Solicitor General Tells Supreme Court That First Sale Shouldn't Apply To Foreign-Made Goods
from the unintended-consequences dept
Earlier this year, we discussed an interesting lawsuit that was being appealed to the Supreme Court between retailer Costco and Omega over copyright claims on some imported watches. Copyright on watches? You can read all the details at that link, but basically, Omega started stamping its watches with a tiny, meaningless, barely noticeable engraving, and then registered that with the copyright office. Omega then sold some cheap watches in Europe, while keeping the prices of its US watches much higher. Sensing an arbitrage opportunity, someone who legally bought the cheap Omega watches in Europe sold them to Costco to offer to US consumers. Now, all of this should be legit under basic common sense and any “first sale doctrine,” but not so fast. Omega claims the first sale doctrine only applies to goods made in the US… and while a district court sided with Costco, the 9th circuit appeals agreed with Omega. This could lead to seriously troubling outcomes — such as if you buy a painting made outside the US and import it to the US, you might not actually be allowed to sell it again!
Unfortunately, it looks like the White House’s Solicitor General is siding with Omega, recommending that the Supreme Court not take the case. That link has some more details on the case as well, including one tidbit I hadn’t noticed before: which is that part of the case hinges on the ProIP Act, which you may recall the entertainment industry pushed hard for a couple years back. Apparently, one of the little noticed sections of ProIP changed the rules on import and export of copyright goods, such that first sale no longer applies to foreign goods. If this interpretation stands, that’s incredibly troubling, and once again demonstrates the massive damage caused by entertainment industry lobbyists continuing to push through their own language into copyright law, and pretending it’s mostly innocuous changes.