Thoughts on Cert in Omega v. Costco

The recent decision by the Supreme Court to hear the case of Omega S.A. v. Costco Wholesale Corporation has raised some eyebrows in legal and library circles. At issue is the legality of “gray market” imports; goods that are manufactured outside the United States for foreign sale, often at a lower cost, that find their way back to the U.S. for sale at discount rates. Many observers had long thought that doing this with copyrighted goods was illegal, but the Court's decision to hear the case calls that into question.

The implications for libraries are uncertain, but could be severe. In order to lend books, libraries rely on two theories that arise out of copyright law. The first is fair use: a library has the right to lend books because of the type of institution they are and the character of their mission. The second theory that libraries use to lend books is the “first sale doctrine,” which states that copyright rights are limited after a good is first sold. Since some books in a library collection may be gray market books, and the origin of books can be hard to ascertain, a decision in this case could cause a good deal of uncertainty.

While it seems unlikely that the Supreme Court will so destabilize the law as we know it, their decision to hear this case is certainly interesting. However, given the closed nature of the Court's decision making process, observers will have to wait until the case is argued to get a sense of what they are thinking.