Yesterday morning, the United States Supreme Court heard oral arguments (transcript here) in the case of Costco Wholesale Corporation v. Omega, S.A., a copyright dispute that Public Knowledge has had its eye on for some time (see our brief in the case and the accompanying blog post). The legal question at the heart of the argument is a seemingly esoteric question of statutory interpretation: namely, what the phrase "lawfully made under this title" means in the context of title 17, section 109 of the U.S. Code. In plain English, the question is whether copyright law's "first sale" doctrine--which is what permits you to give a video game as a birthday present, your local public library to lend out books, and the Redbox machine at the grocery store to rent out movies--applies to items manufactured outside of the United States.
Without the first sale doctrine, those acts of giving, lending, and renting copyrighted works would infringe upon the copyright holder's exclusive right of distribution. First sale essentially says that once the copyright holder has sold a particular copy of a copyrighted work, it doesn't get to control what happens to that copy further down the line. The facts behind this particular lawsuit, where Costco is being sued for reselling wristwatches without authorization, show that copyright law is being applied in situations far removed from the creative pursuits it's traditionally been associated with. As a result, however the Supreme Court decides, the potential ramifications will be quite far-reaching.