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Washington, DC--The Supreme Court on Monday upheld a lower court's ruling that Kirkland, WA-based Costco Wholesale Corp. violated U.S. copyright law by selling Omega watches acquired from abroad at greatly discounted prices, without the Swiss watchmaker's permission.

The 4-4 ruling is a victory--albeit a narrow one--for both manufacturers, as it upholds their right to control pricing and distribution of their products, and for luxury jewelers, as it will cut into competition from off-price and discount retailers who heretofore have been able to obtain from middlemen certain luxury products intended for sale overseas. But the split decision (Justice Elena Kagan recused herself from the case) may leave the door open for future cases along the same lines.

An Omega men's Constellation chronograph watch.