The US Supreme Court upheld a lower court decision in December that the Copyright Act could not be used to apply the first sale doctrine to goods manufactured overseas, after it declined to issue an opinion in Costco v Omega. The 4-4 split, with Justice Kagan recusing, affirmed a decision in a closely watched case involving a model of watches made in Switzerland, sold to an authorised foreign distributor, and imported to the US through an unauthorised sale. The ruling leaves several questions of international copyright exhaustion unanswered. "Nobody carried the day," said Jeanne Gills of Foley & Lardner. "We haven't seen the last of the issue." The ruling essentially grants foreign manufacturers greater control over pricing in the US and the grey market's distribution of their goods. This could present challenges for online retailers such as Amazon and eBay, known for providing luxury products, many from abroad, at discounted prices. "If you're a consumer or a discount retailer, it places a great burden on you," Gills said. "How do you find out where the goods came from?"Until the law is amended or the issue is clarified by the courts, manufacturers may try to avoid these issues through contract law and alternate marketing strategies.
