High court weighs discounters’ tactics

Associated Press / November 9, 2010

E-mail this article

Invalid E-mail address
Invalid E-mail address

Sending your article

Your article has been sent.

Text size +

WASHINGTON — The Supreme Court is weighing whether Costco and other discounters can offer cut-rate goods from foreign manufacturers without violating US copyright laws.

The justices heard arguments yesterday in a dispute between Costco and the Swiss watch maker Omega over a line of watches Costco sold for a third less than they cost elsewhere.

The case has important implications for discount sellers like Costco, Target, eBay, and Amazon, which are part of an estimated $58 billion annual market for goods that are purchased abroad, imported, and resold without manufacturers’ permission. The US-based sellers and consumers benefit from the common practice of manufacturers to price items more cheaply abroad than in the United States.

The software, book, music, and movie industries say a ruling for Costco could threaten their control over copyrighted works. Libraries worry that a decision in favor of Omega could force them to withdraw foreign-made books from circulation.

Omega sued Costco, alleging copyright infringement, after the wholesale membership club offered Omega’s Seamaster watch for $1,299. The suggested retail price was $1,995.

A decision is expected in early 2111.