Omega sued and lost. Then they won on appeal in the Ninth Circuit Court.
Here is a more detailed summary.
Here are the conclusions from the post (emphasis is mine)...
The increased frequency of U.S. companies manufacturing their goods in other countries, i.e., China, Mexico, the Philippines, can lead to unexpected results with regard to the application of the First Sale Doctrine. Consider Company XYZ, an American company that manufactures widgets and stamps the widgets with its copyrighted logo. XYZ has two manufacturing plants, one in Tennessee and one in Malaysia, and it sells widgets manufactured in both plants throughout the world. It commonly sells its widgets to distributor A, in London, for about 40% less than it sells to its U.S. distributors. Distributor A, seeking to make a larger profit, sells the widgets in London to a wholesaler who promptly brings them into the United States. XYZ sues for copyright infringement because it has not authorized the sale of its copyrighted goods in the U.S. Under Omega v. Costco, however, XYZ will be surprised to learn that it has no rights as to one-half of the imported widgets because they were manufactured in Tennessee. XYZ does have rights to prevent the sale of the widgets that originated in China, however, because even though the widgets were manufactured by XYZ and XYZ authorized the first sale, they were not made or sold in the United States.
On the other hand, if XYZ is savvy it will move all of its manufacturing overseas and ensure that its first sale of widgets is always made to a foreign distributor. XYZ could still tailor its pricing to charge substantially more for goods earmarked for U.S. distribution. Since the widgets were not made in the United States and XYZ never authorized a sale in the U.S., it would still control U.S. distribution rights. That can?t be the result the Ninth Circuit envisioned by its ruling in Omega v. Costco. And while a manufacturer is not likely to relocate its manufacturing operation based on the First Sale Doctrine, with costs already drastically favoring foreign manufacturing plants, do we really need to give them another push out of the country?
This is just one more case where the US regulatory and legal environment encourages manufacturers to offshore their ops.