The authorized dealers imported the watches into the U.S. and then sold them to Costco. This stream of commerce enabled Costco to sell the watches to customers below retail price. In 2003, Omega began to engrave its watches with a small emblem — not more than half centimeter across — which Omega registered with the copyright office. Repeat the same stream of commerce again in 2004: Omega sells watches to dealers in Egypt and Paraguay; dealers import the watches into the U.S; dealers sell the watches to Costco; and Costco sells the watches to customers below the retail price. Except, this time around, Omega filed suit alleging that Costco’s acquisition and sale of the watches constituted copyright infringement under 17 U.S.C. §§ 106(3) and 602(a).
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