The U.S. Supreme Court has agreed to hear a case that pits the Swiss watchmaker Omega against Costco over the warehouse club's sales of the company's timepieces bought on the "gray market."
The case has made its way to the top court after a lower court sided with Omega in the dispute. The watchmaker asserted it could restrict Costco's sales of its products because its symbol appears on each item and the logo is protected under U.S. copyright law.
In the past, the Supreme Court has ruled that copyright protection does not apply to products made in the U.S. that are sold outside the country and later imported back for resale. What makes the current case different is that Omega manufactures its watches outside the U.S.
Costco, which bought the watches from distributors and sold them below prevailing market rates, has said that Omega is simply looking to use the copyright to control who sells its products and at what price,
Discussion Questions: Is the gray market a legitimate means for retailers to obtain goods from overseas for resale in the U.S.? What control, if any, should manufacturers have over the prices charged by retailers?