Legal News

High court to look at Costco sale of Swiss watches

By (Breaking Legal News)

The Supreme Court is stepping into a legal fight over Omega's effort to stop Costco from offering the Swiss maker's watches for up to a third less than they cost elsewhere.

The case has important implications for discount sellers like Costco and Target as well as eBay, Amazon and other companies that form an estimated $58 billion annual market for goods that are purchased abroad, then imported and resold without the permission of the manufacturer.

The justices said Monday they will hear Costco's appeal of a lower court ruling that sided with Omega in its attempt to invoke U.S. copyright law to halt the discount sales. Omega owns a U.S. copyright on the Omega Globe Design symbol that is engraved on its watches at the time they are made.

The high court has previously ruled that copyright protections do not apply to goods made in the United States, sold abroad and then imported back into the country for resale. At issue in this case are items that are manufactured overseas, sold by their maker abroad and then brought back here for resale.

This means of purchase, importation and resale is sometimes called the secondary-goods or gray-goods market, and it is a big part of Costco's business.

Full post as published by Breaking Legal News on April 20, 2010 (boomark / email).