FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

OMEGA S.A.,  Nos. 07-55368

Plaintiff-Appellant, 07-56206

v.  D.C. No.

CV-04-05443-TJH COSTCO WHOLESALE CORPORATION,

Defendant-Appellee. OPINION 

Appeal from the United States District Court

for the Central District of California

Terry J. Hatter, District Judge, Presiding

Argued and Submitted

July 15, 2008—Pasadena, California

Filed September 3, 2008

Before: Barry G. Silverman, Johnnie B. Rawlinson, and

Milan D. Smith, Jr., Circuit Judges.

Opinion by Judge Milan D. Smith, Jr.

12107
COUNSEL

David S. Richman and Kenneth E. Johnson, Theodora

Oringher Miller & Richman, P.C., Los Angeles, California;

12110 OMEGA v. COSTCO
Barry R. Levy, Horvitz & Levy LLP, Encino, California, for

the plaintiff-appellant. 

Aaron J. Moss and Norman H. Levine, Greenberg Glusker

Fields Claman & Machtinger LLP, Los Angeles, California,

for the defendant-appellee. 

W. Stephen Cannon and Seth D. Greenstein, Constantine

Cannon LLP, Washington, D.C., for the amici curiae. 

OPINION

MILAN D. SMITH, JR., Circuit Judge: 

In this opinion, we address whether the Supreme Court’s

decision in Quality King Distributors, Inc. v. L’anza Research

International, Inc., 523 U.S. 135 (1998), requires us to overrule our precedents that allow a defendant in a copyright

infringement action to claim the “first sale doctrine” of 17

U.S.C. § 109(a) as a defense only where the disputed copies

of a copyrighted work were either made or previously sold in

the United States with the authority of the copyright owner.

Plaintiff-Appellant Omega, S.A. (Omega) filed claims for

infringing distribution and importation under 17 U.S.C.

§§ 106(3) and 602(a) in response to Defendant-Appellee

Costco Wholesale Corporation’s (Costco) unauthorized sale

of authentic, imported Omega watches bearing a design registered at the U.S. Copyright Office. The district court granted

summary judgment to Costco on the basis of the first sale

doctrine, and awarded attorney’s fees. We have jurisdiction

pursuant to 28 U.S.C. § 1291, and we reverse. 

This circuit has construed 17 U.S.C. § 109(a) to provide no

defense to an infringement action under §§ 106(3) and 602(a)

that involves (1) foreign-made, nonpiratical copies of a U.S.-

copyrighted work, (2) unless those same copies have already

OMEGA v. COSTCO 12111
been sold in the United States with the copyright owner’s

authority. We hold that the first portion of this construction is

not “clearly irreconcilable” with Quality King, and that it

remains the law of this circuit. See Miller v. Gammie, 335

F.3d 889, 900 (9th Cir. 2003) (en banc). Because there is no

genuine dispute that Omega made the copies of the Omega

Globe Design in Switzerland, and that Costco sold them in the

United States without Omega’s authority, the first sale doctrine is unavailable as a defense to Omega’s claims. 

I. FACTUAL AND PROCEDURAL BACKGROUND

The facts are not disputed. Omega manufactures watches in

Switzerland and sells them globally through a network of

authorized distributors and retailers. Engraved on the underside of the watches is a U.S.-copyrighted “Omega Globe

Design.” 

Costco obtained watches bearing the copyrighted design

from the “gray market”

1

 in the following manner: Omega first

sold the watches to authorized distributors overseas. Unidentified third parties eventually purchased the watches and sold

them to ENE Limited, a New York company, which in turn

sold them to Costco. Costco then sold the watches to consumers in California. Although Omega authorized the initial foreign sale of the watches, it did not authorize their importation

into the United States or the sales made by Costco. 

Omega filed a lawsuit alleging that Costco’s acquisition

and sale of the watches constitute copyright infringement

1

“ ‘Gray-market’ goods, or ‘parallel imports,’ are genuine products possessing a brand name protected by a trademark or copyright. They are typically manufactured abroad, and purchased and imported into the United

States by third parties, thereby bypassing the authorized U.S. distribution

channels.” Parfums Givenchy, Inc. v. Drug Emporium, Inc., 38 F.3d 477,

481 n.6 (9th Cir. 1994). Retailers are able to sell these products at a discount because the gray market arbitrages international discrepancies in

manufacturers’ pricing systems. 

12112 OMEGA v. COSTCO
under 17 U.S.C. §§ 106(3) and 602(a), and subsequently

moved for summary judgment. Costco filed a cross-motion on

the basis of 17 U.S.C. § 109(a), arguing that, under the first

sale doctrine, Omega’s initial foreign sale of the watches precludes claims of infringing distribution and importation in

connection with the subsequent, unauthorized sales. The district court ruled without explanation in favor of Costco on

both motions. The court also awarded $373,003.80 in attorney’s fees to Costco under 17 U.S.C. § 505. This appeal followed. 

II. STANDARD OF REVIEW

We review de novo a district court’s grant of summary

judgment under Federal Rule of Civil Procedure 56. Buono v.

Norton, 371 F.3d 543, 545 (9th Cir. 2004). Rule 56(c) provides that summary judgment is warranted when the “pleadings, the discovery and disclosure materials on file, and any

affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” We review a district court’s award of attorney’s

fees under 17 U.S.C. § 505 for an abuse of discretion. Columbia Pictures Television, Inc. v. Krypton Broad. of Birmingham, Inc., 259 F.3d 1186, 1197 (9th Cir. 2001). 

III. DISCUSSION

[1] The viability of Omega’s infringement claims hinges on

the relationship among three sections of the Copyright Act of

1976: 17 U.S.C. §§ 106(3), 109(a), and 602(a). In relevant

part, § 602(a) reads: 

Importation into the United States, without the

authority of the owner of copyright under this title,

of copies . . . of a work that have been acquired outside the United States is an infringement of the

OMEGA v. COSTCO 12113
exclusive right to distribute copies . . . under section

106, actionable under section 501.2

Section 106(3) states: 

Subject to sections 107 through 122, the owner of

copyright under this title has the exclusive rights . . .

to distribute copies . . . of the copyrighted work to

the public by sale or other transfer of ownership, or

by rental, lease, or lending. 

Finally, § 109(a) provides: 

Notwithstanding the provisions of section 106(3),

the owner of a particular copy . . . lawfully made

under this title, or any person authorized by such

owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy . . . . 

This last section codifies the so-called “first sale doctrine,”

which holds that “[o]nce [a] copyright owner consents to the

sale of particular copies of his work, he may not thereafter

exercise the distribution right with respect to those copies.” 2-

8 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 8.12(B)(1), at 8-156 (1978 ed.). 

[2] The text of the Copyright Act establishes by syllogism

that the first sale doctrine of § 109(a) limits § 602(a): First,

given that § 106(3) is “subject to sections 107 through 122”

and § 109 falls within the designated portion of the Code,

§ 109(a) limits the exclusive distribution right in § 106(3).

Second, infringing importation under § 602(a) is merely a

2Section 501(a) provides: “Anyone who violates any of the exclusive

rights of the copyright owner as provided by sections 106 through 122, . . .

or who imports copies . . . into the United States in violation of section

602, is an infringer of the copyright . . . .” 

12114 OMEGA v. COSTCO
subcategory of “infringement of the exclusive right to distribute copies . . . under section 106,” so conduct that does not

violate § 106(3) cannot constitute infringement under

§ 602(a). Finally, because conduct covered by § 109(a) does

not violate § 106(3), and because absent a violation of

§ 106(3) there cannot be infringement under § 602(a), conduct

covered by § 109(a) does not violate § 602(a). In short,

infringement does not occur under § 106(3) or § 602(a) where

“the owner of a particular copy . . . lawfully made under this

title” imports and sells that copy without the authority of the

copyright owner. 17 U.S.C. § 109(a);3see Quality King Distribs., Inc. v. L’anza Res. Int’l, Inc., 523 U.S. 135, 144-45

(1998) (adopting this interpretation). 

[3] Omega concedes that § 109(a) generally limits

§§ 106(3) and 602(a), but contends that § 109(a) does not

apply in this case. Specifically, Omega argues that § 109(a)

provides no defense to the infringement claims because,

although the Omega Globe Design was copyrighted in the

United States, the watches bearing the design were manufactured and first sold overseas. Omega claims that the copies of

the design were not “lawfully made under [Title 17]” in these

circumstances. 17 U.S.C. § 109(a). Costco responds that

although Omega’s position is correct under BMG Music v.

Perez, 952 F.2d 318 (9th Cir. 1991), Parfums Givenchy, Inc.

v. Drug Emporium, Inc., 38 F.3d 477 (9th Cir. 1994), and

Denbicare U.S.A. Inc. v. Toys “R” Us, Inc., 84 F.3d 1143 (9th

Cir. 1996), the Supreme Court effectively overruled those

cases in Quality King, 523 U.S. 135. For the reasons set forth

below, we hold that Quality King did not invalidate our general rule that § 109(a) can provide a defense against §§ 106(3)

and 602(a) claims only insofar as the claims involve domestically made copies of U.S.-copyrighted works. Because we

3Other parts of § 109 qualify the first sale doctrine of § 109(a), see generally 17 U.S.C. § 109, but the parties do not argue that any of those limiting provisions apply. 

OMEGA v. COSTCO 12115
also conclude that the exception to that rule does not apply,

§ 109(a) provides no defense in this case. 

A. Current Rule in the Circuit

[4] Omega’s position was clearly correct under pre-Quality

King Ninth Circuit precedent. This court has twice held on

indistinguishable facts that § 109(a) provides no defense

against a claim under § 602(a). In BMG Music, the defendant

purchased copies of the plaintiffs’ U.S.-copyrighted, foreignmanufactured sound recordings, imported them into the

United States without the plaintiffs’ authorization, and then

sold them to the public. 952 F.2d at 319. Following CBS v.

Scorpio Music Distributors, 569 F. Supp. 47, 49 (E.D. Pa.

1983), aff’d without opinion, 738 F.2d 424 (3d Cir. 1984), we

held that § 109(a) provided no defense against a claim under

§ 602(a) in the circumstances because the phrase “lawfully

made under this title” in § 109(a) “grants first sale protection

only to copies legally made and sold in the United States,”

and the copies at issue were made and first sold abroad. 952

F.2d at 319. The rationale for this interpretation was twofold:

First, a contrary interpretation would impermissibly extend

the Copyright Act extraterritorially. Id. (citing Scorpio, 569 F.

Supp. at 49). Second, the application of § 109(a) after foreign

sales would “ ‘render § 602 virtually meaningless’ ” as a tool

against the unauthorized importation of nonpiratical copies

because importation is almost always preceded by at least one

lawful foreign sale that will have exhausted the distribution

right on which § 602(a) is premised. Id. at 319-20 (quoting

Scorpio, 569 F. Supp. at 49). 

[5] Drug Emporium, 38 F.3d 477, followed BMG Music by

holding on similar material facts that § 109(a) provided no

defense. However, we criticized the prior interpretation of

§ 109(a)’s key phrase—“lawfully made under this title.” By

permitting the first sale defense only against claims involving

copies that are “legally made and sold in the United States,”

BMG Music appeared to give greater copyright protection to

12116 OMEGA v. COSTCO
foreign-made copies than to their domestically made counterparts. See 38 F.3d at 482 n.8. We found that “such a result

would be untenable, and that nothing in the legislative history

or text of § 602 supports such an interpretation.” Id.; see also

2 Paul Goldstein, Goldstein on Copyright § 7.6.1, at 142 (3d

ed. 2007) (criticizing the approach in BMG Music and Scorpio). We therefore created an exception to BMG Music, concluding that § 109(a) can apply to copies not made in the

United States so long as an authorized first sale occurs here.

Drug Emporium, 38 F.3d at 481. 

Denbicare, which involved copies made in Hong Kong and

voluntarily sold by the U.S. copyright owner within the

United States, applied the exception created by Drug Emporium. Denbicare, 84 F.3d at 1145-46. The copyright owner

sued under §§ 106(3) and 602(a) after the defendant purchased the copies and resold them without permission, but we

rejected the claims: The defendant was not liable for infringing importation under § 602(a) because the disputed copies

were imported by third parties prior to the defendant’s purchase and resale. Id. at 1149. The defendant also was not liable under § 106(3) because, in light of § 109(a) and Drug

Emporium, the copyright owner’s voluntary sale of the copies

within the United States exhausted the exclusive right of distribution. Id. at 1149-50. 

[6] Under these cases, Costco would not be entitled to summary judgment on the basis of § 109(a). The statute would not

apply because Omega made copies of the Omega Globe

Design in Switzerland and Costco sold the copies without

Omega’s authority in the United States. The district court’s

unexplained grant of summary judgment on the basis of

§ 109(a) was at odds with BMG Music, Drug Emporium, and

Denbicare.

4

4Denbicare’s rejection of a § 602(a) claim due to the defendant’s lack

of involvement in importation suggests that Omega’s claim under § 602(a)

is similarly unmeritorious because, like the defendant in Denbicare,

OMEGA v. COSTCO 12117
B. The Impact of Quality King

We next address the degree to which the Supreme Court’s

decision in Quality King invalidates this circuit’s construction

of § 109(a). This panel may overrule BMG Music, Drug

Emporium, and Denbicare if Quality King “undercut[s] the

theory or reasoning underlying the prior circuit precedent in

such a way that the cases are clearly irreconcilable.” Miller,

335 F.3d at 900. 

1.

[7] It is clear that Quality King did not directly overrule

BMG Music, Drug Emporium, and Denbicare. Quality King

involved “round trip” importation: a product with a U.S.-

copyrighted label was manufactured inside the United States,

exported to an authorized foreign distributor, sold to unidentified third parties overseas, shipped back into the United States

without the copyright owner’s permission, and then sold in

California by unauthorized retailers. 523 U.S. at 138-39. The

Court held that § 109(a) can provide a defense to an action

under § 602(a) in this context. Id. at 144-52. However,

because the facts involved only domestically manufactured

copies, the Court did not address the effect of § 109(a) on

claims involving unauthorized importation of copies made

abroad. See id. at 154 (Ginsburg, J., concurring) (“[W]e do

not today resolve cases in which the allegedly infringing

imports were manufactured abroad.”). Moreover, the Court

never discussed the scope of § 109(a) or defined what “lawfully made under this title” means. 

Costco did not import the disputed copies. See 84 F.3d at 1149. However,

Costco waived this argument by not raising it in its opening brief. See

Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994) (“We review only

issues which are argued specifically and distinctly in a party’s opening

brief.”). In any event, we must still decide whether § 109(a) provides a

defense against Omega’s claim under § 106(3). 

12118 OMEGA v. COSTCO
2.

[8] We next consider whether the reasoning5 of Quality

King is clearly irreconcilable with our general rule that

§ 109(a) is limited to copies “legally made . . . in the United

States.” BMG Music, 952 F.2d at 319; see also Denbicare, 84

F.3d at 1150. The basis for that rule was our concern that

applying § 109(a) to foreign-made copies would violate the

presumption against the extraterritorial application of U.S.

law. BMG Music, 952 F.2d at 319 (citing Scorpio, 569 F.

Supp. at 49); cf. Subafilms, Ltd. v. MGM-Pathe Commc’ns

Co., 24 F.3d 1088, 1093-98 (9th Cir. 1994) (en banc)

(describing the “undisputed axiom” that United States copyright law has no extraterritorial application). Quality King dismissed a similar concern that the triggering of § 109(a) by

foreign sales would require an invalid extraterritorial application of the Copyright Act, explaining that merely recognizing

the occurrence of such sales “does not require the extraterritorial application of the Act any more than § 602(a)’s ‘acquired

abroad’ language does.” 523 U.S. at 145 n.14. Costco contends that this explanation is irreconcilable with our interpretation of § 109(a) in BMG Music. 

[9] We reject Costco’s contention and hold that the

Supreme Court’s brief discussion on extraterritoriality is not

“clearly irreconcilable” with our general limitation of § 109(a)

to copies that are lawfully made in the United States. Miller,

335 F.3d at 900. The common understanding of the presumption against extraterritoriality is that a U.S. statute “appl[ies]

only to conduct occurring within, or having effect within, the

territory of the United States, unless the contrary is clearly

indicated by the statute.” Restatement (Second) of Foreign

Relations Law of the United States § 38 (1965); see also

5

“[L]ower courts [are] bound not only by the holdings of higher courts’

decisions but also by their ‘mode of analysis.’ ” Miller, 335 F.3d at 900

(quoting Antonin Scalia, The Rule of Law as a Law of Rules, 56 U. Chi.

L. Rev. 1175, 1177 (1989)). 

OMEGA v. COSTCO 12119
EEOC v. Arabian Am. Oil Co., 499 U.S. 244, 248 (1991).

Recognizing the importance of avoiding international conflicts of law in the area of intellectual property, however, we

have applied a more robust version of this presumption to the

Copyright Act, holding that the Act presumptively does not

apply to conduct that occurs abroad even when that conduct

produces harmful effects within the United States. See Subafilms, Ltd., 24 F.3d at 1096-98; see also William S. Dodge,

Understanding the Presumption Against Extraterritoriality,

16 Berkeley J. Int’l L. 85, 101 (1998) (characterizing this circuit’s approach under the Copyright Act as consistent with

American Banana Co. v. United Fruit Co., 213 U.S. 347, 356

(1909), overruled on other grounds, Continental Ore Co. v.

Union Carbide & Carbon Corp., 370 U.S. 690, 704-05

(1962), which described the presumption as a “general and

almost universal rule . . . that the character of an act as lawful

or unlawful must be determined wholly by the law of the

country where the act is done”). 

[10] Given this understanding of the presumption, the

application of § 109(a) to foreign-made copies would impermissibly apply the Copyright Act extraterritorially in a way

that the application of the statute after foreign sales does not.

Under the latter application, the statute merely acknowledges

the occurrence of a foreign event as a relevant fact. The former application would go much further. To characterize the

making of copies overseas as “lawful[ ] . . . under [Title 17]”

would be to ascribe legality under the Copyright Act to conduct that occurs entirely outside the United States, notwithstanding the absence of a clear expression of congressional

intent in favor of extraterritoriality. See 17 U.S.C. § 109(a);

see also Subafilms, Ltd., 24 F.3d at 1096 (“There is no clear

expression of congressional intent in either the 1976 Act or

other relevant enactments to alter the preexisting extraterritoriality doctrine.”). Specifically, it would mean that a copyright

owner’s foreign manufacturing constitutes lawful reproduction under 17 U.S.C. § 106(1) even though that statute does

not clearly provide for extraterritorial application. This is pre12120 OMEGA v. COSTCO
cisely what we proscribed in Subafilms, see 24 F.3d at 1098,

and Quality King provides no basis for rejecting our approach.

[11] Other significant parts of Quality King’s analysis are

also consistent with BMG Music’s limitation of § 109(a) to

domestically made copies. The Court found that copies of a

work copyrighted under Title 17 are not necessarily “lawfully

made under [Title 17]” even when made by the owner of the

copyright: The category of copies covered by § 602(a), it was

explained, encompasses “copies that were ‘lawfully made’ not

under the United States Copyright Act, but instead, under the

law of some other country.” 523 U.S. at 147. Because

§ 602(a) extends to such copies, but on its terms permits an

infringement action only by the “owner of copyright under

[Title 17],” copies of a work can be lawfully made “under the

law of some other country,” rather than “under [Title 17],”

even when the copies are protected by a U.S. copyright. In

short, copies covered by the phrase “lawfully made under

[Title 17]” in § 109(a) are not simply those which are lawfully

made by the owner of a U.S. copyright. Something more is

required. To us, that “something” is the making of the copies

within the United States, where the Copyright Act applies. See

2-8 Nimmer on Copyright § 8.12(B)(6)(c), at 8-178.4(6)-(7).

We also read one of the Court’s illustrations to be consistent with this understanding. The Court stated that given

a publisher of [a] U.S. edition [of a work] and a publisher of [a] British edition of the same work, each

such publisher could make lawful copies. If the

author of the work gave the exclusive United States

distribution rights—enforceable under the Act—to

the publisher of the United States edition and the

exclusive British distribution rights to the publisher

of the British edition, however, presumably only

those made by the publisher of the United States edition would be ‘lawfully made under this title’ within

the meaning of § 109(a). The first sale doctrine

OMEGA v. COSTCO 12121
would not provide the publisher of the British edition

who decided to sell in the American market with a

defense to an action under § 602(a). 

523 U.S. at 148 (emphasis added and footnote omitted).

Assuming the British edition was made outside the United

States,6 this illustration suggests that “lawfully made under

this title” refers exclusively to copies of U.S.-copyrighted

works that are made domestically. Were it otherwise, the copies made by the British publisher would also fall within the

scope of § 109(a). See 2-8 Nimmer on Copyright

§ 8.12(B)(6)(c), at 8-178.4(7). 

Finally, in the decision’s only direct language on the issue,

Justice Ginsburg’s concurrence cited a copyright treatise for

the proposition that “lawfully made under this title” means

“lawfully made in the United States.” 523 U.S. at 154 (citing

W. Patry, Copyright Law and Practice 166-70 (1997 Supp.)).

The majority opinion did not dispute this interpretation, which

aligns closely with the one adopted by our circuit. See BMG

Music, 952 F.2d at 319. 

[12] Costco contends that BMG Music’s limitation of

§ 109(a) to domestically made copies is inconsistent with the

plain language of the statute and its legislative history. This

criticism has been made before, including by this court. See,

e.g., Parfums Givenchy, Inc. v. C & C Beauty Sales, Inc., 832

F. Supp. 1378, 1386-87 (C.D. Cal. 1993), aff’d sub nom. Drug

Emporium, 38 F.3d at 482 n.8. Perhaps most compelling is the

objection that BMG Music would provide substantially greater

copyright protection to foreign-made copies of U.S.-

copyrighted works. A U.S. copyright owner, for example,

6The illustration offers no specific justification for making this assumption over any other regarding the site of manufacture, but Quality King

cannot be “clearly irreconcilable” with our precedent even if the decision

merely permits assumptions that are consistent with that precedent. Miller,

335 F.3d at 900. 

12122 OMEGA v. COSTCO
would be unable to exercise distribution rights after one lawful, domestic sale of a watch lawfully made in South Dakota,

but, without the limits imposed by § 109(a), the same owner

could seemingly exercise distribution rights after even the

tenth sale in the United States of a watch lawfully made in

Switzerland. The difference would likely encourage U.S.

copyright owners to outsource the manufacturing of copies of

their work overseas. Drug Emporium and Denbicare, however, resolved this problem by clarifying that parties can raise

§ 109(a) as a defense in cases involving foreign-made copies

so long as a lawful domestic sale has occurred. See Drug

Emporium, 38 F.3d at 481; Denbicare, 84 F.3d at 1150. Insofar as Costco contends that § 109(a) should apply to foreignmade copies even in the absence of a lawful domestic sale, the

surviving rule from BMG Music requires otherwise. See 952

F.2d at 319. 

In summary, our general rule that § 109(a) refers “only to

copies legally made . . . in the United States,” id., is not

clearly irreconcilable with Quality King, and, therefore,

remains binding precedent. Under this rule, the first sale doctrine is unavailable as a defense to the claims under §§ 106(3)

and 602(a) because there is no genuine dispute that Omega

manufactured the watches bearing the Omega Globe Design

in Switzerland. Id.; Fed. R. Civ. P. 56(c); see also Swatch S.A.

v. New City, Inc., 454 F. Supp. 2d 1245, 1253-54 (S.D. Fla.

2006) (concluding that Quality King is consistent with the

interpretation that “lawfully made under this title” means “legally made . . . in the United States”); 2 Goldstein on Copyright § 7.6.1, at 143-44 (concluding that Quality King

“indicates an intention not to disturb lower court holdings that

the first sale defense is unavailable to importers who acquire

ownership of gray market goods made abroad”). 

3.

We need not decide whether Drug Emporium’s and Denbicare’s exception to the rule in BMG Music also survives

OMEGA v. COSTCO 12123
Quality King. There is no genuine dispute that the copies of

the Omega Globe Design were sold in the United States without Omega’s authority. The exception, therefore, does not

apply in this case. See Denbicare, 84 F.3d at 1145-46

(“[Section] 109 applies to copies made abroad only if the copies have been sold in the United States by the copyright owner

or with its authority.”). Because the exception does not apply,

the question of its continuing viability cannot affect our conclusion that § 109(a) provides no defense to Omega’s claims.

C. Attorney’s fees under 17 U.S.C. § 505 

[13] The final issue is whether the district court abused its

discretion in awarding attorney’s fees to Costco. The Copyright Act provides for an “award [of] a reasonable attorney’s

fee to the prevailing party as part of the costs.” 17 U.S.C.

§ 505. In deciding whether to award fees under this statute, a

district court should consider “the degree of success obtained;

frivolousness; motivation; objective unreasonableness (both

in the factual and legal arguments in the case); and the need

in particular circumstances to advance considerations of compensation and deterrence.” Columbia Pictures Television,

Inc., 259 F.3d at 1197. 

[14] The district court’s award of $373,003.80 in attorney’s

fees to Costco was an abuse of discretion because neither

party has prevailed in this litigation to this point. 

REVERSED AND REMANDED. 

12124 OMEGA v. COSTCO