Quality King Distribs. v. L'Anza Research Int'l - 523 U.S. 135, 118 S. Ct. 1125 (1998)

Rule:

After the first sale of a copyrighted item lawfully made under title 17, any subsequent purchaser, whether from a domestic or from a foreign reseller, is an owner of that item. Read literally, 17 U.S.C.S. § 109(a) unambiguously states that such an owner is entitled, without the authority of the copyright owner, to sell that item.

Facts:

Respondent manufactured hair care products bearing copyrighted labels. Since respondent charged foreign distributors much less for the same products than it charged domestic distributors, petitioner imported respondent's products from a foreign distributor, for resale in America. Respondent sued petitioner for infringement, alleging that petitioner's importation of products with the copyrighted labels without permission violated respondent's exclusive rights to distribute copyrighted material under 17 U.S.C.S. §§ 106, 501, and 602. The district court rejected petitioner’s “first sale” defense under § 109(a) and entered summary judgment for respondent. Concluding that § 602(a), which gave copyright owners the right to prohibit the unauthorized importation of copies, would be "meaningless" if § 109(a) provided a defense, the Ninth Circuit affirmed. Petitioner sought review of the decision. 

Issue:

Was the “first sale” doctrine endorsed in § 109(a) applicable to imported copies? 

Answer:

Yes.

Conclusion:

The court reversed, holding that 17 U.S.C.S. § 602 did not categorically prohibit the unauthorized importation of copyrighted materials, but was limited, as was 17 U.S.C.S. § 106, by 17 U.S.C.S. § 109(a), which permitted the owner of a lawfully made copy to sell that copy without authority of the copyright owner. Since the limited right of distribution did not encompass reselling by lawful owners, 17 U.S.C.S. § 602 was inapplicable to lawful owners of respondent's products, who imported and resold them in America.