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Ninth Circuit Affirms for Costco in Omega Case

By Barry Werbin

The final chapter has closed for Omega in its long-running battle against Costco over genuine imported "grey market" Omega watches that bore a tiny globe design on the rear. On Jan. 20, 2015, the Ninth Circuit affirmed the California District Court's finding of no copyright liability after the Supreme Court split 4-4 in 2010 over Costco's first sale doctrine defense. The 4-4 split had left in place the Ninth Circuit's prior 2008 decision holding that the first sale doctrine only applied to goods lawfully made and first sold in the U.S., not abroad. This left open Costco's rarely granted defense of copyright misuse, which was remanded. The District Court then found in favor of Costco on the misuse defense and awarded Costco legal fees, and Omega appealed. In the interim, in 2013 the Supreme Court decided the Kirtsaeng case, which made it clear that the first sale doctrine also applied to goods lawfully manufactured and first sold abroad.

The Ninth Circuit has now affirmed the District Court and its award of attorneys' fees to Costco based on the first sale doctrine under Kirtsaeng, although the District Court had granted Costco summary judgment on its copyright misuse defense. A concurring opinion would have instead affirmed the copyright misuse finding, which apparently was the only issue formally briefed by the parties. Decision here: Omega v. Costco 9th Cir. 2014.pdf.

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This page contains a single entry from the blog posted on January 21, 2015 1:09 PM.

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