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.