SCOTUS Deadlocks on First-Sale Doctrine Case

The U.S. Supreme Court issued a split decision on Costco v. Omega, a case dealing with first sale doctrine. The court divided 4-4. The case had to do with watches bought overseas and sold at Costco discounts in the United States. The split denies a change in a lower court decision upholding the rights of the Swiss watch manufacturer, Omega.

According to Scotus blog, a different outcome might have been possible if the newest justice, Justice Elena Kagan, didn't recuse herself from the case. Kagan has recused herself from about half of the cases being heard during this term.

Costco argued in its appeal that the Ninth Circuit decision allows copyright owners who make products outside the U.S. to gain added legal weapons against those who buy goods overseas.

More from SCOTUS Blog:

At issue is the so-called “first sale doctrine.” Federal law provides that, if a copy of a protected work is made or purchased legally, that copy can be sold without the consent of the owner of the copyright. Once the owner of a protected work has sold a copy of it to someone else, that other person may sell it without permission of the owner of the copyright.

Under other provisions of copyright law, importing a copy of a protected work amounts to an infringement of the copyright if the copy was made abroad and brought back into the U.S. without permission. The first-sale doctrine is an exception to that provision. The Ninth Circuit, however, ruled that the doctrine applies only to copies made legally and sold inside the U.S.

Some good examples of how first-sale doctrine applies to software and DVDs can be found here.