Use of Copyright Law to Fight the Import of Gray Market Goods Goes to US Supreme Court

Gray market products are genuine goods sold by U.S. retailers outside official distribution channels to exploit worldwide price differences.  What happens is that brand label items are manufactured abroad, sold abroad cheaply by the manufacturer, and then imported into the United States and sold at prices below those suggested by the retailer or offered by the retailer at its own stores.  This is how Costco can sell Movado watches for so much less than you can buy them at a Movado store or through some other retailer who got the watch through Movado's US distributors. 

Courts ruled long ago that copyright law could not be used to protect goods manufactured in the US, sold abroad and reimported to the US outside normal distribution channels.  This is because of the "first-sale doctrine" which says that copyright holders can only profit from the original sale of a product.  Now the question is whether the first-sale doctrine applies to goods manufactured outside the US.  The Ninth Circuit has held that it does not. The Supreme Court has granted certiorari on the issue.  The bottom line is that this case pits manufacturers of brand label goods against consumer advocates and discount retailers.  In other words, it may be time to go to Costco and load up.