It's a thorny dilemma, both legally and morally -- fittingly, the kind of story that, were it turned into a movie, might win a couple Oscars itself. The question is this: Does the Academy of Motion Picture Arts and Sciences have the legal right to buy back an Oscar winner's statuette if he or she (or his or her heirs) decides to get rid of it? What if the Oscar winner wants to sell it at auction and donate the money to charity? Can the Academy in good conscience demand return of the statuette and deprive the charity of those funds? See? Thorny!
For Academy Award winners since 1950, the legalities are fairly uncomplicated. The minute you win the sucker, you have to sign a contract saying that if you or your heirs ever decide you don't want the trophy anymore, the Academy has the right to buy it back for $10. That's the Academy's way of preventing the devaluation of the statuette. If any old schmo with a few hundred thousand dollars could "win" an Oscar at Jack Nicholson's garage sale, the prize would lose all meaning. As it is, of course, winning an Oscar is the single greatest achievement that a human being can ever hope to accomplish -- and the Academy wants to keep it that way.
The issue that's about to go before a Los Angeles judge and jury is what should happen to the best actress Oscar that Mary Pickford won for 1929's Coquette. (That's Pickford and the troublesome trophy in the picture.) The Academy didn't have the first-dibs rule back then -- but when Pickford won an honorary Oscar in 1976, she signed the agreement, and the Academy says that contract was retroactive to include her earlier trophy, too.