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Copyright Misuse and Why It Matters

As a result of the relatively recent decision in Omega S.A. v. Costco Wholesale Corp. (E.D. Cal. Nov. 9. 2011), U.S. copyright law may not be the best bet for manufacturers hoping to stop parallel importers.

Copyright misuse is both a claim and a defense against a copyright owner trying to accomplish something contrary to public policy by intentionally expanding the exclusive rights provided under the U.S. Copyright Act.  In Omega, the watchmaker had relied upon its miniscule copyrighted design, engraved on the back of its watches, to prevent the unauthorized importation of those very same watches into the United States.  The District Court decided that Omega was guilty of  copyright misuse.  

Costco was granted summary judgement and was awarded nearly $397,000 in  attorneys’ fees.  Omega has appealed the lower court’s decision to the 9th Circuit and oral arguments are expected this summer.

If the Ninth Circuit affirms (and/or if other circuits agree)  that “copyright misuse” protects resellers of genuine goods from allegations of copyright infringement when the goods are not, in finished form, inherently copyrightable, then manufacturers of most useful articles (useful articles cannot be copyrighted in the United States) may need to rely on something other than U.S. copyright law to stop competitive parallel trade.

AFTA’s Website with Exclusive Industry Resource Center Officially Launched

Following is a copy of the Press Release distributed earlier today.  Please note the Special Offers valid until 4/1/13 and contact asap to confirm your eligibility.




The American Free Trade Association (AFTA) is pleased to announce its launch of a redesigned website at enhances AFTA’s ability to facilitate industry outreach and grass roots advocacy. also houses AFTA’s Proprietary, Industry Resource Center. The Resource Center offers AFTA Supporters exclusive access to a continuously updated collection of articles, information, media, and documents about the parallel, secondary, discount and/or wholesale marketplace.

Please take a look and let us know what you think…


  Special Offer for 2012 AFTA Supporters:

  • 1 month VIP access to the Resource Center

Special Offer for ORI Members:

  • 2 week VIP access to the Resource Center

Special Offer for 2013 AFTA Supporters:

  • 1 month extension to annual Resource Center subscription

All Special Offers expire on April 1, 2013.  Please contact for password and login information


Update onKirtsaeng

No news….

The Supreme Court has issued several opinions over the last few days, but nothing yet on Kirtsaeng v. Wiley.  The opinion is expected any time before the Court recesses in June and the full opinion will be available on this Blog as soon as it is posted.   In the meantime, if you would like to learn more about why the Kirtsaeng case is so important to AFTA and other ORI members click here to watch a special video:






Waiting on Kirtsaeng and Working with ORI

The Supreme Court has not yet published its opinion in the Wiley v. Kirtsaeng case and now stands adjourned until February 19, 2013.   The opinion is expected any time before the Court recesses in June.  This critically important case will determine whether U.S. consumers are free to purchase, without restriction, copyrighted products that may have been manufactured outside of the United States.

The facts of the case are relatively simple:  Supap Kirtsaeng, a college student living in the United States, had textbooks he needed for school sent to him from overseas.  When he no longer needed those books, he sold them on eBay.  The U.S. publisher/copyright owner, John Wiley & Sons, then sued Kirtsaeng for copyright infringement because Wiley & Sons had not authorized sale of the foreign-manufactured books in the United States.

Kirtsaeng defended his right to resell the used textooks on eBay relying upon Section 109(a) of the U.S. Copyright Act which is commonly referred to as the First Sale Doctrine.  The First Sale Doctrine provides that the rightful owner of a lawfully made product has the right to do whatever he/she wants to do with that product.

The lower courts in this case have held that the First Sale Doctrine only applies to products that are manufactured in the United States.  In connection with all other goods, the U.S. copyright owner must first give permission before even the lawful owner of the article is permitted to resell it, lend it or perhaps even give it away.

AFTA believes that the First Sale Doctrine applies to all lawfully purchased consumer goods that were manufactured anywhere in the world by or under authority of the U.S. copyright owner.  Moreover, AFTA continues to support the work of the Owners Rights Initiative ( , which is a diverse coalition of companies, individuals and associations, all of whom are concerned with the potentially devastating impact of a Supreme Court decision in favor of the publisher.

AFTA will immediately post notice of the Supreme Court decision as soon as it is published.  In the meantime, if you would like to learn more about why the Kirtsaeng case is so important to ORI members click here to watch a special video:


Preliminary Injunction Against Reseller Reversed

Preliminary Injunction Against Reseller Reversed

The 1st Circuit Court of Appeals in Swarovski v. Building 19 has reversed a Preliminary Injunction against a reseller of Swarovski crystal figurines that would have restricted its use of the Swarovski trademark to advertise sales of genuine Swarovski figurines.

Bldg 19 had advertised upcoming sales of genuine Swarovski figurines purchased from salvage and the “Swarovski” trademark was conspicuosly featured in those ads.  The figurines had been purchased without resale restriction, were undamaged, in original boxes, and included Certificates of Authenticity.

The District court had originally issued a preliminary injunction against the reseller limiting/resticting its use of the Swarovski trademarks in print ads.  The Court of Appeals reversed that decision and remanded the case back to the lower court for a more definite finding on likelihood of confusion and irreparable harm, both of which are required for injunctive relief.

A copy of the court opinion can be found in AFTA’s Resource Center at




Introduction of HR 22 – Foreign Counterfeit Merchandise Prevention Act

HR 22 – the Foreign Counterfeit Merchandise Prevention Act – was introduced on January 3, 2013 by Representative Ted Poe (R-TX) with 6 co-sponsors.  This is an amended version of last session’s controversial HR 4216, which was aggressively opposed by those concerned about the unnecessary and likely disclosure of proprietary supply chain information.

HR 22 would provide Customs & Border Protection (“CBP”) with additional authority to share proprietary and confidential supply chain information with unrelated rights holders, to the extent that such information is contained within both visible and invisible product codes and markings.  Providing rights holders with unredacted product samples potentially jeopardizes the integrity of trusted supply chains.  And, because skilled counterfeiters can easily duplicate any product marking, any such disclosure is — in addition to being anti-competitive—unlikely to expedite or facilitate CBP’s determination of product authenticity.

It is critical that CBP do everything possible to prevent entry of counterfeit merchandise which threatens or potentially threatens the health or welfare of American consumers.  However, it is equally important to protect the valuable trade secrets and proprietary supply chain information of lawful U.S. importers.  AFTA is committed to protecting against confusing, duplicative, unnecessary and conflicting rules and regulations impacting global trade in genuine branded consumer products, and is closely monitoring HR 22 which, in the guise of an anti-counterfeiting tool, has the much greater likelihood of decreasing product supply and escalating prices for genuine, brand name merchandise.

If you would like more information about HR 22, please contact AFTA directly at