By  on November 9, 2010

WASHINGTON — The Supreme Court on Monday heard arguments in the debate over the ability of discounters and off-price retailers to buy imported luxury products from middlemen and sell them at lower prices versus a foreign manufacturer’s right to control the distribution and resale of its products.

The high court heard an appeal by Costco Wholesale Corp., which is challenging the right of Omega SA, as a foreign manufacturer, to use copyright law to control the distribution and resale of the Swiss watchmakers’ imported products. The case centers on a provision under U.S. copyright law known as the “first-sale doctrine.” Under that doctrine, any individual or company that owns a copy of a product lawfully made under the statute can sell or dispose of the copy without the authority of the copyright owner. A manufacturer’s rights to distribution of a product ends upon the first authorized sale it makes.

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