for copyright infringement (for importing the copies without authorization) even though the copies were made in China.
Because 17 USC 602(a) says that the importation of the copies infringed Omega's copyright. It's a plainly-worded statute. The only question is, and the one the court had to answer here, is can the first sale doctrine trump section 602(a). They said no, it can't.
So it sounds to me like the article is pretty accurate. The first sale doctrine doesn't apply to imported copyrighted goods.
The first sale doctrine may not apply to some imported goods. It depends on whether they were imported with or without the copyright holder's authorization and whether there was an authorized first sale in the US. If J.K Rowling authorized the importation of a Harry Potter book into the U.S. and I buy that book at a bookstore in New York, then a valid first sale has occurred even if the book was printed in England. I can lend that book to my friend and I won't be infringing J. K. Rowling's copyright.
There have been plenty of cases were imported goods have been legally found to be infringing.
That's true, but they were found infringing because they violate section 602(a) (import without authorization) not because they violate section 106 (making of unauthorized copies).
Let me see if I can simplify this for you. If Bob goes to Switzerland and copies a book that is copyrighted in the US, he hasn't violated US copyright law because US copyright law doesn't apply to people who are in Switzerland (BTW, I'm picking Switzerland randomly, not because they have special laws there). As far as the US is concerned, Bob didn't do anything illegal by copying the book while he was in Switzerland (although he probably did violate Swiss copyright law).
Now, if Bob wants to bring the copy he made back into the US, he needs to get the copyright owner's permission first. If he doesn't he will be violating US copyright law [section 602(a)]. In fact, the copyright owner's permission is required for importation whether Bob made the copy himself or not. Even if he bought it at a bookstore in Zurich and its a totally legit copy, he still technically needs the copyright owner's permission to import it (this may seem hard for some to believe but it's true and the wording of the statute couldn't be plainer).
All the court is saying here is that Bob may not use the first sale doctrine as a defense to say that his importation of the copy he made in Switzerland is not a violation of section 602(a). In fact, they say, you can *never* use the first sale doctrine as defense for a violation of section 602(a) -- even if the copy was made with the copyright holder's authorization. This is why Costco may not use the first sale doctrine in this instance. The copies are otherwise legit, but the importation still violates 602(a).
Again, the reason this is sensible is because there is no way to say, under US copyright law, that the copy of the book Bob made in Switzerland (or the watches Costco bought) is illegal. The copy itself isn't illegal because Bob didn't violate US copyright law when he made it. In other words the copy Bob made is as legal a copy as the copies sold in the Zurich bookstores as far as US copyright law is concerned.
If you are still skeptical, then you really need to just RTFO (like I did).
How is limiting US law to US territory "American arrogance"? I would think applying US law extra-territorially would qualify as "American arrogance".
The US cannot declare copies made outside the US as being either "legal" or "illegal", because that would necessarily mean applying US law outside of the country. If we cannot deem foreign made copies "legal", or "illegal", then how can we possibly judge the legitimacy of the first sales of said copies?
The legal definition of a "copy" under US copyright law is a "material object" in which a work is "fixed" (17 USC 101). The watch is the "material object" in which the copyrighted design is "fixed". The watch is therefore a "copy" of a copyrighted work.
If I correctly understand this ruling, the idea is that because the use of "bots" is not something covered by copyright and, is in fact, not even a copyright-related concept, then using a "bot" can therefore not be a copyright violation. At first, this might sound sensible.
However, the GPL conditions redistribution of modified versions on inclusion of source code. Inclusion or omission of "source code" is also not something covered by copyright. Indeed, "source code" is not even a copyright-related concept. So, following the 9th circuit's logic, would a judge rule that failing to distribute source code of a modified GPLed program would not be a copyright violation, but merely a breach of contract?
The problem here isn't with the courts, it's with the way this story is being reported in the media: all wrong.
At first, I too was like, "WTF? What the hell are these judges smoking?" So then I decided to actually *read* the 9th Circuit's opinion so that I could understand the reasoning that went behind this seemingly loony ruling. Turns out, it actually makes sense and what is being reported in the media is a woefully inadequate summary (with a sprinkling or over-aggrandized sensationalism to top it off).
What the ruling *really* says is that "first sales" made outside the United States don't qualify as "first sales" under US copyright law. In a nutshell, US copyright law can't criminalize the making of pirated copies in other countries, because that would be applying US law extra-territorially (i.e. its outside our jurisdiction). Therefore we have another part of copyright law (section 602(a) for you legal nerds) that says that all imports of copyrighted works have to be authorized by the copyright holder. The court ruled that the "first sale" doctrine cannot trump 602(a) where the "first sale" of the copy occurred outside the US, because to allow that would render 602(a) meaningless (anyone could work around the import restrictions simply by selling the stuff once outside the US before importing it). Judges are not allowed to interpret the law in a way that will make a statute meaningless. The sale of imported copies within the United States must be authorized by the copyright holder before they can attain "first sale" status. This is something that the media is misrepresenting. These stories make it sound as if it is flat-out illegal to resell copyrighted stuff that was made overseas. But that's simply not true. A "first sale" *does* occur when the first *authorized* sale is made inside the US. And after that, any resales are totally legit.
Why does this make sense? It makes sense because without it, the Chinese mafia could simply pirate anything they want, import it into the US and sell it here. Even if they got caught doing this, they could simply claim they are protected by the first sale doctrine and are therefore not infringing copyright. Wired, Techdirt, and just about every other media outlet reporting on this story need to do a better job of conveying the facts correctly.
The only truly wacky aspect of this case (IMHO) is that Omega is getting copyright protection for a watch -- something that doesn't seem to fit the definition of that which should be copyrightable. But, the court didn't rule on that aspect of the case here, presumably because Costco chose not to argue it.