Copyright - Omega Case

I. Discuss the policy reasons for the Omega holding.

The Ninth Circuit holding in Omega seems awkward and misguided because of its haphazard departure from the fundamental property principle that one has the right to alienate property. Although U.S. copyright grants an author a monopoly in an artistic work, the right is limited, among other restrictions of the Copyright Act, by the first sale doctrine, as codified in §106. The Ninth Circuit holding reflects a pro business/ pro price discrimination philosophy.
It is difficult to hypothesize about the court’s policy motivations in holding that Omega did not exhaust its downstream rights when it sold its products to authorized international dealers. One explanation may relate to the expanding international market for parallel goods and the rampant copyright violation enabled by evolving technologies, including the Internet. The court may have been signaling 1.) A desire to restrain the market behavior and 2.) Sympathy with businesses who face distribution control issues as a result of the market/copyright dynamics.
However, the Omega holding is misguided because the Ninth Circuit essentially condoned the use of copyright law to limit international competition. Companies, who manufacture and distribute goods internationally, are now able to manipulate prices and prevent gray market sales. Companies have been given an invincible monopoly that survives downstream sales. Naturally, companies want to maximize profits. However, the court’s objective should be not to protect pricing discrimination, but rather, it should be to apply a policy that supports the primary purpose of copyright: to create more artistic works.
In essence, the Ninth Circuit decision amounted to a restriction on the alienability of tangible products that are otherwise lawfully bought and sold, simply because the product included a copyrighted symbol.

II. Analyze the prediction of how SCOTUS will rule in light of its previous holding in...