In a parallel trade case involving Costco, a popular discount outlet, and Omega, the Swiss watchmaker, the US Department of Justice has come down against U.S. consumers, backing the Swiss companies use of copyright laws to block imports of watches sold at lower prices outside of the US, by Omega. A copy of the DOJ brief is available here. Costco filed a response, which is available here.
The DOJ brief is an opposition to a writ of certiorari, and does not address some issues, including the argument that the “copyright misuse” defense can be used to allow the imports. On one copyright listserve, the policy arguments by the DOJ were described as follows:
- Congress wanted market segmentation in copyrighted works.
- Incentive to outsource, while unforeseen, isn’t a justification for changing construction of the statute.
- The worst policy outcomes, while supported by the CoA’s reading, haven’t actually happened so CvO an inappropriate place to resolve them.
- We have to wait and see if the copyright misuse defense saves them — we take no position on the outcome, but think that’s the way to go.
Some commentary about the case follows: