Having discovered that several of its watches, which were manufactured in Europe, were imported into the United States and sold without authorization, Omega, S.A. ("Omega") commenced an action against Costco Wholesale Corp. in 2005. These watches are a typical example of what are referred to either as parallel imports or gray market goods. In finding for Omega, the Ninth Circuit held that the first sale doctrine does not apply to goods created or produced outside the United States. Such a rule, however, poses grave problems for libraries, in that circulation materials are not required to have a place of manufacture designated. Thus, libraries will be forced to endure large transaction costs in discerning the place of manufacture for circulation materials, or lend the materials at the risk of copyright infringement litigation. This comment proposes that the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS") be amended by recognizing international exhaustion rights, which would preclude most forms of price discrimination across international markets for identical goods, and allow for safer legal waters in which libraries may lend to patrons.
Thomas J. Bacon, Caveat Bibliotheca: The First Sale Doctrine and the Future of Libraries after Omega v. Costco, 11 J. Marshall Rev. Intell. Prop. L. 414 (2011)