Omega S.A. v. Costco Wholesale

I. FACTUAL AND PROCEDURAL BACKGROUND

The facts are not disputed. Omega manufactures watches in Switzerland and sells them globally through a network of authorized distributors and retailers. Engraved on the under- side of the watches is a U.S.-copyrighted “Omega Globe Design.”

Costco obtained watches bearing the copyrighted design from the “gray market”1 in the following manner: Omega first sold the watches to authorized distributors overseas. Unidenti- fied third parties eventually purchased the watches and sold them to ENE Limited, a New York company, which in turn sold them to Costco. Costco then sold the watches to consum- ers in California. Although Omega authorized the initial for- eign sale of the watches, it did not authorize their importation into the United States or the sales made by Costco.

Omega filed a lawsuit alleging that Costco’s acquisition and sale of the watches constitute copyright infringement 1 “ ‘Gray-market’ goods, or ‘parallel imports,’ are genuine products pos- sessing a brand name protected by a trademark or copyright. They are typ- ically manufactured abroad, and purchased and imported into the United States by third parties, thereby bypassing the…