Copyright in logos and exhaustion of rights under the first sale doctrine in grey markets

Abstract

Pheh Hoon Lim is a senior lecturer at the Auckland University of Technology in New Zealand, where she specialises in IP law, particularly copyright law and digital technology.With the internet's seamless distribution channels for cheaper grey goods, price arbitrage continues to be a lucrative business for parallel importers posing challenges for copyright owners. As trade mark law does not bar the marketing of genuine goods, right owners have resorted to the copyright route in alleging infringement of these non-counterfeit parallel imported goods. National copyright laws with importation bans have morphed intellectual property rights into trade protectionism to stifle competition in the same markets.This article focuses on cases revolving around copyright in logos to compare the courts' approaches in Australia and Canada, and the United States' position that hinges on the complicated interplay among three sections in 17 U.S.C § 602(a)(1), § 106(3) and § 109(a) relating to the importation prohibition, the exclusive distribution right and territorial exhaustion of owners' rights.Tension over the unsolved question on whether the defence should apply to goods manufactured and acquired lawfully from abroad saw an equally divided Supreme Court in Costco Wholesale Corp v Omega S.A. The outcome in Wiley v Kirtsaeng further demonstrates well the spectres legislation can create as outsourcing becomes even more attractive (and recognised by courts as untenable) and now overshadowed by yet another spectre that threatens the demise of the first sale doctrine.