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U.S. Supreme Court Deadlocks on 1st-Sale Doctrine Case

On Monday, the Supreme Court of the United States issued its affirmation (PDF) by deadlock on Costco Wholesale Corporation v. Omega, S.A., a court case about the application of the first-sale doctrine to imported goods. At least for domestic goods, the doctrine allows the purchaser of a copyrighted work to sell or give away the work without its creator's permission after the first transaction or sale is made. The Court of Appeals for the Ninth Circuit had decided (PDF) that the doctrine does not apply to imported goods, and thus a copyright holder can restrict the sale of imported goods. The Supreme Court affirmed this decision.

A lower district court had previously ruled in favor of Costco by virtue of the first-sale doctrine, but Ninth Circuit reversed the district court's decision after Omega appealed. The Ninth Circuit ruled that Costco did not have the right of the first-sale because the works in question — watches by Omega and displaying Omega's logo — had been made outside of the United States and had not originally been sold into the country with Omega's permission.

The Supreme Court's affirmation of the Ninth Circuit decision was split 4-4, with recently confirmed Justice Elena Kagan recused and thus not contributing a vote. As a result of the tie vote, the Supreme Court will not hear the case, and the previous decision made by the Ninth Circuit stands.

However, since the Supreme Court affirmed the Ninth Circuit's ruling by deadlock instead of actually hearing the case, no legal precedent has been made that is binding to future cases outside the Ninth Circuit (Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, Guam, Northern Mariana Islands).

While the original case involved watches, the Association of American Publishers issued a brief this past September in favor of upholding the Ninth Circuit ruling, and the association said that the ruling is an important one for all publishers. A decision on first-sale doctrine's application to imports could affect imported items into the United States, including Japanese manga and anime goods. The Berne Convention grants foreign copyrighted materials the same copyright recognition in the United States as American copyrighted materials. A U.S. District Court had ruled in 2008 that the first-sale doctrine did not apply to imported textbooks.

Thanks to PetrifiedJello for the news tip.