Open Access Senior Thesis
Bachelor of Arts
© 2011 Jacinth Sohi
In December of 2010, Costco v. Omega came down from the Supreme Court. The Switzerland-based watchmaker Omega sold Seamaster Collection watches, which were affixed with its copyrighted logo, in the United States as well as in foreign markets. Omega priced watches in the United States market higher than elsewhere. Costco obtained Omega’s watches from a third party that had purchased the watches abroad, then sold them at its membership warehouses for cheaper prices than authorized Omega dealers in the United States. Consequently, Omega sued Costco for copyright infringement. Costco pursued a defense based on the first sale doctrine in response. While from a legal perspective the case was a copyright dispute, this categorization does not make sense from an economic view. Rather, the application of economic models reveals that the core issue in Costco centers about price discrimination, not copyright. This thesis uses a law and economics framework to analyze the facts of and the decision in Costco to determine whether the outcome was welfare maximizing and to assess the implications that the case will have on copyright law in the future.
Sohi, Jacinth K., "The Cloak of Copyright: How Costco v. Omega Enabled Price Discrimination" (2011). CMC Senior Theses. 189.